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Practical implementation of Blockchain as a service

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Most people did not know anything about blockchain until they were acquainted by the unprecedented leaps in the value of bitcoin in the latter half of 2017. Blockchain forms the foundation of Bitcoin and all other cryptocurrencies. Now, innovators are exploring the uses of blockchain in various sectors and whether it is possible to effectively implement blockchain as a service. They are mainly focusing on developing brand loyalty programs to encourage customer loyalty retention through the use of blockchain.

Blockchain technology explained -What is blockchain technology?


Blockchain is the new technology behind fast and tamper-proof transactions. It uses unique encrypted tokens to save transaction information. These sequences are impossible to replicate and hence, tamper-proof. This prevents misuse and eliminates possibilities of a fraud, as each transaction is clearly visible, can be easily recalled and verified. This is blockchain technology explained in simple words.

Blockchain as a service

To use blockchain as a service in the loyalty programs sector would mean to implement a universal blockchain platform. This type of platform would enable the customers to actually use all the loyalty points earned in a meaningful way. A blockchain fuelled loyalty points program has several benefits; but before we get into that let us talk a look at the current situation of loyalty programs.

Present working of loyalty programs


Today, almost all brands offer some sort of return gift when you buy something from them. They could be discounts on future purchases, possible or an assured cashback to incentivize customer spending. More often than not, the reward is in the form of points. These points can later be redeemed at the same outlet for a discount in the future.

Let us illustrate with an example

If a customer knows that his eighth coffee at a store would be free, he will buy coffee everyday so he can be eligible for that free coffee. However, these points are non-transferable between brands. This, means for a customer who uses different brands, they can become worthless.

Another way to explain the concept would be


A person who looks for the cheapest flight every time he needs to travel could end up buying tickets from different airlines like American Airlines for their loyalty programs on different occasions. He will have few miles/points in each of his wallets. This keeps him from availing any kind of meaningful offer even if he used services more often than an average customer. The objective of points is to improve customer loyalty retention and it is defeated when their management becomes a hassle for the user or the points do not seem like reward.

The blockchain solution

Blockchain can remodel all the customer loyalty programs in the market by providing a universal platform to issue, redeem and exchange earned rewards. Blockchain saves information in the form of tokens. Whenever a transaction occurs, it is assigned a token. The loyalty points involved are added, redeemed or exchanged in the consumer’s digital wallet. The new balance is updated across the network in minutes.

Moreover, blockchain has no need for centralized databases or middlemen to facilitate the process. This gives everyone on the platform a fair chance as it prevents the entire process from being commoditized. The customers also get to earn reward points at different stores and use them in completely opposite sectors if they so desire.

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Benefits of using blockchain as a service


Using blockchain as a service for customer loyalty programs can create disruption in the market. It can replace old ineffective systems and make the entire process much faster and transparent. It will also eliminate intermediaries. All sizes of companies stand to benefit from the new loyalty programs as more and more customers will find joy in spending more. This will be reflected as real dollars in the service providers’ pocket. Adopting blockchain-based loyalty programs have a number of benefits such as:

Customer satisfaction:

Having a blockchain fuelled loyalty program will keep your customers happy. They can cash in on their earned rewards anywhere without hassle. This makes your customer, your brand ambassador. They are free to choose where they want to earn points from and as such will look for brands they love. This improves customer retention and overall satisfaction. To top this, customer data is not involved when transactions occur on the platform. This makes them feel safe knowing their data cannot be misused.

Real time transactions:


Transactions performed will be for issuance, redemption or exchange of loyalty points. Blockchain is capable of updating new balances on the accounts within a matter of seconds. The time required may vary for different cryptocurrencies but all of these currencies are much faster than the present  infrastructure.


Blockchain uses easily traceable tokens. When you prefer blockchain as a service for loyalty points, every single transaction that ever happened can be verified and is irreversible at the same time. This prevents malicious activities like reusing credits, abuse, fraud etc.

Reducing costs:


It has an upfront cost that may be a little high for some small businesses but it offers excellent value for money. Over time, the benefits of blockchain as a service will be visible on all levels. It will lead to reduced costs of system management, prevention of fraud and an overall secure system.

Higher revenue:

In time, the use of a universal platform will translate into huge revenue hikes for service providers as more and more customers find real, tangible value in spending on their brands.

Customer insights:

A universal platform will help sellers track spending habits of their customers. This will enable them to offer customers tailored deals and retain as well as build their business.

Customer retention can make or break brands


Having a loyalty program is a must in these times of cutthroat competition. Blockchain based loyalty programs have the power to change everything we know about customer retention. It can totally revolutionize how companies form engaging relationships with their customers. This gives the business an edge over its competitors, especially if these technologies are applied while they are still in their nascent phase. From a customer perspective too, the model looks promising.  It also helps to improve the corporate branding of the company.


This article is aimed at giving information about what is blockchain technology and hopefully,it has done its job. It also gives information on the possibility and benefits of using blockchain as a service; and how it is the need of the hour to streamline loyalty programs. It is true that blockchain implementation has an upfront cost but overtime, customer satisfaction and retention will compensate for it.

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