Probably the most valuable thing to come out of Bitcoin and the cryptocurrency frenzy is blockchain technology.
Sidebar: I always imagine that the world of Netflix’s Altered Carbon is the perfect venue for cryptocurrency. Unfortunately, real life isn’t quite there yet, and there are a host of articles and blog posts about trying to buy things with Bitcoin and failing.
Blockchain technology has been around for a while, and has found new life in the adtech space, but before we get into that, the elephant in the room must be addressed:
What is Blockchain Technology?
Great question. Blockchain is a technology that has its roots in data structures and encryption. It is not intrinsically tied to cryptocurrency, though cryptocurrency would not be possible without Blockchain.
Blockchain keeps a record of all data exchanges (blocks) by using a peer-to-peer network of distribution that continually updates this record (ledger) after every data transaction. A ledger hosted on the blockchain is completely decentralized (hosted by millions of computers at one time) and publicly accessible; this makes it incorruptible (since there’s no “master” copy of the data) and easily verifiable (by finding any other copy of the shared data).
What?
Agreed; let’s get an analogy going.
One of the best ways I’ve seen blockchain explained is as Google Docs without Google.
Google Docs is great. Instead of creating a document in word, emailing it to another party, waiting for them to make edits, and then having them send it back to you, Google Docs lets you create a document and share it with any other parties you wish, so that you can collaborate on the doc in real time.
After every edit, Google Docs automatically saves changes to a changelog that is then accessible as a version history to anyone with access to the doc.
Currently, most databases are operating in the pre-Google Docs era. Two parties cannot be working on the same data record at the same time. The data exists in one place (often referred to as a “walled garden”), and it must be sent to other places in order to transact.
The beauty of the blockchain is that if data exists in this decentralized place, and is safely shareable only to the parties that the creator chooses, data transaction can be sped up immensely, and there’s no risk of data corruption.
A blockchain-based database also allows every individual data holder (yes! That means individuals like you and me!) to control their data and who has access to it.
The Media Play
Advanced advertising and data-driven audience targeting is continuing to take hold on the media industry. Advertisers want to find and reach their most valuable audiences, and inventory holders want to optimize their portfolios to get the most revenue out of it. The way to do it is audience data.
The problem with audience data now is that it exists within those walled gardens of individual companies. Think platforms like Google, Amazon, and Facebook; or credit bureaus like Experian. In order to utilize data from any of these organizations, a purchase must be made, data matching must be done, and then the data must be analyzed, segmented, and prepared for transaction via traditional and digital channels. It’s a long, slow process.
Blockchain can help maximize the security and efficiency of this kind of data-driven audience, but that’s also a long story. Stay tuned for Part 2.