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How blockchain will disrupt Google, Apple, Amazon, and Facebook

How blockchain will disrupt Google, Apple, Amazon, and Facebook

How blockchain will disrupt Google, Apple, Amazon, and Facebook

In the eyes of “experts,” when it comes to blockchain,

there is often no middle ground — it will either be boom or bust, nothing in between.I for one have become a big proponent of blockchain technology, especially the crypto-economics used to jumpstart powerful network effects.But with so many opinions and noise floating around, I thought it would be beneficial to take a deep dive into the ramifications of blockchain technology as it relates to today’s top tech companies.Will blockchain based alternatives unseat Google, Amazon, Facebook, and Apple? After in-depth research into the business models, here is what I found…

A quick explanation

For those new to the space, blockchains are immutable (unchangeable), often trustless ledgers — creating digital scarcity and the possibility for much more. Due to their decentralized nature (run by a community vs a single entity) and their economic incentive models (tokens), they potentially represent a major threat to the status quo — at least that is what enthusiasts would have us believe (more on this later in this article).

Basically, this means that anything that was once done/stored on paper can now be accomplished and recorded on the blockchain, creating an infinite and unchangeable “paper” trail of ownership records, programmable contracts, financial information, personal data and much more. And at least in theory, it would be owned by the users — something unheard of today.

The GAFA tech gods

As we enter 2018, we are entering into an era of unparalleled tech dominance. Companies like Google, Amazon, Facebook, and Apple control more and more of our everyday lives — owning our data and everything around it. The inherent network effects and flywheels these companies built are unprecedented — both in their scope and ability to stave off competition. In this connected world where things are constantly changing, I thought it could be beneficial to analyze/theorize blockchain based competitors to combat the tech giants of today — specifically to focus on what it would take to win.

Google

Google is one of the most complicated companies today, with dozens of divisions and products that dominate our daily life. We will skip most of these areas and instead focus on their primary business model — advertising.

1. Google Search

Google is the dominant search engine with over 77% of global searches going through Google Despite the fact that 1.3B people (there are only 7.6B people globally) live behind China’s Firewall, Google still owns over ¾ of the search engine market. This dominance has fueled Google’s historic rise. 86.5% of Alphabet’s revenue comes from advertising, primarily search ads

2. Youtube

Youtube is the second largest search engine in the world, and easily the largest user-generated video platform. Users upload an impossible 100 hours of content to Youtube every minute. And Credit Suisse believes that in 2015, Youtube and Google Play accounted for ~15% of Google’s revenue (up from 4% in 2010), and forecasted to reach 24% by 2020. Considering Google only paid $1.65B to acquire them in 2006, that is one hell of a deal.

3. AdSense — display advertising

The other piece of Google’s advertising supremacy is their partner network, AdSense. AdSense allows sites to monetize through Google’s advertising platform without worrying about the backend or finding advertisers. Instead, Google handles everything and takes a between 32 and 49 percent of ad revenue generate (the rest going to publishers).

According to Investopedia, AdSense revenues accounted for $15.5B, ie 23% of Google’s total revenue in 2016. Unfortunately, advertising as a business focuses on eyeballs over quality, leading to much of the degradation and clickbaity titles of today. I don’t see the advertising model changing drastically anytime soon, meaning Google’s great success with AdSense is likely to continue (and grow).

How blockchain beats Google

Google’s business is all about eyeballs, attention and “supposed transparency.” Their slogan of “don’t be evil” and mission to openly share information with the world are notably at odds. This creates a scenario where Google’s platform is god and only those that play by his/her rules are allowed in the garden of Google.

But, crypto complicates things for Google. Google’s dominance is primarily driven by the network effects of big data and AI combined with the force of habit — a near perfect storm. At the same time, however, many in the tech community are worried about the role tech giants play in our lives, especially as it relates to selling our personal data. And as we have seen, the tech community is taking some shots from politicians and users over their role in the recent US election.

1. Search

A blockchain based browser/search engine could solve the problem of misaligned incentives. I have started using DuckDuckGo (a privacy-focused search engine) after my research for the book (The Big Four — How Today’s Tech Companies Monopolize the Future) revealed the extent of Google’s power and control over my life. Rather than collecting my personal information to sell better ads, DuckDuckGo (DDG) only occasionally shows ads — and solely based on the actual search query. Imagine that.

DDG’s approach has major advantages for users, namely disintermediating value with personal data — but there are issues as well. The reason Google dominates is their data and AI expertise. They know us better than we know ourselves and are able to deliver better experiences as a result. It is the reason Antitrust action will almost never occur in the US — our definition of monopoly is based on consumer price gouging and poor experiences — the opposite of what today’s top tech companies deliver.

You want the best results for you, and you want them now. Google delivers this. A blockchain based search engine (BBSE) could theoretically win here. Combined with an identity coin like Citizen, a BBSE could use consumer data and preferences (without ever owning/controlling them) to display better, more personalized search results for users.

And if advertising was added, BBSE users would benefit as well, earning tokenized “commissions” in exchange for seeing the ads — removing the adversarial relationship that exists today. Unfortunately, I foresee this as being a long ways off. To change user behavior, you need a 5–10x better solution than the existing product. To get to the point where a BBSE which surpasses Google’s market share (currently 77–80%) will take years. Most people too freely give up their data and information without reading the terms of service (myself included).

2. Video

Competing with Youtube presents many of the same challenges as tackling search. There is one major advantage however, the creators create the platform and value. And because Youtube advertising isn’t effective for the vast majority of creators,

this could be interesting.

According to our analysis, the average CPM that can be expected from YouTube videos is between $0.50 and $5.00. That means that for every 1 million views of your videos, you can expect to make between $500 and $5,000.

That is pretty horrible, especially considering podcast ads earns 5–20x higher CPMs (cost per 1000 impressions). Because Youtube is so competitive and the ability to earn is limited, it makes logical sense that creators would cross-populate content. On a new blockchain based video platform (BBVP), there would be less competition and thus a greater percentage of attention.

If incentives were added for creators to create content and onboard audiences, the rewards suddenly get more interesting. The first mover advantages create inherent network effects and time urgency — bring over your subscribers before some other Youtuber does. That said it would still take time, especially to bring sufficient eyeballs to make good money.

But with strong enough token incentives and quality content, it seems safe to say that news would spread. The question is how fast. Odds are a BBVP would take several years to mature. Youtube has over 100 hours of video uploaded every minute — that is a lot of evergreen, SEO rich content. And because Google favors Youtube, it would be hard to steal search traffic.

Steemit/Dtube is currently working on building a Youtube killer but has a long long way to go to create a credible threat. That said Steemit is one of the most active blockchain projects/cryptocurrencies with a market cap of $1.49B and processes over 1M transactions per day (820k/day as of July 2017) — things are happening!

3. Adsense

Advertising ruined the internet and journalism. When the world switched from subscriptions to display ads, quality started to slide. Today clickbait is king. More eyeballs and pageviews (hence those annoying freaking slideshows) have created a world where artificial attention is rewarded. We have seen the quality of journalism and content degrade — prioritizing provocative headlines, flashy thumbnails and accidentally promoting an asshole like Trump.

NOTE: Trump won because he created controversy, driving eyeballs (ie ad dollars) and thus rankings/ratings around the globe. Our disgust forced us to read and forced his image and message everywhere like an inescapable evil billboard. A blockchain based publication model (BBPM) could, in theory, solve this. Medium does a decent job of illustrating the point (although not profitable), by allowing users to upvote/Clap for articles they enjoy (up to 50 Claps). A similar model could redistribute dollars to the sites and publications we appreciate most.

And there are companies/organizations trying to do just that, both with and without blockchains. This is a hard proposition though because the majority don’t understand the power/risk of personal information. Most people are fine with “being the product” and profiting (receiving free content/access) for their contribution to the system.

In my opinion, the one and only way a blockchain based answer to Adsense could succeed would be tokenized incentives for early adopters (users and publishers) to the system where Adsense ads had an if/then statement attached. If a user is BBPM member, no ads. If not then display ads.

