A year ago, one Bitcoin could be had for about $450.

On Thursday, the cryptocurrency peaked at just over $1,340, as measured by the Coindesk price index, before retrenching slightly to $1318 by this morning. That’s still a return of nearly 200%. Bitcoin has seen a remarkably steady rise since early 2016, fueled by global regulatory normalization, broad interest in the technology from enterprises and banks, and rising transaction volumes. Cryptocurrency analysts, according to Coindesk, think the trend will continue, citing among other factors that most Bitcoin investors are long-term bulls who will take profits conservatively.

Fortune’s technology

But the very transaction volume that is Bitcoin’s key fundamental also presents a serious medium-term threat, as the system has struggled to keep up. Transaction speeds have become impractical for merchant payments, and fees have risen, making the system less competitive with conventional payment systems such as credit cards. Struggles over how to fix the problem have raised the specter of a network split —though that could, at least theoretically, give holders additional value in a manner akin to a stock split.

Bitcoin had a notable previous peak of around $979 way back in November of 2013 (Coindesk’s number seems conservative here—Coinmarketcap records a 2013 peak of $1149). That push was fueled by a wave of mainstream media attention, but prices slumped through 2015 on the realization that the tech’s promise would take some time to fulfill, dipping as low as $204 that August.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

  

The state of bitcoin today is highly discouraging.

Watching grown men hurl insults at each other on Reddit and Twitter is just sad. When I became involved in 2013, bitcoin's potential seemed endless. It was heralded as a possible solution for micropayments, remittances, microfinance, parking meters, email spam and so on. Many women, myself included, believed in bitcoin as a means to address world problems of poverty by providing access to capital for the remaining three-quarters of the world.

As time passed, I became discouraged that many needed use cases did not come to fruition. Startups attempting to build companies with those business models have died. Anything involving small payments in bitcoin has been mostly eliminated due to high fees. The most popular use case is as a store of value. It's not to say that isn't useful: in the growing number of countries with devaluating currencies, bitcoin is an attractive alternative. Bitcoin has had an indelible impact as a groundbreaking technology. But it's disheartening that it has stalled in doing more.

There are fundamental issues that will likely never be solved, as evidenced by the two-year debate on how to scale bitcoin. The community is more divisive than ever. I can't help but think part of the reason it's so dysfunctional is because it's devoid of women. Women (or any rational person) do not want to participate in this dystopian community: it's juvenile and filled with vitriol. Bitcoin desperately needs a Patronus Charm, "a pure, protective magical concentration of happiness and hope.” My disappointment in bitcoin caused me to look at the blossoming landscape of alternate blockchains: eg litecoin, zcash, monero, ethereum and dash have all grown in market size and popularity. It's clear that more alternative coins (altcoins) will develop innovative solutions and come to market. This is why MimbleWimble caught my interest.

Starting point

As a brief background, the original MimbleWimble white paper was placed by someone called Tom Elvis Jedusor (Voldemort’s French name in JK Rowling's Harry Potter book series) on a bitcoin research channel in July 2016. Tom's white paper "Mimblewimble" (a tongue-tying curse used in "The Deathly Hallows") was a blockchain proposal that could theoretically increase privacy, scalability and fungibility. It remained theoretical until recently.

At the end of 2016, someone named Ignotus Peverell (the original owner of the invisibility cloak, if you know your Harry Potter characters) started a Github project called Grin and began turning the MimbleWimble paper into something real. Andrew Poelstra, a mathematician at Blockstream, presented on this work in January 2017 at Stanford University’s Blockchain Protocol Analysis and Security Engineering 2017 conference. More recently, Ignotus posted a technical introduction to MimbleWimble and Grin.

It took me a while to wrap my head around MimbleWimble. The more I internalized it, the more hopeful I became that something more magical than bitcoin could appear. I will attempt to explain MimbleWimble and why what it proposes – privacy, freedom of choice, equal access, fungibility, and sustainable growth over time – are so important. Privacy matters, a lot. One of the most important rights we have is the right to privacy. It’s our right to “keep a domain around us, which includes all those things that are part of us, such as our body, home, property, thoughts, feelings, secrets, and identity."

