Blockchain and Customer Communication

In the second decade of the 21st century, for better or for worse, the web is a much more settled place. Most of the old names no longer exist. But just as the Model T prepared the way for the Lamborghini, so Geocities led to blogs, Alta Vista to Google, and Beenz to Bitcoin.

And it’s with Bitcoin—or, rather, the blockchain technology that enables such cryptocurrencies—that we find ourselves back in a corner of the internet where the fundamental questions have yet to be answered.

Right now, blockchain is young enough that it can become whatever we want it to be. And there are good arguments to say that blockchain will have a significant impact on how companies and customers communicate.

Blockchain 101

Today, we store data in databases that are owned and managed by a single organization. Whether a database lives on a single server, or on hundreds across multiple data centers, its fortunes are tied with those of its owner.

Such a world means that a well distributed database could survive a disaster that occurred in a single data center, but probably wouldn’t survive the death of the entity that owns the database.

Blockchain takes a different approach. Rather than thinking of data as belonging to a single organization, or existing in a central database, it distributes data across the computers of whoever is part of the blockchain. In the case of a cryptocurrency like Bitcoin, that could be literally anyone with an internet connection and the right software.

So, how does that work?

They’re Blocks and They’re in a Chain

The name “blockchain” is actually pretty descriptive. Just like a traditional database, a blockchain has records and those records are called blocks. Put together, the blocks form a chain that stays in the order they were written.

Three things make the blocks themselves special:

1. Once written to the blockchain, a block cannot be removed or changed.
2. There isn’t a central authority that verifies the validity of the blockchain; the validation is built into the blocks themselves.
3. Within time, each block is shared across multiple copies of the chain, which makes it super-redundant.

So, how does that actually work?

It’s Like Mixing Paints in a Palette

Imagine you’re an artist working with watercolors. To get the right shade, you mix other colors together. Oddly enough, blockchain is kinda the same; kinda.

Let’s say we start a new blockchain. Each person on the blockchain is assigned a color that they use as their signature. Our signature color is yellow and so our block is yellow with a number four.

The next person on the chain has the signature color blue and they want to add the number 3.

Now, our blockchain is interesting only if it locks the order in which things happen and prevents anyone from changing what’s stored in the blocks. We can do that in our simple example by combining the colors and the numbers.

We can show that the order and content are as intended by recording the contents and signature of the previous block and by combining the signatures and contents of both blocks together. The yellow signature and blue signature make green; the content of the two blocks make 7.

If a bad actor were to come along and try to tamper with our first block, the second block would no longer make sense.

Pink and blue don’t make green. Two and four do not make seven. So, we know there’s a problem.

This isn’t exactly how blockchain works but it’s close enough to show the basic principles.

It’s Not Just About Funny Money

So, there’s no central authority, it’s pretty much impossible to change a record once it is written, and the whole thing is digital. Combined, they mean that blockchain can be much more than just a niche form of value exchange. In fact, they mean that a blockchain can be a series of self-checking and self-executing contracts between equal parties.

Let’s look at a customer communication example.

Mabel is in the UK and has a cell phone with Company X. She gets a better deal from Company Y and wants to switch her service while keeping her mobile phone number.

1. Currently, porting that number is a partly manual process: Mabel tells Company X she wants to move her number and they give her a Porting Authority Code (PAC).
2. Mabel gives Company Y both the phone number and the PAC.
3. Company Y checks with Company X that the PAC is valid.
4. Company X checks Mabel’s customer record to make sure she has no outstanding debt.
5. Company X confirms it is valid and they release the phone number to Company Y.
6. Within a couple of days, Mabel’s number is ported to Company Y.

There are at least two flaws with this process. One is that a bad actor could slam Mabel’s number; i.e. anyone could claim to be Mabel and port her number to another company without her knowing until it was too late. It sounds unlikely, but it happens.

The second flaw is that human intervention is likely to be needed in at least some number transfers; e.g. where there’s a small amount of debt outstanding.

With a blockchain-based system, the telecoms companies could use smart contracts instead. A smart contract uses blockchain’s immutability and trusted signatures to push a process to the next stage automatically when each of the previous stage’s requisites have been fulfilled.

Let’s look at how Mabel’s situation would play out with a smart contract.

1. Mabel tells Company X that she wants to port her number to company Y. She does so with an electronic signature.
2. The presence of her signature allows the smart contract to then check her account. She owes nothing. The finance system adds a block to the chain to say it has no objections and it too signs it digitally.
3. Company X’s systems contact those of Company Y to announce the planned porting of the number.
4. Company Y accepts the port by adding a block to the chain that provides the technical details needed to complete the port. Company Y’s system signs the block.
5. The presence of the technical details and Company Y’s signature allow Company X to release the number. Company X’s system adds a signed block with further technical details.
6. Company Y accepts the number and signs one last block acknowledging the port is complete and sends an SMS to Mabel telling her that her number now works with her new service.

