We want to navigate you through this dense fog of misconceptions and blockchain myths to a clear perspective of this profound technology for the travel industry.
Blockchain is scam, or blockchain is only for cryptocurrencies. Which was the first blockchain myth you have ever heard of? Today, there is a lot of skepticism in the media, causing many individuals and brands to lose sight of the transformative potential of the underlying technology and its profound nature.
Luckily, this isn't the first time in history. Remember when major brands dismissed Facebook as just a platform for college students? Or when Instagram was considered a place for 'food pictures.' Next was TikTok, with kids dancing.
While many corporates were slow to adapt to emerging technologies, countless individuals and more flexible brands leveraged these platforms to skyrocket their businesses, tapping into new target audiences and building communities.
Following the same pattern of behavior and the popular myths created by numerous «experts,» many have labeled blockchain as a scam. Therefore, we want to navigate you through this dense fog of misconceptions to a clear perspective of this profound technology for travel businesses and your personal career.
Firstly, let's agree: this is not true. To understand why, we need to look at the definitions:
We can conclude that blockchain and cryptocurrency are linked. Yet, they serve different functions. Blockchain is the foundational technology of a decentralized digital ledger that records transactions across multiple computers. Cryptocurrency, on the other hand, is a byproduct of blockchain technology. It is a type of digital currency, like Bitcoin or CAM token, that operates independently. While blockchain provides the platform on which cryptocurrencies are built and transacted, it also has broader applications beyond just supporting digital currencies.
Please keep in mind that while all cryptocurrencies operate on blockchains, not all blockchains are created to support cryptocurrencies.
Blockchain's features, such as its decentralized nature and immutable records, can address many challenges in the current state of the travel industry. As a vivid example, we can take the fragmented nature of booking systems that operate via multiple APIs. These systems often lack interoperability, leading to inconsistent data exchanges.
So, how will the travel industry benefit from this technology? A very reasonable question! Blockchain can unify such fragmented systems with clear data standards, ensuring that every booking, every change request, and every transaction is consistently recorded. This will make complicated manual processes seamless and trustworthy for all participants. There are already quite a number of travel use cases being built across the industry.
Let's make it clear. Not all blockchains are public. There are various types:
The latter becomes more and more interesting in various industries. And there are quite powerful reasons behind it. Consortium blockchains are the networks formed by businesses operating within a specific sector. They share values and vision, collectively committing to build and sustain the network.
Camino Network stands as a testament to this model, as a consortium blockchain designed for the needs of the travel industry.
Now we can address the elephant in the room: "Is my travel data on display for all on your blockchain?» This myth or even concern is quite reasonable, taking into consideration that transparency is one of the UVPs of blockchain.
The answer to this question is no. Firstly, personal data is never directly stored on the blockchain, ensuring privacy. Secondly, data encryption plays a pivotal role. Innovations like Zero-knowledge rollups further improve this security, ensuring that while data is verified, the specifics remain hidden.
This is another myth. So, what is a smart contract? Imagine booking a hotel room. Traditionally, you would reserve the room, then pay, and if any issues arise, you would go through a lengthy process to get a refund and cancel the reservation.
Now, think of a smart contract as a digital concierge. He automatically ensures that once you have paid, your room is reserved. If any conditions aren't met, like the room isn't available, your payment is instantly refunded without calls and emails.
Smart contracts merge the booking and payment processes into one seamless and if needed, reversible transaction. This simplifies the process, ensures transparency, and reduces the possibility of disputes to zero. As a result, the whole travel ecosystem benefits from quicker bookings, instant confirmations, and streamlined customer experience.
However, like any innovation, smart contracts face regulatory considerations to ensure they are used ethically and securely. Consortium blockchains, like Camino Network, have extra layers of security; for example, before deploying a smart contract on Camino Network, a mandatory KYC/KYB process is required. In this case, only verified entities can build contracts in the web3 travel ecosystem.
It is another common misconception that cryptocurrencies are too volatile for practical applications like travel. But what is a cryptocurrency? At their core, these are the fuel for digital networks like blockchains. Remember our digital concierge, the smart contract? Executing its tasks requires a form of payment, much like you would tip a hotel concierge.
This payment, or 'gas fee,' compensates for the computational energy used in processing and validating transactions on the blockchain.
Let's take as an example the Camino Network. In this blockchain, gas fees are fixed, ensuring predictability for all the participants. Moreover, validators of the network have the power to adjust these fees through a democratic voting process.
But what about the volatile nature of cryptocurrencies like Bitcoin or Ether? Their prices, like any other asset, are determined by supply and demand dynamics in the market. But there are other currencies with a more stable nature.
Stablecoins are a type of cryptocurrency designed to have a stable value by pegging them to a reserve, like the US dollars or Euros. This means that while they operate using blockchain technology and benefit from its transparency and security, their value remains relatively constant. For the time being, these coins combine the best of two worlds: the efficiency of cryptocurrencies and the stability of FIAT.
On the way to the digital transformation of such a global industry as travel, having stable currencies and clear gas fee rates is crucial. Along with security and trust, the web3 travel ecosystem will have faster, cheaper, and more reliable cross-border transactions.
This is one of the most true-to-life blockchain myths because one of the UVPs of the technology for many has been its promise of anonymity. And yes, it does provide a level of anonymity that traditional systems can't. However, the reality is more nuanced.
As blockchain technology becomes available in various industries and the web3 space becomes more regulated, the emphasis on identity verification grows, especially in areas where trust is paramount, like travel.
While there have been numerous attempts to create reliable and robust identity verification systems on blockchain, there are still KYC (Know Your Customer) and KYB (Know Your Business) processes that are mostly recognized and working.
Let's look at Camino Network. Being the pioneering layer 1 blockchain for the travel industry, it recognizes the importance of trust and transparency. Hence, it has integrated both KYC and KYB into the framework. Validators, the entities responsible for verifying and adding transactions to the blockchain, undergo a KYB process.
Incorporating KYC and KYB ensures that while the benefits of decentralization and efficiency are present, there is a layer of accountability and trust. Both contribute to balancing the freedom of blockchain with the responsibility of traditional systems. For travel businesses and customers, it means a more secure, transparent, and reliable platform, ensuring that while transactions are efficient and decentralized, they are also conducted by verified entities.
But for the five blockchain myths we viewed through the lens of travel, there are many others. The space is growing, and so do the misconceptions. Below, you can quickly review the most common.
While the list above representing blockchain myths is extensive, new misconceptions will inevitably be born as the industry matures. Feel free to share your doubts and questions with us — the web3 travel community of Camino Network. It is high time to start engaging in discussions and sharing insights with like-minded innovators building the future of travel.