Applications of Blockchains in the Telecom Sector

By | September 21, 2017

telecom blockchains applicationsBlockchains has evolved from a technology for cryptocurrencies to one supporting applications in multiple industries, including telecom. A few leading telcos are investigating the potential of blockchains (link). Many applications are being proposed including roaming fraud mitigation, flexible service offering or selection, IoT contracts, authentication and many use cases. However, when it comes to actual and practical solutions, we are still at the early stages. Where and how to apply blockchains are still hard questions to answer.

Back to basics

Many conditions exist for the application of blockchain in telecom to succeed. Fundamentally, the applications have requirements that can be fulfilled with blockchains. These requirements are paralleled by the characteristics of blockchains:

1- Macro characteristics:

These are characteristics that apply to all blockchains, for example:

Decentralization: Blockchains is a peer-to-peer technology that makes central authority redundant. Telecom applications where central authority factors in could be conditionally impacted by blockchains.

Tamper-proof: Blockchains are immutable and secure. Once miners authorize an entry, it is very difficult [impossible!] to tamper with the record. This implies permanence.

Reliable: Blockchains records and validate each and every transaction [to the beginning of time!]. Validation is rather simple.

2- Micro characteristics:

These are characteristics that differ among blockchains, for example:

Time: How quickly can a transaction be approved and added to the blockchain. There are major differences between different blockchain that affect which platform is best for which application.

Size: How big is the blockchain impacts other parameters related how quickly it gets approved, and the memory, time and bandwidth it consumes.

Type: blockchain maybe private or public. Both functions over decentralized peer-to-peer networks and provide certain guarantees on immutability. But they differ on who is allowed to participate in the network to execute the consensus protocol and maintain the shared ledger.

The final analysis

As a first step for the success of blockchains in telecom, blockchains need to solve existing challenges at lower cost and higher performance efficiency. The characteristics of the blockchains need to be a good fit with the application requirements. At times we find that blockchains are being proposed for applications where there is little match in characteristics such that cost and efficiency requirements are not met. This corresponds to a technology push as opposed to a solution pull. Successful implementations need to avoid falling into such a trap.

In future articles, I will expand on other dimensions. Stay tuned!