The word ‘entrepreneur’ implies several different meanings. One of them is to be at the forefront of new ideas and trends that will lead to success.
This definition explains why so many entrepreneurs are so enthusiastic about cryptocurrency and the world of possibilities behind it. While Bitcoin is now mainstream, some of the emerging uses of the Blockchain technology that powers it are not.
Creator coins are one such use. Combining cryptocurrency with social media, it looks set to transform how we do business online.
What you'll learn 👉
What are Creator Coins and how can we use them?
Creator coins are customized digital tokens that a start-up can launch within its own community. They can use these in several different ways to benefit both the business and its customers.
One way is for the business to reward customers for their support; like when they refer it to someone else, or buy their products more than once. This might also include airdrops – coin giveaways – for people who hold a certain amount of the coin.
Businesses could also establish an entry system to extra products or a premium service, much like airlines already with ‘air miles’ points systems. Again, these would permit coin holders with a certain amount to gain priority over non-coin holders.
The final use would be for customers to use the coin to tip the start-up for good service, or even use the coin to buy a product, service or event tickets that the business offers. It’s effectively a discount, as the client is having to find less fiat cash, but it also drives another important factor – the growth in value of the coin.
Whenever each of the above uses are put into action – whether it’s rewarding a client or offering them coin-related discounts – the value of the coin goes up. Established cryptocurrencies like Bitcoin and Ethereum are prime examples of this: usage correlates with value growth.
On the flip side, when people sell the coin in bulk, as seen with crypto whales, the price of the asset plummets; so, the onus will be on the start-up to encourage holders to keep the coin through continuous incentives.
Then, should the value of the coin go up significantly, customers could even start to take regular earnings from it, and the start-up will, of course, benefit from the increased value of its coin stash.
How do we make a Creator Coin?
Creating a new coin is surprisingly easy. Platforms such as Rally, the first venture of its kind when launched in July 2020, allow creators to launch coins tied to their digital communities. Each creation is based on the $RLY coin, which is powered by Ethereum (ETH). Rally is a sidechain to the ETH blockchain. It gives you ERC-20 tokens that can be converted to ETH, or fiat currencies like the Euro or USD.
So, let’s say you launch one million of your own coins on Rally. While this may sound an intimidating amount involving sums of money the size of a lottery jackpot, your virtual stash will be worth nothing – but it will also cost you nothing to create.
The idea is to offer them to your digital community – whether it be customers or partners – in the form of airdrops; or accept them as a form of payment, as mentioned above. This activity will help to drive the price of the coin up, resulting in a higher value to you and your stakeholders.
Are there any dangers we should be aware of?
Platforms like Rally – and rival BitClout – are bound to regulations that prevent them from charging sky-high fees for creating the coins. Their emphasis is more on building communities rather than profiteering.
This doesn’t mean that creator coins are safe from speculators, though. As we’ve seen with crypto in the past, ‘pump and dump’ operations are designed to make a quick profit, causing the coin’s value to plunge in the process.
The emphasis, then, will be on the start-up to encourage slow but steady growth, rather than rollercoaster ups and downs. Holding onto the coin, or spending it to support the business, will be the key in doing this, rather than selling it for short-term gain.
What are some famous examples of Creator Coins?
Creator coins are already a reality for many start-ups. One of Bitclout’s most successful users is HighKey, an online brand strategist. With the HighKey Coin, the start-up has built a solid rewards system for clients who earn coins for positive contributions to the business. HighKey also issues regular giveaways to drum up interest.
Leading content marketing specialist Copyblogger, too, has launched a coin called $MOVE. In return for holding the coin, community members receive discounts on Copyblogger products, and access to the platform’s high-tier content. At the time of writing, the coin is listed with a value of $2.98 on Rally.
With more projects like this coming to fruition every day, the creator coin movement is growing. 2022 might just turn out to be the year that online entrepreneurship formed a dream alliance with crypto.
