Tech
How Hoteliers Can Dip Their Toe Into the NFT Waters |
Hotels are well positioned to take advantage of the NFT explosion because we are already in the business of creating unique experiences for our guests. By Larry and Adam Mogelonsky – 01/19/2022
With all the hype surrounding 2021 about blockchain, cryptocurrency, non-fungible tokens (NFTs), and the dawn of the metaverse, now is the time for hotels to consider how these rapidly growing trends will impact our industry. How can they improve the guest experience? When is the right time to act? And most importantly, will they help increase revenue or asset value?
What are non-fungible tokens?
As the title suggests, this short article is about NFTs, which are unique (non-fungible) digital identifiers (tokens) that grant their owners specific access to pieces of property, rights (including commercial use), or services. This uniqueness is verified and backed up using blockchains with transactions for NFTs completed in cryptocurrencies; both of these terms are out of scope here, although we strongly recommend you spend some time understanding how they work.
Right now, in early 2022, NFTs are in an early adopter, honeymoon phase, with the crypto community trading digital artworks at exorbitant prices while the outside world looks on in amazement at what are simply harmless iterative jpegs of bored-looking monkeys. Our gut tells us that there is indeed a bubble, but it is not a repeated tulip mania because the technology behind NFTs has deep and diverse applications. The key word in the definition above is “access,” which can be pretty much anything.
The total traded value of all BAYC collectibles just surpassed $1 billion.
Why are NFTs valuable?
A closer look at Bored Ape Yacht Club (BAYC) provides a prime example of where the technology is headed and where the potential value for hotels lies. In case you didn’t know, the total traded value of all BAYC collectibles just surpassed $1 billion. According to its website, BAYC is a “limited NFT collection where the token itself doubles as a membership to a swamp club for monkeys.”
So, you pay for one of 10,000 limited-edition NFTs with the distinct profile picture of a funny primate as visual proof of ownership. But that’s the surface, the Trojan horse, if you will.
This token also gives you dedicated access to a members-only community, which for BAYC includes access to a private Discord server (a rapidly growing social media site that currently has over 350 million users) where you can communicate directly with a host of celebrities (BAYC NFT owners). Currently, this list includes the likes of Jimmy Fallon, Mark Cuban, and Eminem; if you win a BAYC NFT auction tomorrow, you’ll also get privileged access to chat with these bigwigs.
Furthermore, because the primary identifier is unique, the jpeg is entirely yours alone to use across other digital media, most significantly in future virtual reality metaverses, augmented reality platforms, or mixed reality experiences. As Gary Vaynerchuk, another NFT evangelist, says, this is similar to buying a custom character skin or other cosmetic mod for a freemium game, only with blockchain tracking across all games and platforms for as long as the internet exists.
Three NFT Use Cases for Hotels
We’ve already covered a lot of how this works, but based on the above, our hope is that your wheels are in motion. Hotels are well positioned to take advantage of the NFT explosion because we’re already in the business of creating unique experiences for our guests. Not every stay would qualify, but simply thinking in terms of digitized, unique access should generate some use cases.
- Increase unique experiences. Let’s say you run a 200-room property across multiple categories, with no individual keys that have unlimited amenities and sky-high prices. Technically, that’s 73,000 (200 times 365) unique stays per year—not exactly “limited edition.” Instead, let’s say you actually have an indisputably exclusive product, like a presidential suite or villa, where you can designate that any guest who stays there for at least a week (length can vary) receives an NFT to mark the occasion that, importantly, also gives said guest special access to a variety of other perks. What those perks are, exactly, depends on the brand, but some basic ideas include entry to a members-only online community like BAYC, access to private lounges in the real world, free room upgrades, free airport shuttles for all future stays at any location, or early access to future product launches. And since each NFT is unique, the perks can also be delineated by year, edition, and so on.
- Loyalty Program Markets. From the previous use case and the basic ideas listed, the smart question is to consider why you need blockchain or NFTs to unlock all those perks when your current guest profile and loyalty program tracking software will suffice. The answer is markets. NFTs give their owners the ability to sell their token-subscribed privileged access to the highest bidder. This in turn creates residual value for the hotel stay long after the onsite experience has been rendered complete. In a world where brand relationships are eroding, NFTs can strengthen a loyalty program because an owner can then sell their access to future perks, strengthening the incentive to purchase in the present. And those loyalty-based NFTs don’t have to be earned just through one-time experience purchases, but can also be achievable much like our current points-based tiered programs. Again, it depends on the brand.