In order to participate in the BBPM, publishers could jointly collude to “monopolize” the market, creating a linearly sliding scale of advertising intrusiveness across all web properties to encourage laggards to convert (ie overtime sites across the internet become less and less usable and more and more ads/spammy until readers joined the BBPM)

That said, I don’t see a “mafia-like” approach like this being adopted or believe change can happen in under a generation (hard to go from free to paid and be okay with it). Hopefully, it will help kill clickbait…

Amazon

The company Bezos built to sell books online is now arguably the most dominant and diversified company on earth, and the odds-on favorite to crack the $1T market cap first. This seems to be the consensus, at least among technologists. But the majority are often very wrong, so let’s dive deeper.

Understanding the empire

Amazon’s business is made up of five primary divisions: Amazon.com, AWS, Alexa, Whole Foods Market and Amazon Prime. Each on its own would be an impressive business. Combined they create the world’s largest flywheel.

I don’t believe Alexa, Whole Foods or Amazon Prime have any risk of blockchain based disruption (at least in the foreseeable future). The nature of these business models isn’t easily decentralized.

And while decentralized AI could be an interesting component to building an Alexa killer, I believe the bulk of the effort to be merging multiple technologies and disciplines (voice, AI, APIs, hardware) which seem highly unlikely in the foreseeable future

1. Amazon.com

Amazon’s is the most monopolistic and well-positioned marketplace the Western world has ever seen. Last year they did $136B in revenue with double-digit growth every year. 2017 estimates show a staggering 44% of US e-commerce occurred on Amazon.com (Source: Recode). And Amazon has been growing at least 13% YoY (year-over-year) for each of the last 5 years.

It isn’t just a monopoly, it is accelerating. But there is another layer to unpack — Amazon Basics, where Amazon analyzes 3rd party seller data and copies the best performing products. Ultimately Amazon wants to replace ALL 3rd party sellers/products with Amazon Basics versions. Amazon wants to (and will) own the customer and every ounce of margin that comes with it. Marketplaces die when the creator becomes the competitor.

2. Amazon Web Services (AWS)

Amazon should spinout AWS before regulators start antitrust actions) Amazon built AWS for their marketplace. They needed the ability to host images and information for Amazon.com and Bezos being Bezos, built the product in a modular fashion. As AWS grew, Amazon constantly cut prices to crush competition, making

AWS the easy choice.

Your margin is my opportunity

Today ~42% of the web is powered by AWS. That is more than double Microsoft, Google and IBM (combined). Yet given the easy-to-use system and affordable pricing, it makes sense.And growth isn’t slowing, quite the opposite actually. AWS accounts for 10% of Amazon’s overall revenue, with $4.6B in Q3 of 2017 (up 42% over last year) and $1.2B in profit (up 36% over last year). Amazon owns the infrastructure the majority of the internet is built on, can decentralization change that?

How blockchain beats Amazon

I have my money on Amazon. They are the best positioned of the tech giants to own the future. That said, blockchain can create challenges for Bezos’ beast, it depends how it is implemented, incentivized and evolves.

1. E-commerce

While Amazon owns e-commerce today, there are many projects focused on building decentralized marketplaces. Most miss the point though. The issue isn’t Amazon’s ~15%+ transaction fee, that is par for the course and the cost of doing business. And besides, consumers could care less how much sellers pay in fees, it doesn’t affect them.

(Plus 10% is a fraction of the 5–10x improvement needed to switch — it wouldn’t be meaningful enough for sellers to abandon Amazon entirely).

Yes, sellers care about fees, but what is more important is control. As referenced previously, Amazon sellers (like myself previously — more on my backstory here) play on Amazon’s playground. You never knew if/when you will be uninvited — or Amazon could copy your product (Amazon Basics) and cut you out. This creates a constant fear of suspension. If 80%+ of your business is on Amazon, what happens if you lose access?

A decentralized marketplace NEEDS to be built first and foremost by sellers. That is doable in my opinion. Most sellers would do ANYTHING to control their company’s destiny. If that means promoting a blockchain based e-commerce platform (BBEP), you can bet your ass they would — even without tokenized incentives. Adding incentives further accelerates adoption among sellers. But buyers are another story. Here tokenized “discounts” or “bonuses” could be used to lure buyers to the platform.

The challenge is that most sellers cannot easily access their customer base on Amazon. And to contact them and try to bring them off-Amazon can result in suspension. Plus sellers wouldn’t want to send their own customers (ie from their standalone site or email list) to an unproven, competitive marketplace unless it was as an affiliate for other products. Here an Amazon Affiliates type program would be necessary (ie: I sell X and recommend Y related products to past customers on the BBEP, earning tokens for each signup/sale).

This could also be employed for heavily incentivized buyer-to-buyer and publisher-to-buyer referral programs to get customers “in-the-door.” If sufficient supply and trust were built, the platform would start to take off, with crypto-economics driving adoption. If the user experience is inferior, however, this would take a lot of time. Plus consider the options. If Amazon has 100x the product selection, why would consumers use a BBEP? You need better prices or a huge token incentivizes initially — or today’s massive “speculative-esque” belief in the business and team to drive token appreciation.

2. File storage & web services

To be honest, decentralized file storage seems like overkill for many applications. With dirt cheap AWS/S3 file storage, you need a compelling case to justify relatively unproven blockchain based web services (BBWS). Even the CIA (and 2000 other US government organizations) prefer AWS to their own systems — the security is superior and the price is unbeatable.

Currently, the only use case that seems valuable is decentralized file storage for other decentralized apps and protocols. When full decentralization is necessary (or wanted), it makes sense to use a service like Sia or Storj. But even then, it will take time to scale the eco-system, ie primary customer base. Without enough dApp traction, who will blockchain based storage systems (BBSS) serve? This creates a bit of a chicken-egg scenario…

Storj claims a fully decentralized storage system where users are able to buy/rent harddrive space autonomously will make that storage cost 10–100x cheaper than centralized solutions. To store 1T of data on Storj today costs $15/mo plus additional bandwidth fees (for downloads). Google Drive is a flat $10 for that same Terrabyte (plus comes with all the additional functionality of Google Docs etc…)

Compared to AWS S3, Storj does better. While AWS/S3 is $0.023/GB/mo, Storj is only $0.015/GB/mo. But that is only a 34% improvement, well shy of the 5–10x improvement typically needed to switch products/service providers.

That said, some of the top VCs like Union Square Ventures, Sequoia Capital, and Andressen Horowitz all invested in Filecoin so maybe I am totally wrong here. A BBSS is the simplest blockchain model to understand. Users are easily incentivized to provide storage space and customers/enterprises can save a little money on storage. But usually when an opportunity is obvious, it isn’t a great opportunity and becomes pretty competitive, so only time will tell…

Facebook

As of June 2017, Facebook hit an unprecedented 2B MAUs (monthly active users). That is nearly ⅓ of the population. While there are several divisions within Facebook (thanks to a few successful acquisitions), Facebook is at its core a social media and communications company. We will focus on Facebook.com, Instagram, and Whatsapp/Facebook Messenger as these are their three primary businesses and those ripest for blockchain disruption.

1. Facebook.com

Facebook has over 2B monthly active users — yet despite the massive market penetration, they are still growing 16% year-over-year. How is that possible?This is due in large part to the brilliant leadership of Mark Zuckerberg where Facebook bet the farm on mobile — it worked. They were able to go from ~135M MAUs (mobile only) in early-mid 2012 to over 1.15B in Q4 of 2016.

The lion share of growth has been mobile advertising — with mobile now accounting for 86% of their revenue — better than ANYONE expected. Today digital advertising is a duopoly, with Google and Facebook attracting between 57–84% of global digital (outside of China) depending on the source. (Source — FT.com, Recode). Scarier still is the fact that the duopoly is taking >99% of new growth is digital ad spend (as of Q3 2016).