Privacy matters

I consider privacy extremely important. It's very apparent how valuable it is when you lose it or when someone violates it. In my 20s, I was stalked. A person whom I had met in passing on a military base waited for me after work and surreptitiously followed me home. He did this for several weeks – all unbeknownst to me – until one day he knocked on my door and told me he had been following me and professed his undying love. I immediately slammed the door and called the local and military police. I lived alone in the woods and was so freaked out that I moved.

Only someone who has been stalked can understand how frightening this experience was. To this day, it affects many of my behaviors to guard my privacy. Physical trespass of privacy is often preceded by online privacy violations. Recent events, such as Congress granting ISPs (internet service providers) the right to sell your personal information – browsing habits, app usage history, purchasing habits, location data – are very concerning. As Luke Mulks from Brave elegantly wrote, "Your digital data trail is the evidence of your human presence online. Your data is valuable, private, and most important, it’s yours."

What's available

If we cannot rely on our legislature to protect our constitutional rights (can we rely on them for anything anymore?), technology needs to intercede to make it harder for greedy capitalists to put your privacy up for sale. Privacy extends to what to share publicly about what we buy or whom we donate to. These transactions should not be open for all to see. Women, especially those trying to escape repressive social or economic conditions, have a dire need to stay anonymous. That's a fundamental flaw in bitcoin: every transaction and address balance is available for the world to watch and track.

There are some things you can do to hide your transaction, such as tumbling, but you need to go out of your way to use them and they are breakable. Privacy-oriented cryptocurrencies like monero and zcash improve privacy significantly. In monero, the transaction is not natively private but relies on ring signatures to mask exchanges. Zcash leverages a technology called zk-snarks to build private transactions, which is a huge improvement. However, it still requires a lot of extra resources to build a confidential transaction, so most users still issue their transactions "in the clear" (clear vs shielded counts).

The big change

MimbleWimble is natively private. There are no ring signatures or zero-knowledge proofs on top of a transparent bitcoin-like transaction. In a MimbleWimble transaction, all values are fully obscured. There are no reusable or identifiable addresses. Every transaction looks the same to an outside party.

The two properties verified in a MimbleWimble transaction are:

1. No new money is created
2. The parties sending money must prove ownership of their keys.

To verify no new money has been created, you must demonstrate that the sum of outputs minus the inputs equals zero. To verify key ownership, the transacting parties must legitimately prove their public and private keys exist to authorize the transaction. MimbleWimble uses a blinding element to obscure all values – transaction amounts and keys – while holding true basic mathematical facts. The blinding element relies on multiplying and adding secret factors to obscure real values.

let's say I have a transaction with these amounts:

(1) 17 + 12 = 29
The balanced equation shows no new money was created, complying with property 1) above. The equation remains true if I apply a secret blinding number (eg 11) to all terms.

(2) 17*11 + 12*11 = 29*11
Without knowing my secret number 11, you would have a hard time guessing what the original transaction values are in this equation.

(3) 187 + 132 = 319
In equation (3), I’ve managed to keep both the values and blinding number private while still allowing others to verify I have not created new money in my transaction.

The big picture

Still, don't think this is a big deal? MimbleWimble offers other extensive benefits that indicate it could form the foundation of the kind of network bitcoin was meant to be.

Freedom of choice

By obscuring all values, MimbleWimble provides full privacy and gives you the choice of what to reveal. It's similar to donor levels in various non-profits. You’ll see the range a donation was made for, but you don’t necessarily know the exact donation. Both the donor and the non-profit know exactly how much was donated, but no one else needs to know. This "right to privacy gives us the ability to choose which parts in this domain can be accessed by others, and to control the extent, manner, and timing of the use of those parts we choose to disclose."

