How to cook blockchain
Over the past few months, we at BitClave have heard about a large number of new blockchain projects using blockchains in all imaginable and unimaginable areas. I hope you understand that the mere fact of using the blockchain in the project does not give him any superpowers. We analyzed the situation and are happy to present you our current vision of how to use the blockchain in the right way. This article will help you determine if a project is worth your time, money and effort. The article also has a simplified example of how blockchain can be embedded in the online advertising market.
Let's look at the online advertising market participants: Advertisers , Agencies , Advertising Networks , Publishers , Users .
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In the diagram you can see exactly how each of the participants acts. Advertisers pay Agencies for managing their advertising campaigns and creating targeted ads. Agencies pay Advertising Networks for user actions (usually clicks or installations). Advertising networks pay Publishers for impressions and collect information about Users to optimize the number of clicks to the number of impressions. The situation is not uncommon when agencies and advertising networks form rather long chains, each of the chain participants eats their share of the advertiser’s advertising budget.
Ad networks can unfairly set a price for Agencies and Advertisers per action (CPA = cost per action) and, in general, the chain of hungry intermediaries will obviously affect the Advertiser’s budget not in the best way. In addition, the implicit collection of information about Users will give not only incomplete, but also incorrect information, which ultimately will lead to a rise in CPA cost. We will try to solve all these problems in this example by adding a blockchain.
Let's look at the very first and most famous of the modern blockchains - Bitcoin. You can send a request to the Bitcoin blockchain (more precisely, the Bitcoin network) to transfer BTC from your address to any other. Bitcoin blockchain (more precisely, Bitcoin network miners) will check two specific conditions: the signature of the transaction to determine whether you are the owner of the address and the condition of sufficient balance of your address to conduct this transfer. If one of these checks fails, the blockchain will refuse to conduct the transaction. Ethereum Blockchain is able to perform arbitrary checks that smart contract developers can foresee - thus it is a more advanced confidant who is also Turing-complete .
Adding a new character to an area leads to a complete revision of the interaction scenarios of all participants. Users will fill in their profiles in the Blockchain , as well as verify some of the information through regional services using digital signatures. Some advertisers will begin to create ads and fill up the balance of advertising campaigns right in Blockchain . Ad networks will be able to take advertisements from Blockchain and show them to Users through the Publishers' sites and later ask Blockchain to make payments for user actions (clicks or installs). Blockchain will pay for actions not only to Advertising Networks , but also to Users themselves, who have kindly agreed to provide information about themselves for targeting.
What about fraud in the system? Each action (click / install) of the user will be handled by spilled events from the Advertiser : user transfer , user registration , user purchase . The platform involves the evaluation of advertising networks , forcing them to compete with each other for the improvement of statistical indicators. In the absence of a fight against them by the Advertising Network, any clickers will spoil the Advertising Network’s rating, as they don’t result in Advertiser ’s desired events, and the advertiser’s budget will not allocate any more advertising network . Yes, advertising campaigns will allow Advertisers / Agencies to adjust the proportions of the budget to the Advertising Networks . Summarizing: the system is designed in such a way as to make Advertising Networks fight Ford and compete with each other on this basis.
Why is this your blockchain needed by the ad networks themselves? Ad networks will be able to index and rank ads from Blockchain for themselves in order to compare them with their ads. If it is more profitable for a specific user to display an ad from the blockchain than that received from another source - the Advertising Network will be able to earn more by arranging the display of the ad from Blockchain . Over time, ads on the blockchain will crowd out the rest of the ads due to pure targing, which will be released just cheaper.
Why do users have to register with you? This can be part of the abstract program of websites, search engines, browsers - to convince users and carry them through the registration. Also participating in the system will allow users to explicitly choose which information to disclose to Advertising Networks , which will lead to interesting announcements and rewards for providing information. The implicit collection of information about users will be stricter at the level of browsers and operating systems.
In this article, we tried to summarize our current vision of the correct use of the blockchain to help you distinguish projects that are worth your time, money and effort. The subject area should contain the problem of potential dishonesty, and adding a blockchain as an active and absolutely honest participant in the relationship should solve this problem. It is necessary to provide economic benefits for each participant of the relationship for each of the scenarios of his work and take into account possible options for attacks on the system, in order to prevent its work.
PS I'm talking about Bitcoin abstraction there, without going into details of the implementation of the UTXO model. Abstraction of Bitcoin keeps the purses' balances and allows them to be changed by conducting transactions, Bitcoin’s implementation is a bit more upset, but the purpose of the article was not to reveal the details of Bitcoin’s implementation :)
The problem of potential dishonesty
The domain in which you are going to apply the blockchain should have a potential dishonesty problem. It is necessary to analyze the needs and scenarios of interaction of participants to understand the economic benefits of participants from following these scenarios. This will allow you to understand the places where participants are ready to cut for their own benefit.
