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VMware Article: What is Container Security?

Author’s Note: This piece was intended for a tech-savvy audience that would not find certain technical terminology daunting.

As security threats and opportunities to tamper with organizations escalate, it’s increasingly important for organizations to assess their system’s attack surface to identify all possible points of vulnerability. Container Security is a critical part of a comprehensive security assessment. It is the practice of protecting containerized applications from potential risk using a combination of security tools and policies. Container Security manages risks throughout the environment, including all aspects of the software supply chain or CI/CD pipeline, infrastructure, and container runtime, and lifecycle management applications that run on containers. When implementing solutions for container network security, ensure your strategies are integrated with the underlying container orchestration to provide context awareness of the application.

Why is Container Security important?

While containers offer some inherent security advantages, including increased application isolation, they also expand an organization’s threat landscape. The significant increase in container adoption in production environments makes containers an appealing target for malicious actors and adds to system workloads. A single vulnerable or compromised container could potentially become a point of entry into an organization’s broader environment. 

Potential threats continue to increase as more access points become available to attackers. One of the most common container security threats comes from malware that is embedded in container images. In August 2021, Docker found five malicious container images with code that secretly mined cryptocurrency using 120,000 users’ systems. In a similar attack, a separate Docker image was pulled 1.5 million times, demonstrating how quickly this type of threat can spread.

A rise in east-west traffic traversing the data center and the cloud combined with limited security controls monitoring this source of network traffic underscores the importance of container security. Traditional network security solutions do not offer protection against lateral attacks. It’s crucial to create specific strategies for securing containers to reduce your organization’s security risks. 

What are the benefits of Container Security?

Container security has become a primary concern as container usage becomes more popular. The increasing awareness about container security is beneficial, as various stakeholders are acknowledging its importance and beginning to invest in it through various platforms, processes, and training programs. 

Because container security is concerned with all aspects of protecting a containerized app and its infrastructure, this focus is leading to a wealth of benefits. Container security is quickly becoming a catalyst and force multiplier for improving IT security overall. By requiring continuous security monitoring across development, testing, and production environments (also known as DevSecOps), organizations can enhance security in total—for instance, by introducing automated scanning earlier in their CI/CD pipeline.

How to secure a container?

While container security is best thought of as a holistic field, in practical application, its primary focus is on the container itself. The National Institute of Standards and Technology published its Application Container Security Guide, which summarizes several fundamental approaches for securing containers. Here are three important considerations from NIST’s report:

  1. Use a container-specific host operating system. NIST recommends using container-specific host OSes, which are built with reduced features, to reduce attack surfaces.

  2. Segment containers by purpose and risk profile. Container platforms generally do a good job of isolating containers (among themselves and from the underlying OS). However, NIST notes that you can achieve a greater “depth of defense” by grouping containers by their “purpose, sensitivity, and threat posture” and running them on separate host OSes. This follows a general IT security principle of limiting the blast radius of an incident or attack, meaning that the consequences of a breach are confined to as narrow an area as possible.

  3. Use container-specific vulnerability management and runtime security tools. Traditional vulnerability scanning and management tools often have blind spots when it comes to containers. This can lead to inaccurate reporting that all is well in container images, configuration settings, and the like. Similarly, ensuring security at runtime is a vital aspect of container deployments and operations. Traditional, perimeter-oriented tools such as intrusion-prevention systems often weren’t built with containers in mind and can’t adequately protect them.

NIST also recommends using a hardware-based root of trust, such as the Trusted Platform Module (TPM) that is suitable for containers and cloud-native development. This strategy adds another layer of security and confidence. It is also important to reinforce your organization’s focus on security by building it into your culture and processes (such as DevOps or DevSecOps). An important aspect of DevOps beyond maintenance and management is monitoring for attacks and protecting the organization.

What are the essentials of Container Security?

  • Configuration: Many container, orchestration, and cloud platforms offer robust security capabilities and controls. However, they must be set up correctly and re-tuned over time to be fully optimized. This configuration includes critical settings and hardening in areas such as access/privilege, isolation, and networking.

  • Automation: Because of the highly dynamic and distributed nature of most containerized applications and their underlying infrastructure, security needs such as vulnerability scanning and anomaly detection can become virtually insurmountable when done manually. This is why automation is a key feature of many container security tools—much like how container orchestration helps automate a lot of the operational overhead involved in running containers at scale.

  • Container security solutions: Some teams will add new purpose-built security tools and support to the mix that are specific to containerized environments. Such tools are sometimes focused on different aspects of the cloud-native ecosystem, such as CI tools, container runtime security, and Kubernetes. Automating as many manual processes as possible through Kubernetes and similar open-source technologies will help to detect issues in real-time and keep your organization more secure.

  • Cloud & Network Security: Network and container security are often discussed in tandem since containers use networks to communicate with each other. But cloud security extends further, including networks, containers, servers, apps, and the broader environment—all of which are interconnected and thus dependent on one another to remain protected. Addressing cloud vulnerabilities must be a priority for every organization. 

What are the common Container Security mistakes to avoid?

