Modernizing the Loyalty Rewards Industry — Part 1: Digital Loyalty Points
There is a lot of talk about revolutions and the reinvention of industries during these exciting days of digital money pioneering. A significant portion of this excitement can be attributed to hyperbole but this enthusiasm is also founded in realities that are unfolding as the days and weeks pass. Digital money is enabling previously unexplored methods for people to conduct transactions of value.
Digital tokens as a means for exchanging loyalty points has been a long standard example of a digital money technology application designed to function outside of Bitcoin itself. Digital money technology provides many advantages for addressing the challenges faced by the loyalty industry. Modernizing the issuance and redemption of incentive points using digital tokens creates benefits for both businesses and consumers that were impossible before digital money technology.
How does digital money help loyalty?
People like to be rewarded for their loyalty but do not like to be restricted in their actions. Current loyalty solutions are limited in many ways. Loyalty incentive points act as a form of currency but are contained within a closed system. This isolated functionality results in limitations and liabilities.
Using digital tokens as the foundation for incentive point distribution and redemption fundamentally changes the nature of the way these systems function.
How does digital currency help?
Digital money systems are more secure for recording transactions than centralized systems.
Digital money systems are more efficient at facilitating value exchange than centralized systems.
Digital money tokens are openly tradable resulting in flexibility for consumers while reducing liability to businesses.
How can people benefit?
The loyalty industry exists to help facilitate the issuance and redemption of loyalty points between businesses and consumers. New opportunities emerge when digital currency technology is applied to loyalty points:
Open markets for digital money encourage exposure to more users.
Users gain more redemption options with points that can be openly exchanged.
Barriers to loyalty system usage become reduced resulting in greater choice.
The loyalty rewards industry is ripe for a redux. Digital Money and blockchain technology are now providing the foundation for that reinvention.
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