Fred Wilson recently wrote about how Crypto’s promise is not just in the technical but the business model innovation that comes alongside it.
This reminded me of the world of gaming and virtual currencies. In-app purchases and subscriptions are often mapped to coins, passes, candy and other currencies that can be redeemed in an app. Once they have been translated into these virtual currencies, we can similarly innovate on different business models that might work best in a specific scenario. For example, we can use the subscription API to give users coins every month (instead of simple access), and then use those coins to purchase content or pay other users in an app.
This full capability (especially that to pay users with coins) isn’t yet possible with the In-app purchase API’s provided by Apple and Google. But ultimately, the behaviours that have a lot of traction will then get adopted into those platform API’s.
Thinking of Facebook - the world’s largest social network - as a game, the Libra cryptocurrency is their virtual good. Difference being that they’re not the only ones controlling it. It has value pegged to real currency, can be used to trade goods and services, and can be traded in for other currencies on different exchanges. More so, when another app uses Libra, it creates network effect for that currency and the utility value increases for users of Libra. Already, Uber, Ebay, Lyft, Spotify and others have joined. More mature games have multiple currencies running in parallel, much in the same way there are hundreds of possible cryptocurrencies to purchase.
Lot’s of hurdles still to cross, but it’s an incredibly interesting time.