  • Forgetting basic security hygiene—Containers are a relatively new technology that require more modern security approaches. But that doesn’t mean abandoning certain security fundamentals. For example, keeping your systems patched and updated—whether an operating system, container runtimes, or other tools—remains an important tactic.

  • Failing to configure and harden your tools and environments—Good container and orchestration tools—just like many cloud platforms—come with significant security capabilities. However, you must configure them for your particular environments to unlock their benefits—default settings will not suffice. Examples include granting a container only the capabilities or privileges it needs to run to minimize risks such as a privilege escalation attack.

  • Inability to monitor, log, and test—When teams begin running containers in production, they may lose visibility into their application health and environments if they are not careful. This is a significant risk that some teams fail to recognize, and it’s particularly relevant for highly distributed systems that run across multiple cloud environments and on-premises infrastructure. Ensuring that you have proper monitoring, logging, and testing in place is crucial to minimizing unknown vulnerabilities and other blind spots.

  • Not securing all phases of the CI/CD pipeline—Another potential shortcoming in your container security strategy is ignoring other elements of your software delivery pipeline. Good teams avoid this with a “shift left” philosophy, prioritizing security as early as possible in their software supply chain and consistently applying tools and policies throughout.

Is Trading One Cryptocurrency For Another A Taxable Event?

Author’s Note: This piece is specifically designed for an audience that deals with cryptocurrency but needs to learn more about how to account for it. Here is the published piece.

The Internal Revenue Service (IRS) has made it clear that the sale of a digital asset for fiat currency (e.g., US Dollars) qualifies as a taxable event that must be reported. And because cryptocurrencies are considered digital assets for tax purposes, the same rules apply. As a result, the sale of cryptocurrency for fiat currency must be reported on tax documents, and any resulting gain or loss must be claimed. Gone are the days when tax regulators turned a blind eye to cryptocurrency investments and profits. 

While the tax implications of selling cryptocurrency for fiat currency are now well established, the tax situation surrounding the exchange of one cryptocurrency for another is murkier. In this article, we will directly answer the question of whether trading one cryptocurrency for another is a taxable event, and we will also provide some additional information about the tax treatment of similar cryptocurrency activities. Let’s start with a quick summary before taking a closer look at how the IRS views cryptocurrency transactions generally and cryptocurrency-to-cryptocurrency exchanges more specifically.

Summary

The short answer is that exchanging one cryptocurrency for another cryptocurrency creates a taxable event and must be reported. However, not all crypto-to-crypto exchanges require you to pay taxes. Keep reading below to learn about the regulations governing crypto-to-crypto exchanges as well as the framework you can use to calculate your crypto-to-crypto exchange tax obligations.

IRS Guidance On The Tax Treatment Of Cryptocurrency-To-Cryptocurrency Exchanges

Tax Treatment Of Crypto Assets

Generally speaking, the IRS treats cryptocurrency assets like property rather than currency. In terms of tax treatment, cryptocurrency is most analogous to stocks and bonds. “Like these assets, the money you gain from crypto is taxed at different rates, either as capital gains or as income, depending on how you got your crypto and how long you held on to it.” 

Before we get into the details of crypto-to-crypto exchanges, it is important to understand that not every crypto transaction is taxable. In order for a specific crypto transaction or activity to be taxable, a taxable event must occur. “A taxable event is any action or transaction that may result in taxes owed to the government.” So, in order to determine tax liability, crypto investors must first identify if a taxable event has occurred. If a taxable event occurred, then the investor must identify how the cryptocurrency was used in order to determine the amount of taxes owed.

What counts as a taxable event?

There are several kinds of cryptocurrency transactions that do not constitute a taxable event and, therefore, do not trigger tax liability. In general, the following types of crypto transactions are not taxed:

  • Buying crypto with cash and holding it: On its own, buying crypto with cash and holding it is not taxable because a taxable event has not occurred. Tax liability is only triggered when the crypto is sold or otherwise transferred, exchanged, or disposed of in a manner that creates a taxable event. 

  • Donating crypto to a tax-exempt charity or non-profit organization: Donating crypto to a 501(c)(3) not-for-profit organization is tax deductible in most instances. 

  • Receiving crypto as a gift: Crypto gifts are treated similarly to buying and holding crypto - tax liability generally does not come into play until the crypto is transferred, exchanged, or disposed of in a manner that creates a taxable event. 

  • Giving crypto as a gift: Currently, with some rare exceptions, you can gift up to $16,000 worth of crypto per recipient without incurring any tax liability. While gifting crypto is often tax-free, it should be reported in most instances. 

  • Transferring crypto to yourself: Businesses and active crypto investors generally have multiple wallets and/or crypto accounts. Luckily, you can transfer cryptocurrency to your other wallets and accounts without creating a taxable event. In fact, “you can transfer over your original cost basis and date acquired to continue tracking your potential tax impact for when you eventually sell.”

Unlike the crypto transactions listed above, many common types of crypto transactions do constitute a taxable event. Accordingly, the following type of crypto transactions do incur tax liability and should be reported to the IRS:

  • Receiving crypto as payment for work: If you are an employee or contractor that gets paid in crypto, you will almost certainly incur tax liability and must report all crypto payments on your taxes.

