Blockchain Technology and Digital Platform Payments: A Primer

One of the major applications that blockchain technology has promised since its inception is secure digital transactions. This is the fundamental basis of virtually all cryptocurrencies and remains the absolute largest reason why people develop and implement blockchain into their organizations.

Because of this, digital platforms like Pinmo, which use online payments for their business structure are taking a huge interest in this extremely useful part of blockchain functionality. Yes, the traditional model for payments between different platforms and their users and clients is still largely based on fiat financial protocols but the promise of blockchain security with decentralized, open-source cryptocurrency payments holds a tremendous amount of appeal. The motives for this are numerous.

Before we get to those motives, we first need to give a basic breakdown of how the mechanism of a blockchain works:

Instead of a single centralized mechanism for managing payments and recording information that accurately decides specific payouts, blockchain technology offers a mechanism by which all transactions (these could be exchanges of any kind of information but here we’re focusing on payment-related information) are recorded in sequential form inside all the different nodes across a distributed ledger network. A single transaction or sequence of transactions makes up what is called a block and each block is identified with a cryptographic hash function (a sort of tamper-proof mathematical identifier).

That block is then validated into the existing sequence of blocks and their own hash identifiers as a sequential addition to those before it. It is then distributed through the entire particular blockchain network being used by a given platform. Because of this sequential cryptographic validation process and its distribution through an entire network. Each transaction in the chain can be verified by date, details and other factors without being in any way falsifiable. This is literally why this powerful technology is called the blockchain, because it’s a chain of cryptographically distinct blocks that immutably connect together.

Once you understand these basics, the fundamental usability of the blockchain for secure digital payment management becomes clearer. Let’s look at Pinmo as an example:

In the case of the Pinmo platform, the distributed ledger infrastructure of blockchain technology is used for two different but related things: First of all it’s applied to the creation and validation of Pinmo’s own cryptocurrency, the Pinmo token. This token is used to pay users of Pinmo for their social media sharing.

Secondly, these blockchain blocks are also used to cryptographically record all social media ad campaign activity performed by these Pinmo users so that their activity can be measured and the users accurately paid from advertiser campaign budgets. By the same stroke, advertisers who use Pinmo can analyze the blockchain used by the platform to verify that their ads are being shared by users, how they’re being shared and how they’re converting as well.

In other words, in the case of this particular platform, blockchain technology is used not only to deliver secure cryptocurrency payments to users and handle advertiser marketing budgets, it’s also one of the tools used to track all of the performance metrics that are relevant to payments.

The Pinmo token used for these digital payments and the ad activity verification described are both based off the same open-source blockchain architecture, which has been custom implemented for the platform’s ad campaign management, token distribution and social sharing needs.

Similar digital payments protocols exist in many other types of online applications and platforms due to the sheer security and flexibility of the blockchain. Because this technology is essentially tamper-proof for recording digital payment data, it also delivers a fantastically secure analytics tracking tool that feeds back into the payment tracking aspects of the same block creation protocol.

How Pinmo Will Utilize Blockchain to Revolutionize the Advertising Industry

Pinmo’s single most innovative solution for effective digital advertising is the integration of blockchain technology into the platform itself. This implementation benefits both advertisers and Pinmo’s own base of ad-sharing users in several important ways that revolutionize how effectively advertising is targeted at willing users. The Pinmo blockchain also lets users avoid the massive pitfalls of click fraud and poor transparency that plague so much modern social media marketing.

In most of today’s social media advertising landscape, a large percentage of advertiser spending is simply lost to clicks from bots and fake social network accounts. This is fraudulent activity that costs advertisers money on ad campaigns without delivering any ROI whatsoever. The social networks themselves have done little to fix this problem or improve transparency to advertising campaigns.

In other words, while advertisers do get to see analytics for their ads, they still lose money to fraud and lack the ability to deeply monitor just how their advertising was shared, when it was shared, by whom and how well each shared advertisement performed in real time. The result is a social media advertising industry in which marketers pay excessively for hazy analytics and potentially low ROI.

Pinmo’s approach to social media marketing incorporates blockchain technology into social network marketing in a way that mostly eliminates the above problems and gives advertisers complete oversight of just how much ROI they’re getting for their budget. This results in better performing ads, higher business revenues and much more profitable returns for each dollar spent on advertising.

