Nate Nead is the President & CEO of DEV.co, a custom software development company based in Seattle.
Cryptocurrencies are a democratization of typical currencies. They’re not regulated by any single governing body. They’re accessible to anyone with technological access and understanding. And hypothetically, they could be universally accessible. Even more importantly, their existence is maintained, tracked, and governed by the people using them.
This concept has been considered as a platform for something bigger, in the form of asset tokenization; through asset tokenization, physical and conceptual assets could be “democratized” in the same way. For example, a local business owner could tokenize ownership of their business, serving almost like a small-scale version of issuing stock, and paying employees partially in the form of tokens of ownership in the company. Similarly, you could invest in a “share” of an emerging song you like, ultimately capitalizing on a share of the royalties if and when it becomes a breakout hit.
Now, it looks like “smart links,” which integrate smart contracts with existing online link structures, could serve as the groundwork for a new mode of online transaction. But how exactly do they work, and how would they function compared to modern links?
Let’s start with a brief definition of “smart links.” Smart links function much like traditional links, but with a simple, tech-driven twist: smart links natively track when and with whom a link has been shared via an embedded smart contract. Whenever a link generates traffic that results in a revenue-driving action, sharers gets a proportional share of that revenue.
Links themselves have long been a democratizing function in the landscape of the web. Users are free to use links to cite research, recommend resources, and direct traffic however they see fit. And they use links regularly and reliably, constructing a kind of complicated superhighway on the web. Google and other search engines have taken advantage of this for a long time, using both the number and quality of links to evaluate the subjective “authority” of each web domain.
If two sites cover the same topics, but one has three times as many supportive links, that site will be considered more trustworthy, and will therefore rank higher in search engines. In turn, search engine optimization (SEO) has emerged, enabling companies to take control of their own ranking strategies, and link building for SEO has risen to become one of the most popular marketing strategies on the web.
In a way, users are already in control over how links are created and shared—and how they support their favorite businesses and organizations. But the addition of a smart contract would make them a more active and more rewarded participant in this system.
2Key Network has devised the initial structure for smart links, but this is a concept that will evolve in the future, both as 2Key perfects its approach and as other companies and organizations experiment with the idea on their own terms. For now, the general approach is to track each person who comes in contact with a link, associating a wallet with that person. The wallet can then be “unlocked” through any browser offline.
Hypothetically, this could be used for any cryptocurrency network, and even for tokens that don’t yet exist; for example, a company could pay link sharers for their role in generating traffic to a site in the form of tokens of ownership in that site. It’s a wild concept, and one that serves as the imaginary last link in a long chain of development, but it’s certainly conceivable based on the technology to which we have access currently.
Contract creators would be the ones in control of when and how smart links pay off. They’re the ones determining the value of each web visitor, and distributing payment accordingly.
In principle, this could be a massive step forward for online marketing and advertising, as well as encouraging more ethical, more collaborative online interactions and transactions. However, there are a few complications that would inevitably disrupt the status quo.
Here’s an interesting ethical and pedantic dilemma; if you embed a smart link in your own content, hoping to generate traffic to a product page so you can generate revenue, is that considered a sponsored link?
For reference, sponsored links are a modern advertising strategy in which an advertiser pays for their link to be placed in search engine results, in the body of an article, or sometimes, as an article that masquerades as an organic article with a major publisher. Currently, the standard best practice is to acknowledge sponsored links as “sponsored,” marking them clearly so that readers and users know these links have not emerged organically.
Smart links could be considered “sponsored” in a few different ways. Most importantly, money is changing hands; if the link generates traffic, and the user who shares the link makes money, it can be considered a kind of transaction. The inclusion of a smart link is also unlikely to be purely or organically motivated; most users sharing these links will be at least somewhat motivated by the allure of revenue generation.
However, there’s no guarantee that a smart link generating traffic would result in profitability; remember, it depends on the visitor committing some revenue-generating action. On top of that, in a possible future where most (or all) links are smart links, would you then consider all links to be sponsored? What would be the point?
Currently, Google (like other search engines) has strict policies on how links can be built. Because its search ranking algorithm depends heavily on evaluating organic, unbiased links as a measure of trustworthiness and authority, it greatly discourages “link schemes” meant to fool its algorithm or result in the production of unnatural links.
For example, if I link to a bicycle website because I’ve found it extraordinarily helpful, that link can be considered organic; it’s me vouching for this reputable website that I now trust. If the bicycle website pays me to link to them (and I don’t mark it as sponsored), that link violates Google’s terms of service; it’s reading the link as organic, whereas its existence is due to a form of bribery, rather than being the result of earned trust.
So what about smart links? Will they have to be marked as sponsored? And if not, will they violate search engines’ terms of service? We may need to develop rules for links that fall into a gray area here.
Affiliate networks, the most popular being Amazon Associates, allow individuals on the web to build links to individual product pages, then get as much as 10 percent commission on the sale of any products they initiate. It’s a good deal for everyone involved, especially if you have a blog or other platform with lots of traffic.
But smart links could eventually render affiliate links obsolete. For starters, they’re able to track data more reliably. They’re also decentralized, meaning you could hypothetically create them without the help of the “middle man” affiliate network. The emergence of smart links would inevitably disrupt the affiliate link industry, and perhaps come to completely redefine it.
Smart links could also be used to democratize and empower the supporters of charities, bypassing the internet machinations that allow internet companies to profit from charitable endeavors. Instead of competing for clicks on a paid advertising platform, shelling out ridiculous prices per click, charities could opt to feature links to their donation pages through more organic channels. Depending on their goals, they could set up smart contracts to pay users for their efforts in making the charity more visible, or give users the choice to redistribute their payments in the form of additional donations.
The marketing angle itself is more valuable here, since the people incentivized to share these kinds of smart links are more capable of leading charities to the highly relevant, targeted audiences most likely to support them.
Obviously, smart links are still in the early stages of development. There are still many issues to sort out, including how to ensure smart links are being tracked securely and accurately, how to consider smart links in the context of marketing and advertising, and how to make it easier for new users to learn. Additionally, there are many paths for experimentation and development; as smart links evolve, they could come to track far more variables in user behavior (both in terms of how the link was shared and how it was followed). They could also be used for a wide variety of different distribution networks.
In any case, smart links are the natural evolution of standard hyperlinks, and they have the potential to democratize the web even further. Within the next several years, we’ll likely see a full-scale revolution in how we transact (and advertise) online.