PhunCoin, a Cryptocurrency for the Mainstream

Mainstream adoption of cryptocurrency has been the dream of crypto enthusiasts since the launch of bitcoin in 2009. A decade later, however, a Finder.com study shows that only 8% of Americans have invested in cryptocurrencies and 27% say that the tech is “too difficult to understand”. With user-unfriendly platforms with steep learning curves dominating the space and highly publicized regulatory uncertainty, it’s no wonder that the average consumer is hesitant.

At Phunware, we’re working hard to create solutions to these challenges as we get ready to bring PhunCoin to the masses. We envision nothing less than a future of data ownership built on the blockchain and powered by PHUN. We’re passionate about your ability to own your data, and we intend to address mainstream concerns in order to set a new standard for the next phase of cryptocurrency ecosystems.

Regulatory Concerns

Cryptocurrency has finally captured the attention and concern of federal regulators. In the US, the SEC is grappling with defining exactly what kind of asset cryptocurrency is. Currently, the IRS defines cryptocurrency as a property, meaning that every single cryptocurrency transaction, whether investment, divestment, purchases, or even like-kind transfers, is subject to capital gains tax. This creates headaches for taxpaying crypto investors, especially if they’ve profited from a forked cryptocurrency “airdrop” like last year’s Bitcoin Cash, a unique phenomenon that no one is quite sure how to classify.

On the other side of the Atlantic, the EU has warned that they intend to regulate the space at the EU level if “risks [emerge] but no clear international response emerges.” This barrier goes both ways: the lingering anti-regulatory attitudes of the space have resulted in an unregulated free market fraught with scams and volatility. With Bitcoin itself showing volatility, it’s understandable that mainstream and traditional investors have gotten cold feet.

Regulatory oversight is not necessarily a bad thing, however. When designed correctly, it encourages more ethical, trustworthy entries into the space while stopping the scam ICOs that have run rampant. However, overregulation at the expense of innovation is a valid concern for any innovation industry that is rapidly growing. To mitigate that fear, regulatory structures should remain focused on ensuring the security of investors as opposed to stifling innovation.

UX Concerns

Even if regulators decided tomorrow to embrace the cryptocurrency sector, there’s still the matter of friction in onboarding and usage. Currently, the road to investment is rocky. No matter which cryptocurrency you’d like to purchase, you still have to buy BTC or one of the other coins offered by major exchanges with fiat, then transfer those coins to a full cryptocurrency exchange like Bittrex to actually purchase the final asset. This sort of roundabout structure runs counter-intuitive to the idea of cryptocurrency, in no small part because exchanges like Coinbase (which still dominates the space, though other platforms like Binance are beginning to catch up) act as a mediator of adoption with very little transparency into its fully centralized operations. In other words, it sounds a lot like a big bank.

It’s also hard to justify investing in and trading a currency that is subject to capital gains tax on every single transaction. If you buy a cup of coffee with BTC, capital gains apply, making it a complex and expensive afternoon pick-me-up. This highlights a key problem: beyond early adopters and enthusiasts, there isn’t yet a clear benefit for the average consumer to jumping through these hoops. Add to this complex and unfriendly user interfaces that are challenging for novice users to navigate. The biggest cryptocurrency applications are centralized, and offer a far more organized and seamless experience, thanks to the availability of resources and scale that truly decentralized projects lack, but overall, the user experience doesn’t live up to the expectations of the average consumer.

Blockchain needs to deliver something that consumers want that is easy to understand and use. Current projects bring out too much blockchain intricacy with technical breakthroughs like low-value, high-volume transfers or high confirmation speeds which don’t impress the average consumer. Bittrex is an example of an exchange that attempted a radical UI upgrade and was met with strong backlash as a result of neglecting a user-focused flow, so trading off looks for utility is not the answer either. As the field becomes cluttered with functional, but painfully inaccessible cryptocurrency platforms, consumer-friendly UX will become a key distinguisher for both investors and mainstream users.

Currently, beyond tech evangelists and future-focused investors, there’s very little to convince the average user that a cryptocurrency investment is better than traditional alternatives. It’s an uphill battle to take cryptocurrency to the masses. Here’s how we at Phunware believe forward-thinking cryptocurrency projects should go about it:

• Focus on consumer uses and concerns first. The average mainstream investor has questions: where can I spend this? Is there an exchange rate? Is it too volatile to be spent? It’s important not to dismiss these. Smart projects will lay out a series of rewards from the outset. Even if it’s a coin being used to buy a $5 Amazon gift card, that’s a tangible link to the traditional world.
• Liquidity and usability are key. Make sure that your project has a clear end use for your tokens besides just reconverting back to fiat; if the latter is all you aim for, you won’t see value growth and you certainly won’t see adoption. A simple, easy-to-use platform that allows users to spend directly is going to be key to encouraging later adopters onboard. Answer this question: from the perspective of the mainstream user, is it too difficult to spend for the entire investment to be worth their time?
• Hook users via giveaways and simple earning structures in order to capitalize on network effects. The concept of network effects posits that the value of a particular technology or platform to individual users increases as the number of adopters increases. To that end, incentivize and gamify sharing. Capitalize on the unprecedented communication capabilities we have at our disposal today. Human nature is to trust a trusted face; nothing entices a new adopter quite like an endorsement from a friend already using the product.

PhunCoin from Phunware will set the example. PhunCoin-enabled apps will be able to reward low value payouts at scale. Users will quickly learn that the actions they take daily (location sharing, etc.) are now worth a reward in PHUN. This creates a feedback loop of engagement, where users realize that they’re receiving payment for something they do for free elsewhere and thus return, ready to engage with ads that are targeted and designed specifically to appeal to this captive audience.

From here, the platform’s built-in social features as well as targeted rewarded ads will incentivize external sharing of PHUN to entice more users to the platform. As more users participate, the number of brands willing to reward advertisement views in PHUN, run PHUN-rewarded contests, etc., will increase in kind, growing the ecosystem and allowing network effects to flourish.

It’s crucial to ensure that the customers will remain engaged. Our decade of experience in mobile app lifecycle management will allow us to keep users engaged and delighted. We want to set a standard for mainstream cryptocurrency projects that goes far beyond just the ICO. The PhunCoin in-app experience will encourage daily logins and participations with a continually updated feed of offers and opportunities to earn. We will enable viral growth with easy in-app options to invite friends and receive immediate rewards, for both yourself and the new user.

And we will onboard users of all levels of expertise in cryptocurrency with a thoughtful step-by-step process and readily-available support and resources.

At the end of the day, the security of markets is an enormous barrier to institutional adoption. By launching as the first SEC-regulated cryptocurrency, PhunCoin is positioned to set a standard for transparency, trustworthiness and ecosystem structure. The PHUN ecosystem will be decentralized, but governed by a central authority — Phunware, an SEC-regulated 10 year old enterprise technology company. This means that the token can flourish while still having a governance that will ensure no pump and dumps, majority exits, or other issues.

Institutional support is key to soothing the fears of the mainstream looking to invest. A radical new technology will be trustworthy when backed by names you know and systems you understand. The future of cryptocurrency lies in the hands of the masses. The more people investing in cryptocurrency, the more diversified the spread of control over the ecosystem, the more stable the value of the coin. Beyond that, the effect of trusted players entering the space will do wonders for mainstream perception of safety.

PhunCoin intends to be an example for all future sector entrants by upending the one-sided data transactions we perform daily, proving that regulatory oversight does not conflict with a decentralized ecosystem, and bringing the focus back to the end user experience. After all, cryptocurrency should be Phun.