Rebuilding trust block by block
Blockchain technology has the power to unseat the likes of Facebook, Twitter and Google. Why? Because you can trust it
Last month, I predicted social media had hit its peak. But even I was surprised at how quickly trust in platforms such as Facebook and Google began to unravel since I posted my story. The day after my article was published on campaignlive.co.uk, a BBC report claimed that Facebook was allowing child pornography to be published on its platform. Meanwhile, fake news on Facebook is starting to be recognised for what it is: the major scandal of 2016 and one that has done a formidable amount of damage to society.
At last month’s Advertising Week Europe, Google’s European boss apologised after ads from major companies and government agencies appeared next to extremist content on its Youtube site. Marks & Spencer and other major brands pulled out of Youtube. Then, in the US, AT&T, Verizon and Enterprise did the same.
The ad business is not immune to this erosion of trust. According to one critic: “Ad-tech [programmatic] is allowing criminals to steal our personal information and governments to spy on us by tapping into marketing data. It is destroying our trust in the news and repulsing our customers.”
US advertising trade associations have just joined the Trump administration in calling for the rejection of an FCC regulation created to protect consumers by restricting the collection and sharing of personal data by internet service providers such as Comcast and AT&T. These companies are so large and powerful, they seem unassailable. Google, for example, has been described as “the least disruptable” business in media. Last year, it dropped its prices by 11% and still increased its revenue 22%.
But when brands, governments or politicians lose the trust of their audience, they put themselves in grave danger. And it’s worse if there is, say, a new technology coming up, every bit as revolutionary as the sharing economy but twice as trustworthy.
Well, guess what? There is. And it’s big news. The Massachusetts Institute of Technology is holding conferences to discuss its implications, Harvard Business Review has done a special about it and the finance sector is all over it – before it’s all over them.
This new tech does not sound revolutionary or sexy but, as The Economist has pointed out, neither did double-entry bookkeeping or joint-stock companies, but they also transformed how people and businesses co-operate.
The blockchain – an apparently mundane process that drives crypto-currency Bitcoin – is in effect a “trust machine”. And it threatens anyone in the “trust business”. Institutions and bureaucracies such as banks, clearing houses and government authorities, as well as sharing platforms such as Facebook and Twitter – all businesses that capture most of the profits of the platforms they operate.
Blockchain is a shared and trusted public ledger. With no centralised server, software applications are run on a peer-to-peer network of computers not controlled by any single party. This means they can be used to co-ordinate the activities of a large number of individuals, who can organise themselves without the help of a third party.
Don’t confuse this with crowdsourcing, which really is just a trendy way to beg for money from your friends. In the case of blockchain, people who contribute to a platform can actually benefit from the success of that platform.
Let’s say you want to sell your house. You can register it on a blockchain-operated platform for free. Your house will become visible to all users connected to the network. Once a buyer agrees the price for your house, an escrow account is created on the blockchain that requires two out of three people (ie the buyer, the seller and a potential third-party arbitrator) to agree for the funds to be released (a so-called multi-signature account). Once the buyer has sent the payment to the account, you hand over the keys. After receiving the house keys, the buyer releases the funds from the escrow account.
Only if there is an issue between the two does the system require the intervention of a third party (a randomly selected arbitrator) to decide whether to release the payment to the seller or whether to return the money to the buyer. Think about that: no estate agents, no Rightmove and no bank required. In short, no middle man needed at all.
Blockchain can work for ecommerce (Openbazaar), taxi-hailing (Lazooz or Arcadecity) and social media (Akasha, Steem.io or Synereo). It could also challenge Spotify and Airbnb, which recently advertised to recruit blockchain experts.
You may say that blockchain does not sound very convenient, and that is possibly the case (but this could be easily fixed). But what you can’t say is that you can’t trust it. Blockchain is 100% trustworthy – because that is what it is for. It is a trust machine.
If other media brands cannot act in a trustworthy way, that will become a benefit that trumps all.
“The blockchain is in effect a ‘trust machine’ and it threatens anyone in the ‘trust business’”