2. Instagram

Facebook acquired Instagram in 2012 for a $1B for a pre-revenue company with 30M users (formed only 2 years prior). After waiting 3 years to monetize (to focus on growth), Instagram turned on ads and became a cash cow.

And with 100M new MAUs every 6 months, Instagram is exploding in popularity. Copying Snapchat Stories certainly helped (which Zuck was 100% happy to rip — pixel by pixel). Snap’s stock has dropped 50% since the ill-timed (controversial and greedy) IPO. Plus Instagram addresses a different market (millennials) and use case than the Facebook— building their advertising base even larger.

3. Whatsapp and Facebook Messenger

I refuse to consider Facebook messenger a messaging app as it is just the messaging feature of Facebook — thus messages from Facebook come through and grossly distort the usage numbers. Either way, Whatsapp and Facebook Messenger are the two largest “messaging apps” worldwide.

Facebook bought Whatsapp in February of 2014 for a whopping $19B, which again seemed absurd. But Facebook’s business has ALWAYS been built around attention, eyeballs, and waiting to monetize. And if Instagram is any indication, they know what they are doing. Stern Agee, the financial services company estimates Whatsapp could be generating close to $5B in revenue with over 2.3B users by 2023. I would go bigger.

Due to Whatsapp’s more private, intimate nature, it creates growth opportunities that an outward facing site like Facebook and to some extent Instagram cannot match. Essentially even if/as people become more reserved about social media, sharing and controlling their data, Whatsapp can still win — rigging the game in Facebook’s favor.

How blockchain beats Facebook

Of all the Big Four, blockchain poses the largest threat to Facebook. Facebook’s business is built on attention, advertising and collecting user data. A network out of Harvard originally built for college hookups is now worth $524B — and users never saw a dime. They see quite a few ads though.

1. Facebook.com

A decentralized version of Facebook seems obvious at this point. In a social ecosystem without a centralized party, algorithms can be optimized for user happiness, rather than engagement. The biggest problem with Facebook (and Google) is that they are advertising-based businesses. Facebook makes their money on impressions, making it more and more user-hostile over time to drive ad revenues.

From a purely economic standpoint, this means Zuck wants users on Facebook as close to 24 hrs a day as humanly possible. Obviously, this isn’t sustainable, and studies show social media usage (especially Facebook) have a net negative impact on happiness. In the long term this is not sustainable for Facebook — the more you use Facebook, the worse you feel. Russian election hacking and Jew hate based targeting aside, Facebook could have a serious problem on its hands if more and more users start to churn — which appears to be the case.

Why else would Facebook be actively trying to reduce user addiction? Enter a blockchain based competitor… The token incentive structure should be pretty straightforward. Like Airbnb’s refer a friend and you both get $10 credit, a blockchain based social network (BBSN) could rewards users with BBSN tokens for referrals, creating popular content, posting daily etc…

Tokens could represent virtual economies in the network (buying/selling stickers, access to certain bonuses, or even upvote/downvote micropayments) or they could be positioned as advertising prerequisites, where users could “sell” their attention or engagement to advertisers.

It seems highly likely a BBSN will pop up to compete with Facebook. The question is, will tokenized incentives be enough to overcome Facebook’s enormous network effect? I believe yes, but think it will take at least ½ a generation.

2. Instagram

Same as above, plus with the added bonus of influencers. Because Instagram is more focused on one-to-many communication, users that build followings could sell access tokens to advertisers looking to promote products in a more transparent and simple fashion.

Although outside of the target market here, I would give a blockchain based social photo site (BBSPS) a decent chance at gaining significant traction

3. Whatsapp

The odds of a blockchain based messaging app (BBMA) taking off are pretty slim. There are so many messaging apps, why build a blockchain based one? Most messaging apps are encrypted anyway so the trust and security level is relatively high.

The big challenge, however, is scale. As of July 2017, there were over 55B Whatsapp messages sent every day (Source — AndroidPolice). Crypto kitties crashed Ethereum’s network, and that was only a few hundred thousand “transactions”. But cryptocurrencies built on a centralized service is a different story.

The popular messaging app Kik just completed a successful ICO, raising $98M to build a “KIN” currency into their app. With 300M users as of May 2016, it is no surprise that Kik had to quickly switch off ethereum’s net to handle their volume. Rumors are circulating that Facebook may be looking to (or starting to) implement Litecoin for p2p payments.

This would be a landmark moment not just for Facebook but for cryptocurrency — bringing decentralized, non-governmental payments to the masses. If this is the case, Facebook could set itself up as the dominant p2p payment system. Here is why.

The banking and financial services infrastructure is old, outdated and expensive. Even newer, leaner companies like Paypal charge $0.30 + 2.9% on every transaction they process. And Venmo is in the process of starting to charge as well. And while these may seem tiny, especially compared to traditional banking, cryptocurrencies unlock a totally new dimension of money — one that approaches 0% fees with no middlemen or hoops to jump through.

As we have seen, the peer-to-peer payments market is exploding, forecasted to reach $86B in 2018 in the US alone. And with global mobile payments expected to exceed $930B, this opportunity dwarfs the digital advertising space.

If Facebook goes big on implementing either an established cryptocurrency or creating FBcoin, they could own the messaging and p2p payments spaces.

Apple

Apple is the most valuable company and arguably the most beloved brand worldwide. It is also a money printing machine to the tune of $215B in 2016. And that was a down year…

The iPhone and iOS

The iPhone makes up the lion share of Apple’s revenue, 69.4% of (Q1 2017). And if we are being honest, the iPhone is the connection with consumers — the driver of iTunes, the App Store, AirPods, accessories… pretty much the whole shebang. This creates potential problems going forward…

How blockchain beats Apple

Of all the tech giants, Apple is the least threatened by blockchain because ~80% of revenue comes from hardware. That said, there could be issues with decentralized apps and token economies inside Apple’s closed ecosystem. The largest implications center around iOS and the App Store.

iOS + the App Store

Apple is the antithesis of decentralization. A future of dApps built on a decentralized blockchain could create a nightmare scenario for Apple.

The most obvious issue is monetization. How could Apple justify charging users to download freely distributed, open-source apps? I don’t see that ending well. And the App Store is incredibly valuable for Apple, bringing in $8.6B per year. It has also given iOS a big leg up on Android, bringing in 75% more revenue than Google Play despite the difference in downloads. But in a blockchain based future that revenue probably goes away.

More importantly, Apple isn’t friendly with outsiders — they love control. In an open-source world, would Apple become more developer and user-friendly? I do not know. Given the fact that Apple slows down your old iPhone when they launch a new one seems to indicate they are milking the smartphone craze for all it is worth.

And up until recently, consumers were also lied to concerning the “upgradeability” of iPhone parts. No one knew iPhone batteries were interchangeable… I cannot see a company so focused on secrecy adapting well to blockchain-based applications and transparency.

That said, Apple has better security than their Android counterparts which will be increasingly important as consumers store cryptographic assets directly on their mobile devices. If Apple adapts, this could be a big win. If not, it could accelerate their undoing — especially because ALMOST everything depends on the iPhone ecosystem.

Closing thoughts

Blockchain technology is creating an interesting and ever-changing world.

While we have seen hundreds of ICOs promising everything under the sun, little has actually been accomplished or implemented to date. And though I am bullish on blockchain, in the long run, I believe we are headed for a coming crypto winter where teams build, markets (and market caps) crash and only the strong survive.

Thinning the herd will benefit the community, forging stronger teams and bonds among blockchain devs and the ecosystem at large. The big questions to be answered are timeline and scale. Crypto enthusiasts claim Bitcoin and blockchain are the best things since sliced bread, but actions speak louder than words.

What are your thoughts? Which tech companies are you betting on and where do you see dApps, tokenization and blockchain based tech taking over the world? Would love to hear predictions and educated guesses in the comments section below. Which areas of the economy will be most impacted in the coming 5 years? 10 years?

