The Deloitte paper, How Blockchain can impact the telecommunications industry, describes the potential of blockchain to totally disrupt the business of carrier service providers (CSPs) by literally turning their business model upside down.
According to Deloitte CSPs’ business are traditionally built on ownership of the end-to-end value chain for both consumers and businesses – spanning network infrastructure, the provision of core voice and data connectivity, and related consumer services. In the processes inefficiencies are created as business units within CSP operate in siloes, much like banks.
However, in an environment of heightened competition in an increasingly digital world from infrastructure light over the top (OTT) players, together with decreasing revenues from voice and increasing costs due to the high bandwidth demands by applications, there is a need to both reduce costs and find new sources of revenue.
Blockchain has the potential to be for ‘value’ what the Internet has been for ‘information’.
It suggests the existence of plausible applications of blockchain for a CSP, both within its current portfolio of operations and also to capitalize on some of the future telecom trends.
Telecom Asia spoke to Marshall Taplits, co-founder and chief strategy officer, to discuss NYNJA’s efforts around blockchain.
Telecom Asia: NYNJA made an announcement this week on the new blockchain-based messaging platform. Can you talk more about the new service?
Marshall Taplits: There are several layers to the NYNJA platform. One layer is the messaging stack. This is a scalable, cloud-based service, to facilitate high-performance communications. The messaging component of the NYNJA platform is not dependent on the blockchain. The messaging layer is combined with the services that benefit from the use of blockchain, such as user-owned identity.
If you read our white paper, you'll see that we're looking to support self-sovereign identity, which is a huge shift from the way almost every other application today where they own your data and mine it for advertising.
We are building our network using blockchain technology for all the payments, for interactions on our freelance network so that workers can own their identity, own their history and own their money, which cannot be frozen.
How does blockchain impact both OTT as well as for traditional telecom service providers?
For years already there’s been a battle between the telecom carriers and OTT providers. Telecom networks have been turned into a dumb pipe: as long as there is bandwidth, you can use any OTT service. It can be a message or calling app, or any service.
In my opinion existing OTT players will be eclipsed in the same way as the carriers. The reason is because at the fundamental level, they are locked into their payment world, their currency world. If you look at the largest apps in the world with a billion users they are the Whatsapp, the Instagram, which are basically free and they go into a billion plus users.
But apps that require payment or require transactions, with the exception of WeChat in China because of the large population [of the mainland], these apps don’t get pass a hundred or two hundred million users. The reason is because there are not that many people that have the wealth, have the access to payment method, and have the access to the credit cards in the banking system. It’s getting harder and harder to transact globally in the current system.
But this new system is global by default. So we [NYNJA] are going to be one of the apps and one of the platforms that get to not only a billion users, but a billion paid users. And the reason we’re going to do that is because we're going to be able to operate globally and frictionless.
In order for people to be part of our ecosystem all they have to do is to download NYNJA. That's a huge shift from how people have operated in terms of the consumer side and on the provider side.
Are you trying to emulate WeChat, except that you are working on blockchain as a base platform for transaction?
No, I don't think that that's accurate at all. What WeChat is it is effectively a pooled messenger, it is not cloud-based. You cannot login on multiple devices, except for a web browser or a computer that you scan a QR code. Your data is gone if you lose your phone and you didn’t back it up. It is not encrypted. It is unsafe. The transaction layer is only RMB which means it is having a difficult time to go global. If you look at the fundamentals, WeChat cannot go global, as it cannot be integrated into society in the same way it did in China because of RMB. It’s impossible by its nature.
What we are creating is, from the ground up, a cloud-based infrastructure where you can have as many devices as you want, login and synced as you wish, IOT devices, home accessories, everything can be linked to the platform. And your data lives in a cloud that is available for you anywhere. Whether you are on your phone, using your iPad, using Amazon’s Alexa, we will develop an open platform that people can develop on top of and at a fundamental base level is the cryptocurrency marketplace and so everyone in the world can transact from day one, as a provider or as a client. So it is completely different.
Do you see an opportunity to white label the technology to telecom companies looking to build their own ecosystem to fit in their market and country?
Exactly, so now you really hit on why NYNJA is going to be successful. Because what NYNJA is going to do is we're going to have a SDK and a development kit and all these things are going to enable people not only to build the applications inside NYNJA, but to build their applications and their own platforms using the technologies that NYNJA offers in terms of the communication services, in terms of the blockchain services and in terms of the payment channel.
If you want to start an app or a platform now, what is your first thing to do? You go and get your bank account and your visa, your credit card and your American Express approval or PayPal approval and all these things. But what we are saying is: Stop, put the NYNJA kit in. It will bring you global payments, global communications. If you need a conference call service or a file transfer service for example, NYNJA would provide those services in a SDK. Most importantly, it’s going to be a payment layer built-in and it is not something that you need approval for. The only thing you need is to create an account.
So all these telecom companies and all these companies especially in those countries like China which have trouble in internationalizing, NYNJA will be like a stairway to help those companies go international by providing the base layer services.
Similar to AWS, if you want to start something you no longer need to get all the servers, co-location, invest tens of thousands hundreds of thousands of dollars. You only need to create an AWS account and you pay for what you use. We are taking that same concept but now with communication service, blockchain services and payments globally.
How do you intend to generate revenue from all of these companies that would connect to your platform?
This is another area where we have a tremendous competitive advantage because in the current systems, there is a lot of overhead and friction in the payments. If you want to do a transaction on the Google or Apple Platform, they take 30%. If you want to use credit card, in US it’s 2%, in Asia it’s still 3-5%. This is the huge overhead. And what people are doing is to set up their platforms to do auto-bill, and they have to make the prices artificially high because they have to overcome the transaction fees and friction.
I see NYNJA as kind of like a utility. If you look at your gas meter, it charges you for what you need. With cryptocurrencies, we can do that. We will be introducing an entirely fair, transparent and metered service methodology.
If you’re using the NYNJA kit to transfer certain amount of data or do a certain amount of communications or calls or using our payment system, we are going to be able to provide that in a very seamless way globally at a metered level, which is something that current businesses are not able to do.
We don't need to overcharge people just because we need to compensate for the poor financial infrastructure. We are going to take very thin margins that people are not going to notice, but in fact, it can provide tremendous profit and revenue opportunities.
Editor’s note: At the time of the interview, NYNJA was seeking to raise new funds via initial coin offering (ICO).