Bringing Cryptocurrencies to Life: SpankChain

Bringing Cryptocurrencies to Life: SpankChain

By Niklas Spille-Scheich | Cryptonic | 23 Nov 2018


A Revolution, nothing less, was promised with the advent of Bitcoin to the masses; minor newspapers did two-page-specials in late 2017 and got many things about it right. Thinking this way, Bitcoin and the blockchain-technology underneath made the step from a barely known engineering solution to a technology most people have heard about by now. Some major shopping solutions even tried accepting bitcoin payments - and dropped out of these programs as there were more challenges to be faced bringing Cryptocurrencies to real life. Any currency that is not enforced by law or accepted through ease of use is a dead currency, people will turn to things that gets the job done more easily; among the 2000-something currencies listed on Coinmarketcap are some gems that put the idea to good use, though: I'll cover some of these in a series of posts, starting with the SpankChain project.

PSA: The following text may contain links to sites that are not safe for work.

SpankChain is an Ethereum-based project bringing the advantages of cryptocurrencies to adult entertainment: Hardly any other market is so well-known, generates that much revenue and has so little quality of life for those doing a living in this market. The video segment is dominated by a few studios, live camming is either going through few major websites cutting 40-60% out of the performers' revenue (no, they don't pay for equipment needed for work) or is done using common video chats with the performer putting a debit call to the customers' credit card. Credit Card companies happily charge a "high risk" fee, online payment processors happily freeze or delete performers' accounts for violating their Terms of Service. Choose your deal: Give away half of the revenue you had a tough job generating or risk losing all the money you did not withdraw in time for PayPal closing down your account.

Enter SpankChain

On the front, you get a website doing live cams, a set of nice pictures, a tube site is scheduled for this year, heading up to easily using cryptocurrencies to pay for real-life toys or services. Its services are as easy to use as logging in to a browser plugin. In the back, performers get to keep as much as 95% of their revenue for live camming and a projected 99.5% for their pre-recorded clips. Being in beta state, SpankChain managed to attract some 400+ performers with some 2,000+ customers which generated a cumulative revenue of $50,000+ within six months through organic growth.

In September 2018, SpankChain brought the world's first ethereum payment hub to production use, offering instant transactions which do not require gas fees to be paid (Yes, you read that correctly), thus taking load of the main Ethereum network which has been the bottleneck of 2017's cryptocurrency hype; this release came as projected on the projects' roadmap and the developer team is very ambitious to keep up with its projected goals, leading up to a decentralized infrastructure for adult entertainment by the end of 2019 -- a market worth several billion dollars in 2016 (and not likely to shrink).

How does it work? Front.

Easy. Login to MetaMask (or any other Ethereum-aware browser), like a girl and hit the "Tip" button. Using SpankChain's Software Development Kit (due by the end of the year), the payment processing technology SpankChain has deployed can easily be integrated into any existing website. On the performer end, it's the same but the button is labeled "Withdraw". Performers may login to a centralized video/file serving infrastructure paid for by the fees applying, eventually this infrastructure will become decentralized (think IPFS integration).

To overcome volatile ethereum markets, SpankChain utilizes a stabilized token named BOOTY to ensure that a user who buys a token worth a dollar still has a token worth a dollar when he wants to spend it ten minutes later, SpankChain's monetary reserve was bootstrapped during 2017's token auction with some 6.5 million dollars and funds added by selling off SpankChain's share of overall BOOTY revenue.

How does it work? Back.

Under the hoods, SpankChain utilizes a ERC20-based two-token economic system: The utility token SPANK has the magical power to generate BOOTY (well, not so magical. The SpankBank Smart Contract handles the generation and distribution), a dollar-pegged payment token. The user of spank-powered sites won't get in touch with the bank; you as a potential investor may use your favorite exchange (I recommend sticking to SpankChain's own decentralized exchange, ComeSwap) to one-click swap your ETH for SPANK, stake the accumulated SPANK from your wallet to the SpankBank, claim your BOOTY once a month and sell it for ETH on ComeSwap (or any other BOOTY-aware exchange): in the end, you get to keep the SPANK you staked plus keep the revenue generated from selling BOOTY on the open market. There's more magic to it, especially mechanisms to keep the BOOTY-token pegged to $1, but for now it will do.

What's coming up?

The plans are ambitious: SpankChain aims to be nothing less than to be "the" platform empowering performers in the adult entertainment industry and up to now, the team has proven to be capable of delivering. While there are websites to demonstrate the projects' capabilities, the goal is to have nothing less than the infrastructure other websites can be built upon; at least one major live camming platform has expressed interest in switching their technical background to SpankChain's solution once it is ready for production use. While SpankChains' services end at the point where a performer gets to hold Ethereum, work is underway to create a gateway that lets performers cash out from BOOTY tips in their eWallet to Dollars on their bank account with the click of a single button. Replace "adult entertainment performer" with "any online store owner"  and you get the picture of what size this platform may grow to.

