Blockchain Is The Future - But What Is It Exactly?
In January 2009, a mysterious person named "Satoshi Nakamoto" released the first Bitcoin software as open source code, after he published a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System in November 2009. The world started exploring this new concept, but "Satoshi Nakamoto" disappeared.
As Bitcoin increasingly becomes popular for investment, blockchain - the technology behind this cryptocurrency - is also catching attention as well. With the help of blockchain, companies have the opportunity to show the authenticity of their products, and provide absolute transparency to their customer base. In this blog post, Hollywood Branded explains what blockchain is, how blockchain can impact branding and what companies can do about it to garner more awareness by leveraging social influencers to talk about it.
What Is Blockchain?
Blockchain is essentially a chain of blocks with information in it. Imagine an information unit as a block and each block contains three important pieces of information: the data, the hash, and the hash from the previous block.
The hash is calculated by the algorithm based on the data stored and each hash is as unique as a fingerprint. For example, if I sent $100 to Stacy, the data would have me as the sender, Stacy as the recipient, and $100 as the amount of money in transaction. And since I initiated the transaction, my hash would be 0000. If Stacy wants to send that $100 to Greg, the whole blockchain would look like this.
Since each block contains its own hash and the hash from the previous block, it creates a chain.
The fascinating thing about blockchain is how secure and transparent it is at the same time. The idea of blockchain is that everyone who’s involved in the community has a copy of the blockchain and there is no one person in control of the information. You might then ask, if everyone has a copy of the data, doesn’t it mean everyone can hack into the system?
The answer is no.
If someone wants to tamper the data of a block, it will also change the hash, since the hash is calculated based on the data. And if the hash of that block is changed, the system would notice that it no longer connects to blocks before and after it. In addition, it will also no longer match with other copies existed. Therefore, the whole blockchain is nullified. Additionally, it requires a lot of time for the system to calculate each hash. And even if someone successfully changes every single hash on the block, he or she will also have to change every single copy of blockchain that exists. As a result, it is very hard to tamper with a blockchain.
What Impact Does Blockchain Have On Branding?
One of the many things that blockchain can apply to is the management of supply chain. It makes it easier for companies to keep track of their supply chain and prevent fraud. For example, Amazon has been developing its own blockchain to improve its pharmaceutical supply chain.
The most important goal of branding is to establish trust with customers. That’s why companies in the past hundred years have been investing heavily in corporate identity logos, color schemes, celebrity endorsements, beautiful graphics, and all visual branding that sets them apart.
Customers have no knowledge of the supply chain except from the information companies give to them. With blockchain technology, we can see the origin of the supply chain, all the way to the origin of the parts, and you can scan it on your phone and see the entire history. Let's use the example of two types of drugs: one generic and the other one branded. If their blockchains show that they have the same ingredients and dosage, only the generic is cheaper than the branded, customers would be more likely to buy the cheaper one instead of the premium brand, regardless of the branding. All due to transparency.
One challenge blockchain might face in reshaping the branding culture is that customers are so used to passively obtaining information from brands that they might need a period of adjustment to adapt to the blockchain system, while older generations may not change their way of purchasing. However, as more and more large companies start developing their blockchain technology, marketers may soon need to rethink their branding strategies altogether. As the supply chains get more transparent, it may drastically shift marketing as well.
And this is how social influencers can help lead the charge. Working with the right influencers to shout from the rooftops about the brand and their blockchain transparency can help those brands massively - such as generic pharmaceuticals.
How Do Companies Handle The Change?
Blockchain might seem a little bit scary, since it is transparent and truthful. However, instead of fearing it, companies should embrace it.
In fact, proper PR would help alleviate the stress. For companies that have products from credible source of supply, blockchain technology can emphasize that quality.
Specifically, companies can hire a social influencer - or even a PR agency to accentuate their incorporation of blockchain by writing a press release of how blockchain can benefit their consumers. On the inverse, many companies may not be quite ready to be comfortable exposing their supply chain now, but will be pressured to in the future. For those companies, blockchain can be the motivation to improve their supply chain.
If you are interested in working with influencers to help capitalize on your brand's distinctions, then check out these blogs our team has written:
- 3 Insights To Create Affordable Influencer Marketing That Sells
- 4 Things To Consider Before Launching An Influencer Campaign
- 5 Signs Your Brand Should Invest In Influencer Marketing
- Choosing Which Influencers To Use For A B2B Influencer Campaign
And make sure you also download our Influencer Guide to get the tips and tricks our own team uses when creating influencer marketing campaigns.