BLOCKCHAIN — A DISRUPTIVE FORCE?
We’re hearing a lot about blockchain these days, including a fair amount of buzz that it’s going to disrupt the market research industry as we know it. While it seems to us that blockchain technology has the potential to bring revolutionary change to our lives in the coming decade — similar to the magnitude of change that smartphones have brought over the past decade — the potential for disruptive impact on the research industry itself is much less clear.
What exactly is blockchain?
In short, blockchain is an immutable (unchangeable) ledger of information about transactions, which can be distributed but not copied. It’s the technology underlying cryptocurrencies, the most well-known of which is Bitcoin. The concept of blockchain gets its name from the computer code behind it, which literally consists of a chain of digital blocks of data. At its essence, blockchain is a way for users to store, access and make changes to encrypted data. No single individual can change the information because it’s jointly controlled by a group of users, and there’s a record of all changes.
The origin of blockchain dates back to the 1970s, when a system was developed for the specific purpose of validating data being transferred between computer systems. While blockchain is pretty complicated to understand, the point is that it’s a means to authenticate digital information — and that brings us back to market research.
When it comes to fielding primary research, the value of authenticated digital information is not at all clear to us. The problems that blockchain in its current iteration might solve — identity verification, respondent qualification and low transaction cost payments — aren’t actually problems in primary research. Research panels are vigilant about identity verification of survey takers — it’s not in their interest to have bots and fraudsters taking surveys either. In theory, blockchain could provide authenticated data to ensure respondents are qualified to take a survey. But considering how few respondent characteristics are static, it’s not evident that investing in immutable records about qualifying characteristics is worthwhile. Payments to survey panelists are already “frictionless” — not to mention that most people don’t deal in cryptocurrency. And speed of payment could be an issue: Bitcoin processes about seven transactions per second, while Ripple (the fastest major cryptocurrency) processes about 1,500 transactions per second. By way of comparison, Visa processes 24,000 transactions per second.
The potential for authenticating digital information and the potential for individuals to be able to control the information that is shared about them certainly could change our industry in the fullness of time. While it seems unlikely that blockchain as it currently exists will disrupt primary research initiatives, we believe that it does have potential to impact Big Data and advertising delivery in the next five years. Heightened interest in privacy combined with rapid advances in AI is likely to accelerate changes in the availability of data that’s valuable to marketers.
Two decades ago, there was healthy skepticism about the wisdom of moving research to internet survey platforms, and it’s now hard to imagine that there was ever any other way. While we don’t see immediate use or application of blockchain on primary research, we won’t be surprised if future iterations of blockchain — ones that we can’t quite imagine right now — eventually do bring added value or dimension to research.
Fountainhead brings a depth of understanding about integrity in data collection, and we have a keen interest in exploring advances in technology that offer good solutions to research problems. We’re constantly on the lookout for opportunities to bring improvement to the “tried and true.” If you’re wondering whether a new technology or technique offers a smart solution to your research problem — or wonder if it might be merely a “bright shiny object” — we encourage you to get in touch with us to help you evaluate your options.