Is this service attractive?

SpankChain's Cam Site fee of 5% is unmatched in the adult entertainment industry, except for private shows where the performer exposes herself to fraud and chargebacks and the streaming platform is powered by modern technology like WebRTC. Performers are used to having a share between 40-60% of the revenue they generate.

SpankPay's 0.5% transaction fee is unrivaled in the payment processing industry, with PayPal fees starting at $0.30 per transaction plus 2.49% of the transactions' volume for low-volume clients and settling at $0.30+1,49% for clients pushing at least $100,000 through its payment service every month plus something between 1.8% up to 3.3% if you happen to be selling to a client living in another country, adding up to $0.30 plus 5.79%. SpankChain's special power, summing up micropayments (tipping a performer multiple times during a show) to be delivered in one batch is a very expensive service using PayPal: you'd end up paying $0.05 plus 10% of each micropayment.

Coming close to SpankPay in terms of fees is a Bitcoin-based service going by the name of CoinPay which by the time of writing (late 2018) did not deliver samples of their product even though it was pushed by a company that's operating one of the Top10-Bitcoin Mining pools as early as 2015 using a supposed billion-dollar budget. CoinPay aims to have a 1% transaction fee once it goes live.

A functional payment processing service deployed to real use is BitcoinPay, charging a transaction fee of 0.8% while being vulnerable to volatile markets: a merchant being paid in Bitcoin tonight may have an unexpected loss of dollar value by the time he gets to check his office tomorrow afternoon.

Handling Security Incidents

The SpankChain team is very transparent when it comes to security incidents, in the first set of Smart Contracts regarding the SpankBank and payment channel hub, two critical bugs have been found: a malicious actor could have frozen anyone's stake to the SpankBank (resolved by deploying a fixed SpankBank contract) and there has been the possibility of draining SpankPay accounts due to legitimation checks happening too late in the process of cashing out. The person proving this money drain to be possible agreed to return the funds, receiving a bug bounty instead.

What's in for you?

You may happen to be investing into a payment processor, content delivery network, age verification service, decentralized identity service, decentralized exchange, who has already proven that the platform meets a dire demand, attracting more than 400 US-based performers within 6 months of public beta testing. Step One is empowering adult entertainment performers by offering services that are neither expensive nor exposed to fraud (if you stick to the protocol; there always are ways of getting yourself scammed if you leave the path of well-known security precautions; Step Two is offering this platform to other businesses.

The formula for your return is quite easy: You buy some SPANK and stake it in the SpankBank for up to 12 periods with 30 days each; an incentive for long-term stakers applies. All stakes are weighted by their stake duration (not the size of your stake. Remember: this is about empowering adult entertainment performers. They may be happy if they can push back $10 of their earnings into SPANK stakes!), resulting in a certain number of SpankPoints. Each periods' newly generated BOOTY is shared out among all stakers according to their SpankPoints. At some point, this system will reach a steady state with a monthly BOOTY revenue that is somewhat stable.

Summary

The SPANK token seems to be a sound project working with potent partners in terms of product development and has a bright future being an online payment processor, a total supply of 1 billion tokens (8 digits leaving space for up to a quadrillion --1,000,000,000,000,000-- SPANK-toshis) hits an online retail market of about 2.489 quadrillion US-Dollars is definitely worth a second glance. A SpankPay fee of 0.5% --which is unmatched in payment processing-- makes for 12.4 trillion dollars in fees. Subtract some for people preferring to wire transfer or using PayPal or Alipay and you're still catching a good train. On top of that, you'll tap into ComeSwap, the decentralized crypto exchange recommended by the house (finally you can tell people to go for crypto trading bots: everytime their bots do the trading, you cash in on the fees).

Not considering economics, SpankChain is actively empowering adult industry performers to achieve dignity by having untouchable banking accounts and no risk of being on the receiving end of fraud while making cryptocurrencies easy and fun to use. Using the words of Ameen Soleimani, most prominent head on SpankChains' team: "Nothing beats the user experience of instant and free".

Any investments you do in cryptoland may result in a total loss of your funds.
Do your own research.

(a good place to start would be SpankChain's Pinkpaper)

Niklas Spille-Scheich
Niklas Spille-Scheich

Mined some Bitcoin for fun in 2011 and hit format c: before giving that laptop away. Got triple copies of my seed words placed all over the world. Unite 3 of my closest friends to recover access to my crypto assets.


Cryptonic
Cryptonic

I am way too busy to feed a blog with clickbait so you'll find some general advice on here. Don't forget to Do Your Own Research!

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.