There are several terms that you are probably hearing with increased frequency in all tech and finance circles you might end up in:
Bitcoins! Blockchain! Cryptocurrency!
The hype is real. And for a good reason. This could very well be the most disruptive tech of the decade, followed closely by AI developments and the internet of things. More and more people are starting to see the potential benefits and are jumping on the blockchain boat.
While the most obvious applications could be seen in the insurance and fintech areas, marketers, and especially affiliate marketers, could benefit greatly from this tech. In addition, if you were quick about it, you might as well get a significant edge over your competitors, which would then be doubly beneficial.
What is blockchain
A blockchain is a collection of encrypted data stored in blocks that are chained together, as the name suggests. This successive linking of these encrypted blocks grands additional security as a person would need to hack and decrypt all the blocks in chain that have been created after the one where the target information is stored, making such a feat virtually impossible.
In other words, a blockchain is a public ledger in which all the information regarding various transactions are done.
All data that is stored on the blockchain is shared and verified by a large number of computers in that particular network. Cryptocurrency, of which Bitcoin is the most famous one, is awarded to owners of these computers as incentive for the processing power that is dedicated to maintain the blockchain.
One of the most important features of these systems is that they are completely reliable and safe, which eliminates the need for any sort of intermediaries in transactions, such as banks, insurances companies, and so on.
We only need to use something that is called a smart contract – a digital contract that is signed by two (or more) parties and is stored and executed in the blockchain. Even though the contract is written onto a blockchain, it can be used for both standard monetary transactions, as well as cryptocurrency ones.
How smartcontracts can change affiliate marketing
You might have already guessed where this is leading. Blockchain can effectively change the payment methods in affiliate marketing. Since smart contracts can be parametric and dynamic, they could be combined to an amazing effect with the current SSPs and DSPs.
In addition, tracking could be made significantly easier, as a smart contract could have a subcontract in it, which could be made with every single individual that clicks the referral link, ensuring that the click was unique.
This would eliminate the need for pixel tracking, or other methods that are currently used and are far more complicated to ensure the authenticity of the impression. Each referral would have its unique id, allowing both the advertiser and the marketer to have a far more reliable tracking of the affiliate performance.
Of course, it could all work the other way around. You could simply switch your affiliate marketing to cryptocurrency, by either working with various ledgers or mining communities – you could either gain the currency, or a percentage of the mining income in this case.
Bitcoin exchange is a growing industry, and a crafty marketer can get a king’s ransom if they join one of the many fledgling affiliate programs. In addition, finance sector uses bitcoins and other marketplaces more and more, especially for binary options and forex trading, because traders can do their business even when other markets are closed.
Lastly, blockchain could transform the payment method itself. Parametric smart contracts could allow for very precise definitions, and allow for dynamic scaling:
A referral payout could be different based on the time of the day, region, behavior of the visitor, and all of this could be defined in the contract and adjusted automatically. Since the tracking is far more reliable, the payout could be instantaneous.
While this could potentially eliminate affiliate programs, as affiliates could sign contracts with advertisers directly, there is still more than enough room for affiliate program providers, as they could use their expertise to negotiate and arrange all of these contract parameters, and make the whole thing hassle free for both marketers and advertisers.