opinion

Despite Volatility, Bitcoin Is Promising

Despite Volatility, Bitcoin Is Promising

Shortly before Christmas, the sexy advertising network made a decision to quietly start accepting Bitcoin (and became the first adult advertising network to also accept it alongside Litecoin and Ethererum). There were concerns about accepting cryptocurrency with the meteoric rise of Bitcoin, that we could be potentially flooded with transactions from people looking to offload their Bitcoin to anyone who would take it while it was peaking in value. What happened instead was quite surprising and different than we expected. Nothing happened. Nobody used it at all, at least at first.

Even as the transactions trickle in, I’m very unsure about my position on Bitcoin and the other “cryptocurrencies.” We are aware that many of our clients hold Bitcoin and the other cryptocurrencies. However, these “currencies” are not behaving like a “normal” currency. Anyone familiar with investing and stocks should recognize the patterns now being seen in the price and volatility of crypto. The large-scale and widespread rise and fall of pretty much all the top cryptocurrencies in a unified way (not just Bitcoin) shows that the value and prices are swinging because they appear to be getting influenced by huge buyers and sellers — institutional and private investors.

The largescale and widespread rise and fall of pretty much all the top cryptocurrencies in a unified way (not just Bitcoin) shows that the value and prices are swinging because they appear to be getting influenced by huge buyers and sellers — institutional and private investors.

On the face, Bitcoin and other coins are failing as a currency because people are not spending them like money. Individuals and companies are hoarding them and day trading them. It’s being invested in more like a commodity than a currency and people just don’t usually treat cash this way. The volatility means that there will be big winners and there will be big losers, and for it to exist and be used as a currency, it has to be stable. As of this writing, Bitcoin is approximately 80% mined and prices will surely stabilize in the long-term, but any significant rise or fall between now and then may create bubbles or the equivalent of hyperinflation. We just don’t normally see this kind of wild volatility or hoarding in “real” currency. This goes to show the trust in the existing countries and financial systems, or perhaps that people don’t recognize the inherent value in mainstream currency.

Before the new year, BitPay (a very large exchange) made a decision of its own. It decided to no longer allow “adult” transactions and started emailing account holders: “Thank you for being a valued BitPay merchant. Due to a recent update in our Terms of Use, we will soon no longer be processing payments for merchants which provide sexually explicit content.”

Some will recognize this familiar battle as the restriction of financial services to the fully legitimate and fully legal adult industry. Bummer … except BitPay’s decision will have zero impact.

While private companies such as BitPay can censor or disallow accounts to anyone they want (and are completely exempt from any claim of violation of the First Amendment) it does not matter if BitPay allows adult or not, because there are still plenty of other companies that will allow it. One can speculate the only reasons for a cryptocurrency exchange to make this decision is because they either just don’t want to be involved with the adult industry (moral objection) or that the bank allowing exchange of crypto to fiat currency (i.e. real money) does not allow or does not want adult transactions.

Worst case scenario, adult companies start accepting payments directly from wallet holders, just like cash. The value of the coins can be looked up for market value and traded accordingly. This is the entire strength of cryptocurrency — no interference from third parties. While BitPay has started to close its doors to adult, there are plenty of others that gladly accept adult transactions.

Beyond this, recently there have been comments like “cryptocurrency is perfect for the adult industry.” Granted, there is a stigma associated with porn. There is also surely interest by some people to hide credit card transactions from their significant other (or government). While porn is legal in a lot of countries, it’s not legal everywhere, but the idea of Bitcoin and cryptocurrency being “good alternatives” to the adult industry should be unnecessary.

It is pure delusion that crypto transactions provide any truly “private” transactions for porn memberships and purchases. You can look up the history and transactions of any Bitcoin address, and if you also know the wallet IDs for the merchants they are buying from, you can see exactly what they are buying (and how much). Future data breaches will surely link wallets to real identities, which could put all of that activity fully into public view. So much for being anonymous!

Adoption of crypto for adult transactions could theoretically be damaging for the industry as a whole. Just like the damage that Silk Road did to the legitimacy and stigma of Bitcoin, the support of questionable or illegal adult websites by crypto payments could damage the reputation of digital currencies as well as the adult industry by association.