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Agencies see change ahead as clients take more marketing in-house

Agencies see change ahead as clients take more marketing in-house

As brands continue to bring marketing capabilities in-house,

agencies have no choice but to adjust. Brands like Procter & Gamble, Unilever and United Airlines are bulking up their in-house capabilities, and others are following suit. “We are now seizing back control,” P&G marketing chief Marc Pritchard declared recently. The outcome of the move could be disastrous to agencies’ bottom lines. WPP Group’s share price, for instance, is down 14 percent from the start of the year.

“This is going to shrink the size of the outside agency pie because agencies are often not set up to keep pace with the range of tactics and navigate organizations in the ways now required,” said Josh Kelly, managing director at branding and design agency Fine. But just like with the rise of digital, the agency business isn’t going away anytime soon. Instead, a trend toward client control will end up benefiting nimbler agencies over massive ones and project work over retainers. As always, adaptability will ensure survival. “We have to look at it as a positive and adjust,” said one agency executive.

One winner: agencies that have a structure to accommodate project-based work. Agencies are already seeing an uptick in requests around shorter, specialized projects. According to a survey released in January from development firm RSW/US, 35 percent of 115 agencies surveyed said a majority of their assignments are now project-based, while 16 percent said over 80 percent of their work is now project-based. Unlike longer campaigns, project-based work can be done more quickly, often requires fewer resources and has the potential to bring in just as much revenue as longer-term relationships, according to agencies.

One exec at a large agency said although it has lost some agency-of-record opportunities because clients brought resources in-house, it has been hired for more project-based work, and revenue has not slipped due to the shift. In fact, the agency is now making half of its revenue from project-based work and the other half from traditional long-term relationships, whereas a few years ago, the revenue was set at 20 percent coming from one-off projects and 80 percent coming from AOR relationships. Because of the rise in these assignments, the agency has made internal adjustments like orchestrating smaller teams that work one-on-one with clients. Over time, this could save an agency money, although the exec admits that like every other agency, it doesn’t have it “all figured out yet.”

“We have looked at a more dedicated model where we have fewer people at higher experience levels attacking these consultancy-type projects,” said this exec. “We have teams that are smaller and can get these jobs done in a more time-condensed period.” What might’ve taken the agency three or four months to finish before is now confined to two- or three-day sessions with the client and all agency partners, the exec said. What might be difficult to do, said this executive, is value pricing these types of sessions for clients since they would be reportedly receiving the same service but in a shorter time.

But agencies might want to work this out. “There is ongoing pressure on pricing for like-for-like services that agencies provide, not just because of in-sourcing that occurs but because of changing client preferences,” said Brian Wieser, senior analyst at Pivotal Research. Marketers believe specialized boutique agencies, which already thrive on individual assignments, will benefit the most from the in-house movement. “Brands will start looking toward niche agencies who really understand their craft and have deep expertise,” said Quynh Mai, founder at Moving Image & Content.

For others, more project work and fewer AOR relationships means potentially less extensive and expensive pitches, which marketers have found exploitative, draining and a waste of time and money. One agency executive, who prefers to remain anonymous, said his agency will spend between $50,000 and $100,000 on a pitch and only receive a $20,000 to $30,000 stipend from a potential client once every 10 pitches, and only if the agency makes it to the final round. What’s more, ideas can be stolen from the pitch process.

“Every once in a while, you’ll get a client that throws language in the [nondisclosure agreement] that it owns any spec work that an agency does in the pitch,” said this executive. “Most smart agencies won’t sign that. We always push back on that.” “We have seen a client like an idea and don’t select us, but several months down the line, we see it come to life somewhere else,” said another agency executive, on background.

And because pitches have gotten so competitive, some agencies come with the entire campaign already finished, according to an agency executive. But often, a client might identify a need for a pitch and then change that once the agency is on board, resulting in wasted work hours, money, sweat and tears. For the agency above, projects mean the chance to agree to what it calls a “charter engagement,” a period of time when it can work to uncover the real opportunity for their client.

There’s also the hope that, as a result of forming their own internal teams, clients will be more cognizant of what they already need, and pitch projects to agencies accordingly. “A lot of times it’s easy for brands to initiate assignments without doing the homework on what that outcome needs to look like,” said Stephanie Parker, svp of brand leadership at agency Barkley. “As they take on more accountability internally, they have to sit down and think about how they are using their agency resources to their biggest advantage.” “Clients themselves will have some skin in the game,” said another agency executive.

Chris Mele, managing director of creative studio Stink Studios, said building an in-house agency means brands will have more knowledge around the overall creative process, how much talent can cost and how difficult talent is to find and retain, which might just open their eyes to how much they need agencies in the first place. Already, some brands are finding it difficult to recruit for the internal roles they need to fill and have resorted to asking their agencies to act as headhunters. “It’s quite easy to balk at an agency estimate for a project when you’re looking at the overall costs or scope,” said Mele, “but after a couple of quarters of running a 20- or 40-person in-house team, there may be a shift in perception on the return you receive for your money.”

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Marketing.
Interested or have Questions, Call Me, 559-474-4614

 

Bitmain’s Ethereum cryptocurrency ASIC could give us our graphics cards back

Bitmain’s Ethereum cryptocurrency ASIC could give us our graphics cards back

Mining machine manufacturer Bitmain are supposedly developing an ASIC
 
(application-specific integrated circuit) for Ethereum – a cryptocurrency that is currently ruled by GPUs alone. This move could potentially cut down the demand for graphics cards from miners, which would be great news for gamers, but potentially very bad news for AMD and Nvidia.The information comes from senior analyst Christopher Rolland of the investment and trading group, Susquehanna, and reported by CNBC.

“During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC for mining Ethereum, and is readying the supply chain for shipments in 2Q18," Rolland says. "While Bitmain is likely to be the largest ASIC vendor and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development."

This could be a big hit to the customer base of both Nvidia and AMD, although the latter will likely be hit hardest by the potential change in the market – Rolland suggests Ethereum mining accounts for 20% of AMD’s sales. Ethereum currently maintains second from pole position in market cap – second only to Bitcoin – and the virtual currency has, up to now, been dominated by graphics cards to fund its Ether-powered network.

Doubts over the profitability of ASIC miners for Ethereum mining have been at the forefront of discussion for some time. ASIC miners are widely used for Bitcoin mining, although Ethereum has been assumed ‘ASIC-resistant’, due to a reliance on memory – which is currently difficult for graphics card manufacturers to acquire. Bitmain’s new miner supposedly incorporates three motherboards, each with 32 one gigabyte DDR3 modules and six ASIC chips – reports Hexus. Popular miners for ASIC-heavy cryptocurrencies, such as Bitmain’s own AntMiner S9 packed with 189 ASIC chips, utilise far less memory.

It’s not all memory limitations, however. The profitability of Ethereum ASIC miners has been in doubt ever since Ethereum’s inception and the inevitable change to a proof of stake algorithm (one which removes the onus from mining new coins) sometime in the future. This change, however, has been a long time coming, and could still be a long way away. As for AMD, their graphics card business has been booming thanks to the cryptocurrency market, and this business drying up could be especially bad for them. Rolland has since downgraded AMD’s stock outlook from neutral to negative, which represents a potential huge downward slide in share value if it comes to pass. Nvidia, on the other hand, don’t seem all too worried.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Tips for Hosting a Marketing Industry Event That Doesn’t Suck

Tips for Hosting a Marketing Industry Event That Doesn't Suck

One Toronto event featured sessions with titles like The Business of Marijuana, DIY Beer & Craft Culture and Axe Throwing.

I work in mobile marketing, and, in case you didn’t know,
our industry loves conferences.

First, there are the multi-day industry events, typically hosted someplace warm. You fly in with high hopes, but your enthusiasm tempers quickly when you see the bland conference hall, overflowing with attendees, the vendors so eager to pitch you that you feel overwhelmed and outnumbered. 

