It’s no news that blockchain has a major effect on digital marketing. With a CAGR of 56.3%, the blockchain market is set to increase from $7.18 billion in 2022 to $163.83 billion in 2029.
Many industries and marketers use blockchain to build their businesses. And it has become an excellent part of the digital marketing plan.
But as good as it is, it also has its drawbacks. And if you do not know or ignore it, it may mess up your perfect marketing plan.
So this article will show you the pros and cons of using blockchain in digital marketing. Stick around!
What is Blockchain?
Blockchain is a method or system for recording and securing data so that hacking it becomes impossible. Blockchain makes it possible for transactions in Bitcoin and other cryptocurrencies to be more operable.
As such, crypto traders can analyze and carry out transactions in various crypto currencies. This becomes helpful in ascertaining either Bitcoin Kurs USD or Euro, as well as the price of other crypto assets.
As of today, blockchain technology has made its way past the finance sector, becoming a key technology in other industries too. As such, private businesses, healthcare and pharmaceuticals, cosmetics, and telecommunication see a huge improvement in their operations.
That is because proper blockchain tech implementation reduces costs, speeds up transaction processes, eliminates human errors, and boosts the relationship between parties. However, a proper understanding of how blockchain operates is required to excel.
Read: What is blockchain and how does it work
How does Blockchain operate?
Given that it serves as a public digital ledger, it operates in the following way.
- Blockchain is a network of users with access to historical data, and this data updates when new transactions take place.
- It records each transaction as a “block” with a ton of available, verifiable data attached to it. Then, through the peer-to-peer network, that block passes for verification and acceptance.
- After approval, the block gets added to the “chain” of other blocks. After that, no one can change or remove the block.
- The chain is irreversible. As such, breaking it would need big processing power and hours of hacking. As a result, as the user network expands, this feat becomes harder.
Every transaction “updates” the entire ledger, re-creating the chain. All the data is available and shared via a collective database.
The ledger is then refreshed on each device that needs it. As a result, the data is accessible and resistant to hacking or theft. This is possible because it is a decentralized platform.
Blockchain in Digital Marketing
There are many uses for blockchain today. Its original use in financial transactions involved trading in Bitcoin.
This tech appeals to digital marketers because it will help them keep a competitive edge. There are several ways blockchain benefit marketing, and it includes:
- Storing huge data in the cloud, accessible from various devices and locations
- Using smart contracts that involves streamlining the procedure, validating data, and upholding the agreements.
- Fraud detection and prevention in two ways. First, it includes identifying users and verifying the items transferred.
- Data gathering for online marketing. Confirming and then transforming client-inputted data from a variety of sources.
- Data control. This is the process of managing and storing client data. It also involves compiling client data to make it easier to create targeted ads.
Thus, blockchain enables firms to get data via genuine and public markets. This is because it operates on the premise that all data is transparent and verified by its users.
So this means that the “privacy” issue affecting major firms will not be a factor. With this, clients can feel secure knowing that their data, money, and products are safe.
More so, being transparent and accountable is vital if you use blockchain. Thus, adhering to the rules will give you a competitive edge that your clients will value.
Finally, blockchain stands for innovation. This is why firms embracing it will have an edge. So business owners in all industries must know what it is and why it is vital. This is because it will play a significant role in our future lives.
Pros of Blockchain in Digital Marketing
Now you have gotten some ideas on blockchain and digital marketing, let’s look at some of its pros in digital marketing.
No More Third-party
One of its greatest pros is conducting any transaction without relying on a third party. As a result, people using it feel sure that no one is messing with their transactions. It ensures no one sees personal data or tampers with their security and privacy.
Also, firms cannot access your data without your permission; you only share what you wish. You can also feel more assured about getting paid for your services. This is because blockchain allows for rapid payment. There is no need to wait days for cheques or money orders.
Read: Four Enterprise Blockchain Industry Use Cases and Applications
Security and Privacy
Blockchain technology is more secure than centralized systems. This is because it spreads over a vast network of computers and is well encrypted.
Your data is safe from hackers through the added degree of privacy. Hence, tracking down or connecting individual users’ transactions is impossible. Thus, users can choose their names and email addresses during transactions. In addition, you have the choice to finish your transactions in anonymity.
So, you may use blockchain services without concern that others will watch your online activities. Or that identity thieves would gain access to private data like credit card details.
Transparency and Accountability
Anyone can access blockchain records because they are public. Also, they can learn how to handle data and access the records themselves.
Businesses that use blockchain tech show that they value transparency. Of course, your target audience will also know that your privacy policies go far beyond words on a page. But it reflects a solid commitment to corporate duty.
Fast Transactions
In comparison to traditional methods, it provides faster transactions. Usually, centralized banks can take a long time to complete a transaction.
For instance, when someone tries to move money abroad. The actual processing of that transaction could take up to six days. So, many customers cannot rely on the long protocols of traditional banks in an emergency. But with blockchain, a transaction may be over in seconds!
Cons of Blockchain in Digital Marketing
Here are some cons of blockchain in digital marketing
High Cost
The high implementation costs for using blockchain are a drawback. Most blockchain tech uses hyperledger. It demands investing a huge amount by the firm.
Blockchain attracts license expenses. It has costs related to employing engineers and managing teams for various parts of the tech. You must also consider ongoing maintenance costs. As a result, costs might reach millions for many businesses as well.
High Energy Consumption
The tough puzzles in the blockchain need to be better suited for use in the real world. So, the miner must find solutions to using lots of energy each time you update the ledger with a new transaction.
Long Signature Verification Process
This is another major drawback on our list of blockchain’s pros and cons. In essence, you’ll need a cryptographic signature for each transaction in the system.
The ECDSA uses this process to ensure that transactions occur between the proper nodes. However, as a result, each node must confirm the legitimacy of the user, which can be a stressful process.
Image Credits: Pexels
Bottom Line
Blockchain technology is a cutting-edge method of data storage and transmission. Even though it has some cons, most need proper preparation and implementation to fix it. Thus, blockchain becomes the best option for firms looking to enjoy distributed ledger abilities.
But the technique is more complex. Therefore, it is advisable to hire blockchain developers with the necessary experience and skills.
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