It’s what blockchain enables Incent to do that makes us distinctive.
One of our Slack members recently mentioned another blockchain loyalty initiative. We wanted to take some time in this post to explain that using blockchain isn’t what makes Incent distinctive. It’s what blockchain enables us to do that’s so important.
Loyalty is a great use case for blockchain. The rewards sector is full of inefficiencies and is crying out for better tech, as we’ve explored in detail elsewhere. So it should be no surprise that other companies are developing blockchain-based loyalty schemes.
One of our Slack members brought up one such company (we won’t mention the name), which is currently conducting its token sale. The product in question includes an API that allows users to create blockchain-based loyalty tokens, issue more supply, check analytics, and so on.
Efficiency =/= effectiveness
All well and good, if you want to recreate conventional loyalty on the blockchain – which is obviously the aim here. That offers clear advantages over current implementations.
But it also misses a golden opportunity. It takes an imperfect approach and makes it more efficient. More efficiently imperfect, in other words. We call this the ‘lipstick on a pig’ school of blockchain loyalty. (Now it becomes clear why we didn’t name the company.) It might look nicer, but it’s still a pig.
‘Efficiency is doing things right. Effectiveness is doing the right things.’
Efficiency is not the same as effectiveness. You can do something unhelpful very efficiently. In business, you can hold efficient meetings: keeping to time, not straying from the topics in question, including only those people directly involved in the relevant matters. But that doesn’t tell you whether the meeting was necessary in the first place or whether it will further your business. Our financial sector is another good example of this: it’s very good at sucking value out of the real economy without producing much of real value itself.
Within the loyalty sector, we believe the opportunity of blockchain isn’t just the ability to create and move points around more quickly and easily. It’s being able to guarantee limited supply. This scarcity is the key to what we call ‘open value’: rewards that are truly rewarding.
The value of scarcity
Other blockchain loyalty initiatives simply recreate conventional loyalty on the blockchain. Points are issued like fiat money, created out of nothing as IOUs that the company may have to redeem at some point in the future. These points aren’t backed by anything and supply can be unlimited. The issuer can also change the redemption terms whenever they want – which they frequently do, at the customer’s expense.
This inflationary aspect of money is something that bitcoin and crypto powerfully address. Supply is limited, issued under known and predictable conditions. This guarantee that your holdings won’t be diluted is what has made bitcoin ‘digital gold’ and made it so appealing as an alternative asset class. So why has the broader blockchain loyalty sector not taken that concept on board?
This is how Incent uses the blockchain, offering something qualitatively different and fundamentally more effective. Incent’s fixed supply of tokens can never be increased. You can save it, send it to someone else, or even sell it for other digital currencies or Aussie dollars on an exchange, and so have real value. The basic terms of redemption cannot be changed, any more than a regular store can start accepting dollar bills for 90 cents.
From July 2019, participants in the Incent project will get rewarded wherever they spend. not only for shopping but paying for rent, utilities and other expenses. Our new platform goes live on the third week of July, in the meantime, you can sign up to the waitlist here.
It’s fairer, more transparent and, we believe, ultimately a vastly superior approach to doing a bad job more efficiently.