Cointipping and why it’s on its way out
Cointipping is most definitely one of the most popular forms of using cryptocurrencies nowadays. Sure, it will never surpass the popularity of trading these coins on an exchange, but it’s a great liquidity source for most people who enjoy digital products or services.
One of the most common ways to use one’s crypto portfolio in the past was to buy video games on various game markets, but Steam was arguably the most popular. However, the company that owns Steam decided to distance itself from the blockchain due to volatility and uncertainty of value.
But what does buying products with cryptocurrencies have anything to do with crypto tipping? Well, it was basically the initiator of the activity. People would purchase video games through cryptocurrencies thus exposing themselves to three different industries. One was the video game itself, the second was the crypto industry, and the third was the streaming industry.
That’s right. An overwhelming percentage of people who buy video games from Steam is likely to watch other people stream those games in the future. And what do streaming services allow? Tipping the content makers with actual money. This can be in the form of a monthly subscription, a one-time payment or just a show of goodwill.
However, crypto tipping as an activity is slowly bleeding out. Why? Because the volume at which cryptocurrencies are being “gifted” to streamers and content makers is slowly decreasing due to the rebound that the market had in the recent months. Nobody really wants to give away $1 today if it has the potential to equate to $10 tomorrow. Pretty reasonable.
The first signs of decreasing volume
The first time that the market ever saw some kind of decrease in volume when it comes to crypto tipping was when Twitch, the largest streaming website in the world removed crypto tipping completely.
The reasons were yet again, the same as with Steam. The volatility was too high, and the commissions that the platform was getting through the tipping option, was decreasing or increasing rapidly, thus creating several issues with budgeting, financial planning, or even financial reporting in the end.
However, this happened sometime after the crypto winter hit, therefore everybody was aware that it was due to the prices going down. The moment they recovered in the Spring of 2019, Twitch and nearly all other companies, excluding Steam reintroduced the crypto tipping features on the platforms.
However, it didn’t seem to be enough as the activity is still in big trouble volume-wise.
But why is it decreasing if people like doing it so much? Because they’re doing it on completely different websites and platforms than before.
According to statistics, dozens of Bitcoin casino games in Australia turned into safe havens for these people when large platforms removed the option. People started using this “extra cryptos” that were not very liquid on these platforms.
The tipping was in the form of rewarding various software developers for a good game, or just a “small payment” to experienced players for their insight about a game. It sounds quite surreal, but people were actually tipping others to receive a strategy on how to gamble.
Good thing that ship has sailed away already thanks to various educational blogs starting to monetize their content.
Content monetization is also in danger
Although content monetization may sound like a lifesaver for crypto tipping in this article, it’s honestly not.
The largest platform for such monetization is Reddit, where tens of millions of people gather each day and post various types of content. In the past, Reddit allowed its users to buy specific rewards with cryptocurrencies and then give it to their fellow Redditors. Well, the activity is still alive as you can still buy the “Silver”, “Gold” and “Platinum” medals, but not with cryptocurrencies anymore.
That’s right, the company that was providing the technology and the service for this kind of activity decided to shut down, and subsequently remove their product from Reddit. Why? Because of the low volume.
Even in this sense of content monetization, people were simply not willing to donate funds to each other unless they absolutely had to.
The only salvation right now lays in the hands of various blogs that put a paywall on an article that’s sometimes 100 words long. And we all know how that worked out when the paywall could’ve been removed with fiat. It’s not going to be any different with cryptos.
So, overall, crypto tipping may have sounded good on paper, but in the real world, it’s simply too good to be true. This doesn’t mean that cryptos are useless in this sense, though.
But the activity could have some hope in the future when crypto adoption is on a completely different level.
- Cointipping and Why It’s on Its Way Out - Nov 7, 2019
- Bithoven Exchange Announces New Margin Trading Services For Users After Several Requests - Jul 11, 2019
- Binance Exchange Launches a New Fiat Crypto Exchange Called Binance Jersey - Jan 17, 2019
- VISA Acquires Ripple’s Partner Earthport After Closing a £198 Million Deal - Dec 29, 2018
- Report Says Cryptos Could Soon be Legalized in India - Dec 28, 2018
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