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Using Blockchain To Build Up Smart Cities

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Dubai is one of the fastest-growing regions in the world and has big ambitions to become a global tech hub. The young country is working to address the inefficiencies that can arise with increased growth. With comparatively less red tape in the way as compared to many other cities, Dubai is able to implement smart city-type technologies in order to continue pushing digital development in many areas. “We’ve got Silicon Valley in the U.S.; they want to become something like that for the world and for this region,” Sean Dennis, cofounder and chief happiness officer at Loyyal, explained.

One of the main drivers for the new efficiencies they want to pursue is blockchain. Dubai’s smart city program, known as Smart Dubai, is looking to blockchain technology as the critical piece needed to implement a seamless and more efficient digital economy. Loyyal was recently invited to collaborate with Smart Dubai as part of the second cycle of the Dubai Future Accelerators Program, in which it will develop and expand upon the loyalty and incentivization elements of the DubaiNOW mobile app. Dennis and Matthew Hamilton, director of strategic partnerships at Loyyal, recently joined PYMNTS to discuss the role Loyyal will play in bringing leveraging blockchain and universal loyalty technology to help in the ongoing development of Dubai’s smart city initiatives.

The Blockchain Building Block

DubaiNOW gives Dubai residents access to a range of smart services across 22 various government entities, including activities such as paying bills, checking the status of government services and accessing health care information Hamilton explained that the smart component is what Smart Dubai is working on to integrate blockchain applications for payments, loyalty and incentivization capabilities within the DubaiNOW app. Loyyal has been brought on board to develop that incentivization element of the app. Smart Dubai also recently announced their plans for a citywide blockchain rollout with integration partner IBM and advisor partner Consensys.

“We are part of a massive move to put the entire city of Dubai on blockchain to make it paperless,” Dennis said, noting that the government in the region is really putting its all behind this growing effort. Though Loyyal’s work is still in the proposal stage, Hamilton explained that it would like to help the government entities use value to incentivize people to do things that would be either in the government’s or society’s best interest. For example, rather than having invoices every month for utility bills, residents can be incentivized to enter their credit card information so that billing can be done automatically, essentially getting rid of paperwork and making things more efficient.

Hamilton said that Loyyal is looking to add that value component.

“It’s about the commercialization, so that they are able to go beyond recognition and create additional engagement by using tangible value to incentivize behavior,” he noted. For many of the app’s users, these new initiatives will be an introductory experience in using blockchain. Hamilton said the goal is ultimately for users to not even know they are using blockchain. “Earning and redemption offerings are going to be more dynamic, diverse and inherently more customized using a shared/distributed ledger and programmable points,” he explained, “… but the individual wouldn’t really know enhancements are enabled via blockchain technology — they’ll just have a more efficient and engaging experience.”

Dubai’s Smart Future

Loyalty programs can leverage blockchain in many ways to enhance customer experience and achieve increased efficiency. For Loyyal, blockchain is disrupting the loyalty space in four specific ways: increasing interoperability, establishing a real-time nature, using tokenization for powerful tracking and customization abilities and making liability management easier on the balance sheet.

While Loyyal is still in the process of ensuring its big-picture ideas for how loyalty and blockchain will work together aligns with the vision of Smart Dubai, Hamilton shared what the firm’s goal is now. He said it is working on taking Dubai Points, which was a program Loyyal built as part of the Dubai Global Blockchain Council, and monetizing it from a pilot to a commercial project. “We are looking at this as being a citywide, fully interoperable loyalty offering,” Hamilton explained. Ideally, the initiative will also have programs within programs, meaning a government entity could have its own branded points but those points would still be interoperable throughout the city.

Dennis explained that the work Loyyal is doing provides the opportunity for it to build out its use case for Smart Dubai and then prove utility as it moves on to work with other smart cities around the globe. “The rewards or behavior incentivization element of smart city initiatives is a key element to creating a link between the different interconnected verticals or areas within smart cities,” Dennis said.

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