How Blockchain will Impact Digital Marketing and Social Media
Bitcoin, Blockchain… What’s the deal with these cryptocurrencies and how could they possibly impact digital marketing and social media?
Nick Rojas, examines the affect that blockchain has on the marketing efforts of small businesses in this follow up to his recent post, “Why Blockchain Matters to Small Businesses.”
You’ve heard of blockchain before, but you’ve probably always associated it with Bitcoin (or another form of cryptocurrency). If that’s the case, you may have been missing out on the bigger picture. The truth is that blockchain has implications that range far beyond the fringes of the finance and technology sectors. It may also be the next big thing in digital marketing, social media, and many other industries.
Confused? Don’t worry—we’re going to explain everything. Buckle up, and prepare for a crash-course in how blockchain can rock your world.
First, we’d better go over exactly what blockchain is and what it does. Once you understand its purpose in greater detail, you’ll quickly be able to see how many potential applications it has.
Blockchain technology was first used to verify transactions made with various forms of digital money known as cryptocurrencies. Bitcoin was the first cryptocurrency, but it was definitely not the last. Today, there are well over a thousand extant cryptocurrencies—most of which rely on blockchain technology to protect their users.
Blockchain functions by creating a digital ledger that is updated whenever a transaction takes place. That might not sound so different from the digital records kept by a bank or credit card company, but wait—here’s where things get crazy. Unlike those other forms of record-keeping, blockchain copies the whole record whenever it is updated and sends the copies to a number of different networked devices. The copies prevent the need for a central arbiter (which is essentially what banks and credit card companies are), which is why blockchain is often referred to as a decentralized ledger. The advantage to this model is that it becomes effectively impossible to falsify transaction data. Enough copies will exist in different places on the network that the correct data can always be verified.
To put it another way: a hacker might be able to get into a credit card company’s servers—but there’s no way they can hack hundreds (or thousands) of seperate devices that all have copies of the information they want. Advantage: blockchain.
Why Should Marketers Care?
Excellent questions, young grasshopper. Here’s why: because blockchain works for data of practically any kind. That goes for personal data too—which marketers need in order to understand their consumers and find better ways to reach them. Here’s an analogy that might help. Think about personal data like money, and think of Facebook like a bank or credit card company. Before blockchain, you’d have to go through Facebook to access the personal data you needed—but with blockchain, you’ll be able to receive it directly from your customers themselves. In fact, you’ll probably have to.
The fact is that more and more consumers are using cryptocurrencies to make everyday purchases. When they do, most of their personal data is protected. As such, you won’t be able to purchase that data from Facebook or Google anymore. Instead, try setting up an opt-in program where you can compensate individual users who provide their data to you directly via a smart contract: code built into a blockchain to complete various deals automatically. Will it cost a bit more at the front end? Yup. However, there’s an upshot: the data you collect will be way more targeted, since it will come directly from people who are actually interested in your brand.
Blockchain isn’t going away anytime soon. In fact, it will probably affect your industry sooner than you think. Be ready for the change by thinking about how to incorporate this technology in your business now, so that you can be among the first to benefit.