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Blockchain: What are the main challenges and opportunities for businesses?
August 16, 2022
Elliot Hill, director of communications, VeraViews.
When the going gets tough, the tough gets going. It was Billy Ocean who first sang it. But in the tech industry at least, it’s the blockchain industry that’s truly lived it.
There really are few other industries like this one. With fates tied to the crypto markets - and most often to Bitcoin directly - blockchain technology seems to be permanently at the mercy of market sentiment. But scratch the surface a little, and you might find that’s not so helter-skelter as it appears on the charts.
In what’s shaping up to be one of the toughest market periods for crypto to date, this is a perfect time to reflect on the challenges, but also the opportunities, that building a product or working with an advertising solution or platform in the blockchain industry entails. Ready for lesson number one? Evaluate your market.
Nothing encourages innovation quite like adversity. And in blockchain, it’s in market conditions like these that projects with true utility and longevity begin to shine through.
Like the dot-com bubble in the early 2000s, blockchain has had more than its fair share of self-reported ‘world changers’. Brands that claim to do everything from revolutionizing finance to transforming data storage, or even bringing about the fourth industrial revolution are numerous. But they won’t always be so.
The last bear market for crypto in 2018 mercilessly separated the wheat from the chaff. This year’s cycle is proving to be no different, and projects with weakly defined use cases are finding themselves adrift now that retail investors are leaving the markets.
The upside of a niche product-market fit is that boom-bust cycles become irrelevant when technology truly fills a market need. And in 2022, no industry is quite so needy, technologically speaking, as advertising, which is now growing at an unprecedented rate and crying out for a transparent solution to tracking and paying for advertising campaigns.
Don’t rely on third parties - build your own tools
Don’t put all your eggs in one basket. This age-old proverb could have been coined exclusively for the blockchain space. All too often, teams building solutions in the decentralized ecosystem come to rely wholly on a single third-party platform or tech component - which means their fate is entirely out of their hands.
A recent and devastating example is in the Terra (LUNA) ecosystem, which made mainstream headlines recently when its ‘stablecoin’ cryptocurrency, pegged to the USD, lost its value against the dollar - and sent the rest of the network tumbling with it. This led to a halt in the blockchain and swiftly saw multiple decentralized applications running on top of it temporarily cease operations altogether.
Blockchain-savvy customers are well aware of this risk. In fact, having some degree of downtime or disaster is often par for the course. But if you’re building out an enterprise solution for a traditional brand, how do you explain to them that the system you’re building on just went kaput, and you don’t have a contingency plan?
The simple answer is: you don’t. Successful projects with longevity make sure they’re never in that position. But this doesn’t mean you can’t stand on the shoulders of giants if you’re considering building out a blockchain solution.
Our technology, for example, is developed on top of Ethereum, through what’s known as a ‘side chain’ of the underlying blockchain ledger, called VeraChain. While Ethereum is one of the most robust networks in the world, our back-end infrastructure could be quickly adapted to a new blockchain, and our Proof of View module would continue seamlessly running any existing campaigns using VeraChain. If you’re planning on launching or leveraging a blockchain-based solution, make sure you’ve got a backup plan in place.
Why is this important in advertising?
It’s easy to wax lyrical about blockchain, but what does this all mean for the advertising and creative industries - and more importantly, why should you care?
The advertising industry has a problem with transparency and accountability, which has led to critical issues with cash flow and investment. Advertisers don't trust ad-tech companies to operate ethically, and likewise, publishers struggle with cash flow due to the sheer number of third parties with which they need to reconcile campaign figures. On the other hand, open ledger technology makes auditing easy and its immutable nature means that once transactions are accounted for, there is no adjustment.
The advertising market itself is now based on statistical inference, and innovations historically have involved making the data easier to understand. It’s only in the past few years that people have started to realize that their core data might not be valid. By delivering transparency, you solve this issue and open up the potential for hundreds of millions in extra revenue, because the industry has a multi-billion dollar problem with fraud.
Finally, teams that can navigate through the murky waters of the blockchain markets and continue to deliver a solution with true product-market fit are likely to be agile, flexible, and bleeding-edge - and being an early adopter of this tech could put your brand out ahead of the competition.
Outlook for the future
It sounds like a self-evident truth, that a project needs utility and real customers to thrive. But in spite of this, that simple concept has been pushed to its limits in the blockchain industry.
When I first entered the blockchain space, many experts derided blockchain as a solution looking for a problem. Fast forward some years, and blockchain solutions have a problem of their own - staying level-headed in a market that is defined by instability.
For Verasity, and other B2B-focused projects, there’s a clear strategy. Focus on your end-users, deliver value, and build tools that are consistently better and more transparent than their centralized counterparts.
It’s this approach that will drive blockchain projects with real-world utility forward, benefit the communities they’ve fought hard to build, and most importantly, bring value to the brands adopting their tech.