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Blockchain’s Disruption of the Telecom Industry

Many explanations of how “blockchain” technology operates begin by describing it as a ledger. Everyone knows what a ledger is. It’s a place to record transactions to keep track of them. And we prefer seeing them filled out in ink so nobody can change the numbers.

Where we begin to get into trouble understanding blockchain is that, when most people think of a ledger, they think of financial accounting functions. A general ledger details the financial position of a company.

That gets us close. But blockchain is more about “accountability” than it is about accounting. In fact, accountability in the technologically-even-more-advanced future is what blockchain is all about.

No More No-Fault

To understand the impact of blockchain on emerging 5G telecommunications services, let’s begin by taking a ride in an autonomous automobile.

Imagine you’re riding along in your driverless car happily enjoying the countryside or reading a magazine. Though you cannot see it, or perceive it in any way, your car drives out of the Verizon wireless cell zone it was in and your car loses contact with Verizon. What happens next?

It may be that your car then enters a zone where AT&T has the best coverage, but you’re a Verizon subscriber, not AT&T. Later you may pass into T-Mobile territory, or Sprint. Does your car simply stop operating, or worse lose control?

Obviously not. For autonomous vehicles to be truly operable there will need to be agreement between carriers as to how those inter-carrier transactions are handled. And when we think “transactions” we think blockchain. This scenario takes full advantage of blockchain’s nature as a centralized, commonly available ledger that is completely transparent to all parties, in which all transactions are permanent and cannot be altered. When your car goes from carrier-to-carrier the hand-off transaction is recorded by blockchain.

Making the value even more vivid, the next thing that happens is terrible. Your autonomous car and another autonomous car get into an autonomous accident. No worries, just a fender-bender, but this raises an all-important question; who’s to blame? Even in a “no-fault” insurance state, fault still needs to be established. There are more players to consider than you think in this blame-game.

First, of course, there’s you and the other driver/rider. One or both of you may have taken the wheel to control the vehicle yourself. One or the other vehicle involved may have malfunctioned causing the accident. That’s easily enough recorded by the vehicles to the blockchain ledger.

Going further, however, there’s the carrier that your car uses to connect to its controller. Same for the other car. If either of those connections dropped, that may have caused the accident. Or one or the other of the controllers of the vehicles. Or perhaps it was a malfunction of the traffic light at the intersection which suddenly failed allowing both cars to hurtle into each other.

If someone could change the ledger, they could shift the blame from one participant to the next, but one of the core features of blockchain is that such a change is impossible.

So, who caused the accident? This is a vivid illustration of why telecom and blockchain are inextricably linked. 5G transport speeds and almost non-existent latency are needed to assure the constant connection that will enable all kinds of automation like autonomous vehicles. And as we can do more faster there will be more need to keep track of every interaction between devices for accountability purposes as well as performance.

Perhaps an even simpler example is the surgeon who is vacationing on the beach but is needed to perform an important operation. No problem, she’ll just don her virtual reality (VR) visor and remote handgrips to coordinate a robot that will physically perform the procedure. What if the robot shorts out and severs an artery? Was it the doctor making a slip? Was it the connection between the two, and if so, which side of the connection? Was it a glitch in the software that controls the VR? With every second of the operation fully documented in blockchain the root cause of the problem will easily be determined and corrected to prevent a repeat of the calamity.

The New “IoS” – the Internet of Services

Just as everything in the information technology world has gone from providing products for everything to everything-as-a-service, the internet will connect more than just people, and more than just things, it will deliver all manner of services.

Many of these services will be “sold” in units of seconds of time, perhaps even fractions of a second as multiple services “call” each other and “use” each other to deliver a result. Both 5G speed and blockchain universal transparency will be the only way all these microtransactions can be accurately tracked. And, as we’ve seen, some cases can be life-and-death.

Financial services will not be exempt. The most fundamental purpose of blockchain is to centralize accountability while de-centralizing everything else. This includes the world’s banks which desperately need to be decentralized.

Paradigm Shifts in Abundance

Tomorrow will be a far more “fractional” place, with an internet of services all billing each other and ultimately you in nanoseconds of service, but that’s not the only advance coming.

The devices you use to consume these services will continue to evolve, requiring new and perhaps more complex telecommunication services to enable them. Just as the original “flip-phone” user couldn’t foresee the mobile smartphones and other devices we have today, perhaps tomorrows device will be your completely mobile desktop enabling telephone, video, text, composition, spreadsheeting, and much more wherever you are whenever you need them.

5G speed and resilience requires a reliable, rapid facility for keeping track of all these microtransactions, one that is central to all providers and users, is immutable so nothing can be changed once its recorded, and transparent so everyone can refer to it readily. Far from disrupting telecom, blockchain will enable real accountability for everything 5G is used for. What will be disrupted is the loosely disjointed way we are forced to do things today. Disruption can be a good thing.

Read our related blog article on what enterprises should start thinking about as 5G becomes a reality.