Mass Adoption Awaits: One Small Step for Vergeans, One Giant Leap for Cryptokind
If mass adoption is the holy grail for cryptocurrency, then Verge’s recently announced arrangement with MindGeek is a major milestone on the way to the widespread use of digital, non-state issued currencies in our everyday lives.
Like a Vergean – XVG Takes a Bite of the Pornhub Cherry
Sure, the price of XVG plummeted by around 30 percent within hours of the April 17th announcement that the Verge team had inked a deal with MindGeek, the Luxembourg-based, Canada-operated company that owns a suite of adult websites including Pornhub, YouPorn, Redtube, Brazzers, Digital Playground, Men.com, Sean Cody, Reality Kings, and MyDirtyHobby – which bills itself as the adult social network.
Some among the VergeFam may have been disgusted by the relatively insalubrious nature of the corner of the internet in which Verge had hedged its bets. Some may have been disappointed the partnership was not with TokenPay, as was widely rumored. Others perhaps predicted it would toxify the currency for any other would-be retailers. And others still were simply plying the tried-and-true trade of buying the rumor and selling the news.
One Day We’ll Find It, the Pornhub Connection
Regardless of the ultimate fate of Verge itself, its Pornhub & Co tie-up speaks to the promised emergence of cryptocurrencies as a means of exchange in the wider community. Take-up of cryptocurrencies, with the primary exception of Japan, has been slow. Many jurisdictions are battling to define cryptocurrencies, let alone permit their use, whereas others, such as China, have outright banned them. Malta is the most actively welcoming jurisdiction for cryptocurrency enterprises such as trading platforms, with Binance’s plans to move to the Mediterranean archipelago evidence of both the warmth of the Maltese embrace and the gradual encroachment of mainland China on Hong Kong’s prized autonomy.
The U.S. market is enduring an ongoing struggle among authorities to formalize a unified position on digital, non-state issued currencies. The SEC deems tokens sold during ICOs to be securities. Yet once on exchanges, those tokens, when traded, are treated by the IRS as property, and taxable as capital gains. A number of states in the U.S. accept major cryptocurrencies like bitcoin to pay tax bills. But some don’t. Progressive Japanese-style adoption of cryptocurrencies and acceptance of their inevitability has proven elusive at the global level.
From Silk Road to Main Street… the Path to Legitimacy Is Paved by Criminals, Casinos, and Pornographers
A nominal glance at the history of the internet suggests that the adoption of new technologies capable of offering a degree of anonymity tends to follow a pattern of early adoption among marginal or downright illicit industries before heading toward mass adoption in mainstream society. Criminal syndicates, petty thieves, casino operators, and pornography producers were the first to take advantage of the internet’s potential to allow them to operate and reach customers (or victims) discretely and outside the purview of any single nation-state regime.
As Star Trek producer Rick Berman famously said:
“Without porn and Star Trek, there would be no Internet.”
Phillip Elmert-Dewitt’s 1995 Time Magazine cover story, “Cyberporn”, asserted that over 83 percent of the images on usenet (where the origins of internet surfing culture can be traced) were pornographic. Porn sites pioneered advertising and click-bait techniques that would become the envy of online shopping sites a decade later.
Shut down and seized by the FBI in 2013, Silk Road, the online black market that became popular for buying and selling narcotics and weapons anonymously, stands as an example of the internet’s wherewithal to allow people to surreptitiously indulge in criminality. Online piracy skyrocketed with the invention of peer-to-peer file sharing protocol BitTorrent. At its peak in 2003, BitTorrent traffic represented a whopping 60 percent of “peak period downstream traffic in North America”. BitTorrent has since largely been replaced by illegal streaming sites, which, in turn, have increasingly given way to legitimate subscription-based SVOD services like Netflix and music streaming services likes Spotify.
And the internet allows online gambling sites to inhabit safe haven jurisdictions from which they can play host to gamblers from all corners of the world in the comfort of their own homes. VPN services offer gamblers at least some measure of protection from the prying eyes of a non-gambling-friendly state.
Largely sanitized now by anti-privacy pioneers Google and Facebook, the internet is not unlike many technological innovations insofar as its path to mass adoption is littered by empty bullet shells, smoking guns, used needles, destitute ex-gamblers, and smut.
As is the path of digital currencies:
– Bitcoin’s pseudonymity made it ideal for Silk Road users.
– The results of an extensive study by Satis Group, released in March, found that 81 percent of ICOs were classifiable as scams.
– And now cryptocurrencies are consorting with online porn.
Verge’s arrangement with Pornhub & Co, derided and belittled by many, is one more step on cryptocurrency’s march from marginal to mainstream – from early to mass adoption.
Back from the Brink, Verge Gives Detractors a Nudge, Hodlers a Wink
The VergeFam has had a hellish ride of late. Their much-hyped Wraith protocol release was botched and delayed over confusion about which time zone to set the launch to, causing a loss of confidence that spilled over into a 73 percent price slump. In March, the development team announced a crowdfunding drive to finance their growth, suggesting to some the project was in financial peril.
In early April, a malicious actor exploited a vulnerability in the coin’s network code to execute a 51 percent attack, mining XVG at a rate of $56,000 USD per minute. Within weeks of that and around the time of the MindGeek announcement, it was revealed that a Verge impersonator’s Twitter account was verified, while the real team’s wasn’t. This speaks more to Twitter’s incompetence than Verge’s, of course, but it appeared fate had a vendetta against Justin Sunerok Vendetta (real name Justin Valo), XVG’s lead developer. Verge seemed destined to bounce haplessly from one problem to the next.
Robert Downey Jr. taught us that Skid Row was only a few steps away from Sunset Boulevard… and only a few steps to get back again. Likewise, the distance between online porn and Main Street isn’t as substantial as we might like to pretend. Just because it is consumed late at night behind closed doors doesn’t make it marginal.
35 percent of all internet downloads are pornographic. Covenant Eyes, a tech company that produces software that enables parents to track their kids’ online activity and filter out inappropriate content offers startling statistics (though they ought to be taken with a grain of salt). There have been, at press time, almost seven-and-a-half billion individual searches for porn over the past three-and-a-half years. One-fifth of mobile searches is for adult content. Pornography accounts for a staggering 69 percent of the pay-per-view internet content market.
Nevertheless, adult entertainment is rarely consumed conspicuously, so stuffing it into the same basket as crime and gambling is appropriate when it comes to discussing industries with unsavory reputations and a perceived or acknowledged need to operate in a clandestine manner. And it is these industries that historically adopt new ways of doing things before Main Street catches on.
Mass Adoption Awaits
Verge’s privacy characteristics helped it lubricate the deal with MindGeek. If history is any guide, Verge may also have inadvertently lubricated the inevitable and foreseeable mainstreamization of cryptocurrency. In fact, unlike much of the behavior (apparently) engaged in on Pornhub, widespread crypto use may well slip in unnoticed.
Have your say. Is Verge’s tie-up with Pornhub & Co a significant step toward the mass adoption of cryptocurrency?
Images via Maxpixel, Pxhere, Pixabay, Steven Depolo at Flickr
Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts