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What Is Web3?

June 16, 2022 No Comments

How a blockchain-based decentralized internet can change the world

Web3 is a term describing a future internet built on decentralized blockchains, which are the ledger systems currently used by cryptocurrencies.

What Is Web3 in Simple Terms?

At a very basic level, Web3 is the third stage of internet development. To understand exactly what Web3 is, you first need to have a basic understanding of the first two stages.

The first stage of the internet, Web1, mostly involved users reading static webpages, although forums and message boards did exist. The next stage, Web2, marked the arrival of social media like Facebook and Twitter, and sites based around user-generated content like YouTube. The big difference between Web1 and Web2 is many people transitioned from passively consuming content provided by big companies to creating and sharing their own content, although that sharing is still facilitated by websites owned by big companies.

The basic idea behind Web3 is it will represent a transition from big companies controlling and monetizing content on the internet, to individual creators and consumers sharing content and interacting through decentralized networks. These networks would rely on open protocols, allowing anyone to connect and participate, and shift power away from big companies and toward creators and users.

What Is Web3 and How Does It Work?

Since Web3 isn’t here yet, we don’t know exactly how it will work. Most concepts of Web3 involve the blockchain, an unchangeable ledger system used by cryptocurrencies to keep track of transactions. The appeal of the blockchain for Web3 supporters is that it logs everything in a way that is transparent and impossible to edit or falsify. Each new transaction creates a “block” in the ledger anyone can see.

The main issue of the blockchain is the same as its purported benefit. Because nobody can edit the ledger, and anyone can create as many crypto accounts as they want, it’s hard to address and protect against fraud. Once something exists on the blockchain, it’s impossible to remove.

Some proponents of Web3 have suggested that creators and users could monetize their efforts on the internet through the blockchain, or that users could monetize their own data for targeted advertising purposes the same way Facebook and other companies sell that kind of data today.

Control over decentralized services could also be placed into the hands of users, instead of big companies. Decisions to change rules and regulations, when to ban users, and other choices could be voted on by users of a decentralized service instead of decided unilaterally by the company that owns a website. This would take the power out of the hands of big tech companies and place it in the hands of users.

Are There Any Examples of Web3 Today?

The concept of creators and users being compensated through the blockchain is currently still in its infancy, but there are some examples. The video game Axie Infinity is somewhat similar, in that it runs on the Ethereum blockchain and rewards users with cryptocurrency for achieving goals.

Another example is Helium, which is a crowdsourced wireless network that rewards users with cryptocurrency for sharing their home network connections. This effectively creates a large network of hotspots users can tap into, and the owners of those hotspots are able to receive compensation in the form of crypto tokens.

This “play to earn” setup is one of the most widely talked about features of Web3, as it could have a huge impact on both creators and users. Through the blockchain, Web3 could allow creators to monetize their content without relinquishing control to big tech sites, and users could monetize their activities and even their own data.

What About Decentralization of Web3?

Proponents of Web3 spend a lot of time talking about the blockchain, but that’s only one part of the larger picture. The other central conceit of Web3 is it will be decentralized in a way that Web2 isn’t. An easy way to think of this is today, Twitter users can communicate with each other, but they can’t communicate with Facebook users or Instagram users. That’s because Twitter owns its website, controls its communication protocols, and keeps everything locked down. The same is true of most other Web2 sites and services.

For Web3 to function, these would need to be replaced by decentralized services. There are actually signs of this today in the form of federated services where multiple Web2 sites are able to communicate using an open protocol. One example is Mastodon, which is free and open-source software that individuals and organizations can use to build their own microblogging platforms that work a lot like Twitter. Users of the original Mastodon site and users of others, like the India-based Tooter, are able to communicate with each other, because both sites use the same open-source protocols.

Is the Metaverse Web3?

The metaverse isn’t Web3. It’s a term used to describe immersive digital worlds, often experienced through VR instead of a computer monitor or phone screen. In this metaverse users can play games, socialize, and communicate. The big connection between the metaverse and Web3 is that various items in the metaverse could be NFTs, like your avatar, virtual real estate, and other items.

The big difference between Web3 and the metaverse is the latter is currently being championed by big tech companies like Facebook, Microsoft, and HTC. Since Web3 is envisioned as being driven by decentralized networks, open protocols, and the blockchain, the metaverse would seem to miss the mark.

Will Web3 Change the World?

It’s impossible to say exactly what Web3 will do, or even precisely what form it will take, since it’s currently still just a set of loose concepts. There is a real potential for Web3 to change the world though, or at least to drastically change the way you use and interact with the internet.

If Web3 does rely heavily on the blockchain, it could present new ways for both creators and general internet users to use the internet, and a shift to decentralized services would completely alter the landscape and potentially big tech as well.

FAQ

What does “decentralized” mean?

In the world of Web3, decentralization means that the internet and every site on it exists across a distributed network instead of companies owning and maintaining the servers. Ideally, this means that the internet doesn’t really “belong” to anyone, but the concept is vague and nobody has made any progress toward achieving it.
How does cryptocurrency work?

Most cryptocurrency uses “proof of work” to distribute tokens, which means that computers have to solve increasingly complex problems to “mine” the currency. Because of this, cryptocurrency uses vast amounts of energy and has driven up the prices of graphics cards. Cryptocurrency is also extremely unstable and vulnerable to fraud, and it hasn’t seen widespread acceptance for retail transactions.

By Jeremy Laukkonen

Sourced from Lifewire

In News

How Covid broke supply chains, and how AI and blockchain could fix them

February 1, 2022 No Comments

By Andreea Minca

When the coronavirus crisis erupted in 2020, it became apparent that the medical emergency was accompanied by severe shortages, especially in some medical devices.

The pattern was first observed for ventilators: demand spiked everywhere and the supply chain was disrupted. This was because production of the devices spanned multiple countries, with each part dependent on other parts manufactured in different locations. The longer the chain and the more complex the dependence, the greater the exposure of any point to the disruption of another one, and to mandated shutdowns.

Now, two years since Covid first hit, this pattern has affected almost every sector of the global economy. “Supply chain issues” have become so widespread that they are now a running joke, affecting everything from furniture to groceries. But why has Covid had such a severe effect on how we receive products and goods?

In recent decades, supply chains became lean, and they lengthened as they became more cost-efficient: more and more steps were added in the manufacture and transportation of any given product in the name of speed and cost. This means there are more and more places where something can go wrong between you ordering something online and it arriving to your door.

Scandi living room interior with grey, big sofa in the center and modern picture on the wall — The supply chain crisis started with ventilators and ended with sofas. Photographee.eu/Shutterstock

Today, downstream suppliers – such as those who provide vehicle control systems to your car manufacturer – depend on upstream suppliers – such as chip manufacturers – to deliver on time so they can in turn deliver on time to you.

With long chains, risks are now shared between multiple entities all around the world.

Using AI and blockchain to protect trade

Supply chain problems have a knock-on financial effect known as trade credit contagion. This is where firms delay payments to suppliers because their customers delay payments to them. The pay-on-delivery model can lead to cancelled or delayed shipments which can in turn lead to bankruptcies.

While a high proportion of trade credit risk remains uninsured today, a post-pandemic world may see insurance and reinsurance firms fill in this protection gap.

Researchers are currently working to develop methodologies to identify vulnerabilities in global supply chains and to understand their trade credit contagion risks. The goal is to make these systems more robust overall.

How can we design ways to design insurance and reinsurance contracts in order to effectively share the risk and mitigate vulnerabilities? How can reliable trade credit lead to fewer delays in supply chains and replace the familiar predicament we face now, of paying for something in advance with an unknown delivery date?

Artificial intelligence and complex network theory are helpful in identifying the structures that could pose systemic risk. They help us ask: which patterns of connections are likely to lead to delay and trade credit contagion and which are more robust?

Using these tools, we can create large-scale simulators of global supply chains responding to a wide variety of shocks and then use machine learning techniques to detect the problematic parts of the chain. This knowledge can then be used in market designs that strengthen the system before another pandemic or disaster occurs.

Other novel technologies such as blockchain bring the promise of using high quality data to analyse supply chain dependencies. blockchain technology uses real-time data and transparent verification carried out by multiple parties. In combination with other features, such as smart contracts, this could lead to timely resolution in cases of disputes along the supply chain.

An aisle in a warehouse with shelves stacked with boxes — We need to insure each link in the chain. dreamnikon/Shutterstock

My research involves

using blockchain to streamline record-keeping and payments. This problem is challenging because the adoption of blockchain depends both on the specifics of the technology and the cost.

The problem of adopting technology in the presence of positive externalities (whereby firms adopting the technology in turn improve the operations of external parties) is an old one in economics, but now these externalities are systemic in nature: the effects propagate along the chains. The cost of the technology depends on how many firms adopt it, and each one faces business specific costs based on its position in the supply chain, its risk tolerance and its costs to insure these risks.

Real-time recording keeping, the traceability of transactions, and the immutability of blockchain can all help supply chains become more efficient. This is all the more true if we consider the full length of the chain, where transactions need to be verified by several parties: participants in the supply chain, insurance and reinsurance firms.

The future of supply chains

Trade credit insurance is likely to grow after the pandemic. It may rely on private-public partnerships – the pandemic has shown that governments become important players when they impose shutdowns in certain areas.

These funds can be used to make up for payment delays, reduce losses and jump-start critical production where necessary. But not all links in a chain can be insured, and an important challenge is to identify the most important stages under different shock scenarios.

Supply chains can also be rewired – large-scale algorithms can identify which suppliers need to be replaced and which new ones need to emerge.

In a few years, supply chains may look different, as the overall goal shifts from minimising costs, as was the case before the pandemic, to minimising delays and trade credit risks. The end consumer will drive the need to rewire the network, as demand shifts. Ultimately, the flexibility of the customer determines the resilience of the supply chain.

Feature Image Credit: Studio concept/Shutterstock

By Andreea Minca

Sourced from The Conversation

In News

Advertising Fraud Falls Flat When Faced With Transparency: How Can Blockchain Help?

December 13, 2018 No Comments

By Darryn Pollock

The expansion of the digital realm has been fuelled by digital advertising, but increasing numbers of internet users are the reason this fuel exists. As the global audience has moved behind their computer screens, brands, companies, and services have followed, using digital aids to hone their engagement.

The problem is even though advertising online can be far more niche and focused, it can also be falsified and fraudulent. Those companies looking to advertise digitally are paying for certain levels of engagement, seeking numbers which they pay dearly for.

However, being online means that there is a multitude of ways in which these numbers can be falsified and fraudulently submitted. Ad farms, pixel stuffing, botnets, ad stacking are all tools of the advertising fraudsters who are looking to exploit a system lacking in transparency.

That is a keyword in the fight against advertising fraud – transparency. At first, brands and companies rushed to be online when it was apparent that is where the audience was, but as they have become savvier and assured in the space, their demands have become more calculated.

Hitting the numbers desired, and paid for, is one thing, but companies are also looking for proof and assurance that those numbers are being hit, and not fraudulently so. However, the standards of online advertising transparency are grossly inadequate as it stands.

Ad fraud is costing an estimated $3 million to $5 million per day from advertisers who are forced to believe and accept what the publishers are telling them is happening on their sites.