  • Receiving crypto as payment for goods or services: Companies and individuals that accept crypto payments for goods and services generally incur tax liability for those payments and must report them to the IRS.

  • Receiving crypto rewards for crypto mining: Receiving crypto mining rewards often constitutes a taxable event and triggers tax liability. Tax liability is determined by the fair market value of the rewards at the time they are earned.

  • Receiving staking rewards for crypto staking: Staking rewards are treated similarly to crypto mining rewards in that they are taxed, and tax liability is determined by the fair market value of the rewards at the time that they are earned.

  • Selling crypto for fiat currency: When crypto is sold for fiat currency, a taxable event has occurred, and any gains or losses must be reported. 

  • Using crypto to pay for goods and services: As discussed earlier, the IRS treats crypto like property rather than currency for tax purposes. So if you pay for goods and/or services with crypto, the IRS treats the transaction similarly to other instances where property or assets are used as a form of payment. As a result, using crypto to pay for goods or services constitutes a taxable event, and any gains or losses must be reported. Determining fair market value of the crypto can become somewhat difficult due to the nature of this type of transaction. 

  • Converting or exchanging one type of crypto for another (cryptocurrency-to-cryptocurrency exchanges):  Exchanging one type of crypto for another is considered a taxable event and must be reported even if no fiat currency is involved in the transaction. In terms of tax treatment, it’s as if the first type of crypto was sold for USD, and then USD was used to purchase the second type of crypto.

  • Earning other crypto income, rewards, incentives, etc.: In addition to the taxable crypto transactions discussed above, there are also many other ways to trigger tax liability when dealing with crypto. Some common examples include earning interest from holding crypto, receiving crypto as a reward or incentive (e.g., referring a friend to a crypto company), receiving crypto via airdrop, and receiving crypto as a result of a hard fork.

Tax Treatment Of Cryptocurrency-To-Cryptocurrency Exchanges

How much do you owe on your taxes for cryptocurrency-to-cryptocurrency exchanges?

As discussed above, a cryptocurrency-to-cryptocurrency exchange constitutes a taxable event and creates a tax liability. However, the tax rate for crypto-to-crypto exchanges can vary depending on several additional factors, such as holding time and fair market value. As a result, “The amount of tax owed depends on how long you owned the asset and how much profit you took. If you own crypto for a year or more, you’ll owe long-term capital gains tax when you swap it. 

You will pay short-term capital gains tax rates on exchanges of crypto assets you have owned for less than a year. You pay higher tax rates on short-term capital gains because they follow the same rate as ordinary income.”

When one type of crypto is exchanged for another type of crypto within a year from the original purchase date of the first type of crypto, standard income tax rates apply. This means that any gains that you make from short-term crypto-to-crypto exchanges will be taxed at a rate that corresponds to your individual, joint, or business income tax rate. For reference, the federal income tax rates for individuals in the tax year 2022 are listed below:

On the other hand, if you hold your crypto for longer than one year, you will benefit from the federal long-term capital gains tax rate. In most instances, the long-term capital gains tax rates are appreciably lower than individual income tax rates. In fact, individuals with a high annual income can save as much as 17% on capital gains taxes simply by holding the crypto asset for longer than one year. 

Most businesses will pay similar tax rates on capital gains to those listed above because of the pass-through provisions written into the tax code. Pass-through entities such as S-corporations, sole proprietorships, partnerships, and limited liability corporations “...pay taxes on any realized capital gains from their businesses the same as any capital gains realized from their personal investments. Short-term capital gains are treated as ordinary income and subject to the taxpayer’s nominal tax rate, while long-term gains – those held longer than a year – are subject to long-term capital gains tax rates of 0, 15, or 20 percent depending on the taxpayer’s filing status and income.” C-corporations, on the other hand, do not receive a preferential tax rate for long-term capital gains because they are not pass-through entities. Currently, C-corporations pay a flat 21% income tax rate, which is the same rate that they pay for capital gains.

How do you calculate capital gains or losses for cryptocurrency-to-cryptocurrency exchanges?

Capital gains or losses in crypto-to-crypto exchanges can be found by calculating the difference between the cost basis (e.g., purchase price of the original crypto asset in USD) and the fair market value of the crypto being acquired (e.g., purchase price of the second crypto in USD). 

Determining cost basis for the original crypto is fairly straightforward in most instances. However, there are some situations where cost basis can be a bit more complicated. “When you buy cryptocurrency, your cost basis is generally determined by how much you paid for it. However, if you received crypto from mining or staking, your cost basis is determined by the fair market value when you received it. Your cost basis for gifted crypto will depend on both the basis the person who transferred it to you had and the fair market value when you received it.” 

After determining the cost basis, the next step in calculating the capital gain or loss involves the purchase price of the acquired crypto asset. The capital gain/loss in crypto-to-crypto exchanges equals the price of the acquired crypto asset minus the cost basis (purchase price or fair market value of the original asset when you received it). For example, if you purchased Bitcoin worth $2,000 that increased in value to $3,000 by the time you exchanged it for Ethereum, then your total capital gain would be $1,000 ($3,000 - $2,000 = $1,000). In that scenario, you would report a capital gain of $1,000 and pay tax on that amount at a federal tax rate determined by the holding time of the original asset and/or your tax filing status (individual, married, general partnership, C-corporation, etc.).

