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A Marketer’s Glossary to Blockchain Technology

Ternio logoBlockchain applications for marketing have officially arrived. Blockchain technology has the potential to clean up significant inefficiencies in digital advertising by bringing transparency to the entire ad supply chain.

The IAB recently released a report supporting blockchain as a universal solution, and companies like Unilever, MediaMath and IBM are actively testing blockchain technology in their campaigns today.

But marketers are still struggling to understand the principles behind this nascent technology. This isn’t surprising—adtech has a long history of smoke and mirrors and complicated language that makes the already obscure nearly impossible to understand.

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Companies playing fast and loose with language around blockchain technology leads to confusion among marketers as to what’s real and what’s hype. Here are a few terms and definitions marketers should familiarize themselves with:

  • Blockchain – A distributed ledger that holds a digital record of a transaction. The ledger is held by all parties to keep it decentralized and prevents transaction details from being altered in the future.
  • Node – Any computer that connects to the blockchain network to help verify transactions before they go into each block.

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  • Token/Cryptocurrency – A digitized asset, ID, or store of value that is used on a blockchain protocol.
  • Private Key – Can be thought of as a password; a private key allows you to spend, transfer or move cryptocurrency from a wallet through a cryptographic signature.
  • Public Key – A cryptographic code that enables an individual to receive cryptocurrency to their account. The public key combined with the private key is required to ensure the security of the crypto-economy.
  • Smart Contract – A computer program stored on a blockchain that automatically moves digital assets between accounts if conditions encoded in the program are met. It serves as a way to guarantee an exchange of value if contractual terms are satisfied.
  • Wallet – A file that contains a collection of private keys.  Think of this as a physical wallet, but for holding digital currencies.

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Now that you know some of the terms, these are the key questions that marketers should ask when talking to a blockchain provider:

  1. Which blockchain technology are you built on and why did you select it?
  2. Why is blockchain necessary for your application? Can you do what you’re doing without blockchain?
  3. How does your blockchain improve on the status quo?
  4. Can I run a node?
  5. How decentralized is your application?
  6. How are you utilizing smart contract functionality?

Education is power, and it behooves all marketers to spend time educating themselves on blockchain technology no matter how daunting the task may seem.

Until we stop using cryptic language to communicate the benefits of cryptocurrencies and start getting smart about what blockchain actually does, we won’t fully harness the power of the technology to truly improve the ad business.

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