New-technology-induced investment bubbles are utilitarian. They last moderately long and do not prohibit life-changing profits for those outside the financial industry. They also create naturalistic startup incubators and subsequently take humanity to the next technology level.

Let’s look at bubble-time investments once more. If the dot-com bubble taught us anything, a primitive but important tool to avoid poor investment decisions was to stop for a minute and ask yourself “can a player in this market segment really win from super-magic connectivity of users and providers?” Buying groceries over the Internet always looked more klutzy than booking a hotel online, so there we have the contrast in values of investments into Webvan and Priceline, respectively.

However, a bigger and nastier disequilibrium lurked elsewhere: at the time of the bubble growing, it was clear the online stock trading segment itself was already benefiting from a fast and convenient telecom tech while Internet-induced advantages for virtually every other business were dubious. Thus, the service-level infrastructure has been heating up the market itself while it was supposed to be detached and limited to the delivery of buy and sell orders.

Today, deep into the crypto-assets bubble, we place the same blood test construction on it. When we try to inspect a company questioning whether it can really win its competition by going “decentralised” or “blockchain-ized”, we try to compare three alternatives: (1) the best of competing incumbents; (2) the proposed decentralised approach, and (3) a sober hybrid of the two. Projects that abuse the entire decentralisation concept are rare but those who overcook it are not.

The second (stricter) checkpoint inspects whether the project behind an examined project has over-average chances to survive the inevitable coin market crush. Just as during the dot-com times, the infrastructural incentive eclipses the project-level interest. And ICOs are, to large extent, “unintentional scams” where even good teams get spoiled by easy money.

One way to tell a good offering from a bad one is to ask yourself whether the system given really needs a freely traded “native” blockchain token. Until yesterday, the only project that — according to our collective common sense, of course — passed both checkpoints with ease was Bitcoin itself.

But that was yesterday and today brought us some positive news.

What gives adChain some big extra social standing among the neighboring ICOs is complete, full intelligibility.

We think the value of adToken should have some strong support because it is a rare example when an open market for a token is both a necessary and useful thing, not just a crowdfunding tool.

The adChain Registry project intends to fix the colossal problem of online advertising. Unlike tokenized shared workspace or even global lack of distributed computing, this problem is twitching. As James Young puts it, blockchain can do much in the way of “coordination cost savings” for the ad industry. And they call everybody to come and help. Decentralization at its best! I think it would be well to acquiesce in their call.

Why has coordination become an issue in advertising after all? Project authors point to systematic fraud and misaligned incentives within the RTB and other frameworks, but I suppose the problem is broader.

The root of evil is that the Web itself has lately become dominated by pseudo-science. In other areas of life, pseudo-science serves only as a reserve player and is mainly let out in bush league fields. Homeopathy, for instance, has comparatively small global revenue share. Psychotherapy and Feng Shui are only popular on a limited number of markets. It’s not so in the consumer Web.

The general recipe of a pseudo-science is to “look scientific”, i.e. to calculate something and formulate some “Laws”. A pseudo-science has a hard time surviving through an initial period of public acceptance, but if it’s lucky it can later exist for indefinitely long. Once people get used to a practice given, they stop questioning it and assume something being “scientifically proven once and for good” giving it the same level of respect as a GPS they use every day (which uses conclusions such as the theory of relativity to function). Unfortunately, in the Web, very few oligopolies have managed to persuade their false version of attention economy “science” so it has gained broad adoption.

The dominant “cost-per-mille” and “cost-per-click” advertising models pretend to be well quantified and efficacy-correlated (at least, compared to offline ads). They are not. The models are too primitive and easy to fool. The same is true about the main method of measurement of content quality. “Likes” surface up a lot of junk content. Again, this sort of quantification is trivial and its dominance buries much good content under tons of “popular” and yellow stuff. As the result, everybody loses: users suffer an ever-worsening average level of content quality and obnoxious ads, while brands have less and less utility from advertising that now seems to be a systematic fraud of bots with the ad-blocking fireball on the downward spiral orbit.

Worst of all, the closed circle of evil was created on top of those feedback loop abuses: publishers and dozens of breeds of online advertising segment inhabitants have learnt how to make more and more money on the problem, although in short-term only, now ad-blocking seems to be killing all of it including the free Web itself, but that’s another story. Anyway, online ad space has become a complete mess:

The adChain Registry is a witty take on the problem. The devs say: “forget about everyone but publishers. The problem to focus on is the dirty pool of ad inventory supply.” And rightly pointed out, as a brand manager who needs to advertise, one has little chances to have ads placed on good websites only. No matter how hard you try, unless you do it manually, one-by-one, limiting your exposure to very low levels, your brand will certainly be exposed on the wrong sites with inferior content, which, not uncommonly, steal your ad money.

So, we [the people] will now decide which publisher is good [yes, the binary decision] or bad. Let’s heal that [most important] segment “forcefully” and the rest of things will catch up. No need to mess up with the over-complicated ecosystem of programmatic (RTB) relations whatsoever. Let the wrongdoers die from suffocation once we take poison gases they breathe away from the room.

adChain Registry is building an economic game (play for money) and a clean pool of ad inventory supply.

Fair and Effective Incentive Cycle Between Advertisers, Publishers, and Public

So, this time we see some good tokens serving the good. Public = token holders. Token holders filter good publishers [domains] from fraudulent and low-quality ones. Important: token emission is one-time-forever; token is money, and participants play a profitable game. You, as a token holder, can pick any website that is not yet marked good or bad. Publishers are part of the public so they will try to whitelist their sites. If a player thinks the site is good and he also thinks that other people may also think it is good, then he bets some tokens on it. If the vote result is in his favour he wins money, otherwise he loses. The crowd voting could well be biased. However, in most cases, voters should act rationally and settle in productive “teams” for or against a particular applicant’s domain. We’re simplifying it here but the essence is that those who perform good diligence can win some tokens and those with poor judgment or wrong intentions will lose tokens.

Since people who need advertising will quickly learn about the Registry, more and more publishers will want their domains whitelisted so they will need to buy tokens to place bets on the game. That closes the demand circle. The price of the token will grow with the popularity of the docket.

The “game” effectively decouples the incentives of those who decide which publisher is good (the public, i.e. gamers) from those involved in the advertising business. adChain does not fix the problem, but it allows the advertising industry to see the line where the fraud starts.