How Pinmo Uses the Blockchain

Pinmo developed its primary advertising platform business model in 2017 with only fiat money (dollars) as the currency of choice, with over $1 million in revenue and numerous client relationships. This highly successful growth period also involved the use of extremely precise ad campaign analytics through IBM Watson’s AI supercomputer as a back-end management tool for client social ad campaign tracking.

Now, in 2018, Pinmo has taken this already-established and proven approach to the next step by combining it with blockchain technology to turn itself into what is called a DApp (Distributed application) to boost ad campaign security, campaign transparency (which applies to the platform as a whole for all users), and for the handling of user and advertiser payments through Pinmo’s own cryptocurrency, the Pinmo token and other coins.

First of all, at its core, a blockchain is a more sophisticated, transparent and secure way of sharing and storing information transactions. With blockchain technology such as that now being used by Pinmo, instead of being centrally recorded, these transactions are spread and replicated in real time across a distributed networked ledger of nodes (computers, servers or other digital data storage points). Each of these transactions must then be validated through a cryptographic signature process that is almost unbreakably secure and provides each new transaction with a unique time-stamped mathematical signature of its own.

Pinmo’s social media marketing platform is decentralized, making it a perfect fit for the use of this blockchain technology. What Pinmo does is allow advertisers to set up campaigns in which they deliver advertising content, links and other branded information to a large and growing pool of incentivized users, who then share this content to their own followers on their own social network accounts with the major social networks.

Ads by advertisers are paired with their ideal audience of sharing users based on how Pinmo and its advertising clients have optimized the content for user compatibility. The users have a distinct incentive to share ads and other materials because each time they do this on an advertiser’s behalf, they’re compensated by Pinmo based off a track record of their performance at sharing content and getting others to respond to ad content with converting actions.

The blockchain aspect of this decentralized advertiser/incentivized user comes into play across several points in the above process:

Completely Transparent Activity Tracking

First and most importantly, all advertisement sharing actions by users and social media conversions that result from them are tracked as “transaction” data points on Pinmo’s own integrated blockchain network. These transactions can then be followed by both users who created them by sharing advertising materials and by advertisers as they run their own ad campaigns with user participation.

Because the Pinmo Blockchain is transparent and cryptographically secure, every share by a user is logged and trackable in a way that can’t be falsified or modified after it’s happened. This means that users can keep track of exactly how well they’re performing for the sake of payment. It also means that advertisers can track exactly how well their ads are performing and where they’re being shared in real time.

Fraud Protection

Secondly and just as importantly, Pinmo carefully filters all of its users to make sure that they’re real people with real social media followers instead of simple bots. On top of this, the blockchain tracks all ad sharing activity in sequence on a per-user basis. As a result, advertisers get an unprecedented ability to track the exact movement and performance of their ads in a way that makes digital advertising fraud extremely unlikely. In other words, Pinmo’s use of blockchain technology also fights ad fraud in a way that virtually no other typical social media advertising platform delivers.

Payments Processing

The third major way in which Pinmo uses the blockchain is for payments themselves. Users on the Pinmo DApp can be paid by Pinmo tokens, which have been created as part of the same blockchain network that records advertising and sharing actions. Marketers who use Pinmo can pay for their campaigns through the same token while also being able to invest in a process called Proof of Stake (PoS), lets them gain access to additional campaign management tools if they buy 5000 or more Pinmo coins. It’s extremely important to note here that the Pinmo token itself is fully convertible to fiat money (again, dollars) and that it can be exchanged for other high-value cryptocurrencies such as Bitcoin or Ether on third party exchanges.

Pinmo also accepts payments for users and from marketers via two other crypto tokens. These currently include publicly traded cryptocurrencies like Nebulas and Elastos, with other tokens coming in the near future.

The Technical Details Behind Pinmo’s Blockchain

On the more technical side regarding Pinmo’s blockchain, Pinmo happens to be the first DApp that offers a cross-blockchain solution for advertising campaign management. The platform does this by implementing its main ledger and advertisers’ portal on the Ethereum blockchain while delivering its front-end user interface from inside the Pinmo DApp via other core chains like Nebulas, Elastos and Steem. Pinmo also works with these same third-party public chain partners for the creation of Node DApps that join together into a broader distributed traffic sharing community in which the same fundamental benefits of blockchain technology we already described are applied.