Are there instances where cryptocurrency-to-cryptocurrency exchanges are not taxed?

The vast majority of all cryptocurrency-to-cryptocurrency exchanges are subject to taxation. However, there are a few instances that exist in a grey area where tax payments can be avoided or initially appear as though tax payments can be avoided. We will discuss a few of these scenarios below.

Crypto Gifts

As mentioned above, crypto gifts to individuals that are below a certain dollar amount in value are not subject to taxation. Neither are crypto gifts to non-profit organizations. While it may appear as if taxation has been avoided, there has yet to be a crypto-to-crypto exchange. The ownership of the crypto has been exchanged, but the crypto itself remains the same. If anything, the potential tax liability has been passed on to the individual or non-profit organization receiving the crypto as a gift. If the receiver later exchanges the gifted crypto for another type of crypto, they will have to pay taxes on any capital gains. 

Transferring Crypto To Yourself

When crypto is moved from one account to another, it is being transferred rather than exchanged or swapped. As a result, no crypto-to-crypto exchange has occurred. While taxes are avoided, this situation does not generally involve a crypto-to-crypto exchange. 

Capital Losses

In general, crypto-to-crypto exchanges that result in a capital loss do not require tax payments. They do, however, still need to be reported on your tax filings. These types of transactions are not immune from taxation; strictly speaking, it’s just that there is no income to tax. In certain situations, investors can still use capital losses to their benefit by employing a strategy called crypto tax-loss harvesting. 

Like-Kind Exchanges

Like-kind exchanges are a type of “...tax-deferred transaction that allows for the disposal of an asset and the acquisition of another similar asset without generating a capital gains tax liability from the sale of the first asset.” While this definition might seem simple at first glance, there is a great deal of legal nuance and history necessary in order to determine whether an exchange of crypto assets qualifies as a like-kind exchange. 

26 U.S. Code section 1031 established the basic parameters of a like-kind exchange. Prior to the year 2017, section 1031 was thought to apply to various different types of property and assets, potentially even crypto-to-crypto exchanges. However, when Congress passed the Tax Cuts and Jobs Act of 2017, section 1031 was amended and now only applied to exchanges of real property. While crypto exchanges could no longer qualify as like-kind exchanges going forward, the question remained as to whether crypto-to-crypto exchanges could still qualify as like-kind exchanges if the transaction occurred prior to the new law going into effect in 2018. 

Until recently, the question of whether crypto-to-crypto exchanges could qualify as like-kind exchanges had never been addressed by the IRS. As a result, investors were left to decide for themselves whether pre-2018 crypto-to-crypto exchanges qualified as like-kind exchanges. Some investors took a conservative approach and concluded that pre-2018 exchanges did not qualify as like-kind exchanges and that taxes must be paid. Other investors took an aggressive approach and decided that pre-2018 crypto exchanges did qualify as like-kind exchanges, and no taxes needed to be paid. The IRS finally resolved the question in 2021 and decided that pre-2018 crypto-to-crypto exchanges did not qualify as like-kind exchanges. Accordingly, all investors who did not pay taxes on pre-2018 crypto-to-crypto exchanges now owed the IRS back taxes on their capital gains. 

All of this complexity has left many investors with the misunderstanding that crypto-to-crypto exchanges are not taxable so long as the original crypto and the acquired crypto are sufficiently similar. Unfortunately, that is not true. Crypto-to-crypto exchanges are taxable even though it may have appeared in the past that taxes could be avoided. 

Tips For Tracking And Reporting Cryptocurrency-To-Cryptocurrency Exchanges On Your Tax Return

Recordkeeping requirements for cryptocurrency transactions

Most businesses and active crypto investors keep several wallets and use multiple accounts while trading throughout the year. And their investments are rarely limited to just one blockchain network. When it comes time to file taxes, investors must reconcile all of their activity from these various sources in order to have accurate records. 

As we have discussed, crypto-to-crypto exchanges can be particularly thorny from a record-keeping perspective because investors need detailed information in order to calculate capital gains and losses. For example, you need to know the cost basis for every token or coin gifted, bought, exchanged, or sold throughout the tax year. And in order to determine cost basis, you must have information on the date of each transaction and the fair value of the crypto in question on that particular date. The information required for crypto-to-crypto exchanges can span several years depending on the length of time assets are held. Needless to say, if you were to try and assemble all of this information on your own after the fact, you would be in a world of hurt.

Resources for tracking and reporting your cryptocurrency trades

Bitwave is the solution you have been searching for! We offer a highly configurable way to record cost basis and exchange rates so you can easily account for all of your digital assets in one place. And our software boasts over 200 integrations, allowing you to track your activity everywhere you buy, sell, and hold your crypto. Simply put, Bitwave makes tax tracking for crypto-to-crypto exchanges a breeze. Request a demo, and let us show you how we can tackle your toughest DeFi tax challenges. 

Everything You Need to Know About Blockchain Cybersecurity (Chainalysis)

Author’s Note: Any variations in keyword spelling are based on the client’s instructions for SEO purposes.