- Digital twinning. VR tourism is already here and it doesn’t necessarily require unique tokens because its primary purpose is to whet the traveler’s appetite for something else. The act of producing a “digital twin” is to create an identical replica online, which has already found solid applications in predictive maintenance modeling for complex machines like mining equipment or passenger aircraft. As the metaverse inevitably morphs into all sorts of wild and bizarre virtual reality or augmented layering of our corporeal earth, one of the first steps for hotels will likely be photorealistic mirroring of physical locations within a blockchain-based online world. Within these nascent ecosystems, cryptocurrencies will be the medium of exchange, while digital property rights and, for the good of our industry, unique hotel stays, meeting spaces, or access to other exclusive virtual activities may be regulated by NFTs, if the experience warrants. And you never know, having a digital twin could give you insights into how to improve operations on the physical property, just as other industries are currently using digital twinning.
- Capital increase. Think back to the AAirpass program launched by American Airlines in the 1980s, where for $250,000 pass holders received unlimited first class tickets on all the airline’s flights worldwide. Pandemic cancellations aside, if you identify as a frequent flyer and plan to be one for decades to come, that price is actually pretty cheap. Using NFTs, you can create such lavish programs aimed at high net worth individuals—think $1 million for a lifetime of stays in any room or suite at any branded property with all food and beverages included—but also establish within the underlying smart contract that each resale of the pass results in a new incremental floor price and a percentage of the sale owed to the hotel. The end result is that you get a large influx of cash that you can use for current needs like renovations or debt service payments with the promise of future stays and meals, as well as strong incentives for a second-hand market and some form of residual returned to you with each resale.
Going back to the initial questions, it may be a little early to act because the virtual economy of cryptocurrencies, NFTs and the metaverse is very much like the Wild West that has yet to coalesce around a few select universal protocols. However, this should not stop you from putting together the first outlines of a plan that educates your team on what these new technologies are and the opening strategy to take advantage of them. This will be a very lucrative space in the near future, so prepare accordingly.
Larry and Adam Mogelonsky are one of the most published hospitality writing teams in the world, with over a decade of online content. As partners in Limited Hotel Consultinga Toronto-based consulting firm, Larry focuses on asset management, sales and operations, while Adam specializes in hotel technology and marketing. Their experience includes properties around the world, both branded and independent, and ranges from luxury and boutique to select service. Their work includes six books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), “The Llama is Inn” (2017), “The Hotel Mogel” (2018) and “More Hotel Mogel” (2020). You can contact Larry at [email protected] or Adam to [email protected] to discuss hospitality industry challenges or to book speaking engagements.
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July 27, 2024
Donald Trump said at one of the biggest cryptocurrency events of the year that if he is re-elected president, he will fire the chairman of the U.S. Securities and Exchange Commission (SEC) on his first day.
On Saturday, Trump was the keynote speaker at Bitcoin 2024, a gathering of industry heavyweights in Nashville, Tennessee.
The Republican presidential candidate used the event to woo voters and encourage the tech community to donate to his campaign.
Cryptocurrencies have emerged as a political battleground for Republicans, with Trump saying that the Democratic Party and Vice President Kamala Harris were “against cryptocurrencies.”
The crowd was at its most animated when Trump declared, “On day one, I will fire Gary Gensler,” the SEC chairman appointed by now-President Joe Biden. The crowd applauded loudly and began chanting “Trump” at this statement.
SEC files charges against ‘Cryptocurrency King’ Sam Bankman-Frittosentenced to 25 years for stealing billions of dollars from customers of his cryptocurrency exchange FTX.
Speaking for about 45 minutes, Trump outlined some of his ideas for the industry if he wins the November election. He said he would make the United States the crypto capital of the world. His support for the sector is a 180-degree reversal from his comments in 2021, when he told Fox Business he saw Bitcoin as a “scam” that influence the value of the US dollar.
Trump told the crowd at the event that he would retain 100% of the Bitcoin currently owned or acquired by the U.S. government, adding that it would be a “national stockpile of Bitcoin.”