In other words, users of Nebulas, Elastos or Steem (and eventually others) will be able to work with Pinmo’s services through their pre-existing tokens or even use Pinmo to create their own tokenized traffic solutions. Pinmo itself will act as an entry-way for a broader cross-chain environment in which a traffic circle among merchants and other blockchain solutions are created.

Conclusion: What Pinmo’s Blockchain Approach Means for Clients

Pinmo integrates blockchain infrastructure to its already unique social media advertising strategy for levels of tracking and analytics reliability that aren’t available from any other advertising platforms. Advertisers can watch the exact performance of their ads nearly in real time as they’re shared by Pinmo’s users, and know exactly how much return they’re getting for each of them. Users of Pinmo get the same level of security for that they’ll be rewarded accurately for their own activity. Pinmo’s blockchain backbone promises to keep delivering these levels of transparency and trust for both no matter how much the platform scales up in size with its broader cross-chain partners.

How Pinmo Uses Blockchain and AI to Eliminate Bots & Fake Account Losses

In 2017 alone, online marketers lost over $7 billion to bot fraud and fake account-related advertising. A large part of these losses were attributable to website advertising and search ads but a not insignificant percentage belonged to the social media landscape. Clearly this isn’t a minor or uncommon problem. The big question that everyone from social media platforms on down focuses on is how to fight it.

As far as the social media platforms themselves are concerned, there are even accusations that giants like Facebook, Instagram, Google and others deliberately don’t do enough to deal with these advertising fraud issues because they earn money either way. While we tend to believe that the social networks are doing their earnest best to keep their advertising customers from suffering the harm caused by ad fraud, the fact remains that real economic losses are being generated, and that the efforts of these networks aren’t fully effective at stopping fraud losses.

It’s understandable that fraud continues to exist. The sheer number of social media user accounts on the big networks combined with inefficient methods of catching fake accounts and bots create a situation in which at least a part of any advertisers spending gets wasted on exposure to fake activity they still get billed for.

Exacerbating the difficulties social media has with fake ad filtering is the fact that some of the agents behind these types of ad fraud on today’s internet can become extremely sophisticated. This was demonstrated in 2016 when advertising security firms detected an ad fraud bot called Methbot, operated by a group of Russian hackers who had dubbed themselves AFK13. The scale of this one single operation? Traffic from over 570,000 fake viewers was directed to over 300 million advertisements to generate fake clicks. Because these were mostly video ads being promoted to falsified versions of major websites, the CPM on them averaged out at $13.04. This was a cost billed straight to online advertisers in a fraud that netted the hackers behind Methbot roughly $5 million dollars per day while it was operating.

Methbot was very smartly designed in a way that let it mimic real human users to a remarkable degree of detail. Existing ad platform mechanisms, both algorithmic and manual that analyze ad sharing and clicking activity for their customers could have a very difficult time detecting click fraud of such a sophisticated nature. Yet this type of activity continues to exist.

This is where the combination of technologies used by a digital marketing platform like Pinmo steps into the picture.

Pinmo also uses AI analytics and other security mechanisms like 2-factor authentication to verify that all of the users participating in the sharing of its clients’ digital advertisements are indeed real human users. However, since these tracking mechanisms clearly aren’t enough all by themselves. The Pinmo approach to ad fraud elimination also incorporates an entirely new and much more subversion-proof level of vigilance through blockchain technology.

The blockchain is a cornerstone of Pinmo’s efforts to deliver almost perfectly secure, fully authentic advertising performance for customers who want genuine ROI on their investments. How it works is what sets it apart from the methods used even by giant social media platforms in their own anti-fraud, anti-bot measures.

What the blockchain fundamentally does is allow all users and administrators of a network in which information is being transacted to verify each one of those transactions and source it back to a specific, known point of origin. Thus, in the case of the Pinmo platform, ad campaigns are created by advertisers through the AI-supported Pinmo dashboard for their accounts, these campaigns are then also optimized by Pinmo’s manual and algorithmic campaign support protocols. The specific ads in these campaigns are then shared to particular incentivized human social media users based on their interests, and those human users in turn share these ads as they see fit to their friends and followers for maximum reach and conversion.