Cybersecurity and cryptocurrency should go hand-in-hand to ensure your crypto and systems are protected. Cryptocurrencies are built on blockchain technology, which has revolutionized the way we do business and transact with one another. The very nature of blockchain technology—decentralization, cryptography, and consensus—is designed to achieve a level of security based on trust and the absence of potentially corrupt authorities. 

However, the same qualities that are intended to protect the integrity of transactions and ownership also leave it open to security threats. The decentralization feature, one of the hallmark characteristics of blockchain and cryptocurrency, can prove problematic when it comes to security. With no formal or legal structures and no protocol in place to provide traditional financial protection for transactions, there are opportunities for criminals to benefit. 

Why do Cyber Criminals Target Cryptocurrency?

Cryptocurrency is tempting to cybercriminals for several reasons. There is very little formal legislation, it can provide almost complete anonymity, and criminals can flip and convert gains from illegal activities far more easily as compared to an old-fashioned money-laundering scheme. It has also been used as a method of ransom payment for all the reasons just mentioned. Over the years, there has been a notable and steady increase in crypto-based cybercrime as criminals continue to find cracks in the blockchain security systems. 

Blockchain Cybersecurity Threats

Whether you're an individual, part of a business, or an owner, you must understand that blockchain-based cybersecurity threats are out there.

Cryptojacking

Cryptojacking is when criminals gain access to another computer and mine crypto without the users’ knowledge or permission. Hackers use various methods to achieve this, including malicious links, viruses, and phishing. 

Phishing

Phishing aims to gain access to credentials illegally. When it comes to blockchain phishing, criminals use traditional methods to detect keystrokes and mirror screen interfaces to obtain login details and Cryptojack unsuspecting victims.

Trading Platform Hackers

Cryptocurrency is bought, sold, and traded via trading platforms, which require logins and codes like most apps and platforms. Once these details are breached, the hackers use the victim's credentials for their financial gain. In 2021, there were more than 20 significant hacks where the perpetrators stole $10 million or more in digital currencies. By comparison, the FBI reports that robberies of traditional banks averaged less than $5,000 per incident. 

Third-Party Applications

A third-party app is not sanctioned or designed by the manufacturer of the device or the administrator of the site it's offered on. They can be extremely dangerous when it comes to crypto-jacking because it's relatively easy to gain access to the crypto apps and platforms if a user downloads it and provides permission. Understanding the security protocols of third-party apps is increasingly important for businesses. In 2017, during the NotPetya cyberattack, powerplants, banks, metros, and shipping companies were affected by malware that was delivered through a common accounting app in Ukraine. 

Malware

That strange-looking attachment that you just clicked might be malware. Malware related to cryptojacking intends to remain hidden undetected on your computer so it can use your computing power to mine crypto without your knowledge. For crypto miners, it is a significant issue if malware enters their systems. Individual traders who fall victim to malware also put their hard-earned crypto portfolios at risk. 

Investment Scams

Investment scams are fake websites that try their best to seem legitimate. The crypto-related investment scams are prevalent, promising users unbelievable investment opportunities. The keyword here is unbelievable. Once the victim invests part of their crypto with the fake enterprise, they may suddenly find themselves locked out of the account without the ability to contact the scammers. 

Giveaway Scams

Giveaway scams are often used in conjunction with identity fraud, where scammers pretend to be celebrities or well-known crypto personalities. They tend to offer assistance to smaller investors by providing them with once-in-a-lifetime opportunities. Once the investment is made, they disappear along with the crypto. 

Initial Coin Offering (ICO) Fraud

All cryptocurrencies have to start somewhere, and when they do, there's an ICO. If everything is legitimate, it can be a great place to start investing in an exciting new currency. However, when the currency doesn't exist and the ICO is fake, it becomes the perfect platform for criminals to lure people in with an “exclusive” or “limited opportunity.” 

There are many other variations of all of these scams. In essence, cybercrime hasn't changed its modus operandi. The methods have simply been tweaked, and the focus has shifted to crypto instead of credit cards and bank details. Luckily, technology continues to evolve to protect users against looming threats, like Google Cloud’s Virtual Machine Threat Detection (VMTD), which is intended to increase protections against crypto-related malware and hacking. In the meantime, you can protect yourself against these threats by using enhanced security features and trusted providers, combined with instincts, logic, and performing due diligence when checking offers.

The Built-in Protection of Blockchains

Blockchains have various mechanisms to ensure that processes and transactions are fair and sanctioned.

Immutability & Consensus

Immutability and consensus are the two primary ways blockchains attempt to keep themselves safe. Consensus validates transactions via nodes within a network which must all agree on the state of the network. It is achieved via a series of consensus algorithms. 

Immutability is defined by the ability of blockchains to avoid changes to transactions that the algorithms have already confirmed. So immutability can keep crypto transactions and other blockchain functions like NFTs safe. 

Cryptography

Cryptographic hashing functions are vital in maintaining the integrity of blockchain data. Hashing is when an algorithm receives an input of data varying in size and returns an output or hash that contains a predictable and fixed size. These hashes are the unique identifiers for data blocks, which form the basis for secure blockchain transacting. 

