Traveling is an integral part of life for most of us, be it business or leisure, but things have changed considerably since the onset of the COVID-19 pandemic. Frequent flyers no longer fly as frequently as they once did, nor do they book hotel rooms as often. The rewards and miles they accrued over the years before COVID-19 are now sitting in their accounts unused. Technically they earned them, but do they really own them? If they did, they’d be able to do whatever they want with them, like transferring them to others in an unrestricted manner or selling them on an open market.
Joshua Henslee, a software and ERP consultant, says he has the answer to non-ownership of rewards points: tokenize these reward points atop the Bitcoin ledger.
In a recent conversation with Isaac Moorehouse, Henslee said: “Reward points should be tokenized, not for speculation, but as free-flowing assets outside of a single company’s control. I used to travel as much as three times a month and accrued many reward points and miles, but the onset of the pandemic in 2020 changed everything. I didn’t travel at all in 2021, and even though airlines extended the experience miles, I canceled my Platinum card because of the high fees and no requirement of traveling.”
Let’s take a look at an actual scenario. Say you are a Platinum Member of the Marriott Advantage Program and earn reward points for each stay at Marriott hotels. You can use those points to purchase hotel stays at Marriott’s or Delta Airlines tickets, or you can earn cashback. But wouldn’t it be nice if you could also:
- Sell reward points to family, friends, and acquaintances.
- Sell reward points at the exchange rate value of a hotel room or an airline ticket.
- Earn cashback at the price of the exchange rate value of a hotel room or an airline ticket.
Unfortunately, none of that is possible right now. Credit card companies like Chase and American Express (AMEX) fix the price at a cent and control the market value of those points.
Because companies do extensive KYC while registering their accounts, which entails processing confidential information, Henslee said the reluctance of companies in offering a free-flow exchange of the reward points within their current business model is understandable. However, the disconnect between what a company offers in cashback versus the ‘real’ market value of those points is an issue, he stated, adding that it could and should be addressed by tokenizing the reward points onchain.
“These companies don’t tokenize the reward points probably because it is an expensive process and also because it would require a massive engineering effort,” Henslee said. “The fundamental business model of rewarding customers with different services for the earned points is already huge,” he added.
Citing an example of Haste Arcade‘s native token, Henslee continued, “You can’t do much with it right now, but Haste intends for it to be a discount token and a reward token. It already functions as a reward token.”
According to Henslee, these types of models will become more mainstream because they are useful, and consumers will greatly benefit from them.
Check out Joshua Henslee’s previous episodes on his official YouTube channel.
Watch: CoinGeek New York panel, Tokenized Assets, Stablecoins and Custody with BSV
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