If you’re confused about the basics of blockchain—what it is and why it’s seen as so important to the future of online advertising—you’re hardly alone. That’s why the Interactive Advertising Bureau (IAB) has released a whitepaper on the subject. A readable and comprehensive quick-take, the paper not only explains what blockchain is, but details its benefits and use cases for online video advertising.
As for the “what is,” here’s a brief explanation from the whitepaper:
Blockchain is a ledger, or a database, that is stored in a distributed peer-to-peer network without any central point of control. While special permissions are required to write entries to the blockchain, in most cases, the ledger itself is publicly visible. Once an entry is made to the blockchain, it is pushed out to the network and is immutable, meaning that it can never be changed.
So why would ad buyers and sellers need a distributed ledger system? Here are six benefits, abridged from the white paper:
- Trust. Blockchain provides a proven framework for creating trustworthy interactions between parties who do not necessarily know each other. Trust is ensured because parties cannot mask their identities, and because any transaction involving the exchange of value, or data, is encrypted. Only the parties authorized in the transaction hold the keys.
- Transparency. Every transaction that is written to a blockchain ledger, or database, is visible to anyone who has access to the chain.
- Decentralization: No central system, record, or controlling third party is needed
- Safety and Security. Blockchains are in principal designed to be decentralized, peer-to-peer networks with no central authority or point of control…Once an entry is made onto a blockchain it is nearly impossible to alter, because each block references the prior block and the entire chain is copied on every node in the network.
- Fraud reduction. All parties interacting on the blockchain are disclosed and verifiable. Identities cannot be spoofed; inventory cannot be daisy-chained; data can be neither skimmed nor reused in subsequent transactions. In short, every intermediary to a transaction is known, disclosed and approved by all parties.
- Efficiency. Efficiency along with its twin benefit, cost reduction, are natural outcomes of successful blockchain implementations. Efficiencies stem from the reduction of intermediaries in any transaction, streamlined workflow, and a quicker reconciliation period post-transaction.
For much more, download the IAB’s whitepaper for free (no registration required).