FIELD OF THE INVENTION

The disclosed invention relates generally to Blockchain-based software; and more particularly to Blockchain-based system and method for peer-to-peer online advertising auction.

BACKGROUND

Currently, intermediaries allocate online advertising. Digital platforms centrally auction advertising space on search engine, social media and other web sites based on the consumers' preferences they collect. This approach endangers privacy, leads to ad fatigue and is plagued with ad fraud.

SUMMARY

In some embodiments, the disclosed invention enables a consumer to directly specify her/his needs and to receive cryptocurrency or tokens for her/his attention from advertisers. It replaces the central auctioning of advertising space with two smart contracts that are executed by all nodes of a peer-to-peer network and auction and advertiser oracles. The auction smart contract stores and handles bids advertisers submit to get their ads displayed. The auction oracle is an external software that together with advertiser oracles determines the ad price the consumer receives when viewing an ad using a communication channel smart contract as secure communication channel. Cryptography is used to ensure that the advertisers' bids remain private despite the decentralized execution of the auction.

In some embodiments, the disclosed invention is a computer implemented method for a uniform price auction of online advertising on a peer-to-peer computer network. The method includes: deploying an auction smart contract to publish a need from a consumer; receiving encrypted ad bids by the smart contract from a plurality of advertisers; storing the received ad bids in a hash function mapped to the advertiser's address, wherein the stored ad bid includes a hash of the ad content encrypted with the consumer's public key, a hashed encrypted maximum bid price, a public key of the advertiser, and a hashed verification code, wherein the bid price is a maximum amount the advertiser is willing to pay the consumer for viewing the ad content; receiving an advance payment equal to the maximum ad price; reducing a number of ads that can be displayed by the consumer by increasing an ad price and eliminating ads with bid prices lower than the ad price; transmitting the ad price to the consumer via the peer-to-peer computer network, when the hashed verification code is received from the consumer verifying that the consumer has viewed the ad content within an ad-viewing period of time; transmitting a difference between the advance payment and the ad price to the advertiser, by the auction smart contract via the peer-to-peer computer network; and ending the uniform price auction of online advertising.

The ad bids may be encrypted using a Paillier encryption method. The auction smart contract may include a state-change function for checking whether the state of the smart contract needs to be changed.

In some embodiments, the method further includes storing the auction and communication channel smart contract at all nodes of the peer-to-peer computer network; executing a function of a smart contract by all nodes of the peer-to-peer computer network; and storing all transactions in a blockchain.

In some embodiments, the method further includes deploying a communication channel smart contract as a secure communication channel by the auction smart contract between the auction oracle and advertiser oracles, when the auction state is in an “Auction” state; setting a new ad price and comparing the new ad price to the bid prices to determine a number of ad bids with equal or higher bid prices; ending the auction, when the number of ad bids with higher bid prices is between a predetermined minimum and maximum number; and setting a different ad price and repeating setting a new ad price until an ad price with a number of ad bids with an equal or higher ad price between a predetermined minimum and maximum number is determined.

In some embodiments, the ad bid includes the following status: an Open status, where open ad bids are allowed be viewed during the ad-viewing period; an Outbid status, where the bid price of the ad bid is below the ad price; a Disqualified status, where the advertiser of the bid did not follow the auction protocol correctly; a Penalized status, where the consumer has claimed an advance payment of the disqualified bid; and an Advance Payment returned status, where the respective advertiser has reclaimed the advance payment.