Next, there are the smaller conferences, held somewhere convenient, like San Francisco or New York. The content is compressed into a half-day format, and everyone goes home in the early afternoon. You talk to no one and leave uninspired. Finally, there are the company-organized events. More and more former sponsors of industry events have started hosting their own conferences, meetups, happy hours and other organized gatherings. And that's enough to keep you constantly filtering through the invitations in your overflowing inbox — or feeling tempted to forgo the whole task altogether.

Because of this overload, many companies are more selective about what they'll participate in. They want an event with valuable content worth their time and effort. So, as someone who's hosted industry events and attended more conferences than I can count, my main advice to event planners is to put their audience’s needs above all else. With that in mind, here are my must-do’s for hosting an industry event that doesn’t suck.

Build your attendee list thoughtfully.

This seems like a no-brainer, but based on past events I’ve been to, some people are evidently skipping this step. You have to start by clearly defining your target audience. Consider creating attendee personas — detailed descriptions of the type of people you want to attend. Think beyond title, company size or even geographic location. Assemble a group of people who will benefit from meeting one other, and from having meaningful conversations that can have a lasting effect. Odds are, you're not going to throw the next SXSW or CES, and that's OK. Some of the best events I've been to have been smaller in volume  — because 100 decision-makers are likely to be far more relevant than a massive crowd.

Choose the right location.

Let’s face it, when people consider which event to attend, location is a major factor. There is a reason why conferences like the Adobe Summit are held in Las Vegas and Ragan’s upcoming Social Media Conference is at Disney World. So, don't jump to rent a conference hall, because thinking outside the box can help your event stand out. Depending on the size of your event, consider a hip restaurant, a winery or a more creative space, such as this historical train station in Oakland, or even the Magic Castle in LA.

Think about the goals of your event and what location and format would best help you achieve them. Is your event intended to reward your most loyal clients and strengthen your relationships? Choose a destination that is enticing, and perhaps even exclusive. Are you trying to get a big turnout? Think about your attendees’ ease of travel, and of course be sure to make the logistics as easy as possible.

Deliver valuable content in an engaging way.

Take the time to pinpoint what you can offer your attendees that no one else can. Brainstorm internally, of course, but don’t hesitate to consult with others. Ask trusted clients, vendors and friends who fit your attendee persona what they want most from an event like the one you’re planning. Be sure not to spread yourself too thin — decide on a specific theme and stick with it. Events should be hyper-focused, with clearly defined content pillars, so it is clear what people will gain by attending.

For example, iMedia runs global summits all over the world. It always creates a specific theme for each event, based on feedback from the industry. Its upcoming Brand Summit in Bonita Springs, Fla., will cover brand activation in the new economy. In the event’s communication and marketing, iMedia is clearly defining the types of questions its content will answer. Some additional tips for curating the best content possible for your industry event:

  • Invest in the right keynote speaker. He or she will help to pique attendees’ interest and set the tone for the rest of the event. This is not the place to skimp.

  • Keep your sessions short. This will challenge your speakers to focus on their best possible content, and keep attendees interested.

  • Provide your speakers with clear guidelines and information on your audience. Tell them the types of questions you would like answered. Consider reviewing their content before the event to make sure it is on point.

  • Don’t make things “sales-y.” If you're allowing vendors to sponsor a session or two, remember that people prefer case studies to straight sales pitches.

  • Experiment with different formats: panels, breakaway sessions, audience Q&As, games, etc. You want things to be as interactive and engaging as possible.

  • Make it fun! Some sort of recreational activity, happy hour or creative out-of-the-box session allows people to let their hair down and network in a less formal setting.

What "out-of-the-box" might mean

Here are a couple of meetings where event organizers — or outside organizers — did something unexpected:

  • During Tableau’s conference in Austin, Texas, one of Tableau’s competitors crashed the event, offered attendees free doughnuts and handed out tickets for its competing party, featuring artists like Flo Rida and Snoop Dogg.
  • At Trend Hunter’s Future Festival in Toronto, out-of-the box sessions were offered, with titles likeThe Business of Marijuana, DIY Beer & Craft Culture, Yoga with a Mind Reader and Axe Throwing, in order to drive higher attendance.
  • C2, a creative business conference in Montreal, redesigned its setting in 2016 to include an innovative retail experience for attendees, including street art and handmade tea cozies.
  • Stockholm’s Global Forum event tried the silent approach, giving attendees a headset in order to switch between multiple speakers and sessions at their convenience.

There is no shortage of marketing conferences, but there is still a real need for events that offer high-quality, curated content and spare attendees the unnecessary noise they so often suffer through. No matter what industry you are in, if you are hosting an event, the key to success is to truly recognize the value of your audience — both for you and everyone else.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Marketing.
Interested or have Questions, Call Me, 559-474-4614

A Guide to Airdrops Part 1: The Beauty of Airdrops

A Guide to Airdrops Part 1:
The Beauty of Airdrops

We’re sure you’ve all heard the idea that ‘airdrops are free money!’

As wise investors and skeptical purveyors of the cryptospace, we are rightfully incredulous of such a claim. “Free money?”

Sounds like bullshit. In some cases, you’re right. However, in many cases, you’re actually wrong. Because airdrops are so muddled with B.S. and worthless coin drops and require some level of technical knowledge of how cryptocurrency works beyond “send money from wallet A to person in wallet B,” and sometimes even involve the transfer of private keys, many people in the cryptospace stay away from them. But if you’re willing to navigate through the sea of B.S. and find the many (yes, many) projects that actually offer legitimate airdrops that can be cashed out for real value, then you actually can get “free money” in this space fairly easily.

How Much?  

This number depends on you and your personal situation as well as the cryptosphere in general at a given moment in time. How much free time do you have? What projects are offering the airdrops at this current moment? How long do you have to wait for it? Do you need to stake anything? Will the price of the coins drop or rise by the time you finally get around to selling your free airdrop? How much disposable income do you have available to accumulating coins specifically for the purpose of obtaining “free ones”?

Okay, I Get It but Can I At Least Get a Rough Estimate?

So, like I said above, it’s hard to get a ‘rough’ estimate. But if you stay on top of these, and you’re diligent about the opportunities that you pursue, and you have roughly $4,000 of disposable income to invest and ‘hold’ certain coins, you earning an extra $1,500+ per month is not out of the question at all, and that’s a conservative estimate.

Will you become a millionaire/rich off of airdrops? Probably not. But there is a great chance that you can earn yourself several thousand dollars of additional passive income each year doing little to no work without having to ‘gamble’ on making good choices on the markets, and that’s something that 99 percent of people on this planet should want to take advantage of.

So Why Are These Projects Giving Away These Coins?

Because there’s something in it for them and it costs them relatively little to nothing to do so.

Here’s a brief explanation:

  1. They have a new project that they just released, and they don’t want to have their project destroyed by folks that simply bought the coin during the ICO to make a quick profit the day that it launches on exchanges. So, they build in a staking mechanism or some other sort of incentive to encourage people to hold the coin, rather than selling it. This encourages folks to not only buy it, but hold it – shortening up the sell side of the order books (generally), and forcing the price upward gradually. This strategy doesn’t always work, but it has been very effective in the past, and it’s a formula that a lot of different crypto projects have attempted to duplicate for that reason alone.
  2. A hard fork is another common reason for “free coins.” This isn’t necessarily the developers doing; this is just a consequence of initiating a contentious hard fork on any chain. Basically, whenever a contentious hard fork occurs, it ‘copies’ the history of the chain up to that point. So, all of the transactions that occurred in the past are still valid.

Suppose there’s a coin called “ExampleChain.” ExampleChain has existed since 2011, and it has a lengthy history in the community. Some developers decide they’re going to create a hard fork for this chain called “BetterExampleChain” and it’s set to initiate tomorrow. Everything that’s a part of ExampleChain’s history is part of the “BetterExampleChain” blockchain up until the point of launch tomorrow. So, if Billy sent Jill 20 “ExampleChain” coins the week before, the “BetterExampleChain” has that recorded as Billy sent Jill 20 “BetterExampleChain” coins the week before.