Cryptoeconomics

Lastly, a newer concept known as cryptoeconomics adds another layer of blockchain protection. It is based on game theory which models decision-making using rational actors in scenarios with predefined rules and rewards. Cryptoeconomics is the study of blockchain economics and protocols and how their design and function might influence the end user's behavior. The theory, in short, is that there should be more incentive to do good than to behave maliciously.

Even though blockchain has some impressive built-in security features, many of which are evolving and developing daily, there is still a need for some of the more traditional cyber security methods such as: 

  • Identity and access management

  • Key management

  • Data privacy

  • Secure communication

  • Smart contract security

  • Transaction endorsement

When it comes to cybersecurity and cryptocurrency, staying safe is all about vigilance, being savvy, staying up-to-date on the latest security technologies available to you, and getting professionals involved when it makes sense. Taking what works from older security protocols and infusing new strategies will help make you as secure as possible.

AdRoll: The Future of Ecommerce: Sustainability, Social Selling and Other Trends for 2022

The e-commerce industry is continuously evolving, making it difficult for marketers to keep up. This blog discusses the future of e-commerce trends, including sustainability and social selling.

AdRoll Article: E-Commerce Marketing Strategies for 2019 & Beyond

Author’s Note: This is an SEO-style blog adapted to the client’s preferences in terms of keyword usage and possible variations in spacing/spelling.

E-commerce is a rapidly growing and increasingly competitive segment of the retail industry. Keeping up in this fast-paced marketing environment requires responsiveness and forward-thinking strategies. As consumer needs and expectations change over time, and new platforms and technologies become available, it’s critical that your e-commerce marketing strategies continue to evolve and adapt as well. 

Global retail e-commerce sales are expected to reach $4.8 trillion by 2021 according to a report by Statista. Though this translates to an immense opportunity for brands, new challenges are constantly arising. Digital ad costs are increasing (5x faster than inflation), influencers are charging more while reaching less, and competition is on the rise.⁶ So, how will your brand stand out from the crowd? What e-commerce marketing strategies will you employ to establish and maintain a competitive advantage in 2019 and beyond? 

In our e-commerce marketing guide, we focus on the top 5 strategies that your brand can deploy in 2019 to increase consumer engagement, build trust and loyalty, and boost sales and ROI. Our primary focus areas include customer-centric content marketing and SEO, leveraging technology to boost ROI and conversions, social selling and video marketing, Amazon advertising, and mobile.

Customer-Centric Content Reigns & SEO Evolves

Content continues to wear the crown in 2019 as it plays a critical role in every successful e-commerce marketing strategy. If you feel like you’ve been left behind in the heated race to become content creation champion, now’s the time to dive in. Here are a few ways to optimize your strategy or get started from scratch:

  • Launch your blog or increase blog production
    Blogs help to build a loyal, long-term audience, while creating an entertaining experience for your customers. Beyond providing a terrific opportunity to connect with consumers and build trust, posting blogs regularly helps keep your site fresh, which is essential to boosting SEO.

  • Optimize online content for search engines and consider voice search.
    Quality on-page SEO increases rankings and attracts new visitors to your website. Though search engine algorithms are constantly evolving, three factors remain important to rankings: consistency, quality, and relevance.

    The first step to good SEO is establishing a keyword strategy. Identify keywords that make sense for your company and products, and remember that in the modern age of voice technology, you must also consider the way that people search when speaking to Alexa and Siri. As Susan Engleson of ComScore stated, “Voice technology is poised to permeate all aspects of our lives—at home, at work, and on the go.” ComScore also predicts that 50% of all searches will be made via voice by 2020.⁸

    Once you select your keywords, find a natural way to incorporate them into your blogs, web pages, and other searchable content, paying special attention to titles and headings. However, the days of over-stuffing pages with keywords are over (and punishable by poor rankings). So, ensure that your words flow and that your content continues to be enjoyable for your readers.

    It’s also critical to create original content throughout your website—even on product descriptions. Pages that are too similar may be considered duplicates, which would split the SEO value and result in lower rankings for both pages.

  • Create content that speaks to your buyer personas at all stages of the sales funnel.
    In addition to attracting site visitors and building interest in your brand, fresh website content helps to move consumers through the sales funnel. When developing and updating your website, ensure that you have interesting content that speaks to the top, middle, and bottom of the funnel.

  • Capture lead information with enticing, high-value content offers.
    Once your new blogs and web pages attract visitors, it’s critical to capture those leads so you can nurture them through to sale. Identify the types of content that interests your audience and gate it behind a wall that gathers email addresses and other information about your website visitors. Also, consider what format your content offering should take to appeal to your customers. Should forms live on certain pages as CTAs? Should you use lead generation pop-ups? What about exit inquiries? The list goes on.

Leverage Technology to Enhance Customer Experience and Boost ROI

To encourage online sales, it’s important to embrace features that increase buyer confidence and make it quick and easy to find the products they’re looking for—like adding filtering options & improving searchability.

