Why Loyalty — DigitalBits First Use-Case
The mission of the DigitalBits Project is to drive the mass adoption of cryptocurrency and blockchain technology. Large technological shifts are often met with resistance, and in the current state of the market, cryptocurrencies sit at a cross-road — a revolutionary technology with very few users. CEO of DigitalBits Al Burgio delivered a keynote speech at the Blockchain Futurist Conference in Toronto, discussing the idea of “Crossing the Chasm: Bringing Blockchain to the Masses,” which can be seen below.
Two main barriers faced by cryptocurrencies today are:
- They require a change in learned behavior, and people are inherently resistant to change
- The crypto community is small, with use limited to approximately 1% of the global population
In order to solve the issue of cryptocurrency mass adoption, one must address these two issues. How do you introduce a new technology, while requiring minimal change in learned behavior, and simultaneously port millions of users into an ecosystem?
The loyalty and rewards points industry amasses approximately 48 billion dollars in value on an annual basis in the United States alone. Of this, about one third goes unused. You would be hard pressed to find someone who is not involved with one loyalty program or another. Current programs suffer from centralization, have a frustrating user experience, lack liquidity, and exist in silos that significantly limits how consumer capital can be used. With billions of dollars in value, millions of existing users and evident functionality concerns, the loyalty points and rewards industry was an obvious choice as the first use case of DigitalBits technology.
Loyalty and rewards points possess three key characteristics:
- They are an existing digital asset
- Consumers are familiar with points, how to earn and redeem them
- These points exist in the pockets of millions
The DigitalBits blockchain has been constructed to operate as a transacting and trading layer for various digital assets. Built integration ready, existing applications are able to leverage the benefits of blockchain technology, while consumers continue to use applications they are familiar with, requiring no change in learned behavior. By addressing loyalty as a first use case, DigitalBits increases the utility of an already existing digital asset, increasing the perceived value of points and providers, and providing consumers with autonomy over their assets.
At the heart of the DigitalBits blockchain is its multi-hop capability. Current rewards programs are siloed, and it can be an arduous task to transfer value from one program to another, let alone impossible. In order to give consumers full control over their value, multi-hop creates liquidity, even in the absence of a direct market. Allowing trades up to six degrees, multi-hop technology creates an optimal trading environment, wherein the exchange of value can be orchestrated between multiple entities, ensuring that each individual receives the asset they want. This will allow consumers to fully optimize the value they accumulate through points.
Other features that will help to update the loyalty and rewards space are:
- liquid points
- high throughput (capacity for up to 10 000 transactions per second, 3–5 second confirmation times)
- scalable for any business or sector
- transparent costs
- integration ready
- no middleman (reduces unnecessary fees and removes centralized control over the network)
DigitalBits is a general purpose blockchain, focused on use case implementation. The loyalty points and rewards industry currently suffer from limitations that negatively impact both producers and consumers. Utilizing the DigitalBits infrastructure, we can advance the loyalty industry and bring the benefits of blockchain to its vast user base, while helping to drive the mass adoption of cryptocurrency.