The former president also said he would “immediately appoint a presidential advisory council on Bitcoin and cryptocurrencies.”
He talked about the power needed to mine cryptocurrencies. “It takes a lot of electricity,” he said, adding that he would build power plants “to do that” and that it would “use fossil fuels.”
In recent months, some tech leaders have seen growing support for Trump’s presidential campaign. Tesla founder Elon Musk, who is the world’s richest person, has backed Trump. And cryptocurrency moguls the Winklevoss twins, who attended his speech on Saturday, have also come out in support.
Trump noted that his campaign accepts cryptocurrency donations, saying that in the two months since allowing cryptocurrency transactions, he has received $25 million (£20 million) in donations. However, he did not say how much of the payments came from cryptocurrency.
Trump used his speech to frame cryptocurrency regulation as a partisan issue, saying the Biden administration was “anti-crypto.”
Several Republican lawmakers also attended Trump’s speech, including Senators Tim Scott and Tommy Tuberville. Former Republican presidential candidate and Trump ally Vivek Ramaswamy was also in attendance.
The event was also attended by independent presidential candidate Robert F Kennedy Jr. and Democratic Party congressmen Wiley Nickel and Ro Khanna.
Earlier, during Bitcoin 2024, Democratic Congressman Nickel said that Kamala Harris was taking a “forward-thinking approach to digital assets and blockchain technology.”
Tech
WazirX Crypto Exchange Hack and Its Bounty Program: What Does It Mean for Crypto Investors in India?
On July 18, India Cryptocurrency exchange WazirX has been hit by a cyber attack which resulted in the loss of over $230 million worth of digital assets from one of its wallets. The exchange responded by suspending regular trading and reporting the incident to Indian authorities and other cryptocurrency exchanges. The company also launched two reward programs for ethical hackers who can help the exchange trace, freeze, and recover stolen funds.
WazirX said there was a cyberattack on a multi-signature wallet operated through a digital asset custodian service known as Liminal. Multi-signature wallets have a built-in security feature that requires multiple parties to sign transactions.
“The impact of the cyberattack is over $230 million on our clients’ digital assets,” WazirX said in a blog post, adding that INR funds were not affected. The company has firmly denied that WazirX itself was hacked and has brushed aside rumors that it was tricked by a phishing attack.
The exchange also noted that it was “certain” that its hardware keys had not been compromised, adding that an external forensic team would be tasked with investigating the matter further.
But Liminal, after completing its investigation, said: “It is clear that the genesis of this hack stems from three devices compromised by WazirX.”
Meanwhile, WazirX founder and CEO Nischal Shetty said that the attack would have been possible only if there were four points of failure in the digital signature process.
Who is behind the cyber attack?
WazirX has not yet disclosed the suspected parties or perpetrators responsible for the hack. However, news reports have emerged that North Korean hackers were responsible for the incident.
On-chain analytics and other information indicate “that this attack was perpetrated by hackers affiliated with North Korea,” blockchain analytics platform Elliptic said.
In response to The Hindu’s questions to WazirX about the North Korean hackers, cryptocurrency exchange WazirX directed us to its blog and said it was working with law enforcement to investigate whether a known malicious group was behind the attack.
“This incident affected the Ethereum multisig wallet, which consists of ETH and ERC20 tokens. Other blockchain funds are not affected,” WazirX said in its official blog, specifying that approximately 45% (according to preliminary work) of cryptocurrencies were affected by the attack.
The company largely placed the blame on the process of securing Ethereum multisig wallets and said that the vulnerability was not unique to WazirX.
How important is WazirX in the cryptocurrency industry?
WazirX calls itself India’s largest cryptocurrency exchange by volume. As of June 10, it reported total holdings of ₹4,203.88 Crores, or 503.64 million USDT. Tether [USDT] It is a stablecoin, that is, a cryptocurrency pegged to the value of the US dollar, but it is not an official currency of the United States.
When The Hindu tried to access WazirX Public and Real-Time Reserve Proof After the hack, we were greeted with a notice that the page was under maintenance.
WazirX has received both positive and negative reviews in India. The Enforcement Directorate froze the exchange’s assets in 2022, criticizing its operating procedures and lax Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations.
