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How blockchain is bringing gamification to every industry

Tiny people with gamepad playing video games on console. Male and female gamers gaming flat vector illustration. Entertainment, gamification concept for banner, website design or landing web page

Distributed ledger technology is not the most user friendly or easy to grasp. Blockchain gamification is one way to bridge this user gap. The gaming sector has plenty in store to enrich other industries on how to keep customers engaged. According to a recent study by Newzoo, the global gaming industry has over two billion gamers and is worth about $150 billion. Video game income has even surpassed other forms of entertainment, like movies and music, according to the study. The most famous pieces of art can create sales in millions of units and can sustain numerous concurrent users. 

Various industries are embracing gamification or the use of gaming and game design techniques to engage their users better. Marketing departments are now using gamification in their marketing activities to reduce customer churn. Instead of just providing coupons, renewable points, and discounts, businesses are now spicing up their marketing campaigns using cutting-edge technologies to realize engaging risk and reward mechanisms. Starbucks, for instance, has introduced a loyalty program that enables customers to receive better rewards the more they spend. Besides, the company has also deployed multiple tech-based strategies over the years, like mobile apps, QR codes, and segmented reality to engage their customers. 

The blockchain tech power to offer secure record-keeping and enable transactions through cryptocurrencies makes it suitable for such applications. Different services are already establishing new channels to exploit the potential of blockchain-based solutions and possibilities of gamification. Form of gamification may vary. Projects like Sandblock, for instance, use smart contracts to facilitate their loyalty program campaigns. The digital and decentralized games such as CryptoKitties also demonstrate how crypto tokens can represent ownership of digital assets effectively. These use cases also demonstrate how blockchain has brought back fairness and trust in the gaming industry. In this article, we shall see how blockchain tech is bringing the elements of gamification  not only to typical gaming space, but basically to every sector through loyalty programs, digital ownership, and trustworthy and fair practices.  

Loyalty programs for e-commerce

Critics often complain that loyalty programs concentrate on just maximizing profits for businesses. Participants are incentivized inadequately for their participation by loyalty points campaigns that contain biased rules. Though it is acceptable for a business only to carry out sustainable loyalty programs, they are still supposed to offer customers with satisfactory reward rates. 

The problems begin with outlining business objectives, considering that loyalty campaigns can create many benefits. The marketers then continue with designing the reward system, the composition of reward and producing incentives good enough to cause behavior change but mean to the point that they grind down margins. Besides, there are puzzles of customer psychology to consider, which can make two incentives of equal value stir different levels of consumption.  

Using blockchain for business that needs relevant loyalty programs can eliminate such unfair dealings through the transparency it delivers. Smart contracts can be applied to monitor the mechanisms of these campaigns. Through the openness of smart contracts, it is possible to notice if firms are providing irrational terms and conditions. On the other hand in case of public blockchain space, some unprincipled members may also attempt to participate and abuse the system. Determined scammers can also alter poorly designed gaming rules, and therefore, having transparent records shows the participants who are trying to misbehave clearly. 

Launching a successful blockchain loyalty program starts with the objectives of the campaign. Marketers can only engineer the right strategies and evaluate whether they are running their campaigns well only if they have set clear goals. In other words, true benefits of blockchain come to truly valuable and well planned loyalty programs.

The use of digital currencies and blockchain-based feature will give clients more flexibility with their loyalty points. Many loyalty programs restrict these points for specific purposes and redemption with their respective businesses. Contrary, cryptocurrencies are mutually interchangeable and can be transacted with other tokens or fiat money. If companies are not willing to create a universal digital loyalty token with other businesses, then they can settle on the use of interchangeable tokens. A study by Kaleido Insights shows that the interchangeability of these digital reward tokens is beneficial to both the companies running loyalty programs and the participants.  

The treatment of blockchain-based digital tokens as currency makes them far more flexible and interchangeable compared to loyalty points. Participants can easily exchange such a digital token with other cryptocurrencies or fiat money. That means real financial rewards. Such flexibility gives customers more choice on how they should use rewards, increasing the value of the loyalty campaign, and encouraging customers to shop more from the brand. Digital reward tokens can go even be used for such digital transactions as buying other products and paying for services from other companies because cryptocurrencies have value beyond the brand that issued them. The eventual result is a loyalty coin economy, which, when used more, increases in value. 