Because there is this desire for transparency in the online advertising ecosystem, one has to look at what blockchain technology can offer regarding addressing these issues. There are already overly-ambitious projects wanting to cut out the entire intermediatory ecosystem of the advertising space, but this is hardly plausible.

However, there is no doubt that at some level, blockchain and its transparency can help aid in reducing the high level of digital fraud taking place all the time in advertising.

Fighting a battle

The advertising revenue fraud that exists currently is of a large magnitude, but also something that is well documented. Google recently cracked down on a multi-million dollar ad fraud scheme that was utilising over 125 android apps.

Google uses several filters and machine learning models. It also collaborates with advertisers, agencies, publishers, ad tech companies, research institutions, law enforcement, and other third-party organisations to locate potential threats. However, even with all this effort, the crux of the matter is the lack of transparency.

It is the relationship between publishers and brand/companies that need to be addressed at the grassroots level, not the problems that come after this then need to be fixed, as is Google’s directive currently.

“A lack of standards and requirements around reporting has led to a speculated $120 billion of media spending under review due to trust and transparency issues,” explains Anda Gansca, CEO and co-founder of analytics platform Knotch.

The information that brands get back from publishers is often misconstrued or intentionally fraudulent, leaving the companies with no other choice but to accept the number provided by said publishers.

There are many problems associated with these relationships in online advertising, especially when one starts to take into consideration the agencies that play their role in between the parties too, but the issue of transparency is reaching a crescendo.

“Three main conditions contribute to a waste in advertising spend,” Daniel Trahtemberg, Founder and CEO of Zinc, a blockchain advertising protocol company, explains. “First is lack of a reliable and trusted settlement layer between all the businesses involved – advertisers, agencies, exchanges, networks, publishers, and so on – so there’s no single source of truth for any of the players to rely upon.”

“Second is a lack of user data control, privacy and accuracy. Also, third: fraudsters leverage the flaws mentioned above to turn a profit, exponentially increasing their impact.”

A blockchain catalyst?

As the system stands, brands and companies know they need to be online to get to their audience, and they can only do this by engaging with publishers who have the right market for them on their sites. All this leaves the power in the hands of the publishers and allows them to call the shots.

Fraud, and falsifying numbers when in the pound seats, is easy. Moreover, this is why transparency is the key to change this dynamic. “Dialogue and education are necessary, but we are also in desperate need of concrete steps that brands can take to take the reins of the content marketing funnel and make the internet a better place,” Gansca adds.

“There is an energy around transparency, around honesty and the true best interest of all parties this year that I have never felt before. Marketers are ready and excited to move toward a controlled balance between the digital buyer and seller,” said Gansca.

So, can blockchain be the answer for this required transparency? Many blockchain companies have taken wild swings at restructuring the whole advertising revenue space, but this honestly cannot work just on the back of blockchain alone.

“The digital advertising ecosystem is comprised of a bunch of technologically specialised businesses that have developed solutions over time. A lot of new companies operating in the digital advertising industry are aiming to “cut out the middleman”, which I think is completely opposed to the decentralised vision of a blockchain ecosystem,” Trahtemberg said concerning the overly-ambitious ICOs and startups aiming for this ecosystem.

“Any application that proposes a solution that is aiming to be the one stop shop for all advertising needs: from the buying of the ads to communicating with the user, including the user’s demand for free content. They’re essentially telling you they are aiming to be a bigger monopoly than Google and Facebook combined – as they will be the single supplier of everything to do with online advertising.”

This approach that blockchain can disrupt and recreate an existing system is far too overhyped, and most of the time, entirely false in the current climate. Trahtemberg explains the system itself does not need to change, but an additional layer of the blockchain, with its transparent nature, could assist greatly.

“I do not think that we need a new model of digital advertising – as all the related services are not going to be solved magically by using blockchain,” Trahtemberg said.

“Advertisers will continue to need support from agencies to manage their budgets, generate ad units and creatives; demand side platforms will continue to place bids on exchanges to get supply from supply side services that help publishers and app developers manage and optimize their inventory; networks to allow publishers to have a technological layer to monetize ads and manage their digital real estate; in other words: right now, every piece in the digital advertising industry puzzle has a function.”

“If one of those specific functions gets obsolete, it will just disappear or get consolidated… using Blockchain as an infrastructure layer will allow all these applications and services to run in a trusted, transparent and verifiable way.”

Overly hyped

It is easy to get overly excited about the potential of blockchain with its ability to aim at many different sectors – including online advertising. However, one should instead be looking at its core structures; decentralisation, transparency, and immutability, and seeing where these beneficial processes of blockchain can be used.

As Trahtemberg explains, there is already a structure for online advertising that works; it just needs a few kinks to be worked out. Moreover, as Gansca states, one of those kinks is the lack of transparency.

The usage of blockchain in the online advertising space has enormous potential, but that potential should not be taken out of context. The blockchain space is still very nascent and experimental, for an entire advertising market, of such magnitude, to be predicated on this technology would be catastrophic. However, to utilise the technology to ensure transparency could revolutionise the space with little disruption.

Feature Image Credit: Getty

By Darryn Pollock

I am an award-winning journalist that has covered a variety of topics from finance to economics, technology, and even sport. With the emergence of Blockchain technology and the rise in popularity of cryptocurrencies I have focused my efforts towards this fascinating and impo…

Sourced from Forbes

In News

What Is Wrong With Current Advertising Systems And How Blockchain Can Help

November 30, 2018 No Comments

By David Petersson

Every day, ads overrun us in our online journey. While this is necessary to keep many free services we constantly use in business, they are also heavily misaligned. We ignore most of the ads we see, find them intrusive, irrelevant and wasting our bandwidth. For the same reason, many companies are also spending ad dollars without seeing sufficient return.