Equal access

Another aspect of bitcoin that disturbs me greatly is there is little opportunity left for an average person to participate in securing the network. The requirement of a highly specialized and expensive chip for bitcoin mining – the ASIC – has almost eliminated anyone from becoming a bitcoin miner, whose primary responsibility is validating transactions and placing them into blocks. The mining community is now heavily centralized and this has greatly contributed to bitcoin's woes.

The ability to grow over time while still providing equal opportunity to participate are key tenets of Ignotus' Grin implementation of MimbleWimble. Grin is designed to be ASIC resistant so that anyone who wants to try mining can buy a widely available GPU chip at a local Best Buys or online for a reasonable price. Making MimbleWimble ASIC resistant democratizes access. I’ve even toyed with the idea of building a GPU miner with my kids to see what it can do.

Ability to grow over time

Another way to safeguard equal access over time is to ensure the blockchain network doesn't get dragged to a standstill when transaction volume increases. This is the core issue in the bitcoin block-size debate: there are more transactions than can fit into a 1Mb block. As long as there's a restrictive size limit, there will be a capacity issue. A dirty little secret is that to get around scalability issues, almost all payment processors and exchanges do off-chain transactions. Which begs the question: why bother using a cryptocurrency with blockchain?

Increasing usage will increase transaction volume. So how do you ensure that a block size can continue to accommodate volume increases? By streamlining each block. The principle is similar to simplifying equations. If there are terms that are identical on both sides of an equation, you can cut them:

(8) 2+y = x+2
(9) 7+3+5+4+2+y = x+7+3+5+4+2

Both equations (8) and (9) simplify to:

(10) y = x

MimbleWimble maintains that if an output spends an input, you no longer have to keep them because they cancel each other out. This greatly cuts down the amount of data you have to store and process. The only data that nodes keep is unspent outputs and block headers. Instead of thinking of blockchain capacity in terms of number of transactions, MimbleWimble is designed to grow with the number of users. The streamlined blocks make growth sustainable over time as the transaction data set does not continue to get bigger. This increases privacy since transaction data gets removed and it also enables fungibility.

Fungibility

Fungibility is the ability for equal units to be interchangeable. Let's say I give you a dollar – either as a coin or a paper note. The Federal Reserve prints the paper dollar and the US Mint produces the coin dollar, but both are equal. Neither is lesser or greater than the other and you can choose to use a dollar coin or bill interchangeably. This is a key characteristic of currency: equal units must be interchangeable, or fungible. The US dollar is fungible. Bitcoin is not.

The bitcoin blockchain keeps every single input and output forever and so each coin carries a legacy. It's similar to equation (9) above. Another dirty little secret is that when picking which transactions to process – in addition to the fee – payment processors, miners, and exchanges will look at the inputs (ie 7+3+5+4+2) to assess the quality of the transaction. The consequence is one bitcoin is not fungible with another.

The most valued bitcoins are called 'coinbase transactions', which are the ones created when a block is found. They are newly minted and 'clean' and some parties pay a premium to buy them. A hierarchy in coin quality develops. The consequence is, if you receive bitcoins that have inputs that are tainted (eg they have been used in a dark market), spending them may become increasingly difficult. In MimbleWimble, because the (7+3+5+4+2) inputs and outputs are all discarded when spent, each coin is exactly equal to the other. In other words, MimbleWimble coins are interchangeable and fungible.

Conclusion

I'm very hopeful seeing the accelerating pace of research and innovation in public blockchains. If privacy and scalability are solved, MimbleWimble could be the Patronus Charm for bitcoin, perhaps as a complementary sidechain. Imagine what a universal fungible digital coin could enable with access for everyone. One hesitation I have, however, is that many people developing it have taken on Harry Potter-themed pseudonyms. It's understandable given the personal attacks rampant in the community, but it does conjure a mystical aura. I’m glad Andrew Poelstra, a highly qualified real figure, is actively involved with MimbleWimble.