Besides, blockchain gamification boosts the outcomes of loyalty programs and minimizes expenses including lowering of the transaction costs. With blockchain technology, a business can provide loyalty campaigns that are transparent and trusted by participants. The transparency brought by blockchain solutions is essential in loyalty programs. 

Blockchain technology will also bring a more streamlined experience in loyalty campaigns. When businesses carry out over one loyalty campaign, it can be challenging to manage both the company and the clients. Lack of a streamlined client loyalty campaign causes missed opportunities, wasted points, and frustration. 

Decentralized systems

Forbes explored the possibility of using a blockchain-based method using a single cryptocurrency, like bitcoin, across several brands or businesses. This decentralized finance method makes the loyalty campaign easier to run and track, saving time, and adding more value to the participants. 

A decentralized network will further ensure that participants enjoy more flexibility and choice, which inspires them to spend more. The method is best suited for bigger businesses, multinationals (such as the Banana Republic, Gap, and Old Navy), or businesses that are willing to partner with those from a complementing sector (like an airline firm, and a hotel chain).

A decentralized approach represents the future and present of digital transformation to some customer loyalty campaigns. For instance, Singapore Airlines and Delta Airlines have launched a blockchain loyalty campaign, substituting their air miles with digital tokens that used for retail purposes.    

Digital ownership through blockchain gamification

Rewards from certain games and gamified campaigns create virtual assets. For video games, for example, items can be acquired by successfully finishing assignments or by conquering rivals. These digital items can be made accessible to a participant or tied to particular accounts. Nevertheless, “ownership” is determined mostly by developers’ rules. 

Because virtual items carry some form of utility in the games, most people are willing to pay for these items. The value of digital items is around $15 billion. Trading of these items has become a significant activity for many developers. Most of them forbid the exchange of virtual items for cryptocurrencies as they term it as a violation of their terms of service. 

Gamification features and blockchain technology are the main ingredients for marketplaces for the trading of virtual assets. This way, blockchain can enable virtual ownership.

Solutions that act as secure markets for trading digital items can enhance the virtual item industry and connect it with other sectors. Blockchain solutions can boost the market capitalization of this industry. 

Blockchain is redefining the ownership of virtual items and transform them into a kind of financial rewards for users. The technology is a means of creating distinctive identifiers for virtual items market. Developers and publishers hardly offer tools that would permit the safe and secure trade of virtual items in their marketplaces. These platforms employ blockchain and smart contracts that allow gamers to trade among themselves safely. 

Trustworthy and fair mechanisms

Gamification is all about engaging customers through new rules, risks, and reward systems. Unluckily, centralized authorities tend to come up with rules that are only beneficial to them. Blockchain technology compels businesses to design and follow the set rules and create equitable risk and reward mechanisms. Decentralized derivatives are some examples of this. CloseCross, one of Espeo’s clients is part of this trend. The use of cryptocurrencies even allows for gifts, like those from loyalty programs, to carry more financial utility for users. The concept of digital ownership also brings more value to customers’ rewards. Users can be confident that through such methods, all parties will benefit from gamified campaigns. 

According to a PwC survey, almost 70% of customers pull out from loyalty programs when it asks for personal details. This is logical, especially with the increasing cases of online identity theft. Blockchain can reduce such risks. Since anonymity is one of the primary features of digital currencies, participants might not have to provide their personal information. Or, if the need arises, blockchain can keep their details more secure.

Blockchain records are fully transparent and trackable, making it even hard for the execution of unauthorized transactions. The PwC study further established that more than 72% of loyalty campaigns are victims of scams and counterfeit sales to acquire loyalty points for purchases they never made. Using blockchain technology to customer loyalty campaigns would enable brands to track loyalty points in real-time and deliver incentives to their clients more effectively. 

