Blockchain: Beyond Financial Data

AOTMP interviewed Chris Simandl, Owner of TEMteam, Co-founder of Peertech, and COO at Air to provide expert analysis of blockchain and what this new technology could mean for the future of the Telecom industry. Simandl has a vast background in the TEM world and provided his expert insight on the questions below.

Blockchain was originally created to manage financial data; how can the concept of blockchain technology be defined within the parameters of a telecom expense management (TEM) environment?

Blockchain was created as an infrastructure solution, not just to manage data, and that blockchain is actually the underlying infrastructure used for bitcoin. To explain, it entails a financial transactional management and a value management system, not just financial data. This might be why people get these concepts confused when talking about FinTech, InsurTech, RegTech, MedTech, etc. Using blockchain means mitigating the back-office functionalities through the usage of a new technology called Distributed Ledger Tech, DLT. With DLT’s each person (or entity) holds a copy of their own “general ledger”. For example, if someone owes another one five dollars, they would directly transfer the value from their ledger to the receiver’s ledger (like bitcoin). This transfer is represented by simultaneous negative five on the sender’s ledger and a positive five on the receiver’s ledger. This is a straight person-to-person transaction using the blockchain without going through any intermediaries, clearing and back office processes used in banking environments. There are similar, back office inefficiencies in carriers billing processes (roaming settlement, inter-OPCO consolidation, etc.) that could benefit from blockchain
models.

“Similar to the banking world, telecom companies are very slow to adopt these infrastructures into their billing systems. Their billing and consolidation systems, as they stand today, are so complex that they don’t dare touch it. Telecom growth and development is rarely organic and more often acquisition/partnering-based. As such, a telecom acquiring (or partnering) with new technologies (quadruple-play, etc.) or new regions multiply their billing/back-office systems and their complexity rather than assimilating into a common back-office. The result is a consolidation, back-office billing system that looks like a “Rube Goldberg Machine” and if anyone touches it, all of the billing will go down” Chris Simandl

What other ways could blockchain help telecom management?
Blockchains are “Intranet-based infrastructures” by nature (similar to LANs/WANs &/or ERP systems, they function w/in a specific domain (some cases, like Bitcoin, those “Intranets” are global or just on the Internet)). A blockchain is “an “enabling infrastructure template” that requires a plethora of Applications, Processes, Solutions and layered-services to drive those templates.” This is important to understand as blockchains (stress plural) could be set up to help telecom management in many ways.

Within the telecom companies: apart from the internal, billing systems issues mentioned above, the telecom companies (upon understanding the possibilities) could develop blockchain-based “intranets” around all sorts of solution-sets that they currently offer (Roaming settlement, Digital micropayment transactions, Mobile money, M2M and automotive, Smart cities, Healthcare, etc.)

Exterior to the telecom companies: given the telecom companies track-record on billing (and the growth of the
TEM market), Blockchains or Distributed Ledger Technologies (DLT’s) “Inside a telecom company” may not be the best place to “entrust” such technology. All sorts of blockchains could be set up outside of the Telecom companies intranets to “enforce billing veracity”. Call logs and data usage statistics are available on virtually all phones today. So why not base the billing on the terminal’s usage records rather than poorly consolidated Call Data Records (CDR’s) in a Rube Goldberg Machine? Regulatory Authorities, TEM companies, or even social groups (like Lemonade) could build such “blockchain-based auditing” solutions.

Is blockchain different than a traditional mesh network?
Simandl says yes. Blockchain is an intranet-based infrastructure/design to share and distribute ledgers enabling transacting. A meshed network is simply a transport medium to carry any data. Blockchain is an infrastructure that rides on a mesh network, rather than being known as a standalone mesh network.

What kinds of blockchain validation methods are utilized in a telecom management environment?
Blocks on a Chain are immutable once they start their voyage/life down the chain. In the case of smart-contracts, etc., changes are not made to the chain. Transactional blocks (version 2.x, etc.) are “re-issued onto the chain”. There are two major security paradigms in place: the hash algorithms going to each block and the second one is that the shared ledgers are in several places. To explain both of those security controls, let’s say you pass money on, or “value” in this case, if anyone were to try to hack or intercept the five-value we spoke about earlier in this article, they’d have to hack both your and my ledger’s (& hashes) at the same time. If they manage to change yours, it will fall back onto mine, and mine will not make sense anymore. So, what’s the recovery procedure? Simandl said that programmable and planned-for self-healing mechanisms will auto correct this as the chain literally constitutes an audit trail by its very nature.