I hope I can add my voice to the mix, also as a real person. I realize that by not using a pseudonym, I'm opening myself to the troll armies. I’ve attempted to explain why MimbleWimble is interesting to me. I hope it intrigues enough people and inspires both men AND women to engage early; it would be great if this community doesn’t wind up as a testosterone-filled boys club. Apparently, Merope Riddle (Lord Voldemort's mother) is already very involved in MimbleWimble’s development. I believe it’s worth learning, participating in its genesis, and helping to develop a healthy community around it.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

  

Alan Zibluk – Markethive Founding Member

Tencent Joins China Blockchain Race With New TrustSQL Platform

Alan Zibluk – Markethive Founding Member

Alan Zibluk – Markethive Founding Member

How Blockchain Startups Will Solve The Identity Crisis For The Internet Of Things

Digital fingerprints are just the start. HYPR supports all types of biometric data, from simple authentication algorithms for facial and voice recognition to more complex algorithms such as the way you type on a keyboard, the rhythm when you text on your phone, or how you walk on the street. Your home, your car, and your office all have access requirements and there is probably some degree of smarts already included. HYPR positions IoT vendors to include biometric authentication without a huge investment in expertise, money, or time to implementation.

A big part of HYPR's innovation is complete distrust of the internet for transmitting biometric data itself, which never leaves the user's cell phone. A single phone might get cracked and the biometric data used, but there is no path to hitting millions of victims in a single event. Where does the use of a blockchain fit in all this? It will serve as a distributed, trustless store of biometrics validation data. There are several implications and not all are obvious. A blockchain based system is resistant to denial of service attacks that cripple centralized businesses.  Why?  Because instead of bringing down a single server farm hosting with the authentication data, a DOS attack would have to identify and bring down many blockchain nodes hosted by several parties within the same permissioned blockchain environment.

Equally important to DOS protection is business process interoperability. Avetisov explains, “We are building use cases around associative forms of identity through the blockchain.  Right now you can not authenticate between two different corporate entities, such as a bank and a car insurance company because there is not a shared identity between the two companies.  Each company has a different identity stack that is not interoperable.  By using a blockchain, you can have an interoperable ledger for identity between multiple entities without a complex infrastructure.  An insurance company can prove your identity to a bank or a credit card can prove your identity to a streaming service all through biometric data.”

How does it all work?  While the exact mechanics have not been finalized, it would involve each company acting as a validator of the data within the network running nodes that are constantly accepting biometric data. When a company that is not running a node wants to authentic a user, they would look to the network and the nodes would provide data on the last time stamp that a particular user could have been identified with a particular device accepting biometric data.  If the user can prove they had a device that the network has agreed is associated with their identity within a recent timeframe, the user is then authenticated.

The value here is that different companies can identify users based on their specialized identity stack and provide authentication to others without sharing any of their personal data.  Converting your customers to use biometrics is a complex, expensive project. But if 70% of your customers are already using a system from another company, and that system has been built with an eye on assisting third parties to make the jump to biometrics, the barrier to entry is dramatically lowered. Cost savings begin in quarters rather than years.

What sort of benefits accrue if diverse businesses authenticate their users with the same biometrics system? Here's a scenario Avetisov offered that's a nightmare today, but which would have a happy ending in a biometrics enabled world. Children don't typically have identity information until their later teen years when they start driving, so there is a three to five year window where they are allowed to roam widely without a formal ID. If they're brought to a hospital injured and unresponsive there is a delay while they are identified, wasting some of that golden hour in treating shock and trauma. A biometric solution accelerates that process and a blockchain allows that medical institution to authenticate through the identifying information collected from other companies.

These use cases could be implemented using Bitcoin's blockchain, but HYPR has chosen a private solution. While individuals are using biometrics to authenticate, they do so with large entities, and HYPR has focused on serving the needs of banks, health care, and insurance providers.  For these enterprises, regulation around data security is a great concern.  While a public blockchain with hashed or encrypted data provides high levels of data security, it is still unclear how managing data in such a way would fit within the current regulatory framework.  As such, private or permissioned blockchains are the fastest way to market without the need to educate regulators.