Conclusion 

Blockchain gamification in other industries is possible with applications designed to borrow aspects behind the success of the gaming industry. With blockchain technology, other areas can exploit the winning traits of the gaming sector. As blockchain technology continues to disrupt every element of business and daily life, gamification is ripe to follow suit. Carrying out faster, smarter, and more flexible loyalty campaigns can create and retain happy customers. 

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How enterprise blockchain applications can improve your firm’s internal processes

How enterprise blockchain applications can improve your firm’s internal processes

Enterprise Blockchain Applications – fill in the form and download your free copy.

How enterprise blockchain applications can improve your firm’s internal processes

Enterprise blockchain technology is a relatively new tool and companies are still working out ways to put its unique features to good use.

While there are plenty of dubious claims for what enterprise blockchains can do, getting up-to-date advice on how it will fit exactly is still difficult to find. Find out more in this e-book and learn if a blockchain is suitable for your business.

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How blockchain can drive environmental sustainability accounting

People with environmental sustainability concept

Environmental sustainability has been a challenging field for management experts for a long time. This is particularly true for accounting professionals seeking to bring value and more transparent insights to customers. Multiple regulatory strategies give rise to this problem. That said, with the number of exchange-traded funds (ETFs) lined up for sustainability and environmental, social and governance (ESG) issues are now swelling and with billions invested in sustainability programs.

Despite this increasing investor and market interest, nevertheless, sustainability accounting is something of a work in progress. Blockchain technology is already having a significant influence on traditional accounting functionality, but the link between sustainability, blockchain, and accounting deserves further analysis.

In this article, I will discuss how blockchain technology drives sustainable accounting through sustainability reporting, operating in an environmentally sustainable way, transforming carbon and other environmental markets, creating new sources for sustainable finance, reducing transactional complexity, incentivizing circular economies, and connecting the bottom line to everything else going on in a company. But before that, let us briefly look at how sustainability goes beyond risk mitigation.  

Sustainability is more than risk mitigation

While firms have long-established the business risks brought by issues such as scarcity of raw materials, air and water pollution, and climate change, and the essence of minimizing those risks, companies are only now starting to understand that sustainability is more than risk mitigation. 

Done well, sustainability-driven programs- improving energy efficiency, rethinking supply chains, and transforming business models- have the potential to drive competitive advantage, innovation, and revenue growth.

But few companies realize the full extent of these benefits today: a majority of companies all over the world need a better understanding of how sustainability can be translated into various types of business value, and how they can effectively evaluate the return on sustainability-driven initiatives before they can achieve this potential. Only then will such companies establish the business model they require to accelerate and deepen the integration of sustainability into business strategy and operations. 

Research has shown that companies with integrated, organization-wide sustainability models have better borrowing and revenue outcomes than their peers. These firms also consider revenue growth as the primary driver of their investment in sustainability. 

Blockchain technology can have an intense effect on development-based investment, not only by revolutionizing international payment systems but also via improvements to access to finance, supply chain management, and digital identities. This influence goes beyond traditional financial services and business processes and extends to other essential sectors, like agriculture, healthcare, and transportation.   

What is your potential blockchain ROI?

How can blockchain technology create new revenue opportunities for the accounting and financial service workforce? Precisely, how can specialists connect the seemingly distinct forces in sustainability, increasing accounting interest in this industry, and blockchain technology itself? 

Blockchain transparency will drive better reporting

One of the greatest and often quoted problems with sustainability accounting is that businesses do not always reveal non-financial information with the same energy as financial information. This can be even more noticeable and significant concerning sustainability information, which drives bottom-line performance, and exposes the company to significant risks if it ignores defilements.   

Blockchain technology fundamentally requires that all participants of the network communicate in an almost natural and transparent way. This implies that information concerning sustainability projects, not forgetting those with a financial orientation, like GE’s Ecomagination and those with an operational angle, like Coca-Cola’s Water Stewardship program, can be revealed, eliminating some of the dirtiness often associated with sustainability.

Blockchain’s data transparency not only facilitates collaboration between business parties but also fosters trust between businesses and consumers. For instance, the food and beverage industry faces rigorous compliance regulations that encompass everything from proper farming, processing, packaging, transportation, and storage of food- all meant to prevent foodborne diseases and strengthen the increasingly international food system.  

