WHAT IS BLOCKCHAIN TECHNOLOGY?
The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community has now found other potential uses for the technology.
THE THREE PILLARS OF BLOCKCHAIN TECHNOLOGY
The three main properties of Blockchain Technology which have helped it gain widespread acclaim are as follows:
Pillar #1: Decentralization
Before Bitcoin and BitTorrent came along, we were more used to centralized services. The idea is very simple. You have a centralized entity which stored all the data and you’d have to interact solely with this entity to get whatever information you required.
Another example of a centralized system is the banks. They store all your money, and the only way that you can pay someone is by going through the bank.
The traditional client-server model is a perfect example of this:
When you google search for something, you send a query to the server who then gets back at you with the relevant information. That is a simple client-server.
Pillar #2: Transparency
One of the most interesting and misunderstood concepts in blockchain technology is “transparency.” Some people say that blockchain gives you privacy while some say that it is transparent. Why do you think that happens?
Well… a person’s identity is hidden via complex cryptography and represented only by their public address. So, if you were to look up a person’s transaction history, you will not see “Bob sent 1 BTC” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC” while the person’s real identity is secure
Pillar #3: Immutability
Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.
Can you imagine how valuable this will be for financial institutes?
Imagine how many embezzlement cases can be nipped in the bud if people know that they can’t “work the books” and fiddle around with company accounts.
The reason why the blockchain gets this property is that of a cryptographic hash function.
IMPACT OF BLOCKCHAIN TECHNOLOGY IN ADVERTISING MEDIA
The current advertising model is broken: most Internet users utilize ad blockers or ignore ads and advertisers waste money on middlemen, such as third-party ad sellers and tracking services. Blockchain could provide a solution.
In particular, the cryptocurrency known as Basic Attention Token provides an interesting solution. Here’s how BAT plans to improve the advertising experience: Advertisers use BAT tokens to purchase advertising space and user attention through BAT’s digital advertising platform; publishers and content creators (websites, YouTubers, Twitch streamers, etc.) then receive ad revenue and user contributions in BAT tokens; meanwhile, users can earn BAT tokens for any ads in the BAT platform they see (“ad revenue sharing”).
BAT is already integrated with Brave, a new web browser that provides more privacy than Chrome, Safari and other popular browsers. In fact, soon you will be able to earn BAT just by using Brave (although it’s not available yet). BAT hopes to eventually expand to other browsers and websites, as well.
Blockchain technology is having a profound impact on the advertising industry, particularly online advertising. Numerous blockchain projects are currently in the works that are attempting to revamp the traditional online ad model, which has been heavily criticized for the simple fact that users, by and large, cannot stand online ads. The proliferation of ad-block software< attests to this fact.
The problems with the traditional online ad model have inspired a subset of blockchain/cryptocurrency projects that aim to do away with disruptive, irrelevant ads. Brave is a web browser that boasts a host of features aimed at improving users' experience online, while at the same time providing new revenue streams for publishers and advertisers.
By default, the Brave browser blocks all ads online, while giving users the option to allow ads on certain sites that they want to support. The Brave browser also contains a ledger system that anonymously captures user attention to accurately reward publishers and advertisers for successful user engagement. Attention, in this case, is measured by a variety of metrics related to user interaction with ads (e.g. the number of views that last a certain length of time).
Exactly how publishers are rewarded is through the Brave browser's blockchain-based cryptocurrency, the Basic Attention Token (BAT). As the name suggests, BAT is intended to accurately value users' attention online.
Brave's model offers benefits for content publishers, advertising companies, as well as users. Publishers receive BATs when users engage with advertising content on their site. Advertisers benefit from the Brave model through the browser's anonymous attention tracker, which allows advertisers to more effectively target their ads toward users and platforms that are likely to produce greater engagement, leading to higher returns on investment. Finally, users are also rewarded with BATs for their attention when they engage with online ads. CEO Brendan Eich estimates that users could earn over $70 a year through the Brave browser by 2019. Users can then use their BATs to purchase premium services on the Brave browser, or even to tip publishers and content creators
ELIMINATION OF ADVERTISING FRAUD
The single largest impact that blockchain technology is having and will increasingly have on the advertising industry is the elimination of advertising fraud, creating a transparent advertising market that will ultimately reduce waste for advertisers as well as publishers. Forrester estimated that $7.4 billion was wasted in digital advertising and will increase to $10.9 billion by 2021 due to advertising fraud. The blockchain is an ideal solution to this problem and is in fact already being implemented to provide transparent information to advertisers and publishers alike. On either side of the transaction, parties will be able to verify placement and views of advertisements.
There are certainly some interesting ways that companies are countering the fraud that’s rampant in digital ads today, and using the promise of blockchain to address it.
But it’s not just digital click-through ads that are leading advertisers to pay higher rates; online video ads face the same problem. Creators, broadcasters and publishers struggle to make money online (currently, if you’re a creator on YouTube making $100K, YouTube will take 45K and pay you 55K weeks, or months after), while advertisers and agencies are facing a crisis around ad-fraud.
To counter this, UK-based Verasity, a blockchain-based video platform, will eliminate fake views and bots from online video
DISRUPTION/REDUCTION OF ADVERTISING FEES
Currently both advertisers and media are losing out - media is not limited to one area/ subset of people, so advertising is largely not targeted - advertising might be targeted to British readers of The Guardian UK, for example, but advertisers still have to pay full rates despite the fact that most of the readers are in other countries and are unlikely ever to buy their product.
Many users- around 20% estimated- now put gadwalls up- and yet advertisers are still paying the same rates. Advertisers have also had to go through third party management agencies- who have now reduced their fees, due to increased competition and the need for more transparency, but are still having to pay fees to third parties, even for reduced readerships. Another problem advertisers are currently facing are bot clicks or spam clicks, where hundreds of bots are employed, or even real people in countries with cheaper labour are employed to repeatedly click on ads. For advertisers who pay for cost per impression, it is currently hard to track which clicks are real and which clicks are fake.
Blockchain will put advertisers direct to the media- this direct relationship will allow advertisers to get much more specific where they put their ads- rather than placing an ad with the Guardian UK, for example, they would be able to put their ad right by the specific columnists who write about their target subject, so their ads would be much better targeted to their specific audiences. Advertisers will also be able to negotiate directly with the media- thus getting better prices subject to availability. They will also pay via smart contract - allowing them to also pay per genuine click, which will be able to be tracked and recorded via AI and blockchain.
Advertisers have been dropping away from advertising in media, due to lower readers of print, adwalls, and due to less-specific engagement, but blockchain could help both advertisers reach more of their target audience for the same spend, and re-attract advertisers to media by providing these new benefits to advertisers.
There have already been a few smaller projects launch trying to do advertising on blockchain but they haven't seemed to have the contacts or business plan in place to succeed and sufficiently disrupt the market.
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