Let's look at the online advertising market participants: Advertisers , Agencies , Advertising Networks , Publishers , Users .
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In the diagram you can see exactly how each of the participants acts. Advertisers pay Agencies for managing their advertising campaigns and creating targeted ads. Agencies pay Advertising Networks for user actions (usually clicks or installations). Advertising networks pay Publishers for impressions and collect information about Users to optimize the number of clicks to the number of impressions. The situation is not uncommon when agencies and advertising networks form rather long chains, each of the chain participants eats their share of the advertiser’s advertising budget.
Ad networks can unfairly set a price for Agencies and Advertisers per action (CPA = cost per action) and, in general, the chain of hungry intermediaries will obviously affect the Advertiser’s budget not in the best way. In addition, the implicit collection of information about Users will give not only incomplete, but also incorrect information, which ultimately will lead to a rise in CPA cost. We will try to solve all these problems in this example by adding a blockchain.
Blockchain - actor, not a repository
Please stop considering the blockchain as a decentralized, synchronized, reliable storage — all of these attributes are secondary. First of all, the blockchain is an active participant in the relationship . He acts so honestly that no one has any doubts about his impartiality. For example, the blockchain's honesty on the Proof-of-Work consensus is ensured by a large number of miners whose main desire is to make money.
Let's look at the very first and most famous of the modern blockchains - Bitcoin. You can send a request to the Bitcoin blockchain (more precisely, the Bitcoin network) to transfer BTC from your address to any other. Bitcoin blockchain (more precisely, Bitcoin network miners) will check two specific conditions: the signature of the transaction to determine whether you are the owner of the address and the condition of sufficient balance of your address to conduct this transfer. If one of these checks fails, the blockchain will refuse to conduct the transaction. Ethereum Blockchain is able to perform arbitrary checks that smart contract developers can foresee - thus it is a more advanced confidant who is also Turing-complete .
Adding a new character to an area leads to a complete revision of the interaction scenarios of all participants. Users will fill in their profiles in the Blockchain , as well as verify some of the information through regional services using digital signatures. Some advertisers will begin to create ads and fill up the balance of advertising campaigns right in Blockchain . Ad networks will be able to take advertisements from Blockchain and show them to Users through the Publishers' sites and later ask Blockchain to make payments for user actions (clicks or installs). Blockchain will pay for actions not only to Advertising Networks , but also to Users themselves, who have kindly agreed to provide information about themselves for targeting.
Consensus
After adding the blockchain as a new participant to a certain system, it is necessary to re-work the scenarios of the work of all the participants, without forgetting to back up these scenarios with the real economic motives of the participants. It is also necessary to provide for the protection of the system from the inappropriate behavior of the participants, so that even the economically unprofitable actions of some of them could not prevent the other participants from interacting.
What about fraud in the system? Each action (click / install) of the user will be handled by spilled events from the Advertiser : user transfer , user registration , user purchase . The platform involves the evaluation of advertising networks , forcing them to compete with each other for the improvement of statistical indicators. In the absence of a fight against them by the Advertising Network, any clickers will spoil the Advertising Network’s rating, as they don’t result in Advertiser ’s desired events, and the advertiser’s budget will not allocate any more advertising network . Yes, advertising campaigns will allow Advertisers / Agencies to adjust the proportions of the budget to the Advertising Networks . Summarizing: the system is designed in such a way as to make Advertising Networks fight Ford and compete with each other on this basis.
Why is this your blockchain needed by the ad networks themselves? Ad networks will be able to index and rank ads from Blockchain for themselves in order to compare them with their ads. If it is more profitable for a specific user to display an ad from the blockchain than that received from another source - the Advertising Network will be able to earn more by arranging the display of the ad from Blockchain . Over time, ads on the blockchain will crowd out the rest of the ads due to pure targing, which will be released just cheaper.
Why do users have to register with you? This can be part of the abstract program of websites, search engines, browsers - to convince users and carry them through the registration. Also participating in the system will allow users to explicitly choose which information to disclose to Advertising Networks , which will lead to interesting announcements and rewards for providing information. The implicit collection of information about users will be stricter at the level of browsers and operating systems.
Total:
In this article, we tried to summarize our current vision of the correct use of the blockchain to help you distinguish projects that are worth your time, money and effort. The subject area should contain the problem of potential dishonesty, and adding a blockchain as an active and absolutely honest participant in the relationship should solve this problem. It is necessary to provide economic benefits for each participant of the relationship for each of the scenarios of his work and take into account possible options for attacks on the system, in order to prevent its work.
PS I'm talking about Bitcoin abstraction there, without going into details of the implementation of the UTXO model. Abstraction of Bitcoin keeps the purses' balances and allows them to be changed by conducting transactions, Bitcoin’s implementation is a bit more upset, but the purpose of the article was not to reveal the details of Bitcoin’s implementation :)
Source: https://habr.com/ru/post/342802/
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