INVESTING IN THE INTERNET TAUGHT US ONE VALUABLE INVESTING LESSON

By: Thomas McMurrain

IT MUST HAVE A SUSTAINABLE REVENUE MODEL…

How many times have you considered investing in cryptocurrency? Whether you get a kick out of paying for your coffee with Bitcoin, or prefer to HODL (hold on for dear life) to various currencies, the question that serious investors should be asking is does the company behind this coin have a sustainable revenue model?

Between 2015 and 2017 there were over 2000 Initial Coin Offerings (ICO) that collectively raised over $4bn from the public. But this stat alone causes problems, what exactly were people buying? And should they be considered a utility transaction, commodity or security? The recent nature of the rise of cryptocurrency means that it can be difficult for consumers to understand where crypto fits into their portfolio.

Aside from the predicted increase in value from investing in an ICO, there is a new breed of cryptocurrency that is offering users the opportunity to gain other benefits aside from the return on investment from the increased value. Currencies like CMDX are offering members the opportunity to join a group of health-conscious providers who are looking to accept the healthcare-specific coin as a payment method. Members can buy the coin outright on an exchange, and earn the currency by undertaking healthy habits.

CMDX uses similar blockchain to Bitcoin, hence the name,  the “Bitcoin of healthcare” even though it operates on the Ethereum blockchain. It has a number of the same success indicators that Bitcoin had at the outset, it is finite, transparent, portable, private, and potentially profitable. Even during the decline that other cryptocurrencies went through last year, the community of CMDX grew over 200,000 members. CMDX, has a $29.95 annual fee members pay to reap the rewards of their cryptocurrency. Members who promote the business pay $199.95 at the end of their 1, 3 or 5-year term. CMDX also earns transaction fees from B2B and B2C activity.

Indeed, many of these sector-specific cryptocurrencies are also offering investors other perks, in the case of CMDX the coin can be used to pay for health-related products and services, and members will be joining an elite membership that gives users access to real choice for healthy options around the world.

The decline and volatility in investment options that were previously considered the gold standard, such as real estate, is leaving space for new forms of investment. CMDX currently boasts 200,000+ members in 36 countries and has generated $13.6 million in sales revenue from the first 18 months of operation. The business model of these industry-specific coins is holding its own in the market, making them a tempting option for its members who are looking for long term financial security, as well as other health savings benefits.

Crypto is increasingly growing into the mainstream and has been hailed as better than money by Elon Musk. Recent reports have announced that Facebook is looking at getting into the crypto market and is searching for allies to work with on launching the payment service. Nike Inc has also filed with the US Patent and Trademark Office for the term “cryptokicks” which business insiders are suggesting indicates that Nike is considering venturing into cryptocurrency itself.

Companies are starting to see that cryptocurrency can be used to influence customer behavior which can drive more profits for the companies. Blockchain technology could ultimately become the technology that drives all rewards programs such as frequent flier, miles, grocery points and the pay-to-play human information industry where advertiser pay individuals directly to receive offers and ads.

The revenue model for crypto companies and investors has evolved since Bitcoin first entered the scene 10 years ago. But the diversification of benefits that are being offered to consumers is making an investment in crypto more attractive to a wider range of investors who previously would not have considered this expanding market. Making sector-specific coins is certainly contributing to this, and the fact that investors are now being rewarded with real-world benefits, as well as financial return on investment, is also likely playing a part in the technology becoming more widely adopted.

There is a rise in the correlation between tech and consumer products,  consumers are seeing their experiences being increasingly personalized thanks to the data companies have about them. Nike has long been one step ahead of its competitors, and they would be the first sneaker company to jump on the cryptocurrency bandwagon, keeping them on the cutting edge of consumer trends.

INVESTING IN THE INTERNET TAUGHT US ONE VALUABLE INVESTING LESSON
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