‘Decentralization’ is becoming a huge point of discussion in the finance industry – and for good reason. Using blockchain technology, it has the potential to completely change the entire process of marketing in ways that were previously unthinkable.
Most importantly, these are changes that are set to benefit everyone. The big question is: how will they affect the average, everyday Internet user?
The Marketing Industry Today
The marketing industry has experienced some drastic changes over the past few years. In particular, we’ve witnessed the rise of social media marketing. As it stands, all of our major social media websites are centralized organizations that allow people to use their platforms in exchange for their personal data.
In addition, when companies or individuals pay to have their products advertised on a website, or even simply to share information, the corporation – such as Facebook, Twitter, or YouTube – will reap all of the benefits. Meanwhile, the users of these websites receive nothing.
Facebook is currently the most popular social network, and therefore one of the most popular information sharing websites. As of 2017, it had 2 billion monthly active users, and 1 billion daily active users.
Right now, if you want to share information about your product or service on Facebook, you have to set up a campaign on the website and select who you want to target based on information such as their age, location, interests, etc. All of the budget you spend on this campaign will go directly to Facebook.
Despite the millions of dollars of research that has gone into Facebook’s advertising algorithms, there is still one fatal flaw: one of the major ways we make our purchasing decisions is through recommendations from people we trust.
This means that one of the most effective ways to share information is through referrals from regular users. However, because these centralized platforms are keeping all of the revenue for themselves, there is currently little incentive for users to share information about the products that interest them.
As a result, we have no choice but to rely on these largely inaccurate targeting methods, often throwing away large amounts of money in the process.
Introducing Incentive Technology…
Thanks to blockchain technology, multiple companies are already starting to explore new ways to share valuable content in more effective ways.
Because studies have shown that we trust recommendations from our family and friends and people we know on an average of five times more than we trust celebrities, it only makes sense that referrals from family and friends and people we trust and know on a personal level is one of the most effective ways to share information.
One of the companies leveraging this incentive technology to change the way our current referral system works is 2Key.
2Key works in a similar way to Facebook, in that it allows users to define a campaign, choose how much they want to spend overall, and then roll it out to other users.
If users enjoy it, they will then share it will their friends, who will then share it with their friends, and ultimately create a chain of people who liked the content and have shared it. This will continue until the goal has been reached or the funding runs out.
The best thing about this model is that everyone who has been involved in the sharing chain and has made a positive impact will get paid for their efforts. This ultimately results in a real network effect and a real sharing economy.
Users will be rewarded based on how much of an impact they have made by sharing the post. For instance, if the post you shared is seen by a lot of people and is ranked highly by users, you will receive more ‘points’ on your profile, and therefore receive a higher share of the reward.
Alternatively, if your shared content is seen by few people and is ranked negatively by users, you will lose ‘points’ on your profile.
What is the Purpose of an Incentive-Based Sharing Economy?
Ultimately, the goal is to create a world of valuable shared content that doesn’t involve spam or irrelevant content. Such a model will force people to think hard about the type of content they will share, and also to consider who will find it most valuable.
Finally, and perhaps most importantly of all, the creation of decentralized sharing economy brings us yet another step closer to taking back control of our personal information from big tech giants like Facebook and YouTube and putting it back into the hands of those who matter most – the users.
Disclaimer: This is a contributed article and should not be taken as investment advice