Fad or Future: Will Smart Contracts Have an Impact on the Future of Media?
There are a lot of bold claims out there about how blockchain is going to have a major impact on the advertising industry, and – the world at large. But most people are still trying to figure out what blockchain technology actually is, let alone understanding the complexities of a smart contract, a crypto currency or the impact of a decentralised ledger on any consumer.
So, let’s start at the very beginning – because that’s a very good place to start
By now it’s virtually impossible to have not heard of Bitcoin (BTC), but if you’ve somehow managed to evade the online sensationalism and pseudo-experts on this particular crypto-currency then here’s why it was/is special:
- It’s somewhat anonymous. This virtual currency is viewed as entirely anonymous to make transactions with (This is not entirely true but this will become relevant later).
- You don’t need physical cash-in-hand to use it. It lives in an e-wallet, essentially.
- It “bubbled” or “boomed” and made a lot of people very, very rich. The volatile and somewhat unregulated nature of the currency, and others like it, meant that it could sore to ridiculous heights – making many a crypto millionaire. Unfortunately, this also means that a few “whales” largely control the market and trading in crypto is a very high-risk activity.
- There’s a lot of mystery surrounding the creation of BTC because the “father” of the cryptocurrency has never actually disclosed their identity and no one’s been able to 100% confirm it. They simple go by Satoshi Nakamoto. However, they did release a white paper with details on what Bitcoin is about and the motivations behind it.
So, how was all of this crypto business was made possible?
The underlying BLOCKCHAIN technology
Okay, so imagine a number of computers all linked in a peer-to-peer network. They can communicate securely with each other using cryptography. A series of blocks live on this network and the network itself grows every time a transaction is made. It is a chain of blocks – each of which contains a hashtag that shows the history of the block (where the transaction came from before), making it:
- Transparent: You can see where the block has been and the transactions attached to it, at least in the form of its hashkey.
- A mechanism for trust: Because machines help mitigate human error and intention, the blockchain gives us a really useful platform in that it doesn’t require us to trust. For example, banks exist solely for the purpose of providing trust to people, if you really think about it. They provide records and facilitate payments, while providing records that allow us to see that something has been done. They also take a fee, of course. The blockchain does this for us because the record is right there in a public ledger.
- More efficient: There are so many scenarios where people need to wait for humans to sit and accept or reject claims or to verify something. The blockchain does this for us. Here’s a good example of how:
Fizzy – Insurance on the Blockchain: A smart contract
Fizzy is flight insurance on the blockchain in the form of a “smart contract” – we’ll get into this in a moment. Basically, this Fizzy blockchain reads data from airline databases and can see when flights are delayed. It automatically compensates you for a delayed flight without anyone having to check it or approve it.
There are a set of conditions, they are met and something happens as a result, in this case – a payout. You don’t even have to actively claim for it. Watch this video to see how it works.
This is a very practical example of a smart contract.
What is a smart contract?
Blockgeeks put it well when they defined a smart contract as something that “helps you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman”. And this application is made possible because of blockchain technology.
So what does this mean for the future of the media industry?
Okay, so now that we’ve gotten all of that out the way, what on Earth does any of this have to do with media?
How we distribute money, royalties and influencer payments: Content that sits behind paywalls can sometimes be expensive and serve as a barrier to consumers who just want to view a few things and not subscribe. Blockchain and crypto facilitates micropayments for content because it can track what you’ve viewed. This makes micro-content more feasible because it’s easier and more efficient to track it.
Influencers can be paid using smart contracts without having to wait for admins and royalties can be automatically tracked and distributed.
Monetising file sharing and other peer-to-peer transactions: People have always, and will always, share files and media – but now they can pay each other for it quickly and easily without a middleman, using crypto and blockchain tech. This could mean an affordable way to access media from peers.
Deciding whose content belongs to who: There are often disputes about whose song is whose or who was the first person to create content when two pieces are similar. If the creation of content is logged on the blockchain, there’s no saying that you were first – only proving it – solving a major area for disputes.
Whether we combine AI and Blockchain tech: Forbes recently published Artificial Intelligence And Blockchain: 3 Major Benefits Of Combining These Two Mega-Trends, where author Bernard Morr looks at the perks. One of the most relevant use cases is combining the insight of machine learning with basing it on personal data. The artificial intelligence takes care of personalisation, while the blockchain takes care of securing the personal information needed to do so.
At the end of the day…
The technical landscape is in constant motion. And, while it may take time for the media industry to adopt aspects of new technology, the potential of doing so could mean a far more decentralised media structure. With the opportunities that blockchain technology affords us, there is new room for better ideas and more exciting developments in an industry that thought we had seen it all.