Provably Fair Online Giveaways and Contests With Blockchain
Giveaways can be a great way to generate buzz around a specific product or service. Sponsoring an online contest will drive traffic to the business’s website, create new followers, and possibly result in new customers. These days, with a simple like, retweet, and follow, it has never been easier for a business to tap into thousands of potential customers. It’s marketing and it can be very effective. According to Change Conversations, giveaways result in an average of over 34% of new customers, brands gain an average of 17500 fans, and active promotions get 15-1769 clicks with an average of 226 clicks. Although giveaways are mutually beneficial events, it’s not all rainbows and unicorns for either party. Putting aside the accounting, taxes, and legal issues that must be dealt with when running a giveaway, providing proof of drawing and winners to thousands of entrants is a challenge. Employee error, lack of visual proof, and distrust are some of the roadblocks to running a successful contest that can often leave entrants with a bad taste for a business’s product or service. Giveaways can often be surrounded in mystery and frustration. As an entrant, ask yourself these questions.
- How many giveaways have you entered in your lifetime?
- How many have you won?
- How do you know who won?
- How do you know the winner was randomly picked?
- Do you even know if they actually picked a winner?
Trust No One….
The phrase can instill a feeling of paranoia but it doesn't have to be that way. It’s possible to have a giveaway that doesn’t require the entrants to have blind faith the business isn’t pulling a fast one. At the same time, it’s possible to provide the business with legal proof of the winner. By utilizing a specified block height of Bitcoin, Ethereum, or even both, Dragonchain’s provably fair giveaway solution ensures a mutually beneficial and transparent giveaway for all parties involved.
Bill, Justin, and Jack Bill Pulte
Let’s first look at Bill Pulte’s Twitter giveaways. All you have to do is like, retweet, and “must be following so I can DM you” to be entered. Here is a situation that, by all accounts, is legit. His giveaways have helped so many and in the process, he is fostering a community of givers. What Bill has been doing is quite amazing. As far as I’ve seen, Mr Pulte doesn’t broadcast his giveaways. How does the community know that a winner was randomly chosen? The answer is, they don’t. They only have faith that Mr Pulte is a man of his word. Or that his employees, who are likely the ones making the winning picks, are properly trained. These giveaways are mutually advantageous. By having giveaways, he accumulates followers to spread his positive giving vibes. At the same time, entrants have a chance at a little, sometimes grand, reward. The problem, though, is the only proof the community has that a winner has been determined is from a video some of the winners post to Twitter, thanking Mr. Pulte for his generosity. The community is left to wonder if the giveaway was random or even if someone actually won. A provably fair giveaway fixes this.
Justin Sun’s Tesla giveaway. The most legen, wait for it….dary giveaway of the crypto community, and not in a good way. If you didn't know here is what happened. Mr. Sun announced an online Tesla giveaway. All you had to do was follow and retweet a particular Justin Sun tweet to be entered. All the entrants would be placed into a pool and using TWrench, a tweet randomizer tool, the winner would be determined. As is usually the case when one thing goes wrong it all goes wrong. Two weeks and almost 54,000 entrants later, Justin Sun uploaded a video of the drawing and the winner. According to Justin Sun, there was a technical issue and the video was removed from Twitter and a new winner was announced. However, because crypto has the best super sleuths, it all unraveled. According to Cryptonary the staff using the tool wasn't familiar with how the randomizer worked. And according to CryptoBriefing, the original video showed the winner's name prior to the actual drawing. It was also discovered that the randomizer tool was used 88 times prior to the winning drawing, likely due to a lack of experience. In the end, after significant backlash, Mr. Sun gave away 2 Teslas. While admirable and good service recovery, whether they are aware of it or not, one of the previous 88 “people” (some were bots) could have been the winner. While this situation may be seen by some in the cryptoverse as nefarious at the outset, it’s likely the whole debacle was a comedy of errors due to inexperience, lack of honesty, and lack of transparency. A provably fair giveaway fixes this.
This story really isn’t about Jack per se but one of his products, Cash App. Who doesn’t love Fridays? The tweet goes out and instantly Cash App has thousands of likes and retweets. It’s a cashtag and tag a friend frenzy. How would we know if there was an actual winner? The answer is, we wouldn’t. Sure, Cash App sends out a few replies but the totals never add up. For all we know, a $10k pot only has $1k distributed. But, what ends up trending on Fridays? Cash App. People get stoked. Cash App benefits by trending and it drives people to their platform in the hopes they sign up. What if Cash App doesn’t reward the full amount? What if you’re a winner, didn’t know you won, and never had your money deposited? Even if it’s a clerical error you’d never know and neither would anyone else. A provably fair contest can fix this.
A New Giveaway
Dragonchain’s Provably Fair System uses a parameter that is almost impossible to cheat, the hash of a future block. The system records all user entries on Dragonchain for time-stamped and immutable proof of pre-qualification in advance of the selection of a winner. For a Provably Fair selection, the system uses combined future hashes of a pre-defined block height on all current Dragonchain Interchains (i.e. Bitcoin, Ethereum, Ethereum Classic, and Binance Chain) providing provable randomness to the selection. It is not possible to know the hash of a block height of any one blockchain much less all four combined before the block is created, thus making it impossible to profitably game the system. As an interesting result of using the system, entrants and non-entrants alike can watch for the block hashes to prove to themselves who the winner is. The community can not only see who the winner is in real-time but verify the results are accurate and provably fair. Recently we successfully and transparently gave away over $40,000 using this system, all results were posted here. Beaxy Exchange is the most recent business to adopt the system and will be using it for all giveaways and trading competitions. Life’s not fair, but our contests are!
Explore Dragonchain’s Provably Fair System for your contest or giveaways, or contact us right away.