When you think of Bitcoin, you might have one of two opinions. You may consider it a lucrative endeavor, perfect for enjoying finance online. Or, you may think it’s a dangerous gamble to invest in any cryptocurrency. In short, it’s a divisive subject. That’s why it has experienced many highs and lows including breaking the 7K threshold in August, then falling just days later.
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While cryptocurrency itself is up for debate, many people are now looking past it. In fact, they are looking at the technology which creates the currency. This is known as the blockchain, and the idea behind it is fascinating. While the concept would make up an entirely different article alone, all you need to know for this article is how it works. The idea is that whatever transaction you carry out, trusted third-parties are updated. This creates an official record, also known as the chain.
Because of this, many experts have weighed in on blockchain technology as the future. Forbes predicted it would find more use outside of finance, all within this year. The technology is in its early stages, it will take some time before we see any noteworthy effects. However, there are three ways it will change digital marketing for the better.
Blockchain is a system in which records are maintained within an encrypted database across a linked network. The biggest difference between storing data on the blockchain and more traditional storage methods is the trust aspect. Using traditional methods, there is usually a single person or organization with full control over the data. In a distributed blockchain system all participants (nodes) store a copy of the information. Doing so creates a chain of trusted blocks, hence the term blockchain. Data stored on the blockchain is immutable, implying it can not be changed. Only new information can be appended. For a fuller explanation check out this article What is Blockchain.
Ad Tracking Changes
Picture this: you’re online shopping around for a nice red shirt. So far, you haven’t found any that catch your eye. Later in the day, you start seeing ads for red shirts on Facebook. This is just a taste of targeted online advertising. The issue with this, however, is control. According to Hootsuite, each ad on Facebook depends on clicks. A thousand clicks could cost $7.19, and that can change depending on the company. To put it in perspective, consider that over 60% of adults in the US use Facebook.
Advertisers utilize “cost per click” ads all the time, but they still spend a lot to maintain a campaign. Even if there is exposure, let’s consider the end user’s point-of-view. Your ad may attract some interested potential buyers, but the majority will find pop-up ads invasive and bothersome which can be disadvantageous.
With the blockchain system, advertising is done via the basic attention token (BAT). This works hand in hand with the Brave browser, which has become the browser of choice for individuals who prefer anonymity on the web.
Here’s how the BAT works: Those who pay for advertisements use tokens to “buy” ad space. This is kept in private tabs, although other forms are currently being considered. Users meanwhile are given tokens if they choose to view ads whilst using the browser. Those who do are allowed to specify what ads they want to see.
This unique system helps companies find valuable data on their intended target audience faster. Meanwhile, users can enjoy browsing online without having to worry about seeing ads they don’t want. Better yet, they are compensated with BAT for their trouble.
Easier B2B Experience
Contractual obligations between businesses can be tricky. Whether it’s a breach or vague relationship, the main issue stems from the contract itself. Definitions can be skewed, which allows written or spoken agreements to be unfairly abused. Even when contracts are properly written, it can take a long time to put into practice. Businesses have to account for other parties, such as government offices or lawyers. For example, the Winklevoss twins successfully gained over $65 million for suing Facebook over a dispute about ownership, which says a lot about how ironclad contracts need to be.
Enter smart contracts. With a computer-programmed contract, you can set limits and consequences more easily. This system basically lets you create a digitally secured agreement which makes it easier for both parties to ensure their relationship is private but properly enforced–with or without third party intervention.
Take for example, payment for advertising. With a smart contract, the advertising company has to reach a specific milestone to be paid by their partner. Similarly, the partner must pay the right amount to Escrow in order to continue with the service. The digital contract enforces all of these stipulations without the aid of a third party contract specialist, negotiator, or lawyer. This helps users’ digital marketing efforts work more smoothly, without any financial or legal backlash.
Market Transparency
Many companies online promise high-quality service or reimbursement which doesn’t always happen. Some customers find their products to be counterfeit, while others end up being scammed. For example, some shady cryptocurrency exchange platforms fail to keep their security promises. Imagine how nerve-wracking a Bitcoin trade can be, especially after South Korea had lost $30 million in coins through Bithumb.
Even solutions for better service haven’t proven effective. You may be familiar with the infamous music piracy boom. This started in the late 90s, and has plagued many artists ever since. Rather than physically selling disc copies, many of them have turned to streaming. However, platforms like YouTube pay royalties per click, as with advertising. It can be useful for certain artists, but there are no guarantees of success.
That’s why blockchain technology can help maintain a safer and calmer environment. All transactions or products have to pass through a digital ledger system. This allows users to see where their products come from, and who is handling them. This makes it easier for legitimate producers, because transactions can be traced which helps build loyalty and trust in their customers.
On the customer’s end, they can enjoy a high-quality product without going through other third-party platforms. This means they can directly pay for the artist’s work. For example, the site Tao has used tokens for their music service. These can be used by the band to let them create and sell songs online. Purchases by the audience are direct and compensated straight to the band’s token amount.
Conclusion
With a more direct and traceable medium, the blockchain can vastly improve marketing worldwide. While tokens as payment can seem odd, it’s not that out of the ordinary.
And as the technology becomes more easily available to the public, the way it is utilized will also evolve. Soon, you might enjoy a higher token bank than an ATM account. With platforms like Brave and Tao, you could say that cryptocurrency is headed in the right direction.
Admittedly, it’s still taking baby steps. Commercial use of this technology needs more testing, practice, and evidence. However, this could be the beginning of an upheaval in digital spending.
About the Author
Emmanuel Darko is a Blockchain technology entrepreneur and an advocate for the adoption and use of Distributed Ledger Technology (DLT). An ex-banker who has had stints in both commercial and investment banking when he worked with Zenith and Data Banks respectively and he is currently VP at https://icowatchlist.com/.
References:
https://blog.hubspot.com/marketing/blockchain-could-change-digital-marketing
https://www.forbes.com/sites/danielnewman/2017/11/14/4-ways-blockchain-will-transform-digital-marketing-and-advertising/#1c2ba6703fb7
https://www.entrepreneur.com/article/304654
https://www.forbes.com/sites/bernardmarr/2017/11/22/5-essential-blockchain-predictions-that-will-define-2018/#5dab3ded7c93
https://www2.deloitte.com/ch/en/pages/strategy-operations/articles/blockchain-explained.html
https://medium.com/the-mission/a-simple-explanation-on-how-blockchain-works-e52f75da6e9a
Photo by Luana Azevedo on Unsplash