Customer loyalty and Blockchain: Björk’s latest experiment [5 reading tips]
The term Blockchain is on everyone’s minds this year and is being thought of as revolutionary. It’s clear that the technology has great potential, but so far the topic is surrounded by unrealistic promises, many speculations, and content that’s on shaky ground. Today we would like to refer to the latest innovation from the experimental singer Björk. It’s not just about bitcoin, but also about customer loyalty, reward, and music.
Blockchain: from centralization to decentralization
For those who are not sure what Blockchain means, here is a brief explanation:
In the physical world you can go to the bakery, order a few croissants for breakfast, and pay the corresponding price at the cashier. The same happens on the internet, but with the help of third parties, such as banks or payment providers like PayPal or Klarna. The currency used is, in both cases, centralised.
However, this scenario changes dramatically when the currency is virtual and is not issued by a financial institution or government. The integrity and liability of the transactions are then ensured according to the principle of consensus.
According to Goldman Sachs, the term Blockchain means:
“A database (with copies of the database replicated across multiple locations or nodes) of transactions (between two or more parties) split into blocks (with each block containing details of the transaction such as the seller, the buyer, the price, the contract terms, and other relevant details)which are validated by the entire network via encryption by combining the common transaction details with the unique signatures of two or more parties. The transaction is valid if the result of the encoding is the same for all nodes and added to the chain of prior transactions (as long as the block is validated). If the block is invalid, a ‘consensus’ of nodes will correct the result in the non-conforming node.”
This new decentralized understanding of transactions fueled by the tremendous advances in software, communications, and encryption, enables businesses, governments, and people to more transparently and securely distribute information or smart contracts.
The best-known uses of the blockchain are in cryptocurrencies, like Bitcoin, but new concepts are also evolving. For example, YouTube and Apple are considering the licensing of Musicoin, a special crypto-currency for music products, as a means of payment.
That sounds interesting, but could it ultimately attract the valuable attention of customers? It’s hard to say. But this is where Björk’s new innovative idea comes in, and it could even revive the dying music industry!
Blockchain as a reward
Recently, Musically has reported that Björk wants to allow her fans to pay for her new album ‘Utopia’ with cryptocurrencies. But how?
The singer has teamed up with British blockchain startup Blockpool. The startup is working on a crypto checkout plugin for the online shop. Thus, it processes the pre-orders of the album not only via credit card or PayPal, but also via Bitcoin, AudioCoin, Litecoin, and Dashcoin.
No matter which payment method is selected and used, each fan will receive 100 AudioCoins as a reward for pre-ordering. This amount is paid by Blackpool into an e-wallet for each fan.
The idea here is that fans can exchange the virtual coins with other cryptocurrencies, keep them as an investment, or exchange them for common currencies, such as euros or dollars. Over the next two years, they can also earn even more AudioCoins, depending on how much the fans interact with Björk’s music, live events, and digital activities.
This type of action goes beyond classic marketing. With that, Björk and Blockpool want to make blockchain technology known and accessible to the fans. They also want to show what other effective applications this complex technology offers (as described above).
The managing director of Blockpool, Kevin Bacon says:
“Why not reward your fans for engaging with what you do, and reward them in a meaningful way?”
In the future, this reward model could be applied in other environments and in combination with other promising technologies such as virtual reality. In fact, in the future you could replicate this action for VR content. Since Björk has previously experimented with VR, she could surprise fans next time.