So, when “BetterExampleChain” launches, Jill will have 20 “BetterExampleChain” coins in her wallet. And why wouldn’t she?

What Wallet?

So, let’s say Jill has no clue what the hell “BetterExampleChain” is. That doesn’t matter. If “BetterExampleChain” is a true hard-fork, then Jill should be able to “claim” her coins.

What Do You Mean “Claim?”

Basically, Jill has a few options here:

  • Jill can claim her new ‘BetterExampleChain’ coins by configuring the ‘BetterExampleChain’ wallet by inputting her public key and private key (proof that she really is the owner of this wallet), and she’ll gain access to the new tokens. *We’ll get into how to manage this private key issue later.
  • Perhaps Jill has her coins on an exchange that has the private key to her wallet. However, that exchange has decided to do the work for Jill and will compensate her by adding the corresponding amount of ‘BetterExampleChain’ coins to her wallet.
  • Jill has her coins in another wallet service like Coinomi that’s been known to support airdrops. They decide to do the work for Jill and deliver her coins to her.

Thus, if you’re someone that’s looking to make a bit of extra money through cryptocurrency, but you don’t want to risk an absurd amount of money doing so, airdrops may be the way to go. Keep in mind though – airdrops are not without risk. There’s a chance that the price could drop while you’re staking or waiting for an airdrop. Folks in the cryptocurrency world have been known to pick up a coin solely to stake it for an airdrop or to qualify as a ‘holder’ at the time of the ‘snapshot,’ then they’ll quickly “dump” or sell their holdings immediately thereafter. Thus, if you’re not wise about the strategy that you use for an airdrop, you may find yourself losing out.

However, the chances of coming out with a net loss during this process is usually tangibly less than it is for those trading on the open markets. You don’t have to participate in airdrops, but they often present themselves as a viable means of acquiring some ‘easy money’ in crypto. 

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

 

Bitcoin is Gaining Legitimacy in Europe as Dutch Court Deems it Transferable Value

Bitcoin is Gaining Legitimacy in Europe as Dutch Court Deems it
Transferable Value

Earlier this week, a Dutch court described bitcoin as a transferable value

during a case that requested Koinz Trading BV to pay mining proceeds worth $5,000, or 0.591. The court explicitly stated that property rights apply to bitcoin, given that as a cryptocurrency, it is able to transfer value in a peer-to-peer manner. The court went on to note that the cryptocurrency is a legitimate transferable value.

“Bitcoin exists, according to the court, from a unique, digitally encrypted series of numbers and letters stored on the hard drive of the right-holder’s computer. Bitcoin is ‘delivered’ by sending bitcoins from one wallet to another wallet. Bitcoins are stand-alone value files, which are delivered directly to the payee by the payer in the event of a payment. It follows that a Bitcoin represents a value and is transferable. In the court’s view, it thus shows characteristics of a property right. A claim for payment in Bitcoin is therefore to be regarded as a claim that qualifies for verification,” the court document translated by Cointelegraph read.

Differences in Bitcoin Regulation

In the US, cryptocurrencies are considered as commodities, at least by the US Commodities and Futures Trading Commission (CFTC). In Japan, the government acknowledged cryptocurrencies as a legal currency, allowing citizens and businesses to utilize cryptocurrencies to send and receive money. In the Philippines, cryptocurrencies are seen as a remittance method, that provides an efficient method for transaction settlement.

Generally, while cryptocurrencies as a whole are considered as different types of assets or money, they are considered legitimate by most governments. The Dutch court, if it had decided cryptocurrencies was not a legitimate transferable value, it would have requested the company to pay the proceeds in Euros. However, that was not the case, as the court specifically ordered the business to pay 0.591 bitcoin to the petitioner.

In many regions, the legality of bitcoin still remains unclear. In India for instance, the government has offered no additional information apart from an ambiguous message that bitcoin is neither legal or illegal. Consequently, businesses have integrated their own Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, to stay compliant with the country’s existing regulations on financial companies, which can highly impractical and costly.

Europe

However, in Europe, at least within the EU, bitcoin is considered as an asset and a transferable value. In the recent G20 Summit, an international forum participated by the 20 leading economies of the world, global financial watchdog Financial Stability Board (FSB) emphasized that cryptocurrencies like bitcoin are considered assets, and they do not pose danger to the stability of the global financial industry.

“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system,” read the statement of the FSB. Conclusively, if the global cryptocurrency market and businesses within it continue to function as a strictly regulated market with compliant businesses, cryptocurrencies like bitcoin will always be considered as legitimate assets.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

This Marketing Strategy Is a Game Changer for Resource-Strapped Startups

This Marketing Strategy Is a Game Changer for Resource-Strapped Startups

Tech-powered ABM is the future of marketing.
Is your startup prepared for the transition?
 

Take a look around any city sidewalk, classroom, restaurant or waiting room,

and you’ll see how prevalent technology has become in our society. In fact, according to a 2018 survey by Pew Research Center, just more than a quarter of consumers say they're "constantly online." But technology could never eclipse real human conversations and interactions, could it?

According to Daryl Plummer, managing VP at Gartner, that reality is just a few years away. Plummer believes that by 2020, artificial intelligence tech (such as chatbots) will dominate both our social and business cultures, heading up everything from customer service interactions to lead discovery conversations. And because bots will be trained to deliver targeted messages, have personality and incorporate hyperlocal nuances into conversations, people could find great joy in engaging with them. Before we know it, we could all be conversing more with bots than with our own spouses.

We can thank today’s information-fatigued consumers for innovative solutions such as this — and, in part, for the growing popularity of account-based marketing. Rather than wasting time on mass marketing that fails to grab or keep targets' attention, ABM calls for marketers to tailor messages to specific personas or audiences — ultimately personalizing the brand experience for users and generating more viable leads for the company. And when paired with certain technology, ABM can be a real game changer for businesses, especially resource-strapped startups and time-starved entrepreneurs looking to tip the scales in their favor.

Making ABM work for your startup.

It's the scaled-back, prospect-focused approach of ABM that's key to effectively engaging your targets and maximizing your team’s efficiency. Each success you have with a targeted account will offer you new insights, skills and tools that will help you expand your marketing efforts as your startup grows. However, the true secret to ABM success is leveraging the right technologies to set your business apart from the others. The best emerging technologies will help you not only target and streamline your efforts, but also track and strengthen your engagement rates, saving you valuable time and money in the long run.

Some technologies are already known to pair well with ABM. For instance, digital footprints can aid in identifying your audience’s unique obstacles, and predictive intelligence solutions can help you anticipate target accounts' needs so you can perfectly time marketing messages. Furthermore, addressability and programmatic buying can enable you to target messaging to those with certain characteristics, such as job title. But it's important to investigate less-common technologies and automation systems, too, until you’ve customized a tech package that fits your company’s unique audience, focus, needs and budget. With your tech choices squared away, your next step is to incorporate them into your business plan. Here are some tips for making the conversion to ABM:

Don't be a one-trick pony.

Since 2013, Amazon has been the king of curating product recommendations. You can thank its ultrapersonalized home pages, in part, for teaching targets to ignore email blasts and banner ads that don’t speak directly to them. That’s why ABM emphasizes seizing their attention through personalized messages and customized brand experiences.

There are really no limits to how creative you can get personalizing your brand message or user experience. But you’ll typically find that the more effort you put into customizing your outreach, the more engagement you’ll get in return — a top benefit of ABM, according to 83 percent of marketers surveyed by Demandbase. You might start out by building personalized landing pages on your company’s website for specific clients and target audiences. Customize these pages with images, text and special offers that fit the audience’s unique preferences, interests and needs. Then, monitor whether these pages draw users back to your site and which features they interact with the most, and adjust your efforts accordingly.

Take a course in social intelligence.