While HYPR is focused on how to build an interoperable environment for humans to be authenticated via various IOT devices, UniquID is building technology that identifies the devices themselves while they are offline through a very clever use of blockchain technology and smart contracts.

Pepe offered an interesting example of how an offline smart contract might work, “If you want to rent a Zipcar, what happens if neither your phone or the car cannot connect to the internet.  You can’t unlock the car with your smart phone unless the owner of the car comes with the keys in his pocket, drives the car out, and brings the car to a place to download a certificate. This is the only way for the car to establish a secure connection with your phone.  However, with UniquID there is a very different scenario.  Both the car and the smartphone have a UniquID wallet on the blockchain. Zipcar creates a smart contract on the blockchain that unlocks the car for a specific smartphone when a token is received in the car’s wallet.  The smartphone downloads [all or a portion of] the blockchain with the smart contract already executed.  Then when you go to the car without internet, your smartphone uploads the missing blocks of the blockchain that the car does not have, with the executed smart contract, and the car unlocks for the person with the correct smartphone.”

Through this innovative use of blockchain technology, devices do not have to be connected to the internet in order to communicate, identify and authenticate with each other in a secure way.  This is an important mechanic for devices to be able to capture real-time data and communicate with one another in real time.  

Unlike HYPR, which can be built on either a permissioned or public blockchain, this use case relies on the security provided through the proof of work mechanism of a public blockchain.  A private blockchain environment, particularly a small one, may have vulnerabilities that a motivated attacker could exercise, modifying data in ways an offline node could not detect. A public blockchain’s security mechanism, proof of work consensus, costs the same amount to fraud, whether online or offline. Global bitcoin mining capacity is 3.75 million terrahashes per second. Translating that to something you can visualize, an AntMiner T9 will do 12.5 terrahashes per second, costs $1,140, weighs twelve pounds, and consumes 1576 watts. You’d need 300,000 of those to match current global Bitcoin capacity and theoretical attacks could be done with 10% of the total – a hundred and twelve tons of gear consuming 37 megawatts of power costing $34 million.

If you’ve got a $20,000 vehicle but it would take the purchase price of a 220’ yacht to steal it, such attacks are going to remain at the proof of concept stage. However, it is important to note that a downside to the current layout of this plan may require a device to download an entire blockchain, which would be cumbersome for a small IOT device. UniquID has very ambitious plans on how to improve device identity and communication through a new type of secure network that will act as alternatives to SIM networks and certificate authorities that I call decentralized certificate authorities.  Unfortunately, UniquID has not yet released a white paper describing their service, so we’ll save that for another article.

You can see how these technologies will be required for a future with an Uber ordering coffee maker, a grocery ordering refrigerator, or laundry room that makes sure you’re always ready to do the next load. Humans will be identified by biometrics, devices by unique attributes like MAC addresses, likely in combination with the unique attributes of the human that first uses them, imprinting to their new owners the way some newborn animals do with their mothers.  When a service needs to leave a message for a device that isn’t always on if it’s small it’ll be placed directly on a blockchain, while larger data say a software update, will be left as a URL on the blockchain and a cryptographic fingerprint of the file.

We’ve had robotics on factory floors for two generations, lines of carefully laid out systems assembling goods. That sort of automation is going to spread from within a single organization to across multiple enterprises, reaching out to consumers, and eventually imbuing the entire supply chain with situational awareness, speeding deliveries and reducing the need for human interactions.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Blockchain Tracker:
Blockchain’s Role In Digital Advertising

Although it’s still in its infancy stage of being used

outside of the financial arena, blockchain technology is slowly showing signs of impacting other industries. On the tip of everyone’s tongue in the digital advertising arena is blockchain technology. Just as recent as this January, ethereum-based blockchain technology company adChain partnered up with decentralized application studio ConsenSys with the goal of specifically developing a blockchain solution for the online advertising industry.