“By encouraging obscurity and adopting lax AML norms, it has actively assisted around 16 accused fintech companies in laundering proceeds of crime using the cryptocurrency route. Accordingly, equivalent movable assets amounting to Rs 64.67 Crore in possession of WazirX have been frozen under the PMLA, 2002,” the ED said in a statement.
What will happen to WazirX assets?
It is unlikely that the stolen WazirX assets will be fully recovered anytime soon. This is due to the very nature of cryptocurrency, where assets can be easily mixed, transferred, converted, and sent to anonymous wallets. The chances of asset recovery are even slimmer if it is confirmed that North Korean hackers are behind the incident.
CEO Shetty said on X on July 22 that “small” portions of the stolen funds had been frozen, but declined to provide further details. He added that the majority of the funds had not been moved from the attacker’s wallet.
In recent years, North Korean hackers have stolen billions of dollars in cryptocurrency, aiming to circumvent various financial and economic sanctions.
WazirX is currently working to resume normal operations and has planned to launch an online survey to decide how to resume trading on the platform.
While the Indian exchange has defended its security practices and highlighted the challenges facing the cryptocurrency industry as a whole, savvy crypto traders will be looking for action plans and accountability, rather than emotional reassurance.
What does your rewards program consist of?
WazirX has announced two bounty programs: one to gain more information about stolen funds, and the other to recover them. Both programs are open to everyone except WazirX employees and their immediate family members.
Under the first program, WaxirX will reward up to $10,000 to anyone who can provide the exchange with information that can help freeze the funds. If the bounty hunter is unable to freeze the funds on their own, they should work with WazirX by providing enough evidence to facilitate the process.
But “if the participant fails to freeze and/or does not cooperate with WazirX to facilitate the freezing of funds, then the participant will not be entitled to any rewards,” the exchange said.
The second program, called White Hat Recovery, is aimed at recovering funds. Participants are offered 10% of the amount recovered as a white hat incentive.
“This reward will be paid only after and subject to the successful receipt of the stolen amount by WazirX. The above rewards will be payable in USDT or in the form of recovered funds at the sole discretion of WazirX,” the exchange noted.
The bounty programs are expected to last for the next three months.
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Speaking to a crowd of supporters at the Bitcoin 2024 Conference in Nashville, Tennessee, former President and Republican candidate Donald Trump said that if elected, he would make the United States the “crypto capital of the planet and a Bitcoin superpower.”
Trump added that he would “appoint a Presidential Advisory Council on Bitcoin and Cryptocurrencies,” which would have 100 days to “design transparent regulatory guidance that will benefit the entire industry.”
Trump has publicly opposed cryptocurrencies until recently. His latest statements serve as a rallying cry for a tech industry that has long called for more flexible regulatory oversight.
Shortly after taking the stage, Trump spent several minutes naming some of the conference attendees, at one point describing Winklevoss Twins Cameron and Tyler as “male role models with big, beautiful brains.” The former president has continued to speak out against electric car mandates and called for more fossil-fuel burning power plants.
Trump also said he would order the United States to withhold all Bitcoin it currently owns “in the future.” The U.S. government reportedly holds billions of dollars in Bitcoin.
About three years ago, Trump called Bitcoin “a fraud“that is “competing against the dollar.” In February 2024, the former president said that establishing a central bank digital currency would represent a “dangerous threat to freedom.” Yet, in May, Trump declared that he was “good with [crypto]“, adding, “if you’re pro-cryptocurrency you’d better vote for Trump.” That same month, he said he would commute with the Silk Road founder Ross Ulbricht’s Sentencingand his campaign said it would accept cryptocurrency donations.
Recent comments from Trump and independent presidential candidate Robert F. Kennedy Jr. have helped make cryptocurrency regulation a major political issue in the 2024 U.S. presidential election. This comes as the SEC intensifies its scrutiny of the cryptocurrency industry. SEC Chairman Gary Gensler, appointed by President Joe Biden, called the activity “full of fraud, scams, bankruptcies and money laundering.” Trump drew applause at the conference after promising to “fire” Gensler. (U.S. presidents have the power to appoint the heads of many federal commissions, including the SEC.)
With Biden out of the raceVice President Kamala Harris’s campaign advisers have He is said to have contacted to cryptocurrency leaders in an effort to “reset” relations with the industry. Harris’s campaign has not yet said whether her stance on the industry differs from Biden’s.
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