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How can blockchain reshape the telecommunications industry in the 800 billion dollar gold mine market?

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Although it may take another five to ten years for the popularity of the Web3 world, blockchain technology is indeed reshaping the traditional internet and telecommunications industries.

Original title: "How does blockchain reshape the telecommunications industry in the 800 billion dollar market?".

Original source: R3PO.

Conflux Token CFX is one of the best-performing tokens this year, with a nearly 20-fold increase since January, and even with recent declines, it has still seen over a 16-fold increase.

One of the main drivers pushing it up is the launch of blockchain-supported BSIM cards by Conflux and China Telecom. Recently, Conflux revealed details of its collaboration with China Telecom in an interview with CoinDesk, stating that the storage capacity and computing power of the BSIM card is more than 10 times that of a traditional SIM card. Users who switch to the BSIM card will be able to securely store and transfer digital assets, as well as showcase their assets in various applications.

It is reported that Conflux is developing a mobile application that will encapsulate access to BSIM cards, helping users manage digital assets according to their traditional habits without the need to understand encryption keys. The card is considered a unique gateway for users to interact with cryptocurrency-based applications, and SIM card users can upgrade to become Web3 users by upgrading their BSIM cards.

Nowadays, the application of blockchain in the telecommunications industry is becoming more and more widespread, and the collaboration between Conflux and China Telecom is just one of them. Blockchain technology will improve the efficiency and transparency of telecommunications operations in terms of security, data management, and payments, thereby saving a lot of costs and improving user experience. This article takes stock of current practical applications of blockchain in the telecommunications industry and explores how blockchain is changing the telecommunications industry.

800 billion dollar track, what are the innovative companies currently?

The market research and consulting service provider Fact.MR reports that by 2033, the global value of blockchain in the telecommunications market will reach $80 billion. It is predicted that from 2023 to 2033, the market will soar at a compound annual growth rate of 74.8%. Currently, there are some innovative projects in the telecommunications + blockchain market, which R3PO has taken stock of.

1、Conflux

Conflux is currently the only legal public chain in China, and will collaborate with China Telecom to develop a blockchain-based SIM card. The two parties will launch the first BSIM pilot project in Hong Kong later this year, and may conduct pilots in other cities such as Shanghai. The BSIM card will manage and store users' public and private keys, and perform digital signatures in a way that the private key does not exit the card. The BSIM card will allow users to securely store digital assets, easily transfer digital assets, and display their assets in various applications.

BSIM card will provide users with dedicated storage space, which is 10 to 20 times larger than traditional SIM cards, and the computing power is increased by dozens of times. The BSIM card is based on blockchain technology and aims to reduce the threshold for users to enter Web3 and the metaverse, making it possible for mobile phones to access the virtual world in a more secure, efficient, and compliant manner.

2、Telcoin

Telcoin is the first cryptocurrency to leverage the synergy between mobile communication and blockchain technology, dedicated to connecting mobile networks worldwide and enabling seamless conversion between telecom mobile money, prepaid credit, and postpaid billing platforms with its fast and borderless features.

Telcoin is distributed exclusively by mobile network providers affiliated with GSMA (Global System for Mobile Communications Association). Users will fully integrate their wallets into the Telcoin API, which will record their phone number, public key, and a private encryption key.

3、Syntropy

Syntropy's Distributed Autonomous Routing Protocol (DARP) forms the backbone of the Syntropy network, connecting all nodes, computers, and servers to a decentralized global network with built-in encryption and intelligent routing capabilities. Its function is similar to Waze (GPS application), helping to guide internet traffic to alternative paths to reach its destination, thereby improving internet speed and reliability.

4、Wayru

Wayru has developed a new globally compatible hotspot network and a hardware device (called Genesis) for individuals to share their internet connection in exchange for cryptocurrency. Anyone can purchase their Hotspot Pool Token to support the network.

Wayru's sharing economy model provides a basic framework for communities, entrepreneurs, and small businesses to independently build, own, and operate internet networks. The network will focus on reducing the operating costs of centralized internet by using Algorand's blockchain to process telecommunications and other transactions on the network. Of the revenue generated from the network, approximately $40 out of every $100 will be used to maintain the network, with the remaining $60 distributed between Wayru and Pool Token holders. Two-thirds of the distribution will go to the holders, while Wayru will receive one-third.

5、EMG

EMG is a Web3 company under Emeldi Group, which has developed a set of Web3 applications to meet the telecommunications needs of impoverished communities. One of these applications will focus on improving and simplifying the process for customers to verify their identity in order to obtain telecommunications services. Currently, the traditional process requires new customers to personally visit a physical store of a mobile operator, provide their ID and sign dozens of pages of paper contracts. EMG's application aims to integrate smart contracts and achieve a one-click identity verification process.

In addition, EMG is committed to creating a Super App that will combine a variety of services, including traditional services such as taxi or car rental, ordering food, video calls, and messaging, as well as blockchain-based payment options.

6、PKTPal

PKT is an open-source community project that monetizes home internet connections by allowing anyone to become a local community ISP and earn passive income from their internet connection. PKT has released the open-source PacketCrypt algorithm and claims that PacketCrypt is the first bandwidth proof-of-work algorithm ever. Its product, "PKT Cube," is a technology that connects to the PKT blockchain and is the first-layer protocol supported by PacketCrypt. PKT Cube enables anyone in the world to monetize their unused internet bandwidth and compensate users with PKT cash every 60 seconds for bandwidth that they have paid for but are currently wasting.