But there are those who are benefiting from this model. After all, digital marketing has overtaken TV ads and it is a medium where marketers can measure the success of their campaigns and adjust accordingly. Google and Facebook are dominating the digital advertising industry. Amazon is currently in fifth place with nearly $2 billion in revenue for the first quarter of this year, but it is catching up fast as more advertisers turn to it.

Advertisers typically look for the company who can “get the word out” about them most efficiently, but they face a dilemma; most of them know by heart that many of the people they target really don’t need their products. However, they assume that if they just keep popping up all the time (and perhaps crack a joke or get undressed), eventually the consumer will surrender and buy. But here is the thing: if the consumer does not trust you, the impact will be minimal.

No one “hates” shopping –quite opposite, people love a good purchase. A good purchase requires knowledge of the products, but no one ever tells an advertiser that they are looking for a new car because they would instantly start spamming us. We prefer to keep that information private because we suspect it would be misused to sell us snake oil instead of really valuable products. In an era where consumers don’t trust advertisers, advertisers are forced to rely on middlemen like Google and Amazon to hint them at what could work best for them.

The reason is simple: Google knows the customers’ intent, Facebook knows the demographics and Amazon knows what many consider as the most important piece of the puzzle: what people buy. However, this puzzle still lacks one missing (and often overlooked) piece: the consumers. The current advertising business is primarily designed to serve the ad networks – not the companies or the clients. Here is where blockchain could help.

A new era

Blockchain is about decentralization and removing middle parties. There are four players in the digital advertising world: ad networks, companies, publishers and visitors. Companies are the ones who want to sell their products or services, and they do so via the “publishers.” The publishers, such as web admins, are the ones running a website and attract visitors, and the companies alike.

The ad networks sit between the companies and the publishers, match them up and take a huge cut in return. This is the player blockchain aims to remove and optimize the system to run only between companies, publishers and visitors.

By removing the ad networks, the cost for advertising will significantly drop for companies. Furthermore, there are no banks involved so transactions are much easier and faster, which is particularly important as advertisers target a global market. But this is not the only benefit.

Blockchain offers immutability, which essentially means a tamper-proof record of everything that has taken place on the network. This means everyone can track the customers’ journey: where and when they started interacting with an ad and what the results where. This also leads to transparency, as both the company and the publishers have correct metrics of the impressions and clicks.

Like always, specific blockchain projects add more features to these general concepts. For instance, BAT gives users full control of the ads they see and even pays them for the ads they watch. To track the watch time, the project collaborates with the Brave browser, which ironically comes with built-in ad blockers.

Adoption

No matter how promising, currently the digital advertising industry is dominated by centralized enterprises. This can eventually change, as more and more people turn to ad blockers and concerns around privacy and information tracking are beginning to rise. Eventually, the buyers are the people that are currently spammed so the ultimate winner would be the one that really takes the customers’ best interest into account. With blockchain, we are moving one step closer to giving power to the individuals.

Feature Image Credit: Getty Images

By David Petersson

I’m a developer and freelance tech blogger interested in cyber-security, AI and blockchain, and try to separate signal from noise in the industry.

Sourced from Forbes

In News

Can Blockchain Ensure Artificial General Intelligence Develops to Benefit Humanity?

November 12, 2018 No Comments

By Mina Down

AGI doesn’t exist yet, but fictional depictions of intelligent machines eradicating or enslaving humanity abound. One startup is hoping it can use blockchain to develop AGI in a more utopian direction.

What is Artificial General Intelligence?

Artificial intelligence or “AI” refers to machines that can learn and perform tasks like a human. “Artificial General Intelligence” (AGI) is something different. It would be like combining all AI devices into a network. This network would be far greater than the sum of its parts because it would be able to generate a collective artificial general intelligence through the combined experiences of each machine, as well as the interactions of machines with each other.

Thus, AGI would combine the best of human-like thinking and reasoning with the advantages that computers have over humans — perfect recall and the ability to perform near instantaneous calculations. If AGI could also control robots as dextrous and mobile as a person, it would result in a new breed of machines that could take over any role performed by humans. While AGI doesn’t exist yet, experts agree its development is inevitable. The question is what direction will this development lead?

Dystopia or Utopia?

We’re all familiar with fictional dystopian depictions of intelligent machines eradicating or enslaving humanity, for example, The Matrix, 2001: A Space Odyssey and The Terminator series. Not everyone thinks such scenarios are far-fetched. SpaceX and Tesla founder Elon Musk calls AGI the “biggest existential threat” facing humanity and famous physicist and Cambridge University Professor Stephen Hawking said, “the development of full artificial intelligence could spell the end of the human race”.

At the same time, such dire predictions may go too far. An AGI equal to or better than humans could also help develop solutions to problems that seem intractable today, such as climate change and war. Nonetheless, at a minimum, we must worry whether AGI will merely empower the small group of powerful individuals that rule the world today with better means of mass surveillance and population control. Given that most of human history seems to reflect the principles of winner-take-all and might-makes-right, we (humanity) might only have one chance to get AGI right.

Blockchain and Decentralized Apps: One Startup’s AGI Solution

As overwhelming as the challenge of developing beneficial AGI seems, some innovators are aiming to do just that. Kassy.ai is a new startup with the goal of creating a community-developed open-source AGI. Kassy plans to do this by creating a “Knowledge as a Service” (KaaS) Blockchain to function as an infrastructure for a global AI computing system. The Kaasy network will offer a set of kits that developers can use to expand their software applications, better optimize processing times and access load balance computing. The open-source KaaS blockchain code can also be forked to create private knowledge blockchains, for tasks which may involve privacy concerns and other data restrictions.

