How Can Blockchain Impact the Telecommunications Industry?

15 April 2020

alt In simplest terms, blockchain is a technology that secure blocks of data in chains to ensure accuracy and protect against changes. Copies of these chains are stored on various computers for further security. The first application of the blockchain technology was the Bitcoin cryptocurrency, but has now expanded to several use cases and can even execute smart-contracts, which are electronic contracts written in a programming language that transmit information and carry out guaranteed fulfilment of all the prescribed agreements.

Comparison of Blockchain Technology and Centralized Database

Blockchain technology differs from a centralized database. In a centralized database, the principle of client-server is implemented when a user connects to a single server for access. But in blockchain, the principle of distributing information among many computers protects the system from hackers. In most cases, a centralized database stores only the current situation in the system, while the blockchain remembers the entire history.

About the Telecommunications Industry

The main telecommunications industries today are the Internet, mobile communications, data networks, satellite communications systems, digital and analog television, telephone communications, and electronic banking. The rapid development of the telecom industry is one of the hallmarks of the modern economy. In almost all countries, the growth of the telecommunications sector is carried out at a faster pace than the growth of the economy as a whole. From their rapid growth, it is clear that information is becoming perhaps the most important economic resource.

Examples of Blockchain Technology in the Field of Telecommunications

Operators can create a new business line by using blockchain to provide their users with a authentication and digital identity system. To date, telecommunications operators still do not play a significant role in user authentication processes, although they have a lot of data. To avoid fraud, blockchain can play the role of a repository for identification operations.

It is noteworthy that the importance of blockchain in the implementation of 5G is vital. 5G needs many interconnected networks, platforms and hosted technologies that must be compatible to facilitate communication in the system. And blockchain is perfect for this. In addition, Blockchain technology is able to protect telecommunication networks from cyber attacks. As a result, data management will be protected and customer trust will improve. Operators will also be able to expand the market of services, creating secure P2P connections for IoT devices to create a cost-effective and self-managing system, and more.

Blockchain technology offers features like scalability and built-in transparency that can create billing systems based on the blockchain for 5G networks. Operators will be able to manage registration and settlement processes for various commercial organizations. Since the cost of blockchain operations is much lower than that of debit or credit card transactions, blockchain can be used as the basis for paying for such digital assets like music, mobile games, gift certificates, etc., with different companies being able to act as an intermediary of such processes.

Blockchain and Telecommunications Security

The use of blockchain in the security of telecommunication networks is clear, as distributed registry technology can safely and quickly save exchange data and the results of cooperative activities of devices. In the case of hacking a network section, this will not affect the functioning of the entire network.


Enterprise blockchain is only at the beginning of its evolution. In the next 5 years, experiments, checks, and standardization of the blockchain will be conducted. But companies using blockchain technology need to concentrate on the implementation and popularization of this technology now.

Elena Buzovska

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