Blockchain technology has the potential to do amazing things. It can provide an immutable, digital audit trail of transactions, and can be used to cheaply verify the integrity of data. It can help businesses and individuals agree, on a global scale, about the true state of affairs within a market without relying on a costly intermediary. However, when assessing blockchain business models, it is useful to understand what blockchain can’t do. Although digital records may be immutable and verifiable, there seems to be an identifiable grey area.
At the interface between the offline world and its digital representation, the usefulness of the technology still critically depends on trusted intermediaries to effectively bridge the “last mile” between a digital record and a physical individual, business, device, or event.
Within marketing, one issue that often comes up is that a pair of eyeballs that an advertiser is paying for may not actually belong to the person they’re supposed to. The advertiser might think they’re paying to show an ad to a mid-thirties male in the market for a Lamborghini, but the ad might actually be shown to a minivan-driving academic who has no intention of buying another car for kids to wreck but who likes to dream. Blockchain technology can track which digital identifiers are associated with the viewing of an ad, but it cannot help with verifying humanness or the honesty of a buyer’s intentions. Verifying who’s actually behind the digital identifier requires offline verification.
As the ecosystem around blockchain technology develops, new types of intermediaries will emerge that turn the last-mile problem, of keeping digital records in sync with their offline counterparts, into actual business opportunities. While the technology is early stage, as these key complements mature, blockchain has the potential to fundamentally reshape ownership over digital data, and the digital platforms we use every day.