Standards built on a distributed ledger

There are several models currently available in the market that try to link sustainability initiatives and financial outcomes. Integrated accounting, other multiple models, put in place by accounting associations, and business-specific projects, all exist. The issue is not the lack of standards, but rather the absence of a consensus as to what should comprise measures. 

Smart contracts, in and of themselves, symbolize a perfect initial step towards creating standard and implementable protocols for executing businesses. Accounting for sustainability is not an exception but a priority. 

If the information is uniform, and leveraging on the first point, deliberated transparently, accounting practitioners can enjoy the detailed conversations needed to develop and improve full sustainability accounting standards. Importantly, such standards can be used across other areas of the economy, compared to the restricted protocols.

Transforming carbon and other environmental markets

Blockchain technology can provide cryptographic tokens with a tradable value to improve existing market platforms for carbon (or other substances) and create new opportunities for carbon credit transactions. 

A good case study is China’s Carbon Credit Management Platform, undertaken by Energy Blockchain Labs and IBM. The goal is that with the introduction of smart contracts, the transparency, auditability, and credibility of the Chinese carbon market will improve. In the future, blockchain could support an international carbon trading market for individuals, households, and companies.  

New Sources for Sustainable Finance

Blockchain-based finance platforms could potentially revolutionize access to capital and open up a whole new class of potential investors for projects to tackle environmental problems, from investment in green infrastructure projects to facilitating blended finance or charitable donations for developing nations. More broadly, there is the potential for blockchain to bring a system change from shareholder to stakeholder value and from traditional finance capital to accounting for social, environmental, and financial capital. 

Sustainability accounting is a revenue opportunity

This is probably the most exciting point for accounting experts desiring to create a business case about sustainability and technology. At the center of the growing technological integration, in the form of artificial intelligence (AI), blockchain technology and automation, financial services companies, and accounting businesses, in particular, are always looking for extra revenue lines. 

The increasing interest in sustainability, besides indicating a reporting change, is also a chance for forward-thinking businesses. Clients and customers, both current and potential, are going to be held accountable by various stakeholder groups interested in how the company is performing, and how the company is getting those outcomes. Professionals with the ability to connect these dots, between blockchain, reporting, and sustainability, are going to be well-positioned to benefit from this prospect. 

Blockchain technology, at least in the finance and accounting industry, is often regarded in equal measures of excitement and anxiety as it further hastens and magnifies the trends toward automation and eradication of traditional accounting roles. That said, only thinking about the potential of blockchain from the perspective of enhancing attest assets and tax roles overlooks the several opportunities blockchain can help create. 

Reducing transactional complexity

Financial transactions involving massive, cross-border sustainable development initiatives are becoming increasingly more complex, causing backlogs and delays. Blockchain-based platforms (crypto exchanges) and processes can handle multiple transactions more effectively. 

This implies that sustainable projects and other climate-related activities will be more appealing to investors.

According to a report from the World Economic Forum, “Blockchain-based platforms and processes can seamlessly handle a wide range of stakeholders working in various capacities on different projects globally. It will enhance efficiency, minimizing transaction and make climate-related, infrastructure, and other sustainable initiates more attractive for private investments.”  

Incentivizing circular economies 

Blockchain could completely change the way materials and natural resources are valued, handled, and traded through incentivizing people and companies to establish financial value from things that are currently wasted, discarded, or treated as economically invaluable. This could drive widespread behavior change and help achieve a truly circular economy. For instance, Plastic Bank has come up with a social enterprise that offers financial rewards in the form of cryptographic tokens in exchange for depositing collected ocean recyclable wastes. 

Conclusion 

Sustainability reporting, functioning in an environmentally sustainable way, transforming carbon and other environmental markets, creating new sources for sustainable finance, reducing transactional complexity, incentivizing circular economies, and linking the bottom line to everything else going on in the firm are trends likely to grow only more significant moving forward. Blockchain technology, already accelerating change in the accounting and finance sectors, can also open the doors to new opportunities for people and businesses eager to embrace these changes.

