Imagine an online currency whose sole aim is the distribution of wealth to all who create value and utility. The beneficiaries would be a broad spectrum of end-users, exchanges, payment processors, as well as those accepting micropayments — like writers, photographers, musicians, and game developers — as well as those charged with ensuring the integrity of the virtual currency.
Enter NeuCoin, a global cryptocurrency and micropayment community launched in September of 2015. The brainchild of co-founders Daniel Kaufman and Johan Sandstrom, this Paris-based startup has raised over $2.25 million in funding from scores of investors and partnerships with distribution websites.
NeuCoin’s entry into the cryptocurrency space was aligned synergistically with the debut of complimentary portals like GetNeuCoin.com, a new user tutorial site, as well as the money management engine MyNeuCoin.com. As a part of the launch, 100 million NeuCoin tokens were pre-sold to users for an estimated 4,012 bitcoins. The community itself is ultimately controlled by coin holders — 1 NeuCoin = 1 vote.
This massive push, according to co-founder Kaufman, has been laced with excitement. “Three months after launching our first consumer apps, we’ve hit 300,000 users — and the growth rate is now over 250,000 new users per month,” Kaufman told BTCMANAGER. “We have experimented with many different ways of distributing a few free NeuCoins to users and we’ve learned a lot from this.”
Kaufman believes that NeuCoin has now identified the “magic formula” for accelerating its reach to millions of more users. This involves partnering with big media sites that can give their users one to two NeuCoins a day as an incentive for loyalty and retention.
Thus far, NeuCoin’s efforts in this space have yielded it a presence on media website Mongo as well as music-streaming service Jango, where users will be able to “tip” musicians and Mongo’s media creators. As an incentive, NeuCoin offers consumers 25 NeuCoin if the consumer agrees to tip someone. “This approach has been particularly successful with Jango which is attracting nearly 8,000 users per day for NeuCoin,” says Kaufman who has an extensive background in consumer marketing.
NeuCoin, he says, was designed to serve as a fun, easy online token held by a ton of regular consumers who don’t necessarily care about the larger world of cryptocurrencies, at least not yet. To them, NeuCoin is simply an internet token that appears in a game they like playing or a music site they like using, with little effort needed to accumulate a balance.
“Right now, people can use NeuCoins to tip artists on Jango or as tokens in the Facebook game Solitaire Racer and later SongQuest. Artists can use their NeuCoin tips to buy even more exposure on Jango. Of course, people can also simply exchange their NeuCoins for Bitcoin or other cryptos at Bittrex. Once there are millions of people with a NeuCoin balance, the NeuCoin team’s focus will shift to supporting the development of the NeuCoin ecosystem. Assuming that we can build up a mass market of NeuCoin holders, we have no doubt that all kinds of companies will start offering them all kinds of products and services.”
Creating a “Neu” Model
Similar to other cryptocurrencies that are driven by blockchain technology, NeuCoin employs a decentralized model that makes micropayments an easy, enjoyable experience for users. It is fostered by a fundamental belief that the successful mass adoption of a product or service is largely predicated on factors such as ease of engagement, ability to address a problem or issue, and overall value proposition. And it certainly doesn’t hurt if it’s fun to boot.
This approach offers a unique, off-the-beaten-path branding advantage over digital currencies like bitcoin that are only distributed to miners. NeuCoin, overcomes this barrier to wider adoption by giving users a means of easily acquiring a cache of starter tokens to jump in and try out.
Participants accumulate their tokens in an online wallet where they can then be stored, sent and received — all with the ability to control privacy and security via their own private token keys. They are afforded the opportunity to engage with music, video and other content providers that NeuCoin has partnered with for micropayment-based tipping, pay-per-view, ad-free and micro-subscriptions, all through the freemium currency distribution model. The ultimate goal here is to ensure a seamless process for participants to be able to contribute between $0.10 and $1 to content creators.
To ensure the long-term integrity of the NeuCoin diaspora, Kaufman plans to foster the development of two foundations whose primary role will be to oversee the work of miners. Like bitcoin, NeuCoin is mined. But it differs by not requiring proof-of-work, a measure that ensures miner accountability for their transactions.
NeuCoin’s blockchain technology is derived from Peercoin, which uses “proof-of-stake mining” instead of “proof-of-work mining” (like Bitcoin) as its consensus mechanism. Both proof-of-stake and proof-of-work use math in similar ways. The key difference is that in proof-of-work, a given miner’s odds of completing a block and earning a reward is based on the amount of computing power he has, while in proof-of-stake the miner’s odds are based on the number of coins that he owns. For more details on NeuCoin’s technical design see the NeuCoin whitepaper.
Fostering User Engagement Through Gamification
A quick test drive through the MyNeuCoin portal offers a glimpse of the site’s clear, simplistic model for users. Through a process known as “gamification,” new participants are immediately incentivized to engage in the community — a process that yields a small starter batch of NeuCoins through an introductory quiz — with ongoing rewards for regular participation. Moreover, companies and investors who elect to capitalize on this new currency also are privy to a number of ways to receive coins.
A unique feature of NeuCoin is that individual balances can grow by transferring one’s tokens into Growth Accounts. Here’s how it works: Through the consumer friendly mining system or “growth account” users can set aside funds as their stake for blockchain validation and thereby accumulate awards for blocks completed.
Says Kaufman, “We see this as basically a way to make mining easy for regular consumers. It’s essentially a simple web interface to an underlying proof-of-stake mining pool, but users don’t even have to know that, they just earn some coins in a game or on Jango and if they put some coins in a growth (interest bearing) account — they grow. This is designed to be quick and fun for the broad mainstream.
“We also encourage anyone with the technical skills to do proof-of-stake mining on their own to do that — because those rates are higher. Infrastructurally, this is important to the project because we also want to incentivize lots of pro miners staking many coins and having many nodes.”
Driving this entire approach is the company’s desire for a cryptocurrency that’s user-friendly and well promoted — an attribute where they believe bitcoin falls short. It directly addresses the usability issue that has bedeviled the cryptocurrency world from its inception. For many, acquiring bitcoin can be difficult if you are lack understanding of what it is and where to go to get your questions answered. For many, the use of a credit card online offers greater ease than figuring out the nuances of how to execute a bitcoin transaction.
With respect to next steps in the evolution of NeuCoin, the company just integrated the popular Facebook game Solitaire Racer, as well as a robust tipping and reward program through Jango, which has over 7 million monthly users. And integration with a second Facebook game, Song Quest, is in the works. All of this is designed to further feed the gamification of NeuCoin by placing small amounts of tokens in the hands of millions of regular users through games, entertainment, and social media.
NeuCoin’s Future Trajectory: A Final Note
Kaufman believes that NeuCoin’s most important “big project” endeavor over the next few months is keeping user base growth at a quarter million a month through the Jango partnership. This, he says, will help NeuCoin bring on other distribution partners who are interested in seeing a solid case for how an integration can help them boost user sign-ups, and return visitors to their site.
Looking further out, Kaufman says that after securing another 2 or 3 major distribution partners to catalyze the march towards 10 million users, the focus will shift toward further developments of the NeuCoin ecosystem.
Once we reach our user adoption goals, we are excited to see what kind of ecosystem will develop around a massive community of mainstream users — regular people seeking accessibility to cryptocurrency without having to understand any of the technology or theory behind it.