Block Chain Technology in Digital Marketing

Blockchain is like a common digital ledger that stores transactions securely and transparently. In advertising, it helps to solve issues like ad fraud and privacy of data. They view the ads in real-time, and hence the advertisers can determine if the clicks are from real people or machines. There are several advantages, such as

• Stops Fake Clicks & Fraud
• Better Data Privacy
• Cuts Costs & Saves Time

What is Blockchain Technology?

Blockchain is simply a public, immutable digital ledger that keeps transactions in an open and transparent manner. In advertising, the technology is revolutionary. It solves long-standing issues such as ad fraud and data privacy in a straightforward manner.

For example, since all interaction is logged on the blockchain, advertisers can see ad views in real-time and immediately know whether clicks are being delivered by humans or machines. Guesswork is eliminated.

Key Components of Blockchain

Blockchain technology consists of several components that make it secure and decentralized. Blockchain is used in supply chain management, healthcare, and finance.

Distributed Ledger

A blockchain ledger is shared across multiple nodes in a network. Every participant has access to a copy of the ledger, and updates are reflected in real-time across the network. For Example, Bitcoin is the first successful implementation of blockchain using a distributed ledger. They record all transactions on their network.

Do you Know  distributed ledger technology is expected to store 10% of the world’s GDP by 2027.
Source : weforum

Blocks

A block is a collection of data. Each block holds

• Details of the transactions (like sender, receiver, amount).
• A unique code that identifies the block.
• Links to the prior block create a chain.

For example, Ethereum organizes its data into blocks. These blocks not only record transactions but also store smart contracts.

Hashing

Hashing is a security feature of blockchain technology. Each block is secured with a cryptographic hash. It is a unique string of characters generated based on the data in the block. Even a slight change in the data will result in a completely different hash.

Blockchains are founded on the application of cryptographic hashing as a data integrity preservation mechanism. For instance, let’s consider Bitcoin: each of its blocks is assigned a distinctive identification in the shape of a hash, created using the SHA-256 algorithm (Secure Hash Algorithm 256-bit). The hash is employed for two very critical reasons

• Identification,
• Tamper-Proofing,

Types of Hashing

Here are the most common types of hashing algorithms

MD5 (Message-Digest Algorithm 5)

They were Developed by Ronald Rivest in 1991. MD5 produces a 128-bit hash value. They are typically expressed as a 32-character hexadecimal number Commonly used for data integrity verification.

2. SHA-1 (Secure Hash Algorithm 1)

SHA1 was Developed by the National Security Agency (NSA). They produce a 160-bit hash value rendered as a 40-character hexadecimal number. They are used in digital signatures and certificate generation.

3. SHA-2 (Secure Hash Algorithm 2)

Imagine every piece of data having its unique fingerprint – that’s essentially what hash functions do. The SHA family includes several versions that create these digital fingerprints

• SHA-224,
• SHA-256 ,
• SHA-384 ,
• SHA-512,

The longer the fingerprint (more bits), the more secure it is. These cryptographic fingerprints are crucial for

• Verifying data hasn’t been tampered with
• Securing passwords (they’re stored as hashes, not plain text)
• Protecting your online activities through SSL/TLS encryption

SHA-3 (Secure Hash Algorithm 3)

Think of SHA-3 as the upgraded lock on your digital safe. Released in 2015, it’s the newest member of the Secure Hash Algorithm (SHA) family—designed to fix weaknesses that older algorithms (like SHA-2) might struggle with.

Why Does SHA-3 Matter?

• Tougher Against Attacks
• Built for Modern Threats

Bcrypt

BCrypt is a password-hashing algorithm designed to stay secure long-term. Unlike older methods, it

• Adds a unique ‘salt’ to every password, preventing bulk cracking tools.
• Gets slower intentionally—so as computers get faster, BCrypt just scales up the work needed to crack it.

That’s why apps like WordPress and Django still rely on it, despite newer options existing.

