For digital marketing — from ad tech and agencies to the entire ecosystem — initial blockchain conversations should center on application and readiness. For example, how do we use these new solutions to help publishers, agencies, advertisers, and consumers? Is my organization actually ready to green-light a multimillion-dollar blockchain initiative?
Here’s my answer, mid-2018: I’m a blockchain proponent but I also believe that digital marketing must focus on solutions that leverage only the best elements of distributed-ledger tech.
The promise of blockchain — a way to bring consumers, publishers, and the middle players together in powerful, transparent and dignified ways — that’s real. But making sure the tools we develop truly include the strongest and most important features of the tech … that’s the part I’m watching, because there’s the potential for some quality-drift out there in the blockchain space.
Back to Bitcoin
The first successful public ledger in the blockchain space that we know of was built to support bitcoin, the cryptocurrency that put distributed-ledger on the map. Every blockchain solution aside from bitcoin sacrifices at least one key element of the security, decentralization, consensus rules, and/or incentive structure that bitcoin includes. This is why it’s the foundation to which we need to turn.
Even today, this iteration is the most robust and assured we’ve ever had — a public blockchain of transactions with ownership assigned by cryptographic proofs acting as a store of value for billions of U.S. dollars. These transactions are validated by a peer-to-peer network, using consensus rules for what constitutes a valid transfer between participants.
Bitcoin does not require permission to participate, and transaction blocks are signed by a dynamically adjusting proof-of-work which is performed by “miners.” Key to bitcoin’s success, these miners — rewarded with monetary incentives to follow the rules — invest large amounts of up-front capital toward specialized computers, and the electrical costs of running them, to perform this work.
The bitcoin foundation is the one on which we should base our industry’s work, and we can’t ignore the numerous failures we’ve seen over the last nine years of bitcoin’s existence. Recent advents show that second- and third-layer solutions built on bitcoin can serve the protocol well, however. For instance, earlier this year RSK launched a smart-contract platform which offers the same security as bitcoin in terms of double-spend prevention and settlement finality but that also allows organizations to experiment with new features.
As we look to potentially use blockchain to run what’s expected to become a $215 billion global mobile-advertising industry, we must apply the same level of skepticism we would for any significant in-house development effort. Make certain you incorporate the following steps into your process.
Finally, yes, digital advertising can introduce blockchain to reduce discrepancies in ways that that have never been available to all participants in the ecosystem before — but it’d be a missed opportunity if our industry simply settles for efficiencies around media-buying settlement steps, for example, when the big picture — serving consumers and all our industry stakeholders in more powerful ways — is right in front of us.
Bitcoin has opened up an entirely new way of transacting. It is still early days for the technology, and there is a huge opportunity in front of us to build a more trustworthy ecosystem of transactions.