Page 53 - AVN February 2018

“The intimate token is taking the benefits of crypto
and tailoring them to the unique requirements of
the adult and sex tech industries,” Callon-Butler said
about their upcoming ICO.
As a peer-to-peer payment network, using third-
party processors is not required to send or receive
payments, though many businesses in adult want
to use cryptocurrency processors to make handling
payments for site memberships easier. This leaves
many people in adult still vulnerable to the whims
of non-adult processors. Bitpay is one of the largest
processors for Bitcoin payments for businesses. You
may remember Bitpay as a fairly large presence at
industry shows back in 2013 and 2014. CNBC and
Coindesk have quoted Tony Gallippi, CEO of Bitpay,
regarding the value of processing for high-risk clientele
and how his company solves an issue for the industry
concerning payment processing and chargebacks; and
how the adult industry will bring a high volume of
transactions for Bitpay, boosting their business and
legitimacy as a payment processor.
“Some of these people [in adult entertainment]
have been burned before by new payment transaction
companies coming in and taking their money,” Gallippi
told CNBC.
At the end of 2017 Bitpay announced they would
no longer be working with any merchant that provides
sexually explicit content and gave notice to all their
account holders in adult that they had two months
to find a new payment processor. Bitpay did exactly
what Gallippi criticized other companies for doing.
Thankfully, there are other crypto processors, such as
GoCoin, that are not adverse to the adult industry.
When it comes to accepting Bitcoin payments, there
are concerns that many people share, processing needs
that need to be filled, and tech/security requirements
that need to be met. Can Bitcoin solve all these issues?
“Being online and global, there is a need to provide
users with as many payment options as possible;
increased options for your customers means increased
conversions and sales,” said Paul Armstrong, CEO
of Lit3.com. “Bitcoin hasn’t hit mainstream just
yet. While there are several large organizations that
have discussed offering it as a payment option, these
large organizations have the budget to maintain risk,
whereas small businesses must limit as much risk
as possible. If you’re considering Bitcoin for your
customers, there are some upsides and downsides that
should be considered. It’s great from the point of view
of having zero charge-backs—you can set transaction
fees (priority) and anonymity for the user. But there
can be security concerns and the market is also volatile
to the point that it can impact profit margins. Some
of this can be avoided by selecting a processor and
currency that can automatically convert payments to
local currency, avoiding inflation issues.”
The biggest issue concerning implementation is
that most people still don’t understand how the core
transaction processes work and thus how to go from
incorporating it into their site to money in their bank
account.
“BEING
ONLINE AND
GLOBAL, THERE IS A
NEED TO PROVIDE
USERS WITH AS MANY
PAYMENT
OPTIONS AS
POSSIBLE.”
—PAUL ARMSTRONG, CEO
OF LIT3.COM.
“Now that cryptocurrencies are gaining a foothold
in modern day use, there will soon be a point where
it is combined with AVS or other necessary tech
services so that the barrier to entry and ease of
implementation in Adult will be accessible to all,”
said Mike Ackerman of Actually Helping.
Interest in Bitcoin has significantly increased
but many consumers still don’t realize that it is a
transactional currency and not just an investment
with the potential for high return. Problems for
adoption “include high transaction fees and slow
processing times (ironically, these are issues that the
cryptocurrency was designed to solve) as well as a
clunky, non-intuitive user experience for people trying
to buy crypto for the first time,” said Leah Callon-
Butler.
Bitcoin is still dominated by the tech savvy. People
who are new to it tend to get overwhelmed with the
buying process and are unclear in how to use the
Bitcoin once they have it. Though many websites are
trying to improve the user experience, it remains a
barrier to entry. To increase Bitcoin payments, the
community needs to do more to encourage Bitcoin to
be used as a payment method. This may require an
education push from websites to their users.
From a business perspective there are still a lot of
questions that people have. In 2018 we will likely see
more sites integrating Bitcoin payments into their
websites. JuicyAds recently added cryptocurrency
payments.
CEO Juicy Jay said, “We decided to start accepting
Bitcoin out of curiosity mostly. We are the first
advertising network in adult to accept Bitcoin,
Litecoin, and Ethereum rather than just Bitcoin. With
Bitcoin (most likely) in a bubble, we felt the other
cryptocurrencies were a bit more interesting. There
are affiliates who want to get paid in Bitcoin (and I
am sure they have their own personal reasons) but
potentially to stash them away and see if they inflate
more in value.”
Cryptocurrency has the potential to be a payment
method for all aspects of the adult industry, from
paying for content, paying consultants, writing
paychecks, to paying affiliates.
“I see a lot of potential for cryptocurrency in the
adult industry,” said MacKenzie Peck, founder and
editor-in-chief of Math Magazine. “In an era when
companies and individuals are being crippled by
morality clauses, terms of service changes, and the
whim of sites, credit card companies and transaction
services—protected, stable, anonymous transactions
going mainstream could be a big win for porn
creators, providers, and consumers.
“Cryptocurrency has the potential to make it easier
for people to pay for their porn, for performers to pay
for groceries, and for production companies to accept
payment easily and without fear of being shut down
by Visa or Paypal.”
Until Bitcoin stabilizes again, we are not likely
to see a lot of people using it as a payment method.
However, alt-coins such as Litecoin and Ethereum
are a lower cost per coin, which can lower the mental
barrier to entry of purchasing a Bitcoin for $15,000
(price of Bitcoin at the time of writing). Even though
you can purchase fractions of Bitcoin (aka satoshi’s),
meaning people can buy in at any amount, there is
a mental barrier that says they are spending $15k,
even though they are only spending 0.00132447 BTC
which is $19.95. Many consumers still feel there is an
opportunity cost for spending their Bitcoin and not
holding (or HODLing for the crypto folks).
2018 should see a lot more adoption of Bitcoin, and
alt-coin’s, into business. This year has the potential
to herald some significant developments in payment
processing with Bitcoin, as well as developments
in user interface to encourage beginners to get into
crypto more easily. We are not likely to see crypto
falling away from headlines for quite some time.
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