On top of the KaaS blockchain, Kassy will build an AI algorithm marketplace. The marketplace will be distributed so anyone can use and add new algorithms. The AI algorithms can be optimized to run distributed calculations and power machine learning, thus producing AI skills usable by anyone using the platform. Applications include video processing, machine learning, molecular simulation, AI conversation partners, employee-as-a-service solutions, augmented and virtual reality solutions, and real-time robotic fleet management. The marketplace will also have a built-in compensation mechanism where contributors earn rewards when someone uses their algorithm. Skill rewards for complex skills are issued as a tree, where each complex skill payment is split between itself and the integrated simpler skills.

Building Blocks for a Beneficial AGI

In the short term, Kaasy’s plan consists of linking a global community of AI specialists within an ecosystem of projects that allows each to contribute to the direction they want AI development to move in. However, the technical features described above support Kassy’s long-term goal of using blockchain technology to make AI accessible in the simplest of applications and devices, which will in turn act as building blocks for a future global Artifical General Intelligence.

Disclaimer: I do not own KAAS coins and I have no plans to participate in the ICO. This is not investment advice.

By Mina Down

Sourced from Hackernon

In News

‘Like buying a helmet for walking’: Blockchain fever has spawned a cottage ad tech industry

May 22, 2018 No Comments

By Jessica Davies

Ad tech is not immune to jumping on new trends. Remember big data? These days, blockchain is the latest craze. Interest — if not precise understanding — from advertisers and publishers in how the technology could be applied to the digital ad supply chain to make processes more transparent has spawned a cottage industry of vendors rolling out flashy decks and concepts. The problem, per usual: The promises more often than not far exceed the present-day reality.

For every smart blockchain business proposition, there are four more startups making loud, but mostly empty claims about what they can deliver. It’s either that, or they’re randomly asking for people to donate to their initial coin offerings, but without any sign of a viable product.

“No one has a viable product yet at scale,” said Dan Wilson, CEO of London Media Exchange. “I’d say 95 percent of current blockchain vendors will be blown up inside 18 months, maybe less.”

Publishers may find the concept interesting, but for most of them, it’s too early to warrant investment. “It’s another case of a barrel load of tech inventing a problem that doesn’t exist,” said a publishing executive. “Currently, it’s like buying a helmet for walking.”

The hype and interest in blockchain’s potential has spurred agencies to jump on the bandwagon and spawned a flurry of recent events on the topic that cover how the theory of blockchain can actually be applied. But to attendees, it’s clear there is a way to go before the technology can move beyond the theory stage, for advertising at least.

“Blockchain has been discussed at length [at these events], and yet there seems to be a complete lack of understanding as to what it actually can deliver and how it will work,” said Julia Smith, an independent digital consultant.

Over the years, digital ad trading has become less transparent and increasingly untrustworthy both for advertisers and publishers. That’s why blockchain technology, which acts as a ledger that validates all transactions on an encrypted basis, has been hailed as a highly attractive proposition for solving real problems in media, such as removing the long-criticized opacity of the programmatic ad trading ecosystem.

That lack of understanding is what some players are banking on, according to sources. It’s a familiar story for ad tech. Emphasizing the complexity around the nuts and bolts of how digital ads are bought and sold programmatically used to be a useful tactic for ad tech vendors hoping to maximize publisher and advertiser investment in their services. Today, publishers and advertisers have more control over their supply chains and understand what questions to ask. But blockchain is exhibiting similar patterns, according to sources. Things easily get confusing when there are no protocols, precedents or standards around them yet.

It’s not just the din made by certain opportunists trying to make a quick profit off the back of the interest in the technology. Another big, unanswered question is around the currency behind blockchain, rather the premise of blockchain itself, according to Smith. Blockchain’s basic premise — to allow for a record of transactions and deliver transparency — is generally welcomed, but its association with cryptocurrencies is putting some people off. “What publishers and advertisers are concerned about is that in order to trade using blockchain, the currency has to be cryptocurrency,” Smith said. “As an investor in bitcoin, I have seen firsthand the volatility of this currency, and this is making the industry nervous and therefore reticent to jump in with both feet.”

That said, publishers and advertisers whose inboxes are getting increasingly clogged with pitches from blockchain startups aren’t likely to see it slow down anytime soon. For now, the topic is here to stay. So the key is knowing the right questions to ask, rather than being dazzled by the tech lingo. “First, ask what business challenge a blockchain ad tech vendor will solve for you,” said Paul Gubbins, programmatic lead at News UK-owned video ad firm Unruly. “Then ask to see an end-to-end flow of examples of how it has worked for other clients in your sector, as well as whether the information will be stored on a private or public ledger,” he added.

By Jessica Davies

Sourced from DIGIDAY

In News

What is Blockchain Technology? A Beginner’s Guide

May 1, 2018 No Comments

By Chantelle Lafaille

You may have heard the term “blockchain technology” before, in reference to Bitcoin and other cryptocurrencies. For the uninitiated, the term might seem abstract with little real meaning on the surface. However, blockchain technology is a critical element of cryptocurrencies — without it, digital currencies like Bitcoin would not exist.

If you are new to cryptocurrencies, and new to blockchain technology, read this guide on the basics to get yourself started. If you are already a seasoned trader, maybe you’ll learn a thing or two you didn’t already know.

A Brief History of Blockchain

To start, let’s talk about the history of the blockchain. Before it was ever used in cryptocurrency, it had humble beginnings as a concept in computer science — particularly, in the domains of cryptography and data structures.

