Dethroning Visa: Blockchain Technology May Enable Greater Transaction Speeds than the Payments Giant

Featured – The advertising technology sector, usually abbreviated to AdTech, is a vast and growing industry – but it’s going through some growing pains. One of the most challenging processes in the digital advertising industry is ensuring that pay per click, or ‘PPC’ ads, are tracked and served effectively. Visitors arriving on a website through PPC ads are 50% more likely to make a purchase than organic visitors, and in 2017 alone, over $10 billion was spent on PPC ads.

With such substantial financial incentives, and as adverts are served to millions of people worldwide each day, the infrastructure powering the AdTech industry has to be robust. That’s why AdTech professionals are now looking to blockchain technology to provide transparent and decentralized solutions for delivering ads.

Some of the most promising of these companies are delivering platforms that boast large transactions per second (TPS) and smart ways to reduce ad fraud. For example, one innovative new AdTech start-up, the Bulgarian-based AdEx, is leveraging its decentralized protocol to deliver a faster TPS than payments giant Visa. Here, we take a more in-depth look at their new AdTech platform.

More transactions per second than Visa?

American payments giant Visa processes 150 million transactions per day, from over 3 billion unique credit cards. As you might imagine, this generates a huge amount of transactions that require processing every second. To meet this demand, the Visa network is able to handle up to 1,700 TPS.

However, in a recent press release, the AdEx Network shared how their newly released platform can process up to 7,500 TPS for advert micro-transactions. Using blockchain technology, AdEx processes payments for every ad impression generated through the AdEx network and stores this information on the blockchain – providing a reliable and immutable record of ad engagement.

Since their invite-only platform went live in June 2019, the AdEx Network has generated over 11 million transactions in just two months, during 108 campaigns through 17 unique publishers. AdEx’s 7,500 TPS during public benchmarking currently puts the network’s transaction capacity at more than three times that of Visa.

How does AdEx work?

Established in Sofia in 2017, AdEx has initially been a decentralized ad exchange, before launching its own full-stack protocol for digital advertising. The founding principles of AdEx are centered around providing decentralized solutions for inefficiencies in the digital advertising industry, including high incidences of ad fraud, low transparency, and a lack of privacy.

The AdEx network is powered by an open-source blockchain protocol, developed and deployed on top of the Ethereum blockchain. Called the ‘AdEx Protocol,’ AdEx’s solution functions similarly to traditional advertising platforms by providing real-time tracking of ad impressions and facilitating the trade of advertising space and time.

However, by virtue of its underlying blockchain technology, the AdEx protocol is able to provide a second layer of verification for ad impressions, proving that real interactions have taken place, and recording transactions made between ad publishers, advertisers, and the customer.

Scaling the AdEx Network

Those familiar with blockchain technology know that scalability, the ability of a blockchain to handle a high number of simultaneous transactions, has been a persistent issue. To maintain a high TPS, AdEx has developed a novel solution they call ‘payment channels.’

AdEx payment channels, which they developed under the codename ‘OUTPACE,’ eliminate the complexity involved in current scaling solutions. Instead, AdEx’s payment channels are processed off-chain but settled on-chain, which not only contributes to a high TPS, but it also significantly reduces transaction costs.

For advertisers, this high TPS and low cost mean that multiple parties, in this case, publishers, can be paid using a single channel. In practice, this allows advertisers to run the same ad campaign across multiple different publishers with much greater ease.

The future of digital advertising?

So, will decentralized solutions be the future of digital advertising? With blockchain-based platforms such as AdEx, there are more options than ever before for advertisers and publishers to take back control of the way ads are served and interacted with. Through an open-source and decentralized protocol, ad fraud and other dishonest activity could be virtually eliminated, making digital advertising fairer and faster for all parties.