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Benefits of blockchain in emerging markets

JAKARTA - Indonesia. March 12, 2018: Aerial photo of iconic BNI 46 Tower with located in South Jakarta Central Business District,

Blockchain in emerging markets promises to drive down to the cost of remittances and trade finance, improving financial inclusion for many of the world’s nearly two billion people currently without a bank account.

One thing that categorizes developing countries is inadequate access to banking. Individuals and small businesses would like greater access to financial services currently unavailable trough traditional finance. High levels of mobile coverage and new disruptive payment apps such as Bitpesa offer new solutions.

Blockchain technology is a digital, distributed, immutable transaction ledger that eliminates the need for intermediaries. By doing so, it provides several opportunities for cost savings while opening new market segments for existing financial institutions and new players alike. 

While developed markets experience exponential growth and advancements, the chances of emerging markets competing fairly with them on a global scale seem bleak sometimes. Nevertheless, the introduction of blockchain in emerging markets has reopened the prospects of a revival in these nations. Some of blockchain’s use cases can improve payments in developing countries by reducing remittance costs, enhancing financial inclusion, and eliminating corruption loopholes. 

But before that, let us briefly discuss how blockchain technology drives efficiency in existing businesses and how it creates new markets in developing countries.   

How blockchain drives efficiency in existing businesses 

Much of the attention surrounding blockchain technology is from developed countries, especially in the payment sector, where the technology will likely have a significant impact because of its power to minimize payment costs. This has led some to reassess micropayments as a viable model, for example.

As a result, distributed ledger technology is heavily linked with financial institutions that deal with process efficiency services. These companies have started using blockchain-based solutions to solve specific issues or improvements in their business models, such as data reconciliation, supply chain tracking, clearing, and internal settlements. 

Meanwhile, some international banks and financial intermediaries have partnered with blockchain firms to explore applications that apply to their business models and learn how this revolutionary invention may improve their legacy infrastructure. They are also considering consortia to leverage development and potential transition expenses and to raise the standard of blockchain technology.   

Many corporate projects so far have embraced private blockchains, such as the Linux Foundation’s Hyperledger Fabric, as companies try to weigh the pros and cons of the revolutionary technology and retain the integrity of their existing business models. 

The Post-Trade Distributed Ledger Group brings together international banks, custodians, central security depositories, and central banks from all over the world to share information and concepts on how blockchain technology can positively influence the post-trade landscape. 

Creation of new markets

Blockchain is a disruptive technology that can re-engineer economic models and facilitate the creation of markets and products that were formerly nonexistent or unproductive. Most of these new market prospects are related first to its offer as an alternative to fiat currency, solving issues of currency inflation and political instability. Second, its power to achieve a digital identity in a fast and cost-effective way improves financial inclusion of previously underserved markets. 

Blockchain technology also creates opportunities for startups and established businesses form non-financial sectors with a strong consumer base, like telecommunications or e-commerce establishments. Such players are rapidly innovating to create new business models and services, and are transforming the value chain landscape and challenging banks.  

These initiatives have mostly originated from established markets, targeting developing countries directly or indirectly. Though they are not entirely based in developing countries, the best-funded ones are from developed markets for now.  

A considerable chunk of the total venture capital has been invested in the digital wallet and capital market service segment. Regardless of their source, these startups are targeting the economic activities of emerging markets, such as remittances and trade finance. 

This is an exceptional phenomenon, implying that developing countries can be reasonable testing grounds for new ventures, where high demand for financial inclusion and relative inadequacy of infrastructure can speed up the use of new technologies — particularly blockchain. The prospect of outspreading banking services in such markets is high, with two billion adults lacking access to financial and credit services globally. Cross-border payments and remittances are a case in point: it has a market value of over $4 trillion with transaction charges that range from 5% to 30%. 

How blockchain in emerging markets can improve payments

Minimizing Remittance Costs

Citizens of developing nations who have migrated to developed countries for work drive the international remittance system. Time and again, these individuals send money to their families and friends back home using financial intermediaries such as Western Union, PayPal, MoneyGram, Payoneer, etc. These intermediaries impose high transaction charges. 