One thing is for sure, though. The limitation of supply of cryptocurrencies is truly a financial game changer. Currencies like the U.S. dollar can be manipulated by adding additional money into the supply and can be directly affected by the addition of debt. If these actions lead to the devaluation of U.S. currency, the resulting inflation would steal wealth from everyone holding that currency. While it’s true the prices may swing chaotically in cryptocurrencies right now, at least the amount in circulation doesn’t change based on the decision of central banks and governments.

On the other hand, the widespread speculation of the real value of cryptocurrency, and its future as a currency has already caused temporary damage to the ability of Bitcoin to function as a real currency. Recent articles suggest that Bitcoin can only handle six transactions a second (versus thousands of credit card transactions per second). The sudden interest in crypto has already slowed the speed that buying and selling can take place (due to volume). Over time, the hashes will become more difficult to process, and moving crypto will require ever increasing processing power and capability to profitably solve the crypto hashes. That could potentially drag down the transaction processing speed and destroy Bitcoin’s ability to function as a currency at all. Only time will tell what will ultimately unfold.

Juicy Jay is the CEO and founder of JuicyAds, the Sexy Advertising Network. You can follow Jay on Twitter @juicyads, visit JuicyAds.com or like on Facebook.com/juicyads.

Related:  

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

How to Halt Hackers as Fraud Attacks Rise

For hackers, it’s often a game of trial and error. Bad actors will perform enumeration and account testing, repeating the same test on a system to look for vulnerabilities — and if you are not equipped with the proper tools, your merchant account could be the next target.

Cathy Beardsley ·
profile

VerifyMy Seeks to Provide Frictionless Online Safety, Compliance Solutions

Before founding VerifyMy, Ryan Shaw was simply looking for an age verification solution for his previous business. The ones he found, however, were too expensive, too difficult to integrate with, or failed to take into account the needs of either the businesses implementing them or the end users who would be required to interact with them.

Alejandro Freixes ·
opinion

How Adult Website Operators Can Cash in on the 'Interchange' Class Action

The Payment Card Interchange Fee Settlement resulted from a landmark antitrust lawsuit involving Visa, Mastercard and several major banks. The case centered around the interchange fees charged to merchants for processing credit and debit card transactions. These fees are set by card networks and are paid by merchants to the banks that issue the cards.

Jonathan Corona ·
opinion

It's Time to Rock the Vote and Make Your Voice Heard

When I worked to defeat California’s Proposition 60 in 2016, our opposition campaign was outspent nearly 10 to 1. Nevertheless, our community came together and garnered enough support and awareness to defeat that harmful, misguided piece of proposed legislation — by more than a million votes.

Siouxsie Q ·
opinion

Staying Compliant to Avoid the Takedown Shakedown

Dealing with complaints is an everyday part of doing business — and a crucial one, since not dealing with them properly can haunt your business in multiple ways. Card brand regulations require every merchant doing business online to have in place a complaint process for reporting content that may be illegal or that violates the card brand rules.

Cathy Beardsley ·
profile

WIA Profile: Patricia Ucros

Born in Bogota, Colombia, Ucros graduated from college with a degree in education. She spent three years teaching third grade, which she enjoyed a lot, before heeding her father’s advice and moving to South Florida.

Women In Adult ·
opinion

Creating Payment Redundancies to Maximize Payout Uptime

During the global CrowdStrike outage that took place toward the end of July, a flawed software update brought air travel and electronic commerce to a grinding halt worldwide. This dramatically underscores the importance of having a backup plan in place for critical infrastructure.

Jonathan Corona ·
opinion

The Need for Minimal Friction in Age Verification Technology

In the adult sector, robust age assurance, comprised of age verification and age estimation methods, is critical to ensuring legal compliance with ever-evolving regulations, safeguarding minors from inappropriate content and protecting the privacy of adults wishing to view adult content.

Gavin Worrall ·
opinion

Account-to-Account Payments: The New Banking Disruptor?

So much of our industry relies upon Visa and Mastercard to support consumer payments — and with that reliance comes increased scrutiny by both brands. From a compliance perspective, the bar keeps getting raised until it feels like we end up spending half our time making sure we are compliant rather than growing our business.

Cathy Beardsley ·
profile

WIA Profile: Samantha Beatrice

Beatrice credits the sex positivity of Montreal for ultimately inspiring her to pursue work in adult entertainment. She had many friends working in the industry, from sex workers to production teams, so it felt like a natural fit and offered an opportunity to apply her marketing and social media savvy to support people she truly believes in and wants to see succeed.

Women In Adult ·
Show More