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Worlds colliding: where telemedia meets cryptocurrencies

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Bitcoin and its fluctuating value maybe all over the headlines, but that hides the true value of cryptocurrencies. Here Rory Maguire, MD, aimm, takes a look at why businesses should be looking seriously at them – they might just be the future of payments

Cryptocurrencies are hot news at the moment, not because of any revolution in consumer spending capability, but because they can make you very rich- or very poor – in a matter of weeks.

If you own a part of a Bitcoin and have for a long time, then the time to dispose of it was when the tabloids were talking about how high the exchange rate was. It peaked at over $19,000 before falling back to just over $7,400 due to profit taking, fear of increased regulation and nervousness that the bubble may burst – a self fulfilling prophecy.

But why would people own a Bitcoin for several years? Apart from trading on sites that get governments departments and financial regulators worried and being a volatile investment vehicle it had virtually no use for us everyday humans.

Now, the landscape is changing and it’s time for the global Telemedia companies to move in and bring their expertise into the equation. The catalyst behind the change is the rapid emergence of other digital currencies – currencies that are built for a single purpose and the growth of exchanges to allow interchange between the currencies.

These new digital currencies are generally launched onto the internet through a process called “Initial Coin Offerings” or ICO’s. Basically, anyone can buy the digital coins, and they don’t really have a present day value apart from what was paid, but they may have a future value.

This is where the speculators move in. The future value is primarily based on a combination of adoption and usage, linkage with the value of other cryptocurrencies and scarcity. The most important aspect is that a digital currency exchange will take it on board enabling holders to swap their Ethereums for Ripple, their Litecoins for Dollars, Dash for Euros – you get the picture!

Cryptocurrencies or Digital Currencies all benefit from the same aspect in that once a consumer converts their sovereign currency into a digital currency, it can float free of the restrictions related to the sovereign currency. Who can use it, for what purpose, in which location, to what limits, and how you can earn it etc. all fade away.

The other common aspect about digital currencies is the back-end processing-intensive Blockchain technology (see page 13) that performs simultaneous encryption and ledger transfers to maintain the integrity of every digital transaction without dependency on banks to keep tabs on what is moving where.

This is where companies that plan to enjoy a contained and lasting relationship with their customers are looking at digital currencies, blockchain and exchanges to facilitate this relationship.

Singapore Airlines has announced a private blockchain enabled app using KrisFlyer air miles as the currency. App users can spend in a contained environment of retailer partners and earn by buying / flying air miles and the private blockchain technology keeps a full audit trail track of the transactions.

One UK based football club is experimenting with a digital environment with its fans facilitated through its own digital currency. Fans can buy the currency through an exchange, spend it on tickets, half time beers and t-shirts, earn it through attendance, competitions and recommend-a- friend schemes and exchange it back to sterling if the need exists.

This also improves the mobile engagement with the fan base post-GDPR as this is now a “club membership conversation”, not a “marketing message”.

Digital currencies are fuelling the online gaming environments from multiuser role playing games to casino type online environments. Conversion from sovereign currency to digital remain relatively anonymous and de-restricts the global nature of player to player gaming.

At aimm, we are also seeing a willingness from mobile operators to expand their Direct Operator Billing (aka Carrier Billing) capabilities to embrace digital currencies where the spend occurs in a closed environment and not for speculative purposes. A digital wallet, funded through the mobile account means a more tactile relationship between the consumer and their online spending and moves the consumer post-billing enquiries to the digital wallet provider and away from the MNO’s front line staff.

The Telemedia industry should be embracing, inventing and operating digital currencies with blockchain capabilities behind it to support every transaction. Smart users will be the early adopters and a relaxation away from some over restrictive regulation built up over the years will restore the innovative flair of Telemedia companies.

Author

Rory Maguire is Managing Director, Association for Interactive Media and Micropayments (aimm)

Which companies are already taking cryptocurrencies?

BitCoin may get all the headlines – and it may look volatile right now – but many big names are already betting on cryptocurrencies as a payment method. Here are some of the names you may have heard of who are already using crypto.

Microsoft

Yep, the mighty software company uses Bitcoin on Xbox and Windows stores to allow the purchase of games.

Dell Computers

You can also buy a Dell computer from the manufacturer using Bitcoin/

Tesla

Forward thinking in automotive doesn’t just mean sending a car to Mars, it also means taking cryptocurrencies. Indeed, someone has already bought a model S using Bitcoin.

Save the Children

It isn’t just commercial organisations that are turning to new currencies: leading children’s charity Save the Children now accepts donations via Bitcoin.

Steam

Game company Valve has partnered with Bitcoin payment service Bitpay to bring everyone’s favorite Cryptocurrency to games platform Steam. It’s the Worlds most popular Online gaming platform with more than 125 Million users, who can now easily buy a game paid for with Bitcoin.

OKCupid

One of the world’s most popular dating sites, will now introduce Bitcoin to millions of people who have yet to hear of it. Bitcoiners can now pay for a list of functions at the OKCupid website, such as PM’ing individuals with priority messages.

Newegg

A popular niche marketplace that trades in electronics and computing equipment accepts payments in Bitcoin.

Magnificent Tea

A company on a “Mission To Rid The World Of Terrible Tea”, this dedicated Tea club in the UK accepts Bitcoin.

Zynga

Social gaming giant Zynga has announced that it will be accepting bitcoin for in-app payments in selected games, as a “test” with payment processor BitPay

Virgin Galactic

Yep, you can book your ride into space using Bitcoin on everyone’s favourite space tourism company.

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Editor and content creator for Telemedia – for 18 years and counting

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