  • Interactive Product Visualization

E-commerce brands that can overcome the downsides of purchasing online will surpass competitors. By leveraging technologies like interactive product visualization (IPV) that enable zooming into details and viewing products from 360°, your brand can help consumers eliminate the guesswork involved in shopping online, make informed decisions, and increase conversion rates.

  • Product Demo Videos

Product demo videos can also support this process by showing how products work. For example, watching a video of a model wearing a particular outfit helps consumers visualize how an outfit might fit, move, and cling to the body during normal use. 52% of consumers say that watching product videos makes them more confident in their online purchasing decision.

  • Artificial Intelligence
    Artificial intelligence (AI) is having its moment in 2019. Though it may sound futuristic and intimidating to many brands, AI is the secret weapon to staying competitive in the modern era of marketing. The term “AI” encompasses a wide range of technologies that substantially increase efficiency and provide meaningful and actionable data—which marketers can use to dramatically increase revenue and ROI.

    Modern marketing must leverage data to continually improve and meet the ever-changing needs of consumers. AdRoll enables marketers to launch complex campaigns across multiple channels, then leave the platform to do the work for them. The AI tools continually analyze the effectiveness of campaigns across ad types and channels and automatically adjust bids to maximize ROI and optimize for campaign goals. With machines doing much of the manual and complex data analysis, your team is free to pursue other aspects of your marketing strategy.

    In 2019, AI will continue to grow and expand in its application, improving everything from the tracking of customer traffic online to inventory management and even automation. E-commerce brands can use AI to see which products appeal to which consumers, analyze how consumers engage with their websites, and determine which types of products are more likely to convert each individual consumer. AI is the key to skyrocketing ROI results and getting the most value out of your marketing budget.

  • Retargeting
    92% of first-time website visitors are not ready to buy and leave without making a purchase. Those opportunities and any related advertising dollars are wasted if these visitors disappear forever. However, retargeting enables e-commerce brands to capture these opportunities and market to them until a sale is made by following visitors across the web on all of their favorite sites—including social media. Visitors are reminded of items they expressed interest in, and receive recommendations of similar items they are likely to enjoy.


    If retargeting is not part of your current marketing plan, it should become a primary strategy in 2019, as it runs automatically and requires little effort from your team. However, it carries the immense potential to significantly increase ROI.

  • Automate your email marketing workflow.
    91% of consumers check their email on a daily basis; making email the number one communication channel.³ When done well, email converts more successfully than any other marketing method and results in higher average value per sale. For every $1 spent on email marketing, you can expect an average return of $38.

    Though email automation is not a new technology, it is a necessary one. By automating your workflows, you can nurture leads and strengthen customer relationships while you work on other aspects of your marketing strategy. By letting the software work for you, you save time and resources, while getting more for your money.

Social Selling and Video Marketing

We can’t talk about marketing in 2019 without including social media. Social media is quickly taking over as the primary method for communicating with consumers, attracting new audiences, and selling products. The ability to shop directly on Instagram has changed the game for e-commerce and has made Instagram a top-priority platform for brands. 

To step up your social media efforts in 2019, consider adding more video content, leveraging user-generated content, and launching influencer campaigns and collaborations with other brands. Partnering with companies that share a similar audience to you to create giveaways and run contests can help to increase page likes and followers through cross-promotion. 

Personalized video messages and 360° video can also deepen engagement with your audience. Forbes predicts that live streaming will become even more popular this year, so consider experimenting with live video on Instagram and Facebook. Remember that every audience is different, so continue to experiment, analyze, and revise until you strike the right balance of content type and frequency of posts for your particular audience.

Amazon Advertising

New reports indicate that 68% of American shoppers head directly to Amazon when browsing for products. In addition, 80% of shoppers who plan on purchasing from a different site still visit Amazon first to read reviews and check prices. Amazon’s ability to attract eager shoppers at their first search attempt is why experts are predicting that the future of advertising is at Amazon and the future of Amazon is advertising. In order to increase visibility, your brand may want to include Amazon in its advertising plans.

Mobile

Experts predict that by the end of 2019, the majority of all purchasing may tip toward mobile. In fact, 2016 saw the majority of e-commerce sales made on mobile devices, and eMarketer estimates that 72.9% of online purchases will be made on a mobile device by 2021.⁸ Add to these predictions the fact that shopping through social media platforms like Instagram is quickly becoming the norm, and you can safely say that mobile is a critical focus for e-commerce now and into the future.

As consumer behaviors, social platforms, and technologies continue to evolve, your marketing techniques will need to adapt as well. Though there are many approaches you can take, by focusing on the critical components in this e-commerce marketing guide, you will be well on your way to taking your brand to the top in 2019 with responsive and successful marketing strategies.

AdRoll Article: 7 Highly Effective Digital Marketing Strategies for 2020

Author’s Note: This is an SEO-style blog adapted to the client’s preferences in terms of keyword usage and possible variations in spacing/spelling.

Modern digital marketing strategy is anything but static. As technology continues to advance, so too must your marketing strategies if you are going to compete and thrive. In 2020, learning how to leverage various technologies to respond to changing consumer behaviors and preferences will be critical to staying ahead of the competition. Here are 7 highly-effective strategies to implement to reach your marketing goals in the new year.