What really sets ABM — and potentially your brand — apart is how you can make each account feel seen, heard, understood and appreciated. Doing so is vital to keeping your contacts satisfied. In fact, 84 percent of marketers told ITSMA that ABM has the highest return on investment of any marketing strategy or program, showing that ABM’s customer-driven approach is key for marketers in retaining and growing business relationships.

How do you learn all the nitty-gritty details about your contacts so you can craft messages that make a real impact? And how do you keep up with all the changes and challenges they experience over time? A great place to start is by subscribing to a public information service, such as Google Alerts, that allows you to customize search parameters, track company activity and receive alerts whenever changes occur. To unveil more minute distinctions, interests and challenges, monitor your target account's online social activity on sites such as LinkedIn and Twitter (try the list-building feature). Each new tidbit of information will help you anticipate your contacts' evolving needs, reshape your marketing messages and boost your startup’s value in their eyes.

Look beyond sales.

We all know that networking can be helpful in business. But when you’re working on a smaller scale, recognizing and capitalizing on business connections are frequently a pivotal part of building enduring relationships. It’s often that “we run with the same crowd, so let’s be friends” connection that pushes target accounts to choose your startup over your competitors. It’s important to remember that networking for your startup isn’t all up to sales, though. The rest of your team can make valuable connections that propel your business forward, too. In fact, a SiriusDecisions study found that when its clients cross-aligned their product, marketing and sales teams, they saw a 25 percent increase in revenue growth and a 56 percent increase in profitability.

The ideal way to uncover every valuable business connection your team may have is through the TeamLink feature on the LinkedIn Sales Navigator. With that information, you can then work your connections, get a dialogue going with potential customers and start building rapport that will hopefully lead to a sale. Technology isn’t going anywhere. It’s infiltrating our social and business lives more and more every day. But that doesn’t mean you need to adopt every form of new technology just to get your brand noticed. Instead, focus your efforts on account-based marketing solutions and technology. It’s the surest way to build meaningful connections, increase marketing efficiency, stay on budget and put your startup on the road to success.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Marketing.
Interested or have Questions, Call Me, 559-474-4614

Establishing ethical guidelines for marketing cryptocurrencies

Establishing ethical guidelines for marketing cryptocurrencies

The marketing of cryptocurrencies and Initial Coin Offerings (ICOs)

is currently operating like the Wild West. From Ethereum to Litecoin to Neo, there are over 1,300 offerings in the burgeoning crypto market, and people like James Altucher are here to profit off the confusion. However, change is afoot. Facebook banned advertising of ICOs and cryptocurrencies, Google just joined suit and even Twitter is attempting to rein in the fraudsters. We need to establish what regulations must you follow to avoid liability and what ethical guidelines should the industry establish on its own to foster trust and legitimacy.

The Cryptocurrency Regulatory Landscape in Flux

So far, the U.S. is taking a cautionary approach to regulating cryptocurrencies and ICOs, issuing more statements than clear-cut regulations. This Coinbase article on ICO regulation summed up the government’s confusing approach well: “Be careful. ICOs are risky and dangerous. It’s possible that a token, depending on the circumstances, might not be a security, but it probably is. If the token resembles a security, again on a case-by-case basis, then you need to follow existing securities regulation for an ICO.” So, an ICO may be a security and governed by securities laws. Or maybe it isn’t. This lack of clarity poses risks for everyone from investors to entrepreneurs to marketers of running afoul of the law. Moreover, it poses questions of ethical duty: What rules should we follow? Should government put regulations in place?

There are many experts in the crypto industry that bemoan any mention of regulation, as the markets frequently react negatively to them. The anti-regulation sentiment is strong among Bitcoin investors, too. A recent survey by Lendedu showed that nearly 50% believe the government should not play a stronger role in regulating Bitcoin and virtual currencies in 2018. On the other hand, some experts say that the market is ready and even needs regulation to stabilize and gain the trust of mainstream investors. “I believe we need more regulation. It will hurt in the short term, but I believe it will eventually add a zero to the market cap,” said Protocol Ventures founder Rick Marini in an Q&A with VSC. “There’s a lot of big money—pension funds, endowments, institutional money—that is sitting on the sidelines, waiting for clarification.”Indiegogo Moves to Set a Standard and Self-Regulate

We should be looking to platforms like Indiegogo for inspiration on what a self-regulated crypto market should look like. Previously limited to the crowdfunding space, Indiegogo has chosen to follow all securities regulations in its initial foray into the crypto sphere in order to protect both sellers and investors and make the market more accessible to everyone.

Indiegogo partnered with FINRA-registered broker-dealer MicroVentures when it launched its equity crowdfunding portal last year to “help ensure [its] equity crowdfunding offerings are SEC compliant,” and it will similarly offer SEC-compliant ICOs. This is despite, as Indiegogo readily admits, the fact that many ICOs today are conducted outside of securities laws. For sellers, Indiegogo provides a registered broker-dealer that can facilitate token pre-sales inside current SEC regulations in addition to providing critical investor accreditation validation, know-your-customer (KYC), anti-money-laundering (AML) services. Additionally, it is not a free-for-all market—the company is carefully curating its selection of vetted token pre-sales to prevent shady ICOs from being offered on the platform.

Currency Ratings are Vital to Self-Regulation

The cryptocurrency industry should also consider creating independent cryptocurrency rating agencies a la S&Ps and Moody’s that rate bonds. While the 2008 market crash proved that these credit-based rating services are not perfect, that’s actually a good thing. The flaws in existing systems give the crypto industry a baseline for best practices and a way to learn from past mistakes. This could be accomplished via independent analyst teams that interview companies that are planning ICOs, and issue reports on the need for a coin in their stated use case, the financial strength of said company, management team pedigree, venture capital support, and then deliver A-F rating scale on the comfort with such an offering. In keeping with crypto’s purely market-based structure, non-governmental oversight seems more appropriate, especially if the market provides enough incentive for competing analyses.

It is possible that a truly crowdsourced rating prediction system could also be developed to supplement or even supplant the independent analysts. Studies have shown that non-expert “crowds” can be astonishingly effective at predicting outcomes. For example, UC Berkeley’s Good Judgement Project found that it can improve outcome predictions by training ordinary people to make more confident and accurate predictions over time as “superforecasters.” If applied with appropriate safeguards from manipulation, this crowd prediction model can also be applied to rating cryptocurrencies. Not only may it prove to be more accurate than ratings agencies, it’s very much in line with the decentralized nature of the cryptocurrency world.

I tend to believe clear and nationwide regulation of cryptocurrency will help stabilize the market and make it safer and more appealing to mainstream investors. But government regulation challenges the technical and cultural core of cryptocurrency as a decentralized market and a store of value that’s not tied to any one government-issued currency. Self-regulation of marketplaces and marketing could be the perfect middle ground. Effective self-regulation, exemplified at Indiegogo, can protect the future of the industry, the viability of cryptocurrencies, and even stem further government regulations. Of course, there is no guarantee this will stop regulation or even that users will want to adopt any rules. But the “good guys”—which is probably the majority of us—have a duty to act ethically and with the best of intentions when dealing with all types of investments, including the new frontier of cryptocurrencies. We can literally have the livelihoods of our friends and neighbors in our hands when doing this kind of work and we should all act accordingly.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Marketing.
Interested or have Questions, Call Me, 559-474-4614

Cryptocurrency Airdrops: The What, the Why, and the How

Cryptocurrency Airdrops:
The What, the Why, and the How

As the blockchain industry and ecosystem develop,

new terms become commonplace amongst those who run in blockchain technology circles. In the cryptocurrency sphere, the word airdrop has taken on a different meaning from the more widespread military definition. In the blockchain world, the term airdrop refers to gifts.

What is an Airdrop?

Airdropping is the process of distributing tokens to a user’s blockchain wallet at no cost to them. It is a technique commonly used by startup businesses that are undertaking an Initial Coin Offering (ICO), as a tool to promote projects and increase their brand exposure. In addition to this, airdrops can happen when there is a fork in a cryptocurrency. Examples of this include Bitcoin users getting Bitcoin Cash, and Ethereum users getting Ethereum Classic tokens equal to the value of that held in their original wallets.

