Blockchain, the king of 2018! (Uh, what’s a blockchain?)

Welcome to 2018, the age of mainstream cryptocurrency day trading and the 10th anniversary of the conceptualization of the blockchain, which is the foundation of Bitcoin and all of its many (many) counterparts.

That’s right. It took a full decade for a fad to get going in earnest and for the common folk to even become remotely aware of its existence.

Two questions you may have at this point:

• “What’s a blockchain?”

and

• “What does it have to do with marketing?”

(If a third is, “How can I stop hearing about Bitcoin?!” – I really wish I could help.)

For the first, it’s hard to be a regular reader of anything these days and not be exposed to detailed background pieces, but in case you’ve avoided them and don’t feel like heading to Wikipedia right now:

A blockchain is an “open, distributed, decentralized public ledger.” Each transaction posted to this ledger is recorded in a unit called, that’s right, a “block” that is linked to the previous block forming, you’ve got it, a continuous “chain.”

This linking is accomplished via an unwieldy long unique string of characters (usually 64 of them) called a “hash” that appears only in the previous block and the new one.

The transactions are verified by a community of people called “miners” who write programs that run on powerful, energy-sucking computers to solve crazily complex cryptographic puzzles just to confirm that the hash character string in the new block matches the one in the previous.

If it is correct, that means no one could have altered the transaction data in the block (trust me) so it’s securely kosher and can be added to the ledger.

Once in there, it is then distributed to anyone who has or wants a copy of the ledger.

Why do miners spend the time and insane amounts of electricity required to do the cryptodance? Because if they are the first to solve it and post it to the ledger, they are rewarded.

For example, in the case of Bitcoin they get… Bitcoin (worth US$15,000 each at this very moment of writing, but maybe much less or more in the next).

Ok, so those are the basics of what a blockchain is. Why it exists is that it secures online transactions made “peer-to-peer” (one person or entity to another) while cutting out any middlemen or “trusted intermediary” who may take a cut of the transaction and/or impose cumbersome, time-consuming, and costly regulations.

In the case of cryptocurrencies that means central banks, for fiat currency (government-backed legal tender like the US dollar or the Euro) it’s a platform like PayPal, for property it’s the mortgage brokers, supply chain has its logistics companies, and for marketers wanting ad space, it’s the media buyers or demand-side platforms (DSPs).

And that brings us to the second question:

The reason advertisers might be interested is that new groups such as the New York Interactive Advertising Exchange (NYIAX), in partnership with Nasdaq, are using it to create fully transparent, open platforms to list and direct-sell future ad space inventory without third-party fees or the fear of fraud – such as with impressions being inaccurately accounted for, as is all too common today.

Another company, adChain, is also using the blockchain to completely eliminate ad buying deception by tagging a creative piece to allow the agency, publisher, and advertiser all know when someone has looked at the ad and what actions they took, without having to rely on someone else to tell them.

Of course these systems and the many others popping up will depend upon widespread adoption for them to be successful, but they are all finally delivering on the long touted promises of the Internet and digital age: openness, transparency, and efficiency.

Let’s just see if the blockchain can help them take root in an industry plagued by bureaucracy, opportunism, and questionable ethics.