Telecommunications industry urgently needs to break through bandwidth bottleneck

The telecommunications industry is facing a challenge of rapidly increasing internet bandwidth demand. Data shows that in recent years, bandwidth demand has more than doubled due to the impact of the pandemic and technological trends. With VR/AR applications, blockchain, and other technologies becoming mainstream, this growth is expected to continue. However, the current infrastructure is limited by decades-old protocols and cannot keep up with the explosive demand. Currently, every telecommunications company and internet service provider (ISP) must face two major problems.

1. Bandwidth demand increase leads to network congestion

On the one hand, ISPs are struggling to keep up with the ever-increasing consumer demand. It is not uncommon to experience delays or service interruptions, also known as lag. For example:

In 2020, YouTube service experienced a global outage.

The Organization for Economic Cooperation and Development (OECD) has warned that since the start of the COVID-19 crisis, there has been a sharp increase in demand for broadband communication services. Compared to before the crisis, some operators have seen a 60% increase in internet traffic.

In 2021, a service interruption caused websites such as Amazon, Twitter, and Twitch to crash.

Every weekday evening from 7pm to 11pm, network congestion is slowing down the speed of data-intensive applications and services.

In the future, bandwidth demand will continue to grow rapidly. According to Huawei's prediction, the global average monthly wireless cellular network traffic per person will increase by 40 times by 2030, reaching 600GB. The main reasons for this growth are: first, virtual reality games and augmented reality applications use 2 to 3 times more traffic than ordinary games and applications; second, online apps will continue to experience huge growth; and third, more and more remote areas will be connected to the Internet. All of these will drive consumer demand for bandwidth growth, while Internet service providers are struggling to keep up with this growth. The International Telecommunication Union (ITU) has revealed that by 2030, about $428 billion will be needed to connect 3 billion people who are not yet connected to the Internet.

No wonder Mark Zuckerberg, CEO of the American tech giant Meta, has publicly stated that it may take 5 to 10 years to provide users with a seamless Metaverse experience.

2、70% bandwidth unused

The telecommunications companies have invested a lot of resources in building their servers and data centers, connecting homes around the world with fiber optics, and taking care of these assets around the clock. However, 70% of the existing infrastructure is not being used.

So, why would congestion occur if a large amount of bandwidth is not being used? This is precisely the limitation of the current infrastructure construction method for the internet. For example:

There is only one road from the suburbs to the city center. During peak hours, this road experiences traffic congestion. However, unless we want to waste resources, it is impossible to widen the road enough to allow all these cars to pass at once. But during other times of the day, there is almost no traffic on this road.

The same problem also arises with internet bandwidth.

Monetizing bandwidth: How can blockchain solve network congestion issues?

So, can blockchain solve the problems of bandwidth waste and network congestion?

Telecom companies can use blockchain technology to create decentralized networks, allowing users to share their excess bandwidth with others in exchange for cryptocurrency or other rewards. This can also help reduce network congestion and improve overall network performance. Perhaps in the future, anyone can monetize unused internet bandwidth using blockchain technology to earn passive income.

In addition, blockchain technology will also improve the current situation of the telecommunications industry in the following areas.

1. Fraud Prevention

Fraud detection is a fundamental issue in the field of communication service providers. According to GSMA (Global System for Mobile Communications Association), the industry's annual fraud cost exceeds $38 billion. The use of blockchain technology can effectively improve this problem.

Take roaming scenarios as an example. When making a call from another country, all generated data must be verified between the originating country's operator and the destination country's operator. However, in billing, due to the lack of a universal database, there is a risk of fraud caused by information asymmetry. If this information is stored on the blockchain, this problem will be solved.

2、Billing Process Improvement

The current roaming settlement and compensation system is very slow, expensive, and requires a lot of effort. In this case, using "smart contracts" deployed on a blockchain network will allow all parties to reach agreements in real-time and may use the Token system to make payments between them.

3、Let more people access the Internet

According to a recent report from the International Telecommunication Union (ITU) of the United Nations, nearly 3 billion people worldwide have never used the internet, accounting for about 37% of the global population. The UN agency also stated that over 12% of the population cannot access the internet.

Blockchain can be used to create digital identity systems, allowing people to access mobile data and telecommunications services without traditional forms of identification. Additionally, with smart contracts, telecommunications companies can create an identity recognition and file system without requiring customers to sign a large number of documents in the office.

Conclusion

Although the popularity of the Web3 world may still take five to ten years, blockchain technology is indeed reshaping the traditional internet and telecommunications industries. Telecommunications companies in the Web2 era rely on serving users through SIM cards, subscriptions, and direct billing, but these will be challenged in the Web3 world.

For telecommunications operators, it is necessary to completely rethink how to operate in a more open Web3 world and decentralized infrastructure. They also need to consider how to provide value in a world where content, data, ID, and property rights are mainly owned and controlled by users, as well as how to market, distribute, and operate their own services. We also look forward to seeing how blockchain technology can create new growth and innovation opportunities for the telecommunications industry.