BLOCK WHAT? BLOCKCHAIN…WHAT THE HELL IS IT?

By - CTL
January 29, 2018
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By Marcus Honesta.

Blockchain is the buzzword that is getting a great deal of press at this moment. But what is Blockchain, and how will it affect you and your Marketing and Advertising in the next few years.

To understand better the implications we went to an expert – Unruly.com – to explain just how this might happen. But who might you ask are Unruly.com? Well according to their web site they describe themselves as:

Unruly gets videos seen, shared and loved across the open web for brands that want to move people, not just reach people.

By bringing emotional intelligence to digital advertising, we help 91% of Ad Age 100 brands inform and inspire 1.44bn people around the world, using polite outstream formats on sites that people love. UnrulyX, the viewable video SSP, creates better ad experiences for consumers, improved brand outcomes for advertisers and increased revenues for top-flight publishers.

Unruly was founded in 2006 and acquired by News Corp in 2015. With 300 Unrulies across 20 locations worldwide, our super power is emotional intelligence and our secret weapon is passionate people on a mission to #DeliverWow.

In its 2018 predictions list, Unruly advises us:

 “Blockchain looks set to revolutionise the fight against ad fraud in 2018”.

“The central tenet of blockchain technology – decentralised ledgers and data storage – has the potential to allow far greater transparency along the advertising supply chain, ensuring all parties have visibility on whether an ad has been seen, who it was seen by and what actions were taken.

With this opportunity up for grabs, the ad industry is already seeing an influx of blockchain-based exchanges and a number of industry bodies creating working groups. We also expect to see a number of high-profile mergers and acquisitions as the dust settles.

However, if blockchain exchanges are going to pave the way towards a fraudless ecosystem, speed will be a big factor. Currently, blockchain-enabled exchanges can only handle approximately 5 transactions per second, which is far slower than real-time bidding (source: TechCrunch)”.

A bold prediction. However it doesn’t explain what Blockchain really is or does.

In effect all contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economy’s digital transformation. They’re like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

Blockchain promises to solve this problem. The technology at the heart of Bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. To explain just how block chain works we turned to “The Harvard Financial Review”.

How Blockchain Works:

Here are five basic principles underlying the technology.

1. Distributed Database

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although there is enthusiasm for its potential, however there is a worry; a worry about the hype. It’s not just security issues (such as the 2014 collapse of one Bitcoin exchange and the more recent hacks of others). Experience in studying technological innovation tells us that if there’s to be a blockchain revolution, many barriers technological, governance, organizational, and even societal will have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.

True blockchain-led transformation of business and government, we believe, is still many years away. That’s because blockchain is not a “disruptive” technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum.

 

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