Blockchain and location technology

22 August, 2018

Blockchain and Location Technology

As we become more reliant on technology, the reliance on location tech becomes more prevalent. We use location technology to get directions from GPS systems, get search results of nearby stores, order ride-sharing vehicles, and more. With the prevalence of location tech in today's world, it makes sense that there are many startups and individuals interested in applying blockchain tech to location services. From general location-based services to location-based advertising, the use of blockchain has numerous use cases, many of which are already underway.

Enhancing Location-Based Advertising

One of the most exciting applications of blockchain technology is in location-based advertising.1 With target audiences spread around the world, location technology has become an important part of targeting advertising to a specific audience to increase return on investment. Geotargeting advertisements is particularly important for small businesses who need to work hard to build their brand.

The problem is that many people have concerns about the privacy of GPS-based ad targeting, making users more hesitant to decide to opt in. There are additional problems with inefficiency in some of the current location-based advertising methods for bringing in customers. Blockchain tech can assist with these issues and several others.

Because the blockchain stores information on a decentralized ledger, many of the privacy-related concerns about location-based advertising become negligible. Due to the immutable nature of the ledger, customer data is secure. It also gives advertisers transparency, including the ability to know that no intermediaries are involved.

There is also a significant potential for retailers to add tokenization rewards to their location-based advertising. Platforms can choose to reward users for opting into sharing their location for targeted ads with tokens, which the users can then use to make purchases. Location-based advertising platforms can also reward users who participate in the platform and spend tokens by giving them access to more tokens to use.

There are also other ways to harness tokenization in location-based advertising, including rewarding those within an area that complete specific tasks.2 Those can include writing quick reviews or making a post on social media. This system makes it possible for retailers to easily harness the power of satisfied customers to promote their brand via incentivization. Shoppers earn rewards that give them discounts they appreciate, while retailers can offer relatively small discounts yet still incentivize satisfied customers.

Creating Location-Based Data Markets

Another exciting use case of blockchain with location technology is via a location-based data market, something startups are already working on.3 This use case is a logical extension of blockchain tech considering the importance of data in our lives. Everything we do online, from browsing to buying a product, is analyzed by data companies and retailers to target services or just collect general data. Many people are unhappy about this invasion of privacy, and the blockchain can put people back in control.

Location-based data is crucial for a lengthy list of applications, including the previously mentioned location-based advertising. Governments and large companies also want access to this data for urban planning reasons. Other uses for location-based data include real estate development, creating smart cities, conducting academic research, and planning financial services. With the increasing number of Internet of Things devices, there is more location data available than ever before.

Even so, those who want access to data and the people the data is about face challenges with the current setup. The centralized market for location-based data does not offer transparency for buyers who want to know how their data will be used. Meanwhile, those who buy data cannot confirm that the data they receive is genuine or collected in a way that complies with privacy laws. Both parties must deal with a go-between who takes a profit.

Many people feel that these challenges can be overcome with the blockchain, with the startup Fysical serving as the perfect example of a solution. Fysical developed an open and decentralized market for location data. It offers data audit trails, so buyers know that the data they purchase came from a legitimate source and was collected in accordance with regulations. At the same time, those who sell their data get to remain in control of whether and when to sell it, complete with the ability to track how it is used. The platform supports location data from transit data, receipt data, mobile and Internet of Things sensor data, and proximity and location data. The Fysical platform uses its own cryptocurrency, the FYS token, to enable transactions, eliminating the need for an escrow service or intermediaries.

Proof of Location with Smart Contracts

The use case of proof of location services for smart contracts shows that not all blockchain applications for location tech will improve services that were taking place before the blockchain arrived. Smart contracts are an integral part of the blockchain, and they can be dramatically enhanced with location tech. This comes down to the fact that many smart contracts have location verification as a trigger for their execution.4

The applications of smart contracts that are dependent on location include supply chains, KYC/AML verifications, parametric insurance, and certain consumer transactions. The last of these could be a case where a smart contract takes money from the wallet of the buyer once the ordered item arrives at its destination. While GPS may seem like a reasonable solution for some, it is not enough since GPS signals can become unavailable from lack of coverage, natural occurrences, and intentional or unintentional interference. There is even the possibility of hacking mobile apps to limit the usefulness of GPS.

Multiple blockchain startups have worked to develop proof of location blockchains that address this issue by combining the blockchain and location technology. Foam, for example, is a hardware-based solution that will rely on Low Power Wide Area Network devices. XYO has existing hardware from XY Findables, its sister company, and plans a firmware upgrade for those who already own XY Findables devices. This upgrade would turn them into 'sentinels' for 'proof of origin.' Platin relies on smartphones and 'sensor fusion' that combines Wi-Fi, cellular network observations, GPS, accelerometers, and Bluetooth. The project has plans to limit manipulations on devices and is still in the preliminary stages.

A Closer Look at Some Location-Related Blockchain Products

StreetCred is another example of a company creating a location data marketplace.5 This project already raised $1 million in seed funding by June and aims to provide an easier way of buying and selling location data. The project team points out that those who want to make an application like Pokemon GO or Uber would need location data for it to be functional, which now is expensive and hard to obtain. With StreetCred's marketplace, users will get rewards when they collect the relevant data, and companies that want the data will find it much easier to buy it.

The previously mentioned XYO also has the potential to be a major player in the link between location technology and the blockchain.6 XYO includes Bound Witnesses and proof of origin, which its team feels will allow it to become the most definitive location oracle. Proof of origin confirms the information provided is valid and cannot be falsified. Bound Witnesses ensures that two XYO Network components were at the same location simultaneously. XYO sees use cases for pay-on-delivery e-commerce systems, universal location protocol to use with automated drones, and reducing medical errors, among other applications.


1) 1 Using Blockchain Technology to Enhance Location-Based Advertising.

2) How Blockchain Can Enhance Location Based Advertising?

3) Meet the Company Creating a Location-Based Data Market on the Blockchain.

4) Proof of Location for Smart Contracts.

5) StreetCred Is Building a Blockchain-Based Marketplace for Location Data.

6) Intriguing Use Cases of Cryptographic Location Technology