Frequent flyer miles should be a crypto

Posted by on Oct 3, 2014 in Thoughts | No Comments

This morning I woke to an email I had received from British Airways saying my 7,000 frequent flyer Miles where about to expire.  I had spent a few years living in the UK and with no intention to return, I didn’t have a need for these *points* anyway.  These Miles or points, are effectively a token.  A token that I had to spend money to accumulate.

However, just because they are no use to me, does not mean there is no demand for them.  Someone in the UK that is 7,000 points off a free flight.  So why can’t I sell my token on to this person for the highest bid?  I’d take a few dollars or a few millibit for them, its better than nothing.

The problem is that the airlines have a closed loop system.  These points only exist on the airlines databases somewhere.  As they are redeemable for a good or service, a debt on the companies balance sheet, they must be protected.  This protection also comes at cost to the airline.  Firewalls, dedicated servers, backups, other security measures and so on.

If an airline inverted their thinking and simply made these a crypto coin (aka a token), then their cost of protecting these assets would be significantly reduced.  It would also open up free markets and enable owners of these tokens to exchange and developers to write their own apps to complement these airlines.

You might argue that the airlines want these tokens to expire, but I would disagree.  Because I can get a “free” flight, I will most likely pay for a return flight, and perhaps even pay the $10 for a packet of inflight peanuts.  These systems don’t bump an otherwise paying passenger off, they just fill a potentially unoccupied seat.

The problem grows worse when you use affiliate or partner airlines.  You can’t use your Qantas Miles, you can’t aggregate them.  You can’t even call the local ticket office, you have to call where your rewards card is registered.   Its absurd, especially when their business model is international travel!

Now if your still following, lets explore the options further.  What is a boarding pass?  This printed out piece of paper is probably one on the most un-secure security documents that I can think of.  Your ticket is just a token, representing a seat on a specific flight at a specific time.  Instead of a boarding pass, a provable digital signature should be that pass;  that access to the flight.  Undeniable. mathematical proof that the recipient is the rightful owner.

Currency is just the first app!