How Bitcoin Technology Can Be Used in Digital Marketing
- December 20, 2017
- Online marketing
When people talk about Bitcoins or cryptocurrencies, they usually speak of it as money. While this is perfectly valid, Bitcoin technology is also creating new trends in the Internet marketing sphere.
There are two ways to use cryptocurrencies: as a security or a protocol token. When cryptocurrency is used as money, it is called a security and at risk of government regulation and control, because the U.S. SEC views Bitcoin as property. This means you would need to report gains on anything you traded. John Rhodes, a writer for Seeking Alpha and founder of the Digital Coin Collective states, to be beyond government regulation, cryptocurrencies have to have:
- Rights to program, develop, or create features for the system, or to “mine” things that are embedded in the system;
- Rights to access or license the system
- Rights to charge a toll for such access or license
- Rights to contribute labor or effort to the system
- Rights to use the system and its outputs
- Rights to sell the products of the system
- Rights to vote on additions to or deletions from the system regarding features and functionality.”
When a token or Bitcoin works in this way, it is called a protocol. Essentially, a protocol works as an investment, but this isn’t a passive investment. The value of this token goes up as it is used in an application or digital product. Basically, the token fuels and runs the app. This can be lucrative for the possessor of Bitcoins or tokens, as well as the person who is being invested in. These investments allow digital marketers to create a unique ecosystem. That allows digital marketing to function in two new ways.
- Investors and Customers:
When people buy Initial Coin Offerings, you have the money or means to make a product before ever having to launch or create the product. People can invest their Bitcoins in your project, and you can use these investments to build your product. After your product is finished, you already have an invested and interested list of consumers to sell to, rather than having to make the product and then search for consumers. When you develop a product, the demand for Bitcoins goes up, because people want to use your product. You are given these tokens from consumers, and you either use them to fuel the app, sell them, trade them, or use them to develop new products.
You can also gain investors by using a digital marketing and advertising technique called airdrops. Airdrops are blockchain products which allow the distribution of tokens or coins after a project ICO is completed. It is a dividend or free money given to those who invested in your product, which gives them more coins to invest and use in future products. This creates a never-ending cycle that is changing the way people market their goods.
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