Recently, cryptocurrencies have dominated the news with Bitcoin, Litecoin and other altcoins generating mainstream buzz. Companies are utilizing a myriad of marketing efforts, particularly social media, to drive interest within the sector.
The interest in cryptocurrencies has mainly been speculative as investors look to ride the wave. On November 27, CNBC reported that there were 13.3 million users for Coinbase, the leading U.S. platform for buying and selling Bitcoin. In contrast, Charles Schwab maintained 10.6 million active brokerage accounts.
With that said, technology is evolving at a rapid pace and 2018 will be the year that blockchain, the backbone behind cryptocurrencies, establishes itself as the fastest-growing digital technology since the evolution of the internet. The blockchain is a distributed incorruptible digital technology infrastructure which maintains a fully encoded database that serves as a ledger where all transactions are recorded and stored. For those not familiar with blockchain, here’s a good primer for beginners.
Today, startups are jumping on the blockchain and looking for ways to promote their idea or company above the noise. These companies understand that we are in the midst of a “Gold Rush” and are laser-focused on promoting their solution to drive interest, raise capital and increase market share.
Many companies are being built to leverage blockchain to create greater efficiencies and maximize the current frenzy. (Full Disclosure: My company started an accelerator for blockchain businesses, helping them grow from concept to reality to widespread adoption.
With Blockchain technology migrating from early adopter status to mainstream adoption, below are three ways blockchain will disrupt traditional business and impact marketing in 2018.
1. Capital Security
Access to capital is currently one of the major challenges startups face, as the ability to fund an idea and grow a business is burdensome. Lending options are not the same around the globe, and blockchain levels the playing field in the global economy.
Firms and agencies do not always have the ability to raise capital efficiently as costs of loans and transaction fees make the process a non-starter. Blockchain will ultimately serve as an engine for securing capital since cryptocurrencies are decentralized and there are no fees associated with them. Entrepreneurs can benefit from the blockchain by accepting funding from angel investors and venture firms the world over, in quick time.
The quicker companies are to (more easily) secure capital, the quicker they’ll be to invest in building their teams and promoting their business. In particular, a larger yield of startups will lead to a higher overall marketing spend, which will impact the addressable market for agencies and firms alike.
2. Real-Time Automation
Blockchain essentially automates processes, and formal client agreements will benefit from a fully automated approval process. Often, blockchain is referenced as a “smart” ledger/contract. Implementing blockchain as a replacement for the typical multiple executive approval processes would cut down project delays and create a universal agreement across business sectors impacting both clients and agencies.
Similarly, blockchain can automate the sourcing, supply chain and procurement processes by tracking responsibilities throughout their life cycle, which would ensure accurate data and accountable transactions. This would disrupt the way marketers engage with and service their clients.
Agencies will be impacted by automation as it reshapes the relationship amongst your business and customers. Automation in smart contracts and/or sourcing provides real-time updates and a live snapshot that provides for seamless reporting from all transactions, tracing the actions and deliverables effectively.
3. Influx Of Startups
Blockchain has begun to generate excitement, and entrepreneurs will attempt to devise the “next big thing” via the use of the blockchain network. Many will see blockchain as the next dot-com opportunity. As companies form to leverage blockchain, the investment community will follow as they did in the 1990s. The excitement and push to build blockchain businesses will spur the economy and ultimately create a robust market for agencies to service blockchain companies.
Blockchain companies need marketing to position their startups above the noise. Leveraging agency expertise will help these companies grow and position them for success. A forward-facing company with a crisp look and a targeted message will build its brand and put itself in a position for investment. For the marketing industry, blockchain provides the largest addressable market since the 1990s.
In the early 90s, the internet was something that many didn’t fully understand or realize the impact it could have on our future. Back then, companies were quick to add the dot-com suffix to their name in an attempt to build off the growing momentum. Similarly, fast-forward to 2018 and companies are adding “blockchain” to their name purely to increase valuations.
According to Bloomberg, Long Island Iced Tea Corporation changed its name to Long Blockchain Corporation after it received an ultimatum from Nasdaq in October. When Nasdaq threatened to delist Long Island Iced Tea unless its market value rose above $35 million for 10 consecutive business days, it added “Blockchain” to its name and achieved the target market value via a surging stock price. Kodak has also stepped into the field, announcing the roll-out of KodakCoin.
As 2018 progresses, it will be interesting to see if the cryptocurrency bubble bursts. If there is a market correction, will it impact the excitement around blockchain? In fact, most speculative investors in cryptocurrencies don’t fully understand the difference between crypto and blockchain, and their investment in crypto is really an investment in the blockchain.
In short, as blockchain continues to evolve, we’ll see a changing dynamic within the marketing community. Business transactions will get a makeover and this will create a verified transparent network that will ensure privacy and security. This will be the year that blockchain goes mainstream, and the adoption of its processes will lead to a boom that will disrupt traditional business and impact marketing.
This article by Matt Anthes first appeared on Forbes.com.