Scrypt

Scrypt is designed to make password cracking extremely difficult by

• Using lots of memory – This makes it hard for attackers to use powerful GPUs/ASICs for brute-force attacks.
• Being intentionally slow – Unlike fast algorithms (like MD5), it’s built to delay hackers.

By requiring both time and heavy memory usage, Scrypt stays resistant even as computing power improves.

Consensus Mechanism

Blockchain networks utilize the consensus protocols in the validation of transactions.

• Proof of Work (PoW)
• Proof of Stake (PoS)

For instance, Ethereum switched from PoW to PoS in 2022 with its “Merge” upgrade.

Smart Contracts

Smart contracts are digital contracts that contain provisions coded directly into them. Smart contracts execute automatically when requirements are met. For instance, Ethereum made smart contracts well-known.

Types of Smart Contracts

• Token Creation Contracts
• Decentralized Finance (DeFi) Contracts
• Governance Contracts
• Escrow Contracts
• Staking Contracts
• Liquidity Pool Contracts
• Airdrop Contracts
• Cross-Chain Contracts
• Decentralized Identity Contracts
• NFT Contracts

Decentralization

Decentralization means there is no central authority controlling the network. Instead, all participants work together to keep the network. This approach improves security and enhances transparency. For example, Filecoin, a decentralized storage network

Deloitte's 2021 Global Blockchain Survey revealed 73% of respondents strongly believe in new revenue streams from blockchain.
Source : Deloitte

Blockchain technology is built upon several key components that together form a secure, transparent, and decentralized system.

How Does Blockchain Work?

They creating a secure system for recording and verifying transactions. When a deal occurs, it is grouped with other transactions into a block. This block holds information like the deal amount, sender, and receiver.

There is a code that is specifically given to every block, called a hash. The hash is similar to a fingerprint on the block. They make it impossible to change. Now, having been made, it needs to be confirmed by members of the network. This is called consensus.

Blockchain networks employ the mechanism of consensus for validating the transactions. Having validated, it adds the block to the blockchain. This blockchain consists of blocks arranged in series of all previous transactions.

Each node in the network will have a replica of the blockchain. This is how the system gets decentralized. A block added to the blockchain can never be altered without altering all the following blocks.

As of January 8, 2025, there are approximately 20,529 reachable Bitcoin nodes worldwide.
Source : Bitnodes

Benefits of Blockchain in Digital Marketing

Blockchain technology can offer a transparent way to manage data in digital marketing, including

• They were used to enhance the customer experience.
• They enable new business models that were previously impossible.
• Blockchain technology automates much of the work associated with digital marketing, such as following and authenticating transactions.
• They provide an unambiguous and transparent record of all transactions.
• They enable quicker and safer payments.

Real-World Applications of Blockchain Technology

• They used to connect influencers with brands.
• They are used in advertising platforms to buy and sell digital advertising inventory.
• They are used in a secure way to manage customer data.
• They verify the authenticity of content, like articles or videos.
• They track the origin and movement of products throughout the supply chain.
• They offer a new way for gamers to interact with each other and with game developers.
• Blockchain can be used to manage digital assets, like music or art.
• Blockchain social media platforms can offer a new way for users to interact with each other.

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Decentralized Loyalty Programs

• In blockchain-based loyalty programs, rewards are often tokenized.
• They automate many of the tasks involved in loyalty programs, like tracking and verifying transactions.
• They can improve the customer experience using blockchain technology.
• They offer real-time rewards and benefits.
• This provides a secure way to store customer data.
• They can allow easy redemption.

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Limitations of Blockchain Technology

• Scalability Issues
• High Energy Consumption
• Irreversibility of Transactions
• Regulatory Gray Areas
• Security Risks
• Storage Bloat
• Not Truly Anonymous
• Upgrade Challenges

Conclusions

Blockchain technology is safer, transparent, and more reliable. It protects customer data using strong encryption. It also tracks ad spending and audience reach. This helps improve trust and efficiency in digital marketing.

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