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Value plays a vital role in the business scene. Many of the largest enterprises in the world today have gotten to that position on the back of consistent value creation for their customers. Value is in itself an abstract concept but one that is arguably at the center of the entire business process. Some of the most iconic organizational success stories down the years have come from the ability of entrepreneurs to envision a value creation enterprise that people can buy into. From the personal computer to the mobile phone and even ride sharing and social media services, being able to carve a value creation niche is something that has always aided the cause of successful companies. It is therefore not so much of a surprise to see an emerging trend of using blockchains as a means of creating value which in turn is driving up the stock prices of some companies.
Blockchain technology is perhaps the most sophisticated incentive-based network protocol in existence today. The entire ability of a blockchain network to be self-sustaining is based on the active participation of network nodes in its governance and maintenance. This active participation is rewarded by means of incentive which is usually in the form of cryptocurrency tokens. As the blockchain space continues to evolve, more intuitive incentivised blockchain-based reward programs are being developed and employed by organisations around the world. These programs rely heavily on the mass appeal that cryptocurrencies are beginning to generate in the mainstream world as more and more people want to get their hands on some Bitcoin and other cryptocoins. With Bitcoin prices reaching record levels, this trend is most likely to continue.
The Chanticleer Holdings Example
Chanticleer Holdings is an investor in the Hooters Restaurant franchise. The firm owns a total of 9 Hooter’s Restaurant and also has a minority stake in the Hooter’s of America Corporation. The company is for all intents and purposes a small to medium scale enterprise. Their designation on the Nasdaq stock market is NASDAQ: BURG. Their ownership of Hooter’s Restaurant franchise is just one of the many fast, casual, and full-service restaurant franchises that they own.
At the start of the year, the company decided to offer a blockchain-based rewards program to its customers. Customers who eat at their restaurants will be offered digital currency in exchange for their patronage. In the aftermath of the announcement, Chanticleer’s stock price rose by 50 percent on the Nasdaq market. This led to a massive surge in the company’s market value to about $12 Million.
The company is partnering with Mobivity; a blockchain-based platform to offer cryptocurrencies to its customers. Using the Merit cryptocurrency that is native to the Mobivity blockchain platform, customers who eat at Chanticleer restaurant will earn Merit tokens. These tokens can then be used to purchase future meals or can be traded with other customers. For example, a customer could eat a burger sandwich on Monday evening, earn a certain amount of Merit coins and use them to buy a buffalo chicken sandwich the next evening. Alternatively, the customers can trade the merit tokens with a friend so they can have a treat at the nearest Chanticleer owned restaurant.
The significance of such a customer reward program is profound, to say the least. Customers are essentially mining cryptocurrencies by eating at their favorite local restaurants. This will in no doubt improve the adoption of cryptocurrencies in the mainstream society. It can become an avenue for more people to begin to understand and appreciate just how cryptocurrencies and blockchain technology works. As seen from the reports of the stock price increase, it is also beneficial for the company. They can ride the wave of the crypto popularity to improve the financial standing of the enterprise.
Other Notable Examples
Chanticleer isn’t the only company that has tried to take advantage of the crypto market to advance its financial standing. A number of companies are beginning to identify the perceived hunger for cryptocurrency ownership among a significant portion of the population as a means of boosting their brand image and market stature. In October of 2017, BiOptix changed their name to Riot Blockchain Inc. and their stock price grew by a 500 percent in two and a half months. It wasn’t just only the name that changed, but the company’s focus as well. Originally a Biotech firm, when BiOptix became Riot Blockchain Inc. it changes focus to the blockchain technology space. The company has a stake in Coinsquare which is the second largest Canadian Crypto Exchange Platform.
Other companies such as Long Island Iced Tea Corp and Longfin have seen their stock prices soar by making announcements about making a move to the crypto market. Long Island Iced Tea rechristened itself to Long Blockchain Corp while Longfin acquired a crypto company. While the jury is definitely still out about the long-term implications of these decisions, the present fact of the matter is that companies are going the crypto-route, and not just tech companies only.
Potential Future Markets
There is no denying the fact that some companies will be keeping an eye on the Chanticleer experiment. If it proves to be a success, more organizations will be tempted to implement such a move. Already there are blockchain-based start-ups that have launched ICOs for loyalty and reward-based service solutions. Conventional business could begin to offer blockchain-based incentives to customers in a bid to boost patronage and drive up their stock prices. The potential markets that can adopt this program include hospitality, travel & tours, online gaming, and online retail just to mention a few.
People are actively seeking ways to acquire cryptocurrencies. The price of some of the major cryptocoins like Bitcoin and Ethereum is above the means of many average folks. Incentive-based programs being offered by businesses can become a veritable means of acquiring crypto for many individuals. This could very well be their first steps into the crypto market. The organizations also stand to gain as well with increased patronage and improved stock prices. Overall, the adoption of cryptocurrencies in the mainstream world is also taken to a higher level.
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Boosting Stock Prices with Blockchain was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.