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How XYO network can help solve a $2 billion problem for the travel industry

Sanchit Ameria



How XYO network can help solve a $2 billion problem for the travel industry
Source: XYO Network

For travelers on the go, few things are more frustrating than to arrive at your destination only to discover that your baggage has gone missing and with no clue where it ended up. Aside from the inconvenience, no matter how well the rest of your flight was, you’re sure to remember only that it ended on a sour note. As bad as it is for an individual traveler, the problem is even worse for the airline industry as a whole.

One industry estimate put the cost of dealing with lost luggage as a $2.1 billion loss in 2016. According to the U.S. Department of Transportation, airlines are required to pay a traveler up to $3,300 if their luggage is delayed, lost or damaged for a domestic flight and up to $1,742 for international flights.

But airlines are not alone in dealing with preventable losses. Lost keys remain a sizeable problem for rental car companies as careless customers do not always place keys in return boxes when they bring a car back after hours, or somehow manage to lose keys in any other number of ways. Stolen vehicles also cause lost revenue headaches for car companies as well. It may not sound like much, but costs for replacing keys and having employees devote countless hours dedicated to that task really adds up.

How can airlines and car rental companies take steps to recover this lost revenue? XYO Network will soon be able to help solve ongoing customer service and revenue draining problem.

XYO has developed cutting-edge blockchain technology that makes it economically viable for airlines and rental car companies to track the location of luggage, keys, packages and other types of assets. As these types of items move from one location to another, their locations are logged in the blockchain. XYO has developed a way to provide a transparent, unmodifiable ledger of a bag’s movement from the time it leaves a customer’s hands until the time they pick it up at a baggage carousel. Similarly, car companies can track the location of their keys from the time they rent a car to a customer until the time when the customer returns the car to a rental location.

What is XYO?

XYO has built the first location-based, blockchain network that tracks the movement of items in the real world. Most cryptocurrencies are focused purely on a digital exchange of value, meaning that they deal only with financial instruments or contracts. There are even some cryptocurrencies that only exist for trading.

After years of research and development, XYO has found a way to bridge the digital world to the real world. Utilizing Bluetooth and GPS devices that have location transmitting abilities, XYO is able to determine the location of items it tracks. Because there are already millions of devices available in the real-world that can provide real-time location information, XYO doesn’t have to build and deploy these intermediary transmitting devices. It simply leverages those that are already available.

If lost luggage and keys are such a costly problem, why hasn’t the travel industry fixed it already?

The answer is simple. The technology to build a tracking device small and cheap enough to fit on key rings or attach to luggage hasn’t been available before now.

Unlike hotels, which seem to have figured out this problem by providing customers with cheap, easily replaceable cards, at least for rental cars, such technology simply isn’t available. Replacing car keys is expensive, and you can’t drive a car without one.

There hasn’t been an outside company that’s stepped up to the plate with a solution because it goes back to cost. It’s not only tracking devices that must be created but also the network they’ll run on as well. This is an extensive and costly build out, making it easier for airlines and car rental companies to just swallow the losses.

Even if a company could present a device tracking solution, rental car companies and airlines would have to figure out how to work it into their business models and infrastructure.

Rental car companies would likely absorb the price since a device must be placed on each key ring or a tracking device on actual cars to prevent vehicle theft problems. But it could also mean increasing rates for customers to pay for tracking devices and network usage.

Airlines have a different problem. Because airlines don’t own a passenger’s luggage, the tracking device could be offered as an option. Airlines might offer it for free, or it could wind up as a separate charge, much like existing baggage fees.

The travel industry also needs to be concerned with the reliability of the network. Transparency would be an issue as well, meaning that if a system was built, passengers may not have any way to track where their luggage is at any given time.

How XYO will increase revenue in the travel industry

By tracking keys and luggage, XYO can cut down on lost revenue due to these items being misplaced. XYO would be able to provide this tracking ability through small, affordable devices that can fit on a key ring and attach to or fit inside of luggage. Here are how some real-world solutions might take place.

Rental Car Companies

Consider a customer who misplaces their rental car keys or even accidentally leaves the rental car company with the keys after turning in the car. The rental car company can simply log onto the XYO network and find out exactly where the keys for a given car are and who has them. Because their keys were not digitally detached from the customer, the company will know how to contact the customer.

Rental car companies can save even more by tracking stolen vehicles. In addition to providing a tracking device on key rings, the car can also have a tracking device. In the event a car is stolen, it’s critical to try and find the car as soon as possible to prevent it being damaged. Of course, the rental car company will not know who the perpetrator is since they are not digitally attached to a key ring or the car. But the car can certainly be tracked in real-time.

