Yesterday I got a great letter from a relatively new member / shareholder, urging us to reconsider using Bitcoin as a reward mechanism. Thanks to JH for taking the time to share his/her thoughts. My reply follows the email.
Here’s the email from JH:
I recently became a member/shareholder in iConsumer and was very excited about the company’s business plan from what I had read about it online. I like the fact that you do, indeed, give very impressive rebates to your shoppers in the form of stock and cashback. It is a very exciting company to be part of.
However, as you’ll see in my emails with support below, I was somewhat disappointed to learn that I can not select how I want the cashback portion of my rewards to be denominated. I can understand that the crash in BTC that occurred in the months directly after you initially started offering it as a reward must have left many members quite dismayed at the idea of receiving their rewards in BTC. However, I’m one of those people who believe that cryptocurrencies are the way of the future. Thus, I feel that if iConsumer is the first eBate-like company to reward its users in crypto, it will be THE company that people adopting the cryptocurrency economy will turn to for this type of service and that larger companies will look to as a buyout opportunity as crypto continues to become more widely accepted. However, if iConsumer only offers fiat cash, how is that any different from all the other companies that already do the same thing?
I understand that, for now, the big deal with using iConsumer is that we can receive stock rewards and the cashback percentage is larger. However, that can’t go on forever, and when it’s over, then what is iConsumer? Just another Ebates, Rakuten, Honey, etc? So why will the average person choose iConsumer over one of those larger, more well-established companies?
Whereas being the first company to offer crypto-rewards would set this company apart when more and more people start to adopt crypto. I understand that the act of converting fiat rewards to crypto is quite trivial and that any of those other more well-established companies could adopt the practice at the drop of a hat, but to people outside of the black box, iConsumer would still be the first to offer that option, and often, that’s all that matters. However, I don’t think the current practice of converting the cash to BTC right before transferring it to the member will qualify as being the same.
Just wanted to offer my 2 cents as a shareholder. But whatever you decide to do, I hope it works out well for all of us.
JH – We invested serious money and mental anguish to make iConsumer the first and only company that could legally reward ordinary shoppers with ownership, and even better, publicly-traded ownership on a U.S. regulated stock market. That’s why we have a ticker symbol – RWRDP, and you can see us quoted on the OTC. More shopping, more ownership. Refer more shoppers, more ownership.
You have a stake in our future. Do you really care what happens to me-too services like eBates or Honey? Rewarding you with ownership makes us very, very different.
Back in 2017, back before we really had the stock thing going properly, we spent a chunk of shareholder money on figuring out how we could issue our own token, how to get listed on an exchange, how to reward, denominate, and redeem in crypto, and how to manage the market risk. We learned a lot.
One of the things we learned was that the attributes and risk / reward of owning stock in a publicly-traded startup was much the same as getting crypto for shopping, except that the stock market is U.S. regulated. If we do well, the market might reward us in the form of doubling or tripling our stock price. It might even treat us better than that. Owning stock in a startup gives you all the thrills and chills of owning crypto, with less risk and hassle for all concerned.
We did like the fact that transferring BTC to a member was easy and cheap. We had built the mechanisms, and they worked rather well. We had created hardened systems to mitigate the risk of transferring in BTC. It’s definitely better than Paypal or writing a check.
When we eliminated cash (or Bitcoin) back in 2019, we focused on the fact that the price of our stock, the upside and downside (that’s for our lawyers) nature of it, is much more dependent on member / shareholder shopping than the price of BTC or other existing crypto ever could be. Said another way, members shopping can (and should) affect the price of our stock. Their shopping never could affect the price of BTC.
We think rewarding shopping with our stock gets you better thrills and less risk than rewarding with crypto.
Interestingly, our pandemic pivot reintroduced cash/BTC back into the mix. As you mentioned in your exchange with our support group, you’d prefer to see rewards denominated in BTC, not in cash. As you know, you have three ways to get your cash. As a check, as BTC, or you can buy stock with it.
The only real difference I see from what you’re asking and what exists is who bears the risk of the price of BTC fluctuating (the stock price at which we reward you hardly ever changes, due to SEC regulations). Back in 2017, iConsumer bore the risk of the price of BTC fluctuating. Now, if the price of BTC changes between the time you earn your cash back, and the time you ask us to transfer it, the risk is yours.
We like that our member/shareholders care about our future. eBates sold for a billion dollars. Honey for way, way more than that. When they sold, their shoppers got nothing. If somebody buys iConsumer, our shoppers win, too.
P.S. Eliminating rewarding in BTC also made our regulatory filings about three pages shorter.