ConsenSys’ Founder, Joseph Lubin, commented in the joint press release about how blockchain technology adds value to digital advertising: “There is tremendous value and disruption potential of this technology beyond FinTech. The development of smart contract-based applications in digital advertising is an ideal use case for blockchain. Supply chains and value chains are ideal use cases for Ethereum, as it enables many cooperating and competing participants to work fluidly together on a shared platform that they can all trust to realize an efficient and fraud-resistant n-sided marketplace. We’ve been iterating on the adChain blockchain implementation for a year and believe adChain will significantly change the way advertisers and publishers operate their supply chains to exchange ad impressions.” Developed through the Swiss non-profit organization, The Ethereum Foundation, ethereum is a blockchain platform that’s defined as “a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”

As such, it should come as no surprise that the digital advertising realm is beginning to use blockchain to help prevent fraudulent advertising. The first example of the technology’s use in digital advertising comes from Los Angeles-based startup company MetaX. It seeks to fight ad fraud via its new adChain protocol, which enables its own supply chain to adapt in a scalable, trustworthy and secure manner via blockchain. MetaX’s Co-Founder and CEO, Ken Brook, understands how quickly the digital advertising arena is growing and thus believes standard industry procedures just won’t cut it. “Blockchain has a number of exciting implications for digital advertising. Fraud prevention is a natural first application given the transparency and security blockchain brings, and because fraud is such a major issue for the advertising sector,” he said.

Another avenue blockchain technology is being used for in digital advertising is ad-delivery verification. While trust in advertising isn’t at its highest point, some are touting that blockchain has the ability to be used to see if advertisements are being delivered and whether or not they’re going to the correct place. Blockchain also allows advertisers to track who opened the ad, where it was opened and what possible conversion rates are from the promotional push. Through all of this, blockchain ultimately helps out two parties, which include the digital advertising industry, with its budgeting, and streamlining its services and consumers with transparency into ad practices. By removing any third-party interference, access to information on how advertising works internally and the paths it takes to reach consumers will allow the public to likely have more control over incoming targeted messages.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

The “City of the Future” is One Step Closer to a Blockchain Based Economy

Dubai’s Blockchain Goals

Dubai has quickly grown into a global hub for trade. Now, it’s planning to use blockchain as the basis for its economy, further enhancing this status. Blockchain has the potential to simplify record-keeping and the transport of goods all over the world. In concert with Dubai’s advanced transportation infrastructure and near-zero taxes, businesses will experience Dubai as a secure, reliable business-friendly environment.

Although Blockchain is primarily known as the technological basis of the digital currency Bitcoin, the technology itself can function in many roles. Blockchain allows users to share and track information from transactions and contracts using a digital ledger, and the records are secure, verifiable, and permanent. With blockchain serving as the basis for both private business and government services in Dubai, service provision will be more efficient. In short, doing business in Dubai will become far simpler for any kind of business.

“We want to make Dubai the first blockchain-powered government in the world by 2020,” Aisha Bin Bishr, director general of Smart Dubai, a government office charged with facilitating innovation, told The Wall Street Journal. “It is disruptive for existing systems, but will help us prepare for the future,” she says. This commitment to using blockchain at the government level makes Dubai the first city in the world to promote the technology in this way.

In March, a citywide implementation effort began, led by Smart Dubai. The office will educate both the private and public sectors about the potential of blockchain, and conduct workshops with key stakeholders, public and private, to identify which services can best be enhanced by blockchain and prioritize them for implementation. It also will educate the public and private sectors about the technology’s potential. Once these efforts are finished, Smart Dubai predicts that the blockchain rollout will begin later this year as the public and private sectors collaborate on pilot projects. The office will also build a shared Blockchain as a Service platform for implementing government projects.