How will the rental car company know the car has been stolen vs. a customer using the car? Because XYO uses smart contracts on its blockchain, a car leaving the facility that is not digitally attached to a valid, paying customer will trigger a geo-based action on the smart contract. This action will then inform the rental car company of a possible theft.


Lost luggage is the bane of the airline industry. Not only do they have to reimburse customers for lost luggage but it also eats up lots of customer service time and generally results in negative publicity as well as a disgruntled passenger. Right now, at best, the problem is that luggage is basically eye-balled with periodic scans during its entire movement. That isn’t enough to prevent lost luggage.

Of course, lost luggage isn’t just a burden on airlines. Most of the burden is on customers. If a customer doesn’t initiate a lost luggage claim, it’s likely nothing will happen. But once the claim has been initiated by the customer, it doesn’t stop there. That is only the tip of the iceberg in the customer’s journey to retrieve their luggage.

To resolve this problem, XYO’s tracking devices can continuously broadcast passengers’ luggage locations. The airline will always know where any specific piece of luggage is located. In a related cost-saving measure for airlines, by employing crypto-location technology, manual scanning of luggage will become redundant and eventually obsolete.

Since a tracking device does not need to be proprietary to any single airline, a device can stay in a bag and be used over and over with different airlines. It only needs to be replaced if it is damaged. This allows airlines to cut their device cost since not every bag will need a device for each individual flight.

Additionally, customers will be able to log onto the XYO network and check the location of their luggage. There will be full transparency for both airline employees and customers.

Digging into the details of how XYO works

The XYO network is blockchain based and uses several components to accomplish real-time location-based tracking. These components include:

Sentinels are cost-efficient tracking devices that gather data. Essentially, they are location witnesses and broadcast their location to Bridges. A location data point is referred to as a heuristic. It is the data being broadcasted.

Bridges are location data transcribers. They receive Sentinel heuristic data and then make it available to Diviners. Bridges also create Proof of Location metadata, which is used to validate location information.

Archivists store location information from Bridges. They do this in a decentralized form with the goal of having all historical data stored so that it can be easily retrieved if necessary.

Diviners answer queries on the XYO network about Sentinel heuristics, basically answering the question of where a particular item might be at a certain point in time. Query answers are logged into the blockchain by Diviners using Proof of Work.

The XYO network is decentralized and trustless. This means no one has complete control over the network. Thus, trust that any party will correctly log information into the blockchain ledger is not required. This provides a high degree of security because no one can hack or modify a blockchain-based ledger or avoid Proof of Location and Proof of Work metadata entries.

To ensure accurate location information, the XYO network provides ERC20 tokens as an incentive for providing location data. Consumer querying for the location of an item pays in XYO tokens to have their query answered. The more data required to answer the query, the more tokens it costs.

For example, a user might query the location of their luggage and pay a small number of tokens for the transaction. An airline might query for all luggage on a flight, which requires more resources and data from the network. Thus it cost more in tokens.

Unlike many cryptocurrencies currently in existence, XYO rewards with token usage rather than token mining. This type of incentivizing puts more reward on token utility rather than on computing power, which miners need. Because computing power is only for a select few, mining skews the incentive to a small group. XYO better distributes incentive throughout the network since there are far more people using the XYO token than there are mining it.

Integrating the travel industry and XYO Network

Integration for rental car companies into the XYO network will be fairly simple. After installing slip-on key ring devices, all keys will be trackable. The same holds true for placing tracking devices on to cars to help prevent theft. XYO handles the network aspect so rental car companies do not need to worry about any type of infrastructure.

Rental car companies can decide if they want to provide access to the XYO network for customers or simply have customers call the car company when a key is lost.

For airlines, they will ensure every customer’s bag receives a tracking device. The small cost of the device can be included in baggage check fees. Airlines will reap cost efficiencies since some customers will have a tracking device from checking bags with a different airline. Since airlines can use generic tracking devices, it does not matter which airline provides them. There isn’t a need to replace a tracking device with an airline specific device.

Providing real value to everyday consumers and businesses

The XYO network is the first of its kind, offering a location focused blockchain. It bridges the divide between the digital and real worlds. Unlike many existing cryptocurrencies currently in the market that focus mainly on financial services, XYO provides value to everyday consumers and a variety of companies and industries that require location-based technologies.

To know more about XYO Network, Click Here!

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A part-time contributor at AMBCrypto, Sanchit is a IIM, Indore graduate with interests in the blockchain and cryptocurrency technology. His work has been published by Indian Commerce Magazine and a couple of other local publications. Sanchit currently does not hold any value in any cryptocurrencies or projects.