Cryptocurrencies are the new star on the block, and social platforms are already jumping on the bandwagon.
What Are Cryptocurrencies?
I’m glad you ask. To understand the power of cryptocurrencies and their true potential with regards to the digital space, it’s important to have a basic of understanding of what they are.
The short answer: cryptocurrencies are digital currencies, designed to be anonymous and secure. Here’s a more in-depth definition.
Benefits of using cryptocurrencies include:
- Privacy and anonymity – public keys are used to identify people as opposed to their real identities, meaning identity theft is essentially impossible.
- Security – cryptocurrencies are digital and encrypted making them much harder to steal than, say, a wallet full of cash.
- Availability and speed – send money to essentially anyone in the world with almost instantaneous transactions.
- No middlemen – no third-party involvement means that unlike banks, credit unions and so on, there is no risk of being charged excessive fees or restricted access to funds etc. You set the terms of service.
Consequently, there are thousands of cryptocurrencies available right now. Most noteworthy players in the game include Bitcoin, Ether, Litecoin and Ripple.
The Cryptocurrency Trend (Or Just a Bubble?)
Cryptocurrencies are clearly on the rise. As I write this, 1 Bitcoin is worth as much as €5002. A quick Google Trends comparison confirms the rising trends.
Despite the upwards trends and the increasing value of Bitcoin and other currencies, critics suggest that we are simply experiencing a cryptocurrency bubble.
These currencies are typically dismissed due to a lack of third party mediators and regulators. Furthermore, there are those who suggest that they have “no intrinsic value” and are used for criminal activity. It is worth noting that Amazon was also called a bubble and criticised in similar ways. What do you think?
How Can Crypto Revolutionise the Digital Space?
As more and more businesses and websites start to accept payments via Bitcoin and other altcoins (alternative coins), social media and digital platforms are jumping on the bandwagon.
Kik, The Canada based messaging app recently closed its ICO (Initial Coin Offering) for its very own cryptocurrency – Kin. The ICO resulted in an initial investment as much as €42 million. Kik’s mission statement for Kin is to create “a decentralised ecosystem of digital services for daily life”.
Kik is not alone in this pursuit. IndaHash, an award-winning app connecting influencers with global brands is in the process of opening IndaHash Coin for its ICO.
Why are these companies moving in this direction?
Because the benefits are clear and the potential huge. These include:
Single Currency, Single Platform
Users will have the ability to pay for services via a single digital currency, which include benefits of cryptocurrencies such as efficiency, privacy and the lack of excess fees.
Incentive to Engage
Platforms can further incentivise users and influencers to engage with content. How, you might ask. Kin’s economic model is a great example. Kik’s model allows users to an earn currency through their interactions with brands and content. The curreny can then be spent on services and advertising within the platform.
More Choice, More Innovation, More Freedom
Users create an “open ecosystem of tools for digital communication and commerce that prioritizes consumer experience”. This means users become the main consideration of the model when it comes to digital services. The possibilities are endless when cryptocurrencies are introduced as a way to reward, incentivise, simplify and secure user interactions online.
In conclusion, the potential for cryptocurrencies is massive. With countries such as Russia and China looking to regulate or outright ban crypto activities and a market that continues to resist and grow despite all this, it will be interesting to see what lies ahead.
Daniel S. Perera, MSc Digital Marketing Strategy
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