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Marketing experts say scalable blockchain key to revolutionizing loyalty programs

27th June 2022 Print

In the past few years, blockchain is steadily becoming known as a viable technology for resolving age-old issues in the digital infrastructures of many types of businesses. But not only will blockchain make digital systems more efficient, but it can also enhance them in a way that will enable companies from across industries to maximize profits.

Since the start of mass production of goods, businesses have relied on marketing and its advertising component as a means of being able to provide products that people need and want, as well as making these products attractive to consumers. An important factor in the success of any business is customer retention. 

And implementing loyalty programs is one of the most effective ways to ensure customers keep coming back. At the most recent BSV Global Blockchain Convention, marketing experts say that a blockchain must be scalable in order to revolutionize loyalty programs, which have been used as an effective marketing tool since the 1700s. 

The panel on marketing and loyalty programs on blockchain, moderated by BSV Blockchain Association Marketing Head Martin Coxall, is composed of experts and executives in the field: Oceanside Digital Assets President Chad Anderson, Haste Arcade Co-Founder and CMO Joe DePinto, Mijem Inc. Chief Strategy and Purpose Officer Phuong Dinh, and TonicPow Co-Founder and CEO Luke Rohenaz.

Why the need for a scalable blockchain?

There are many ways that blockchain can revolutionize loyalty programs; however, experts agree that it has to be a scalable blockchain. This is because only when a blockchain continuously scales can it accommodate the huge amount of customer data needed.

“One of the things, and I was there from the early days of launch parties, we would always connect the online world to the offline world… We’d have a strong presence at all of these different events where we’re a primary sponsor… We could pump the ads all the time to really make sure that anything that we’re a part of would be well-attended,” Anderson shared.

“One of the things that we would be doing in today’s world is something called proof of attendance protocol. And that’s something that a lot of people are doing in the NFT space now, where you come in and you scan in with your QR code. And then, this would be something that people could earn rewards on from attending multiple events and get into different tiers the more they attend,” Anderson added.

Only a scalable blockchain will be able to make a proof of attendance protocol both efficient and practical, because scaling allows transaction fees to be lowered to make it practical for businesses to use it. For instance, the Bitcoin Core (BTC) and Ethereum (ETH) blockchains are popular with both individual consumers and businesses nowadays. However, they are not scalable; and this makes it inefficient and expensive. 

BTC is stuck with 1MB data blocks and a throughput of just seven transactions per second (tps) at a current average fee of $1.4 per transaction, while ETH can process up to 70 tps at an average fee of $10.57. 

Now, imagine having five separate events with 2,000 attendees each and needing at 10,000 pieces of customer information to be put on the blockchain to start with. That company would then have to shell out $14,000 on BTC or $105,500 on ETH just to record customer attendance on the blockchain for these five events. 

And what if this company does a total of 50 such events per year? It would not be sustainable and practical to spend this much just in marketing these events. What is more is that these transaction fees can go even higher as the system is clogged by a surge in transactions. 

Because an unscalable blockchain cannot handle a high number of transactions, it oftentimes results to not only expensive transaction fees, but to failed transactions. On ETH, a failed transaction is non-refundable, which means that failed transactions are equal to loss of money. 

Why BSV?

The Bitcoin SV (BSV) Blockchain, on the other hand, has unlocked its ability for limitless scaling after it restored the original Bitcoin protocol in February 2020. This has allowed it to be continuously scaled since then. Now, the BSV Blockchain is already at 4GB blocks and up to 100,000 tps with average fees of 1/20 to 1/100 of a cent. 

And as the BSV network continues to scale, terabyte-sized data blocks and millions of transactions per second at 1/1000 of a cent are real possibilities. These numbers are what make it practical and efficient for both big and small enterprises to use BSV. Micropayments become possible, which is the sending of a very small amount of money at a single time. 

“I’m obsessed with micropayments—that’s what attracted me to Bitcoin to begin with and the ability to use them as an incentive mechanism to have customers promoting businesses. [At Barpay], we service several thousand bars, restaurants and hotels. Basically, with QR codes, the customers can scan to view the menu, order and pay. And the last piece of that is once you’ve had your experience, people would go and leave a review,” DePinto said.

“Since you’re getting the opportunity to earn micropayments for the reviews that you leave on these restaurants, so now, the customers are doing the marketing for the venues themselves in a way where they can earn based on legitimate content,” DePinto added. 

And the marketing executions that can be built on a scalable blockchain are endless. And this is also why the BSV Blockchain can provide utmost utility to businesses across many different industries. 

“The fact that we’re putting loyalty points and things like this on a blockchain now, they can take new forms. They could be more useful than they were before. They can be interoperable with other companies. You can easily make a deal with some partner that is a really good complement to you… You can redeem points over here and vice versa because we have a universal database that we can check it against. Whereas before, they were all independent systems,” Rohenaz pointed out.

“The way I see blockchain and specifically BSV, as it grows in utility, the ecosystem grows. It’s kind of like a correlation marketing program where once you own BSV, there’s more utility for it. It’s not only a financial token that you could have, but you can also use it for other applications like micropayments or there are games that are on the BSV chain,” Dinh revealed.