With this, three different factors work together to ensure that each ad is being shared by real users through real social media accounts to other real users:

First, Pinmo’s own Watson-powered user verification procedures and two-factor authentication are working to filter a base of real people who are being compensated to share Pinmo ad campaigns on their social media accounts.

Secondly, these shares by users and the converting actions they generate are verified for their authenticity through Pinmo’s system, which is itself supported by IBM’s Watson supercomputer for maximum verification and processing power

Third and most importantly in this entire context, the entire sequential process of ad campaign creation, ad sharing to users, ad selection and sharing by users and advertisement response (clicks and converting actions) by friends and followers of those users are all tracked as transactions in Pinmo’s own decentralized blockchain network.

What this last characteristic means most of all is that users, advertisers and Pinmo’s own administrators can track the performance of each ad not just as an abstract analytics statistic but also as a specific series of cryptographically secured blockchain transactions which are all sequentially registered across a distributed ledger of events and cannot be falsified. These blocks can be individually reviewed live, as they’re created by advertisers who want to examine their own analytics down to the most granular possible level.

The full combination of AI ad optimization technology, manual verification of all user activity, shares and clicks, and sequential blockchain tracking of all transactions works to create an advertising environment in which fraudulent click activity through bots and fake user accounts become much more difficult to get away with.

How Blockchain Technology Can Validate Ad Campaign Metrics

One of the fundamental requirements of ad campaigns is effective analytics. You, as a marketer, want to know precisely how your ads are being displayed, where they’re being shown, how they’re converting and how accurately these metrics are all being tracked. These needs only increase in importance as a given ad campaign becomes more complex.

There is, however, a fundamental problem to how these performance analytics have been tracked up to now: A lack of complete transparency. Yes, social or search advertising platforms like Facebook, Google, Twitter and others, as well as numerous small ad management services, have both human and algorithmic systems in place to handle this problem to deliver varying degrees of analytics precision, but they all suffer from ambiguity gaps. In other words, while you can have ad campaign metrics for performance delivered to you in detailed reports, full transparency for verifying the progression of actions that led to them step-by-step is largely out of bounds.

This is where blockchain technology such as that used by Pinmo steps into the picture in a distinctly innovative way. In order to explain how it does this, let’s take a quick look at how a basic blockchain works first.

In essence, a blockchain is a distributed ledger of sequential transactions (these transactions being events of any kind in which information is recorded and exchanged). The different nodes, or computers, across which the ledger transactions are distributed all represent parts of that particular blockchain’s network. Every time a transaction happens within a blockchain, it is spread among all these nodes and has to be cryptographically validated by a majority of them through a sort of automatic consensus mechanism that stamps the transaction as a legitimate event in said blockchain’s sequence.

When this happens, the transactions being validated are added as new cryptographically stamped “blocks” in the sequential chain of all previous validated transactions. This chain of blocks is spread across the entire distributed network ledger for the sake of additional security through decentralization. The whole thing in its totality is what we now call a blockchain. Since each transaction block comes sequentially after previous blocks and attaches to them by a cryptographically unique mathematical hash process, the sequential integrity and origins of any given block are absolutely secure.

This in turn assures anybody who looks at the whole blockchain that the timeline of transactions contained in each block represents completely validated and real events inside the platform that the chain is being run on. Because most blockchains are completely open for detailed examination, anybody can examine every sequence of activity inside each block in minute detail to verify its legitimacy.

This description of the blockchain is of course very basic. Plenty of additional and highly detailed mathematical processes work behind the scenes to make a blockchain function as it should. However, these basics alone are enough to make it obvious how this technology can be helpful to the validation of online advertising metrics.

Basically, by making each possible piece of activity in an ad campaign –be it the creation of an ad, its sharing by someone else, a converting click on that ad by another person and so forth—into a mathematically “tagged” transaction inside some sort of customized blockchain ledger, an advertising platform like Pinmo can deliver perfect campaign tracking.

In other words, with blockchain integration of ad campaign activity at its most granular level, Pinmo or any other ad platform that does the same thing can deliver not only overall ad campaign analytics, it can also let an advertising client examine the blocks for their ads for themselves. By being able to do this, the advertiser can see the exact process of actions by the ad platform and third parties that made any given advertisement perform poorly or well. The level of analytics this delivers is far more detailed than has been the case with conventional ad campaign analytics up to now.