The key difference here is that Mabel kicks off the process with her digital signature and then everything else happens automatically between the systems of the two companies. The blockchain contains the authority, the record, and the instructions necessary to complete the port without human intervention.

For a real-world example, take a look at Tradelens. It’s a project between IBM and shipping giant Maersk that uses smart contracts to speed up cross-border trade.

Okay, that was a little detour but it’s only by cutting through the hype of blockchain and understanding how it works that we can start to think about how it might be useful for customer communication.

Truly Omnichannel Communication

Omnichannel communication is the goal of many customer service organizations, but stitching together an ongoing conversation across all possible channels is a technical challenge, to say the least.

But when we look at it, the problem seems really like it is blockchain-shaped. The communication is happening in multiple places, many of which we don’t control. So, we need a way to store that communication that preserves the order and detail, even if it disappears from the original source. We might also want to use it as an audit log in the case of a customer or regulatory complaint.

Signed, ordered blocks that we cannot change or remove would be excellent ways of stitching together the many parts of our omnichannel conversation with a customer. Now, the decentralization aspect is less interesting here but that’s okay; a private blockchain can still give us all the other benefits even if the decentralization is less useful in this case.

Unambiguous Identification

Very few countries, or companies, have solved identification. Social Security Numbers, plastic ID cards, or combinations of semi-private information (date of birth, mother’s maiden name, favorite band as a teenager) are all limited in both the security they offer and how applicable they are to digital identity.

As such, much customer communication is hampered because it’s hard to know whether the recipient truly is the intended customer. Email and SMS are not especially secure, for example.

Using ideas from blockchain, we can create unambiguous digital identities for everyone and in Estonia they’re doing just that with the e-identity scheme. By using a smart card, citizens can digitally sign and decrypt communications.

If customer communication took place on a blockchain, we could ensure only the intended recipient could access the content—through encryption—and have a permanent record of that communication.

AI-Led Customer Service

Both of the above examples could deliver real improvements to customer communication today. The technology is there ready to be implemented.

However, just as many of us thought our Geocities websites were rather smart back in the mid-90s, so it is that what we can do with blockchain today is only a glimpse of how we might use it in the future.

In truth, blockchain is quite boring. It’s plumbing. It’s an enabler. Within time, we’ll think of blockchain in the same way that we think of relational databases today; that is, not often.

For customer communication, the real value of blockchain will probably be in how it enables AI-systems to communicate with and assist customers autonomously. Let’s look at one last example.

It’s 2025. Sureya is riding in her car when another car crashes into hers. On impact, Sureya’s car logs its GPS coordinates, photographs the scene and collects instrument readings from the five minutes preceding the accident. The car adds these to a private blockchain used by Sureya’s insurer to record her interactions with the company.

Not long after the crash, Sureya calls her insurer to discuss what happens next. The call is answered by a human contact center agent, as the insurer already knows that Sureya has been involved in an accident and their research shows that people prefer to speak to human agents just after a crash. However, it is the insurer’s AI that takes control of the call. While the human agent provides reassurance, the AI listens to the call and adds a transcript to the blockchain. Later, the AI can use the information from the car and from Sureya’s call to then take the next steps in the insurance process.

The blockchain, being unchangeable, ordered, and smart enough to enable next steps to happen automatically, enables the AI to process Sureya’s claim. It can interact with the other party’s insurer, with the local police, and with the rescue service. It can enable pay-out to the repair company and then automatically organise reimbursement from the other party’s insurer. All the while, it automatically keeps Sureya up to date through chat messages.

Blockchain is an enabler in this situation. It enables the AI to act without needing a human to sign or approve actions. Customer communication happens more or less as normal, but with the support of an AI that is empowered by blockchain.

Drawbacks

Obviously, blockchains are not perfect. Distributing changes across a large public blockchain is relatively slow. For example, Bitcoin can manage only around 100 transactions per second globally; not enough to serve humanity generally. The technology is also as yet unproven; we say that a blockchain is immutable but could new technologies, such as quantum computing, enable bad actors to make changes to historic blocks?

It’s important to view blockchain as just another technology. The commonly repeated joke is that blockchain is just the world’s slowest distributed database. There’s some truth in that; we should see blockchain for what it can enable and not as particularly exciting in itself.

When it comes to customer communication, we’ll most likely see gradual improvements from blockchain rather than overnight revolution. However, if you can integrate blockchain into your customer communication plan today then you’ll be ready to take advantage sooner than most other businesses.