Why conduct an Airdrop?

Airdrops can happen for a number of reasons, the most common being:

To reward loyalty: Free tokens can be provided as a reward to users of cryptocurrency exchange websites, giving them free tokens to say thanks for being loyal to their platform. That was the case in 2017 when Binance gave 500 TRX to its users.

Marketing: Used by companies to attract attention during their ICOs in order to encourage investment in their crypto tokens. They are also often used at the launch of a new cryptocurrency, particularly when this is the result of a fork (for example, the Bitcoin Cash airdrop mentioned above).

Decentralization: This can help to create a higher level of security for the network and its users. For example, OmiseGO distributed a sizable chunk of its tokens to Ethereum users.

How do Airdrops happen?

One of two methods are generally used to conduct airdrops:

Planned: Planned airdrops are usually announced in advance, as part of a marketing strategy to promote a project and generate excitement in the crypto-community.
Surprise: Surprise can also generate excitement and a lot of free publicity when it is a well-established cryptocurrency that conducts the airdrop.

Where to find Airdrop information

Information relating to airdrops can be found in a number of sources, including:

  • Social media accounts/profiles
  • Crypto/blockchain forums
  • Crypto/blockchain news sites/applications

These sources can help users select the most popular or current airdrops. Besides this one, two other websites to source interesting and reliable information about airdrops are Airdropalert and Airdropaddict. Information about airdrops can also be sourced directly from the horse’s mouth, with companies that plan airdrops announcing them through social media and press releases. These releases generally contain the requirements on how to be eligible for the drop. An example of this can be seen in LCCX.

Security and scams

Like any other new technology, crypto and blockchain technology has attracted plenty of scammers in the recent past, and airdrops have not escaped this. It is, therefore, necessary to verify information about an airdrop, especially if you heard about it in an advertisement. You should never be asked for a private key, for your personal data, or for you to transfer funds.

Conclusion

Airdrops can be a useful technique to raise awareness of a new token or project – or to gain some coverage in the press with the excitement of free tokens for an established cryptocurrency. They have benefited the market greatly in building desire in users to invest in new projects, and to remain loyal to existing ones. But, like all technologies, it is vital to be on guard against scams and scammers, who will try to cheat you of your hard-earned cash and crypto.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

An In Depth Look Into Blockchain Technology

An In Depth Look Into Blockchain Technology

Blockchain, a brainchild of the of the mysterious pseudonym Satoshi Nakamoto,

is an indisputably ingenious innovation. The technology allows digital information to be distributed to users without being copied, thus creating the spine of a new kind of internet. The Blockchain technology was originally invented for the sole purpose of governance of the digital currency, Bitcoin, however, tech pioneers have devised and continually devise other potential uses for arguably the most disruptive technology.

Bitcoin (BTC), tagged – quite appropriately the “digital gold”, currently has a total currency value of close to $9 billion (USD) with Blockchain technology being central to its development as well as other emerging altcoins. Similar to the internet, understanding how the Blockchain works is not a strict requirement for utilizing the technology. However, having a basic knowledge of the Blockchain technology would help you get a grasp of why the technology is revolutionary.

Distributed Database

Essentially, Blockchain works like a spreadsheet which is duplicated thousands of times across a network of nodes. This spreadsheet, by design, gets regularly updated with trade transactions.

This is essentially how the Blockchain functions i.e. information on a Blockchain exists as a shared database that is continually updated and reconciled. One of the amazing benefits of the Blockchain technology is the fact that this database of information and trade transactions is not stored in any single location and not governed by one central node or computer. Records kept on a Blockchain is indeed public and easily verifiable by anybody.

The fact that the Blockchain is not governed by any central node – instead, it is hosted by millions of nodes/computers concurrently over the internet – means it cannot be hacked.

Durable and Robust

Blockchain technology, similar to the internet, has a built-in robustness. The Blockchain stores blocks of records that are the exact same across its network and as such, this stored information cannot:

  • Be governed by a central authority &
  • Does not have any single point of failure

Since the invention of the first Blockchain based digital currency (Bitcoin) back in 2008 to this recent date, there has been no significant disintegration of the Bitcoin Blockchain (problems recorded with Bitcoin to date have been as a result of hacking or mismanagement). These issues are not attributed to the underlying concept of the Bitcoin Blockchain but to bad intentions (hacks) and human error. As with the case of the internet’s (which has been around for about thirty years) durability, the Blockchain technology is revolutionary and it is set to stay as it gets developed further.

Incorruptible and Transparent

The Blockchain technology network functions in a state of consensus whereby it automatically checks-in with itself on a ten-minute loop. Essentially, the Blockchain technology functions as a self-auditing ecosystem of digital assets’ value, it reconciles all transactions that occur in ten-minute intermissions. Each group of these reconciled transactions is called a “block”. As a result of the Blockchain automatically reconciling transactions, there are two resultants properties yr.

  • Transparency:
  • Transaction records are embedded within the Blockchain network as a whole and it is publicly accessible by every and anybody.
  • Incorruptible:
  • The Blockchain cannot be corrupted. To alter any unit of information on the Blockchain network, a huge amount of computing power is required to override the entire network.

While there is a possibility of this occurring theoretically, it is not practically feasible. Taking control of the Blockchain network to garner bitcoins would destroy the value of the digital currency itself.

A Network of Nodes

The Blockchain is made up of a network of computing nodes i.e. computers that are connected to the Blockchain network. These connected nodes (computers) use a client to perform transaction validating and relaying tasks, they automatically receive a copy of the Blockchain when they (nodes/computers) join the Blockchain network. Collectively, these nodes create a powerful second-level network. Each node that joins the Blockchain network is an “administrator” of the network and has an incentive for its participation as part of the Blockchain network i.e. ‘mining’ Bitcoin (in the case of the Bitcoin Blockchain).

‘Mining’ is sort of a misnomer, in actuality, it means each of the nodes competes to win Bitcoin (BTC) by cracking computational puzzles. While Bitcoin was the primary reason for the Blockchain technology invention, currently, there are over 800 altcoins available in the crypto sphere. Likewise, there have been other adaptations of the Blockchain technology concept with the Ethereum Blockchain especially being used as a working board for alternate Blockchain adaptations in industries ranging from finance, transportation, e-commerce etcetera.

Heightened Security

Blockchain technology offers an enhanced security for digital information via its storage of records across its network, thus eliminating the risks associated with records being held at a central location. Additionally, the Blockchain technology being decentralized translates as the network lacking a centralized point of vulnerability that can be exploited by hackers.

The Blockchain technology’s added security also comes from the use of encryption technology as its security methods, unlike the internet whereby users mostly rely on the ‘username-password’ system which opens up well-documented security issues. In the Bitcoin Blockchain, there exists the public and private “keys”. The public key which is a long, randomly-generated string of alphanumeric digits is the users’ address on the Blockchain. Users receive Bitcoin to this address (also called a wallet address).

The private key is a password (also a long, randomly-generated string of alphanumeric digits) acts as a personal user’s password for their wallet address. This private key is used to access your digital assets. While the Blockchain safeguards your digital assets (Bitcoin in this illustration), users are mandated to safeguard their private keys.

How Blockchain Technology Works

So, let’s break down how the Blockchain technology actually functions. When a new transaction occurs or an existing transaction is edited, these information enters into a Blockchain. This information is evaluated and verified by the nodes connected to the Blockchain via the execution of algorithms.

Since the Blockchain is consensus-based, a majority of connected nodes would need to come to a consensus about the validity of the history and signature of the transaction information after which the new block of transaction information is accepted into the Blockchain ledger and a new block is added to the transaction chain. Otherwise, the block of information is denied and not added to the chain. The distributed consensus model allows the Blockchain run as a distributed ledger without the need for a centralized governance.

Chuck Reynolds


Marketing Dept
Contributor

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