City Of The Future

Dubai’s vision for becoming the city of the future goes far beyond a blockchain economy. By 2030, 25% of Dubai’s road transport system will be using AI and will, therefore, be driverless. The use of rooftop solar power will be mandatory by 2030 — the same year the country plans to reach 25% of its goal to generate 75% of the city’s energy via solar power by 2050. With what will be the world’s largest 1000 MW concentrated solar power plant scheduled to open in Dubai in 2020, the city should be on track to reach that goal.

Dubai is also home to “Smart Palm Trees,” 3D-printed trees with Fiber Reinforced Plastic (FRP) that act as community tech hubs throughout the city. The trees provide free wifi, city information, and device charging powered by solar. Dubai is also going to be home to the world’s first 3D-printed skyscraper; the first 3D-printed office is already in use. The city is also planning for a hyperloop, and inviting entrepreneurs and innovators with working ideas for technical solutions to pressing problems to join the Dubai Future Accelerators program to foster more great work.

A blockchain economy will be the next step in this process, and it will fit right in. “We have a very clear objective to make Dubai the capital of the blockchain industry,” Ms. Bishr tells WSJ. “By 2020 we’ll have 100% of applicable government services and transactions happen on blockchain.”

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Reasons Social Media Marketing
Is Still Underrated

Unmeasurable effects.

The return on investment (ROI) of social media is hard to measure, and I’ll be the first to admit it. One of your biggest goals is attracting a large following of people who are enthusiastic about your brand, and improving both your brand’s reputation and brand awareness. These aren’t as objectively measurable as on-site conversions, but they can and do lead to greater consumer interest, which manifests as sales eventually. Trying to pin down an exact value for all these benefits is next to impossible, even for the pros, so the value of a social media campaign is almost always underreported.

Anecdotes.

People also use anecdotal evidence as a basis for their opinions about the strategy. For example, they may know of another business who used social media and didn’t see any results, so they stay away from it in the present. However, these anecdotal examples often don’t examine the types of tactics these businesses used, and they certainly don’t represent the average across multiple businesses.

Apples and oranges.

Ironically, these same business owners often cite the fact that anecdotal evidence can’t prove a strategy’s effectiveness for everybody. They point to major influencers or big businesses in the social media world and explain that social media works for them because it fits naturally with their industry, or because they have the resources to invest in a heavy campaign. It’s true that some industries may be naturally inclined to perform better on social media than others; tech companies and consumer-facing businesses are two good examples. However, social media marketing can be used by practically any company—it may just require an adjustment to your approach.

Poor targeting.

Some businesses look at their own results and use those results as a gauge of the long-term potential of their campaign. But they may not realise that their strategic targeting is interfering with their results. For example, if you buy 1,000 followers using some super cheap follower-adding service, but only 4 or 5 of them ever interact with your posts or visit your site, it could be that the remaining 995 don’t belong to demographics relevant for your business, or that you haven’t been using the right engagement strategies to cultivate interest. Don’t underestimate the potential of a well-researched, strategically focused campaign.

 Lack of investment.

Effective social media marketing can’t be done on a whim. It needs to be planned, researched, and strategically executed. That means you’ll need to spend a significant amount of time or a significant amount of money to see results; and since many business owners aren’t willing to make that investment, they never see a fraction of their potential results. By that point, they’ve seen what a small investment does, and they’re unwilling to make the jump to a larger investment.

Social media marketing isn’t an “underground” strategy; it’s talked about heavily (and I should know), and there’s no shortage of content covering its feasibility and best tactics. But the perceptions of marketers and business owners are still lagging behind the evidence, and they’re only hurting themselves in the process. The more you learn about the effective implementation of social media marketing, the more plainly beneficial it seems—but you have to treat it as a legitimate marketing strategy if you want to research it appropriately.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Ways to monetize your
social media followings

Turn your social media presence into a way to generate revenue — even if you don't have a massive following on Facebook or Twitter.

Alan Zibluk – Markethive Founding Member