Although the travel industry is said to have a great need for digital innovation, according to Pablo Castillo, the CTO of blockchain-based travel agency Chain4travel, “aviation is the most obvious sector to innovate with blockchain.” To support this claim, Castillo, a former CIO of the Hotelplan Group, pointed to the airline industry’s outdated technological infrastructure and lack of standardized data.
Pablo Castillo about Blockchain and travel
In written responses to Bitcoin.com News, the CTO also argued that the use of blockchain helps reduce fragmentation, which is currently a defining characteristic of the travel industry. Furthermore, the use of this technology can also contribute to “seamless operations across the industry.” However, much of how the technology can help reduce friction in the travel industry will depend on the agnostic nature of blockchain technology, Castillo argued.
When asked why he believes the travel industry should have its own layer 1 blockchain, Castillo emphasized the seasonal nature of the industry. He argued that since the cost of most layer 1 blockchains is known to increase when network usage peaks, using these chains could therefore be “financially damaging during high booking periods.”
Meanwhile, Chain4travel’s CTO also addressed how blockchain can help prevent security incidents such as the 2018 Marriott data breach in his replies sent via Telegram to Bitcoin.com News. Below are Pablo Castillo’s answers to all questions.
Bitcoin.com News (BCN): What are the major categories of players in the travel industry and the challenges they face that can be solved using blockchain technology?
Pablo Castillo (PC): The travel industry is huge and consists of many so-called travel industries, such as the airline industry, airports, car rental, hospitality, mobility, cruises, trains, etc. The agnostic nature of blockchain technology makes it the ideal foundation for this immense industry worldwide. While the entire industry has a huge need for digital innovation, I believe aviation is the most obvious sector to innovate with blockchain.
Aviation is a complex domain with numerous stakeholders. If you know it from the inside, you also know that it is overloaded with outdated technological infrastructures and an urgent need for innovative solutions. Some of the long-standing challenges include the lack of standardized data and extremely long payment and settlement times that can be up to twelve months. We can also take issues of ticket ownership and the potential for resale on secondary markets as an example to illustrate the new potential that the blockchain solution will bring.
My experience in travel technology and my understanding of the transformative potential of blockchain make it clear that only such a combination can solve most existing problems. For example, we are working on a solution for transparent and immutable data standards, seamless payment processes and many other directions put forward by travel experts, such as blockchain-based loyalty programs.
Current loyalty program models are often too complicated: travelers find it difficult to claim rewards, providers struggle with rewards authentication, and all partners must provide each other with manual reports or confirmations.
BCN: There are already quite a few layer 1 blockchains that the travel industry could use to improve the experience for both service providers and users. So why are some players in this sector advocating a sector-specific layer 1 chain?
PC: The idea of Camino Network as a Layer 1 blockchain tailored for the travel industry is rooted in industry challenges, insights and specific needs. Again, they are all drawn from the experience of the founders and the community.
It’s no secret that the travel industry is highly seasonal. There are ups and downs in booking periods, which generate different amounts of traffic. On most blockchains, gas costs depend on traffic, which could be financially detrimental during high booking periods. The more traffic, the higher the gas. Would you like to wait to book your ticket at night, when the petrol rate is lower?
That’s why Camino Network has its own gas reimbursement structure. It is fixed and can only be changed through votes. And only network validators can vote on the gas fee. This means that all control over transaction fees is in their hands, ensuring stability and predictability of transaction fees for the entire network.
Please note that every validator on Camino Network is a travel-related business and must go through a Know Your Business (KYB) process to ensure trust. KYB provides verification, but also plays a strategic role in building new partnerships between all consortium members. It eliminates the need for lengthy paper contract processes.
The travel industry has many more unique demands and challenges that are constantly being brought to the table by the community. These challenges are being addressed in a continuous phase of development of Camino Network’s core infrastructure. This approach enables solutions that directly address the challenges and blockchain opportunities of the sector. Such a scenario would not work with generic blockchains.
BCN: The travel industry is highly fragmented and this could be one of the reasons why friction runs deep in the sector. Can you describe how blockchain technology can help reduce this friction?
PC: If you look at the back end of the travel industry, you would be very surprised at how overloaded the sector is. Numerous partners, service providers and customer interfaces operate through a complex labyrinth of APIs. An average travel organization quickly has to maintain dozens of different APIs.
The key to reducing fragmentation and introducing seamless operations across the industry lies in the agnostic nature of blockchain technology. That’s why Camino Network addresses these challenges with global data standards and shared connectivity.
Contemporary travel is structured in vertical lines. There are airlines, accommodations, cruises, transportation and other industries, each with its own technology packages. Let’s take an example and plan your next trip. In the airline industry, you may use an online platform like Kiwi for ticket booking. But for check-in and boarding you must use the interface of the airline you are traveling with.
For accommodations, platforms like Booking will manage your stay, while the hotel will use different systems for during-stay services. This list can be very long because each industry and platform operates independently and manages different aspects such as bookings, payments and customer interactions, often without communication between them, leading to a fragmented user experience.
BCN: Given the nature of the travel industry, B2B participants on the network must be authenticated to ensure the security of user data. How do you authenticate such participants on the Camino network, if at all, before they are given the opportunity to deploy or interact with smart contracts?
PC: Both know your customer (KYC) and know your company (KYB) verifications are performed through a third-party provider. Before smart contracts are deployed, the deployment address must be successfully verified by KYC or KYB. Interaction with smart contracts, on the other hand, is not covered by this rule. Still, any smart contract can integrate a mechanism to verify the status of an address and block interactions if the address has not been verified by KYC/KYB. It is the discretion of our partners to determine whether they want this level of verification in their smart contracts.
BCN: Privacy concerns in the travel industry are as real as they get, as travelers are required to share sensitive data. A data breach at Marriott in 2018 reportedly exposed up to 500 million guest information. There have been many other similar reports. Do you see blockchain technology helping to keep user data safe and private?
PC: We have already touched on the data privacy issues and said that security is the core priority for Camino Network. We are currently building a decentralized, encrypted travel messenger. It is an absolutely new tool that aims to provide a new level of connectivity to network participants and further improve privacy and data security. The product is in the MVP phase. We will test it within the closed community to make improvements before it is deployed on the main network and available to all network participants.
The transparent nature of blockchains made us start working on such a solution. This encrypted messenger will first enable secure communication between service providers, and then we will introduce this messenger to travelers. What I can say now is that this tool is designed to ensure that sensitive information, such as offers, dates, personal details or payment details, is exchanged in a secure and encrypted manner and can only be accessed by the parties involved in the transaction . A very simplified, but clear statement that can explain the essence of the messenger is that it allows travel companies to ‘connect with one, connect with all’.
What are your thoughts on this interview? Let us know what you think in the comments below.