Many have heard of it, but just a few have understood it. Since 2013, blockchain has been matched only with the concept of bitcoin, the digital currency. However, it can be applied to different fields, first of all marketing. Read in Italian. But its link to bitcoin has clearly cast a shadow on its potential, meaning marketers neglect it.
We must say that the technology is neither easy nor intuitive.
In a nutshell, blockchain technology decentralizes functions and makes central authorities, both monetary and general, useless (Read more here, link in Italian).This is done by means of file sharing peer-to-peer protocols, private and public key cryptography, and cryptographic hash functions, transforming data with a variable string length into a fixed length record with a unique cryptographic key.
This is how it works: every piece of data or record, such as a financial transaction, is recorded and synchronized on all blocks/computers belonging to the same network, and all data must coincide otherwise the transaction is not authorized. The data corresponds to the “transactions”, while blocks represent the recording of how and when such transactions have been permanently entered into the system. The identity of the person generating the transaction is public, while the type of transaction remains confidential. Data cannot be modified or tampered with. And if someone tries to tamper with one block, all the following blocks are invalidated and that specific blockchain is automatically removed from the network.
The blockchain architecture can be safely and reliably applied to any type of digital data, starting from bitcoin to medical information, data concerning contracts, media etc. to the point of revolutionizing the world of digital marketing and bringing about relevant financial benefits for those who operate in the web universe.
Blockchains are, indeed, “distributed databases”, which can not only keep a “non-hackable” record of transactions, but also store the recordings of digital signatures.
Not needing a central authority (such as Google or Facebook) to ensure the reliability and dependability of transactions, cuts out the middle man. For instance, marketers wishing to publish ads and the owners of websites could communicate directly. Basically, if blockchain can ascertain that users are real and confirm the reliability of data concerning the actual clicks to be paid to websites, advertisers and site owners will not need mediators to sign their agreements, therefore decreasing costs and increasing profits.
Microsoft, for instance, is working on a kind of identification system based on blockchain technology to be integrated into its systems to prevent on line scams involving the use of its products with fake or “second-hand” codes.
Enjoyed this blog? I’ll post more on this subject in next week’s blog. Please check back next Friday for the follow up post.