Does the impact on processing speed and confidentiality make blockchain technology a poor fit for the healthcare telecom vertical?
Not at all, according to Simandl. It all depends on how the blockchain is set up. Blockchain does not underestimate the importance of identity, rather what is “on the blockchain” is the Patient-ID and referencing (like a “medical DNS”), not full-medical-record-data. The ability to cross-reference those ID’s with the patients pathologically rich-metadata is part of the efficiency of blockchains.

How does blockchain improve security for data by supporting both decentralization and the use of higher level encryption?
Apart from the two security paradigms mentioned above that work in harmony, the distributed, blockchain ledgers hold the equivalent of an “images Meta tag”. The “data payloads/containers” associated with that “blockchain tag” can also be encrypted as well as the hash algorithms protect each block in the chain and the literal impossibility of hacking multiple ledgers’ hashes simultaneously in a synchronous chain.

How is this technology merging with upcoming 5G rollout to streamline provisioning of access networks?
Simandl says 5G is the beginning of the end of the original, telecom business model (circuit-based pipes/plumbing and “fat minutes on the network”). The old, “Rate*distance*call-time” paradigms do not apply anymore; we’re now talking packets and nothing else (e.g., metering). Just observe the uptake of IP-based voice applications like Skype, Whatsapp, Facebook Messenger, Googletalk, etc. even on 4G. Imagine when phones are “always online”.

Even more interesting, look into the “Applications” setting of a Mobile GSM: “Phone” is nothing more than an application and is no longer within the OS Kernel. Just like dial-up-Internet, ADSL, and public-Wi-Fi, all telephony is destined to be simplified to monthly subscriptions for “all-you-can-eat”. Euro-net-neutrality is one example of this (no roaming surcharges, etc.).

As the information in each blockchain increases with every iteration, where does data get stored and what ways are available to move data? Eventually, wouldn’t that data bog down a system?
A greater knowledge of blockchain infrastructure(s) is required as this question is a non-issue that is posed in all accelerators, incubators, etc. who don’t understand the paradigm. Once the paradigm is understood, this question is answered.

How is blockchain technology projected to impact the telecom sector (identity management, file storage, smart contracts, etc.)?
EVERYTHING will be impacted and improved. In a world trending towards 5G (always connected), IoT, Blockchain all together, identification (of people, enterprises & things) is paramount for verifiable addressability. The biggest question is around the roles that the telephone companies, the TEM companies, the regulatory authorities (FCC) or the users will play to affect the changes and improvements. For example, a TEM companies’ clever usage of DLT’s/Blockchains would render the TEM Lifecycle far more rapid, efficient, accurate and auditable to implement and manage over today’s, classic TEM processes of “Contract/Invoice discovery/recovery”.

As an example, TEMteam is already working on enabling Distributed Ledger Technologies DLT’s or blockchain from a TEM company’s perspective to “drive the mistrust out of the operators”. Subscribed users with a wireless application for managing terminals, call session logs and Data-volume could use an immutable blockchain for optimal efficiency and auditability of Telecom billing disputes. Simandl also talks about Peertech’s plans to provide solutions to the upcoming changes in messaging, identification, personal reputation, decentralization and peer-2- peer paradigms, and security in his blog.

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Contributing Author
Chris Simandl
Owner of TEMteam, Co-founder of Peertech, and COO at Air
https://www.linkedin.com/in/simandl/

Author(s)

  • With over 50 years of combined industry experience in telecom, mobility, and IT management, the AOTMP Research and Advisory team writes Analyst Perspectives, Market Landscapes, and State of the Industry papers. The team evaluates current and future state trends and performance in telecom management while addressing the needs and interests of enterprises and the vendors who support them. The AOTMP Research and Advisory team is comprised of Timothy C. Colwell, Scott Lawrence, Stacy Hiquet, Andrew Hartwyk, Kelly Teal, Christine Kruze, and Matt Swift.

2018-02-21T15:38:08+00:00Categories: Perspective|Tags: , , |