The very primitive form of the blockchain was the hash tree, also known as a Merkle tree. This data structure was patented by Ralph Merkle in 1979, and functioned by verifying and handling data between computer systems. In a peer-to-peer network of computers, validating data was important to make sure nothing was altered or changed during transfer. It also helped to ensure that false data was not sent. In essence, it is used to maintain and prove the integrity of data being shared.

In 1991, the Merkle tree was used to create a “secured chain of blocks” — a series of data records, each connected to the one before it. The newest record in this chain would contain the history of the entire chain. And thus, the blockchain was created.

In 2008, Satoshi Nakamato conceptualized the distributed blockchain. It would contain a secure history of data exchanges, utilize a peer-to-peer network to time stamp and verify each exchange, and could be managed autonomously without a central authority. This became the backbone of Bitcoin. And thus, the blockchain we know today was born, as well as the world of cryptocurrencies.

How Does Blockchain Work?

So, then, how does the blockchain work? Let’s recall a few key features before we get into the details:

1. Blockchain keeps a record of all data exchanges — this record is referred to as a “ledger” in the cryptocurrency world, and each data exchange is a “transaction“. Every verified transaction is added to the ledger as a “block”
2. It utilizes a distributed system to verify each transaction — a peer-to-peer network of nodes
3. Once signed and verified, the new transaction is added to the blockchain and can not be altered

To begin, we need to explore the concept of “keys”. With a set of cryptographic keys, you get a unique identity. Your keys are the Private Key and Public Key, and together they are combined to give you a digital signature. Your public key is how others are able to identify you. Your private key gives you the power to digitally sign and authorize different actions on behalf of this digital identity when used with your public key.

In the cryptocurrency world, this represents your wallet address (public key) and your private key is what let’s you authorize transfers, withdrawals, and other actions with your digital property like cryptocurrencies. As an aside, this is why it’s so important to keep your private key safe — anyone who has your private key can use it to access any of your digital assets associated with your public key and do what they want with it!

Everytime a transaction occurs, that transaction is signed by whoever is authorizing it. That transaction might be something like “Alice is sending Bob 0.4 BTC”, will include Bob’s address (public key), and will be signed by a digital signature using both Alice’s public key and private key. This gets added to the ledger of that blockchain that Alice sent Bob 0.4 BTC, and will also include a timestamp and a unique ID number. When this transaction occurs, it’s broadcasted to a peer-to-peer network of nodes — basically other digital entities that acknowledge that this transaction has occurred and adds it to the ledger.

Each transaction in that ledger will have the same data: a digital signature, a public key, a timestamp, and a unique ID. Each transaction will be connected, so if you move back one transaction in the ledger, you may see that Chuck sent Alice 0.8 BTC at some time. If you move back another transaction, you might see that Dan sent Chuck 0.2 BTC at some other time before that.

The anonymity of cryptocurrencies come from the fact that your public key is just a randomized sequence of numbers and letters — so you are not literally signing with your own name or some sort of handle. A public key doesn’t tell you the real identity of the person behind it. You are also more or less free to generate as many key pairs as you want and have multiple cryptocurrency wallets. Be warned though, there could be other ways someone can figure out your identity — for example, through your spending habits.

Why is Decentralization So Important?

For enthusiasts of blockchain, you will hear a lot about the decentralized aspect of it. What makes this so appealing is that it makes the blockchain impervious to censorship, tampering, or corruption.

Because it uses a peer-to-peer network, copies of the ledger are stored in many different locations, and unless you manage to track down every single one of them (Bitcoin is estimated to have over 35,000 nodes in its P2P network), you can’t destroy it. As well, because so many different, independent nodes are keeping track of the ledger, modifying it in an untrustworthy way won’t go very far because all the other nodes will disagree with that transaction and won’t add it to the ledger.

This is a huge part of why so many people believe blockchain technology is the future of currency, and why it is being adopted in industries other than cryptocurrency.

There’s Always a Downside

However, like any system created by humans, there are always downsides.

Blockchain technology has a pretty steep learning curve. Especially for the typical individual without a technical background, all the jargon and computer science concepts involved may intimidate and scare away otherwise would-be users. However, the rising popularity of cryptocurrency is resulting in the blockchain moving into the mainstream, with a lot more resources available to make the topic more approachable.

Transferring, trading, and buying cryptocurrencies usually involves a transaction fee, and is not usually instantaneous. The former can be costly, the latter inconvenient.

There is also a concept called the “51% attack” — if for some reason 51% of a peer-to-peer network validates an otherwise invalid transaction, it will still get approved and added to the ledger by nature of how the validation process works. Maybe right now it’s unlikely to happen, but it is a security flaw that might have potential for exploitation in the future.

However, there are a lot of developers, users, and enthusiasts who truly believe blockchain technology is the future. Many want to see the technology succeed, so stay tuned for new developments!

By Chantelle Lafaille

Sourced from Invest in Blockchain

In News

Company Uses Blockchain and Social Media to Create ‘Word-of-Mouth’ Marketing Campaigns

April 6, 2018 No Comments

By Bala Murali Krishna

An Italian-born startup has used Blockchain to build a peer-to-peer digital platform that taps the power of word-of-mouth marketing on social media.

Friendz, with offices in Milan, Rome and Madrid, allows companies to engage armies of social media users to promote their brands. Users get rewarded for creating and sharing content on brands with their friends. The startup was co-founded in 2015 by the trio of Alessandro Cadoni, Daniele Scaglia and Cecilia Nostro.

Early backing

With €500,000 in financing, Friendz has built a strong technology platform and assembled a roster of clients including Jeep, Disney and Reebok. According to Friendz, the three-year-old company has run marketing campaigns for over 200 brands, creating and promoting branded content with the help of 200,000 users with a combined reach of 1.5 bln. In 2017, the company reported €1.2 mln in revenues.

