If you are an investor, you are probably keeping a very close eye on the Bitcoin phenomenon. The cryptocurrency recently surpassed the five-figure mark meaning one Bitcoin is now worth seven times the amount of an ounce of gold. Unsurprisingly, therefore, there is much speculation that the bubble is about to burst. But naysayers have been predicting this since the beginning of the year and yet the currency has risen 900 per cent since then.
Irrespective of whether the value collapses, the interesting thing about Bitcoin for the marketing community is what sits behind it: blockchain.
Blockchain has been developed specifically for Bitcoin as a new way of storing and maintaining huge volumes of data. It is a public ledger of all Bitcoin transactions that have ever been made. The blockchain is a dynamic entity. New blocks are added to the chain as new transactions take place. Many people, particularly in the banking and insurance industries, are getting very excited by this technology as they believe that it could be used to change the way that these sectors work with data as it is proven to be significantly more secure than existing databases.
The reason for this is that blockchain is a distributed database, which means it exists on multiple devices and servers around the world. Each transaction is time stamped, verified by multiple users, and then encrypted. Consequently, there is no one entity in charge of it. Once encrypted, any data put into the blockchain can only be changed if all the stakeholders agree and any changes made are registered. This makes hacking incredibly difficult. The fact that blockchain is self-auditing means that breaches can be detected before they become large-scale problems.
These are the reasons that blockchain is being hailed as a secure, verifiable and highly transparent platform.
For marketers blockchain has the potential to revolutionise many marketing processes such as supply chain management, identity verification, internet display ad serving and global loyalty programmes, to name but a few applications that are already being worked on by technology firms. However, in the short term, blockchain also has implications on data security. From May 2018, any organisation that deals with customers in the EU will be required to adhere to new, more stringent data protection legislation which includes reporting a data breach within 48 hours or face substantial fines. To date, blockchain has not been hacked demonstrating the attractiveness of this technology as a way to keep customer data safe and secure.
One of the most important parts of the marketing management process is market analysis â€“ keeping an eye on the micro and macro environment and identifying any changes which could impact the organisation. Increasingly, due to the speed of change in the technological landscape, this means constantly reviewing developments such as the launch of a new media platform or an evolution of an existing piece of software. It also means keeping abreast of totally new-to-world technologies that have been built for a specific purpose but can be adapted to suit other industries or processes and build competitive advantage, as will be the case for organisations and marketers that quickly get to grips with blockchain.