According to the World Bank’s latest Migration and Development Brief, remittances to developing countries hit a record high in 2018. The recorded remittance to emerging markets in 2018 was $529 billion, an increase of 9.6% from 2017. The brief also revealed that the global remittance fee for Sub-Saharan African countries was an average of $20 per $200, which was the highest in the world. 

With the emergence of cryptocurrencies, the cost of remittances can be considerably lower. While Bitcoin remains the largest cryptocurrency by trading volume, it can be difficult and unpredictable to use for remittances. Stellar meanwhile offers faster transactions and low fees making it ideal for remittance systems.

Already, there are several platforms using blockchain in emerging markets in Africa and Southeast Asia that support cross-border and peer-to-peer payment solutions, like BitPesa. 

BitPesa is a blockchain firm offering foreign exchange and business-to-business crypto-based payment services in Kenya and many parts of East and Central Africa. The startup has managed to leverage the existing financial models by partnering with the M-Pesa mobile money network, a subsidiary of Telecom Company Safaricom and provider of mobile payments and significant incumbent player (almost three-quarters of Kenya’s adult population have an M-Pesa wallet). 

Improving financial inclusion

Low financial inclusion is a significant problem in developing countries. According to the World Bank, there are over two billion people globally without a bank account, and a big percentage of this number comes from developing countries. In nations like Pakistan, Chad, Somali, Burundi, Niger, Yemen, and Cameroon, less than 15% of the adult population has access to banking services. Even those with bank accounts lack access to premium banking services, so they qualify as unbanked. The lack of access to banking services prevents them from partaking in global commerce.  

With crypto services like BitPesa in Kenya, BitSpark in Hong Kong, OkCoin in China, OkLink in India, Rebit, and Coin.ph in the Philippines, billions of the unbanked population have access to financial services through cryptocurrencies. These startups are providing crypto banking services via mobile phone applications. The telecommunication industry has been able to attain a higher market penetration compared to the banking industry. 

These blockchain-based companies are capturing the existing widespread use of telecoms to deliver their services to unbanked and underbanked people. The eventual result is better financial inclusion. 

Besides, there is also an added advantage of empowering small and medium-scale businesses. Local merchants can tap into global trade. Financial institutions in developing countries are reluctant to offer loans for small-scale enterprises even when appropriate collaterals are in place.

With blockchain, platforms like BitPesa and OkLink can provide crypto-backed loans to small and medium scale businesses. This will go a long way in getting them started in foreign trade, which is an integral part of national commerce. 

Another feature of financial inclusion that many developing countries face is the lack of global payment systems. International commerce is mainly denominated in US dollars, and it calls for specialized payment and documentation systems. This is an obstacle for many merchants in these countries as they lack access to foreign exchange and the means to send and receive money in foreign currency. 

BitPesa is championing the provision of solutions to these issues across Africa. In Indonesia, TenX has a digital wallet that enables users to receive Visa card payments. 

Eliminate corruption loopholes

Corruption is one of the significant issues facing developing countries. The absence of economic democratization and corrupt officials has created a framework that has left the mutual prosperity of these nations at the mercy of a few individuals. The middle-class has shrunk, and over 70% of the people survive below the poverty level.  

In emerging markets, misappropriation of government funds by corrupt officials is a significant issue. Refusal to adhere to project contracting best practices leaves state projects to be run by groups that channel the allocated funds to their pockets. The use of digital currencies, particularly those embracing smart contracts, will enable a more transparent contract system. With blockchain records being accessible to everybody, citizens will be able to track the way their funds are being used. 

Conclusion

Blockchain in emerging markets will lead to lower remittance costs, better financial inclusion, and put an end to corruption loopholes. Driven by high demand, especially in catering for the needs of financially excluded markets, and a hedging plan through cryptocurrencies in situations of currency inflation and political instability, blockchain technology appears ripe for adoption. It will undoubtedly be interesting to see to what extent emerging markets apply blockchain solutions to the problems facing them.

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