Friendz opened an ICO on March 1 and has already carried out more than 20,000 transactions from around 14,000 micro contributors. It has sold 22 mln ETH.

One of the few marketing companies leveraging the power of Blockchain, Friendz is betting on lower-cost, decentralized marketing on social media, as digital advertising spend steadily grows.

Digital ad spending to be worth $378 mln in 2021

Global ad spending is projected to rise to $757 bln in 2021, up nearly 30 percent from $584 bln in 2017, according to eMarketer.

In 2017, digital ad spending overtook television advertising for the first time, as it reached $209 bln worldwide, according to Magna, the research arm of media buying firm IPG Mediabrands. In 2020, Magna expects digital ad spend to account for 50 percent of all ads, up from 41 percent in 2017. The digital ad market could be worth an estimated $378 mln in 2021 if one extrapolates Magna’s estimate with that of eMarketer.

If the two sets of data back Friendz’s business prospects, Nielsen’s Global Trust in Advertising lends even greater support to its “word-of-mouth” model. According to its seminal 2015 survey, in which the leading New York media firm surveyed over 30,000 people, 83 percent of people base their purchase decisions on advice from friends and family or “people we know and trust.” Also, 66 percent trust consumer opinions posted online, the third-most-trusted advertising format.

Friendz eyes B2B business too

Currently, Friendz targets B2C companies to build its business, but it has its eyes on B2B companies too. The company believes its adoption of Blockchain not only makes its platform safer and stronger but, notably, improves its business model and long-term prospects.

The technology would enable its platform to be used by every kind of business in need of creative content, or even “every online activity-as-a-service,” Friendz has said. Examples of potentially new services that can be enabled on the company’s platform include app reviews, bug testing, market research and lead generation.

Currently, Friendz is active in Italy and Spain and proposes to expand its business to other parts of the world, starting with the rest of the European countries, America and Asia.

FDZ coins to be listed on top international exchanges

The FDZ coins are based on ERC20 and are being offered at about $0.067. The ICO has a soft cap of 50 mln FDZ and a hard cap of 750 mln FDZ. It will be possible to trade the coin on the most famous international exchanges anytime after the conclusion of the ICO, the company said.

Tokens bought during the so-called Power Hour received a 40 percent bonus and are locked for one year. The coins will be unlocked proportionally over 12 months. The stipulation, Friendz said, would curb speculation such as ‘pump-and-dump’ methods, and keep the value of the FDZ cryptocurrency stable.

Friendz plans to use the ICO proceeds to expand its business abroad, create a larger global community and for further technology development.

By Bala Murali Krishna

Sourced from COINTELEGRAPH

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

In News

Cheatsheet: Blockchain is coming to programmatic (sorta)

November 22, 2017 No Comments

By Yuyu Chen

Blockchain — which originated in financial services and is essentially an open ledger (a massive spreadsheet) of transaction data — is a new ad tech solution in town. Its promise is to provide advertisers more transparency and solve problems related to ad fraud and brand safety.

The underlying technology of blockchain is sophisticated, but how it works is straightforward. In its simplest form, blockchain works as a community. For instance, if a brand buys inventory from 10 publishers programmatically, the 10 publishers, the supply-side platforms that those publishers work with, the advertiser’s media agencies, demand-side platforms and the brand itself could form a group where members have different levels of access to a ledger. Pavel Cherkashin, co-founder and CEO for Blockchain Programmatic Corporation, explained that the multiple access levels allow only authorized parties in the transaction to access the data for audit purposes, while the remaining members have access to aggregate data for analysis and modeling purposes, etc. Transactional data is encrypted to ensure its protection.

“Each member of the network is a ‘node’ storing a certain amount of data on their servers and earning rewards, or tokens, for processing this data,” said Cherkashin. “They also conduct the audit and crowdsourcing of the data to ensure its accuracy and compliance.”

Blockchain is still in its early days, but some industry initiatives use it. For instance, Nasdaq said in March that it is providing blockchain technology to power a startup called the New York Interactive Advertising Exchange that trades guaranteed advertising contracts, while the Interactive Advertising Bureau’s Tech Lab formed a blockchain working group in September led by GroupM’s mPlatform and NYIAX. (It hosted its first full working group meeting on Nov. 1.)

Despite these applications, lots of use cases for blockchain are still theoretical. Here’s what you need to know.

The key numbers

The global blockchain market is expected to grow from $339.5 million this year to $2.3 billion in 2021, according to data firm Statista.
EMarketer predicts U.S. programmatic display ad spend will reach around $32.6 billion this year.
There are at least 11 publicly traded blockchain companies. The number of blockchain firms — private and public — that specialize in advertising is not clear.

The blockchain company view
Ken Brook, CEO for blockchain ad platform MetaX, said that in an unreleased beta test of blockchain with an undisclosed advertiser, his team discovered that between bot traffic, invalid banner video and unauthorized inventory sellers, more than 30 percent of the advertiser’s online ad spend wasn’t what it paid for.

“There is an immense problem around disparate data sets, especially when these numbers are used to justify ad spend and return,” said Brook. “There is also a lot of obscurity on how inventory is sold and resold.”

Cherkashin added that neither SSPs nor DSPs can provide the required level of trust and ability to process data as crowdsourcing in blockchain does. After all, with blockchain, the intermediary is a robot, not a human, so people can trust it with their data.

Cherkashin’s team patented the concept of multilayer blockchain, where 100,000 independent blockchains can work concurrently, which allows the system to process more than 1 million transactions per second, according to Cherkashin. “The compromise we need to accept is that there is no real-time consensus between all of the blockchains, but for advertising audit and data analysis, this is not required,” he added.