1) Use Insights-Driven Marketing

There are a vast number of tools available to marketers to track, analyze, report on, and automate marketing efforts based on real data from customers and target audiences. Gone are the days of blindly guessing and testing advertising, hoping for good results. In the era of big data, AI, and machine learning technologies, marketers can understand what their audiences want, how they shop, what messaging appeals to them, and where to find them, unlike ever before—all with real-time information! 

A study by McKinsey found that “intensive users of customer analytics are 23 times more likely to outperform their competitors in terms of new customer acquisition than non-intensive users, and nine times more likely to surpass them in customer loyalty.” This is likely why 41% of survey respondents said that data analysis is the most desired skill for new hires in 2020.

2) Employ Chatbots & Conversational Marketing

As technology develops and big companies like Amazon provide more real-time, 24-hour support to consumers, the general shopper’s expectations have changed dramatically. Consumers expect immediate service, with 42% of people expecting a response within 5 seconds and 36% expecting a reply within 5 minutes. To meet rising demands, companies are starting to exchange inbound phone support, call centers, and other human services for AI / Machine Learning chatbots. Unlike humans, these bots can provide quick communication with potential customers 24/7—answering questions, helping to find website content, and even upselling—all while saving costs!

3) Build Trust and Transparency

Trust is a crucial component of any brand and should be a priority for every digital marketing strategy in 2020. In every interaction with your audience, focus on building trust, and emphasize transparency. As mistrust for technology companies and concerns over private data usage continue to rise, it’s never been more critical for brands to build open and honest relationships with their audiences. Companies producing transparent and easy-to-digest information are likely to retain 94% of their customers.

4) Focus on Customer Retention

Existing customers contribute massive value by becoming repeat customers, leaving helpful reviews that boost buyer confidence, and bringing in new customers through their referral networks. In addition to the fact that new customers cost 5 times more to acquire than it costs to keep an existing customer, repeat customers also spend 300% more money and tend to purchase more expensive products with confidence. 

While customer retention has always been a valuable part of marketing efforts, the importance of healthy, long-term customer relationships continues to grow. Luckily, greater access to customer data also makes it far easier than ever before for marketers to understand their customers and provide offerings that will entice them to become loyal patrons and 5-star references. Happy customers are essential to creating a healthy referral program. These programs are vital to every modern digital marketing strategy since consumers are more likely to make purchases based on recommendations from friends, family members, influencers, or other forms of social proof.

5) Continue Working with Influencers

The influencer marketing industry is expected to hit $10 billion by 2020, in large part because of the massive impact that social media has on today’s consumers—with 74% of people trusting the information on social media to make purchasing decisions. So long as 86% of women continue to use social media for purchasing advice and 49% of all consumers depend on influencer recommendations to make purchases, this will continue to be a major focus for digital marketing teams.

Influencer campaigns also help to circumvent ad-blocking technology, which has become a serious issue for brands. 40% of customers use ad-blockers on laptops and 15% on mobile. As ad aversion continues to rise and ad-blockers become more popular, partnerships and creative approaches to marketing will help to overcome these new hurdles. 

If you’re not working with influencers, you may be missing out on a huge opportunity to gain credibility, broaden your reach, and acquire new customers. Though the cost of influencer campaigns continues to increase, brands are still gaining strong ROI from these marketing activities, earning an average of $6.50 for every dollar spent. If you don’t have influencers as part of your digital marketing strategy, it’s time to update your approach in 2020.

6) Optimize for Voice Search

Voice is one of the biggest online marketing trends for 2020. Over ¼ of all US adults own a smart speaker, and 31% of smartphone users around the globe use voice-activated search. This demand for voice technology is only predicted to grow, with analysts estimating that 50% of all searches will be conducted by voice in 2020. 

So, how does this affect your digital marketing strategy? Primarily, it means optimizing your website content and SEO strategy by considering how people search by voice. The most critical change to make is to include long-tail keywords in your plan. When a consumer types a search, they will often shorten a query to just “instant pot recipe,” for example. However, when they use their voice, they tend to ask a complete question like, “what is an easy instant pot breakfast recipe?” That change should be reflected in your keyword choices to compete for those search results. 

7) Leverage AI Technologies to Boost ROI

Automation and AI are trends that will continue to grow and evolve as technology advances. For now, one of the key technologies to focus on is the AI-driven ad-serving tool. These tools provide a single platform for all of your advertising efforts and use AI technology to continually optimize your advertising efforts based on real-time data. 

Key features, like retargeting campaigns, leverage data to personalize campaigns for individual ad viewers in a way that boosts CTR and conversions. Smart bidding features work even when your team can’t to automatically allocate your budget based on ad performance. 24/7 campaign optimization results in massive value to your company through cost savings and a significant boost in ROI. Technologies like AdRoll enable you to get the most for every dollar spent with minimal effort and resources, making this technology a must-have in 2020.

Digital marketing strategy is continually evolving to meet consumer demand and the new requirements placed upon marketers by updated algorithms, new social media channels, new consumer technologies, and the like. Though it can sometimes feel nearly impossible to keep up with all of the changes and best practices, these 7 high-performance strategies will help you get a jumpstart in 2020.

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