Blockchain technologies are a new wave of the future, which are being implemented everywhere in almost all corners of business and marketing. The transition is justified because blockchain is safer, faster, and more efficient and transactions are cheaper. The last point is especially important for affiliate marketing.
In this article, we will discuss the advantages of blockchain for affiliate marketing, as well as ways of implementation.
What is blockchain technology?
A blockchain is a form of an encrypted decentralized database. Several levels of encryption allow you to ensure data protection in the best possible way. All transactions related to cryptocurrency are stored in blocks connected (thus the name - blockchain). Each block and the information stored in it is checked by computers that decompose these blocks using cryptological tasks, while simultaneously comparing the results. If the results of all computers on the network match, then the information is considered verified and stored in the blockchain.
For each completed block, the reward, for example in the form of bitcoins, is distributed among the miners. Blockchains can store not only a database and information about transactions but also almost any information. Blockchain can be used as an online registry where information, for example, transactions, is kept secure.
This system eliminates the need for intermediaries, which makes all transactions faster, more efficient, cheaper, and safer. Security is determined by the fact that when one block is completed, a new one immediately begins, which is tied to the previous one, creating a chain that cannot be stopped or turned. That is if at least one block is hacked to obtain information, then in this case it will be necessary to decrypt each block that is encrypted, possibly more complicated than the previous one, the more the complexity of the tasks grows by the minute.
Blockchain technologies allow you to create smart contracts. These smart contracts are automated digital contracts created by two parties, they are stored and executed using the blockchain.
Considering all this, the blockchain can be used for anything: storing data, signing documents, and buying in a store! Each step of the contract is stored in the blockchain, all transactions are immutable, and there is also a clear control log.
What happens at the smart-contract level?
- Two parties agree to the terms of the contract and sign it;
- Both parties receive digital tokens to use for the desired purpose;
- The terms of the contract are fulfilled;
- Data is stored in the blockchain with a timestamp and the end of the contract.
How to use blockchain in affiliate marketing?
The most popular answer would be to use bitcoin or other cryptocurrencies on a smart contract for transactions instead of standard money, which would simplify the verification and payment process.
Automation with the help of "smart money"
Do not forget about smart contracts. They let you create new payment structures that allow you to bring the payment closer to the value, instead of just paying a fixed percentage for each click. A smart contract allows affiliates to get detailed information about what they are paying for! Let's take an example: with the help of smart contracts, you can distribute payments by levels of leadership quality! With the help of a smart contract, you can distribute funds for various actions, while having an understanding of what you are paying for. Add to this the automatic distribution of funds in real-time, this feedback will increase efficiency, because thanks to this, partners adapt their programs more dynamically based on what works!
New market latitudes
Decentralization of blockchain technologies is the current reality, which can already resist centralized databases. The speed of transition from the hub-and-spoke model to a more distributed and open market of publishers and affiliates who can work with each other with less friction and costs.
Blockchain and smart contracts allow you to combine all traffic in a single channel for analysis, automation, and scaling with a more diverse traffic source. Under these conditions, clients can be both publishers and affiliates allowing them to open up more opportunities for long-term partnerships and establish more direct bilateral relations between the parties, using real-time reporting.
Transparency of relations will allow you to withdraw closed networks from the market that do not offer exclusive relationships or an additional level of services!
Even more transparency in business relations
Many blockchains have an open registry that allows you to see all transactions, clarifying concerns about the honesty of the partnership. Transparency makes it easier to do business without having to establish trust first, which negates some of the justifications for having a network of branches.
Fears about the database falling into the hands of, for example, competitors are also reduced to nothing. Transactions are encrypted. Each of the parties to the smart contract has a decryption key, which makes it possible to restore a single source of the entire transaction history! The blockchain does not have to be publicly available. Private or authorized blockchains use a different approach to ensuring confidentiality and establishing trust than their public counterparts (for example, bitcoin). In this case, you can find trusted participants who will have access to the ledger!
Save capital on transactions
Undoubtedly, one of the most important advantages of blockchain is the reduction of transaction costs, especially as computing power increases. Take, for example, platforms and SaaS, then one of the most expensive components is payment processing and management of multiple currencies and conversions. Blockchain solves this problem by eliminating not only the lag between payments and transfers but also by using tokens in smart contracts to pay when the conditions of smart contracts are successfully fulfilled, which provides instant payment.
Over time, the very 1-2% that is eaten up on transactions and SaaS solutions will turn into an impressive amount, for which thanks will be said to blockchain technologies.
Data Security
Once again, encrypted transactions simply provide more secure data transfer and transaction processing, while all participants are part of the same system. This goes even further to ensure absolute security, but also detects and prevents fraud.
Higher value
At the moment, blockchain technology supports transactions with a higher value in affiliate marketing, and there are more and more interesting and profitable partner programs as they scale and attract capital to cryptocurrency. Affiliates can structure their requirements to get the results they need while paying for the level of return on investment that is necessary for a stable relationship with affiliates. The tighter the cooperation and as the relationship between the publisher and the affiliates deepens, blockchain marketing shows impressive opportunities for further partnerships in this area!
Enough opportunities! What are the pitfalls?
- Anonymity is difficult to justify to the tax authorities
- Anonymous miners or network validators can come out sideways to you - theft of cryptocurrency, sabotage of the network, etc.
- Fear of risk in big brands
- A lot of "newcomers" in the field who can play a bad joke on you
Recap
Blockchain and smart contracts are a natural development of affiliate marketing. Why? It is more efficient, cheaper, and safer, allowing affiliates to achieve their tasks' desired results. At the moment, this is one of the fastest-growing areas of technological innovation that is transforming society. This opportunity allows you to develop a partner strategy on the blockchain, which will be innovative, smart, and advanced, making life easier for all participants. The network will grow at a furious pace with the universal introduction of these technologies. We will likely wake up tomorrow to the news that another huge brand is entering the game, focusing on speed, transparency, and reducing transaction costs.
In the long run, the changes that blockchain brings are likely to give affiliates and publishers a lot of new choices.
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