Adchain, which uses Ethereum-based blockchain technology tailored to improve the integrity of online advertising, has partnered with decentralised applications studio ConsenSys.

Global ad spending reached $542.55bn (£433.474bn) in 2016, driven by bigger investments in digital advertising – but it's a flawed ecosystem. Digital advertising lacks many of the core building blocks that make it secure, costing the industry billions of dollars a year, said a statement.

The industry's siloed data and limited standards make it impossible to identify many types of fraudulent behavior, and as result nefarious actors exploit gaps and lack of transparency to steal value from the digital supply chain. These issues are exacerbated by continued fragmentation between advertising channels and protocols. The real-time buying and selling of inventory across a wide array of new platforms results in little visibility into who's buying what. A common language to coordinate and eliminate these fraud perpetrators is needed.

Ken Brook, founder and CEO of adChain, said: "Fraud and inefficiencies in the supply chain cost the industry $8.2 bn annually – and that's a conservative figure. Fraud is impossible to audit today. The Methbot discovery, which stole up to $5m daily from top advertisers and publishers, is only the tip of the iceberg and underscores the critical need for a new infrastructure."

Blockchain can provide transparency into the supply chain using a shared ledger which also provides an audit trail. Beyond ad delivery verification, blockchain is also the only solution to provide a universal data set and common language everyone understands and trusts – becoming the single source of truth that all participants can access to work together and eliminate fraud, said the statement.

Joseph Lubin, founder, ConsenSys, said: "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 realise an efficient and fraud-resistant n-sided marketplace. We've been iterating on the adChain blockchain implementation for almost a year and believe adChain will significantly change the way advertisers and publishers operate their supply chains to exchange ad impressions."

Brook added: "We have a big vision and it's one we think ethereum developers will appreciate. The problems that plague online advertising require a scalable blockchain solution and the skills and intelligence of the developer community, who always appreciate a solid challenge. ConsenSys brings extensive technical and market expertise in the implementation of blockchain protocols and applications. They are the perfect partner to bring the two worlds of the crypto community and online advertising together."

AdChain is hosting a workshop series, Xlabs, to educate developers on blockchain development. Developers will also have access to a set of APIs and tools to build decentralised applications (DApps) on the adChain blockchain. The adChain implementation showcases how Ethereum applies to digital advertising and the many problems that need to be solved.