FlightDelay will use blockchain to disrupt the aviation and insurance industries

Rage Comment : People who fly frequently must have encountered flight delays and are often troubled by the cumbersome delay compensation application process. Although this is a right granted to passengers by law, various human factors cause many people to be unwilling to apply for compensation or find it difficult to obtain compensation. So imagine if blockchain is used in the aviation and insurance industries, people will no longer worry about these daily trivialities. FlightDelay, a decentralized application based on Ethereum, is committed to realizing this beautiful vision.

Translation: Annie_Xu

Airlines are required by law to pay passengers compensation for flight delays or cancellations. But as anyone who has experienced it knows, the process is a nightmare. So much so that some companies have grown rapidly by purchasing individual compensation rights and handling compensation on behalf of individuals.

This situation is about to change. The decentralized application FlightDelay based on Ethereum hopes to replace the current cumbersome claims process with a simple and friendly process, bringing the aviation industry into the 21st century. As long as you install MetaMask, you can get flight information and select the time and date of departure and arrival. The application interface is as follows:

I randomly picked a flight and insured it for 0.5 ether. If the flight was not delayed, I would not get any compensation. But if it was delayed by 15 to 29 minutes, which is a 20.34% chance, my MetaMask wallet would receive 0.95 ether.

That is, just click OK and that's it. The rest is done by complex code in the background, ensuring that if independent data confirms that the flight is delayed, we can automatically get compensation. FlightDelay founder Stephan Karpischek was a researcher at ETH Zurich (Ethereum in Zurich, Switzerland) and a business analyst at UBS.

“We get data from the flightstats.com API and we calculate various probabilities based on that, especially over the last three months. If the probability of a delay is high, the odds are low. Ultimately this can be a zero-sum game, except for the fees we have to pay for the API and Oraclize.”

It's open source, so everything is available for easy viewing. Technical contributors can edit the code. For everyone else, it's just a useful, dynamic website.

The insurance industry has been disrupted, is aviation next?

As long as there is a binary answer, such as whether there is a bankruptcy or a breakdown, whether the ship is delayed, the entire insurance process can become an application. And if the police, courts, and fire departments all open up their data (as they may have to), data streams can be introduced into all kinds of everyday things, such as mobile phones, laptops, homes, and even car insurance.

The use of blockchain-based smart contracts can reduce costs. Therefore, in the near future, the insurance industry will become zero and service, and individuals can retain more wealth, thereby increasing various standards. Flight delay compensation is only slightly more complicated.

By law, airlines must pay passengers compensation for flight delays or cancellations. But the claims process is artificially blocked. Angry passengers whose flights were delayed jammed the halls just to get a reasonable explanation. But airports are limited in area, and airlines and rail companies treat these consumers like monopolies. However, since the law stipulates compensation, insurance companies and entrepreneurs still have a chance. Karpischek said:

"It's actually an unsolved problem in the aviation industry today. You know consumers are angry because their flights are delayed. Then they have to go through the torture of various institutions just to get compensation. Now we can imagine replacing that with a fully automated insurance contract."

For example, in a billion-dollar insurance market (even if not a trillion-dollar market), we know how insurance can be applied and adapted to a larger scale; as long as there is enough data support, the process can be automated. However, to realize this vision and simplify delayed claims, greater changes are needed, and the currency itself needs to become a native digital currency to the greatest extent possible.

The Bank of England is considering it, but it’s five to ten years away at the earliest. Some airlines already accept Bitcoin, and if they want to succeed in the future they’ll need to try Ethereum or try to implement the Ethereum-based stablecoins envisioned by British economist and political philosopher Friedrich August von Hayek.

Karpischek said:

“Airlines are now legally required to offer consumers compensation for long delays, but the process is cumbersome and makes them reluctant to do so. What I can imagine (I’m not sure if this will work yet) is that a checkbox in the booking process could offer low-cost flight delay insurance (like the additional carbon footprint compensation that some airlines offer).”

So once we can buy tickets with cryptocurrencies, it will be easy for airlines to offer additional automatic insurance. This will be the future. Maybe even an airline will accept Bitcoin for ticket purchases. This future is already within our reach.

Aircraft manufacturer Airbus recently joined the Hyperledger project, among other things, to show that the aviation industry has already begun experimenting with blockchain. More players will follow, and the role of disruption brought about by market competition and new inventions cannot be ignored. However, in addition to this, FlightDelay has brought us something that has already revealed the possibility. The entry requirements of the past and present will usher in a new era for the entire insurance industry and even skyscrapers.

Karpischek said this is just a preview of "the potential of blockchain," and there are many more possibilities. It shows how Ethereum can turn Bitcoin and even the entire blockchain field into the newest and most real world.