BPC will launch with more than 100 publishers this December, and Cherkashin expects at least 10,000 advertisers will get on board through token purchase by the end of this year.

The industry view
It is widely reported that one big problem with blockchain’s application in programmatic buying is the technology is not capable of handling millions of bid requests per second. “I don’t think blockchain is the solution. From what I’ve read, blockchain can only handle around 2,000 transactions per second, while in programmatic, we are doing millions of transactions per second,” said Nick Jordan, founder of data trading company Narrative I/O. “Ad tech likes to add layers of solutions on top of other solutions.”

Jordan said that even if blockchain can process 100 billion ad impressions per day, only three or four organizations like Google and Amazon have the computing power to manage the large databases required by that volume, which goes against the promise of blockchain: a distributed ledger. “Basically, the industry goes back to the hands of walled gardens,” he said.

Drew Bradstock, svp of product for Index Exchange, echoed Jordan’s sentiment. Bradstock said SSPs, DSPs and publishers can work together to provide advertisers more transparency. If advertisers and publishers rely on blockchain, there will probably be an ad tax on using the solution.

“You don’t need blockchain to audit the ledger,” said Bradstock. “For advertisers, it’s always cheaper and easier to hold their partners accountable than pay extra tech tax.”

By Yuyu Chen

Sourced from DIGIDAY UK

In News

Blockchain Is a Game-Changer for Online Advertising

November 1, 2017 No Comments

By Joe Liebkind

In the massive world of online advertising, blockchain will be a force to reckon with. Unlike with some blockchain products such as cryptocurrency, advertising can employ blockchain in a plethora of unique ways. The applications of this technology in advertising will help ad creatives target audiences better, share data, make users safer and more private, and democratize who controls the data that the industry relies on.

A New Direction for Advertising

One of the most notable features of blockchain as a finance application is anonymity. While this is a product of blockchain’s origins in bitcoin, for advertising, anonymity is sometimes counter-productive. Blockchain solutions for advertising will instead make use of the robust accountability that the technology provides, wiping the slate clean for all participants.

Blockchains built since the original (bitcoin) have expanded upon the importance of such transparency, and many of the most influential chains will find their killer apps in the advertising world. Companies like Papyrus exemplify this trend, with platforms that make it easy for users to know exactly who is paying to advertise to them, and where their data is coming from. With Papyrus, these users can even decide not to share any of their browsing habits or other usage data, though if they do, advertisers can pay them for it directly.

From the user side, this is preferable to the excess of ceaseless, inaccurate ads that bombard us daily. Advertisers might be put off at first, but will quickly realize that the system works in their favor as well. (See also: Disney Creates Blockchain Platform to Rival Ethereum.)

This type of schema is a far cry from the current way of doing things, which sees users voluntarily surrender their most personal information with little reward. These are the “terms and conditions” that most people skip over when setting up new applications. With new, blockchain-based platforms like Papyrus and MetaX, all those with a stake in advertising will share resources, see the entire flow of information in the same place, and have an even playing field that allows for more efficient competition.

Another venture, Bitcomo – a blockchain-driven lead generation platform – is creating a smart contract-based advertising model (pre-sale ICO kicks off on September 18) in which payment is due once results been delivered or after generating a smart contract-triggered sale. Bitcomo offers a solution to the traditional advertising model in which publishers are at the mercy of advertisers who are not always able to pay the entire commission as a protection against leads that were not approved.

Similarly, advertisers cannot be certain they are getting their money’s worth and are often forced to blacklist publishers who may be conducting fraudulent activities. (See also: Investing in Cryptocurrencies: What to Keep In Mind.)

Kanstruktor over at Steemit explains: “Decentralized network between advertisers and publishers through caching, and logging of clicks and leads, key statistics, personalized nodes in the blockchain operator MetaHash (fork of Ethereum – ERC20). It is a basic principle of protection against fraud and concealment of data on actual transactions from advertisers, or making unrealistic target bots in the traffic of publishers instead of real users.”

Blockchain’s Advertising Chops

For online advertising, data is precious. It reveals patterns in one’s shopping and search history, comprises social media posts and leaves priceless clues behind. Blockchain distributes this data to the entire network, whereas it was once kept on secure company servers and put up for sale to bidders with a relevant interest.

Apart from functionality that gives users more control, and puts the value of their data exclusively in their hands, this decentralized system benefits ad creators as well. They will have access to immense shared pools of relevant data, already vetted by other participants and proven with the chain, making ad targeting much more accurate and much less expensive. Blockchain’s irrefutable, ledger-like system is a perfect tool in the hands of ad companies whose bread and butter are key performance indicators like clicks and likes.

Instead of paying upfront for expensive ad space targeting fishermen, for instance, the same fishing gear company can use a blockchain advertising company to target those who have expressly stated (with their data-sharing preferences) that they are interested in such gear. The game will no longer be based on flighty browsing habits, but on hard data. Moreover, smart contract ad buying solutions make it possible for companies to buy conditional space, which will only show an ad should the target fulfill certain parameters.

Blockchain’s Future in Advertising

Online advertising companies are just now beginning to develop real use cases for blockchain in their daily activities, and those who get ahead of the curve sooner will benefit greatly. Blockchain is the ultimate democratization tool, and while those who currently protect the status quo are right to be afraid, at some point everyone will realize that an open system creates as many opportunities as it takes away.

The future is fast in coming, and instead of predicting it, the fast movers are already making it happen. (See also: Cryptocurrencies Will Fail Without Cross-Chain Transactions.)

By Joe Liebkind

Sourced from Investopedia