Cryptocurrencies for change arise in B.C.

Inspired by Bitcoin, companies develop CryptoAid, GENERcoin, and Kailakoin
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Imagine a currency in which every time coins are minted, some of them go to “noble causes”. That’s the vision of Paul Dickson, president and CEO of Newnote Financial Corporation.

The Vancouver-based company is developing a digital currency called CryptoAid, which will be “mined” into existence by computers. Much like Bitcoin, the CryptoAid network will reward miners for their services by paying them new coins.

The difference is, Dickson told the Georgia Straight, that CryptoAid will automatically allocate a random portion—between 20 percent and 50 percent—of each reward to a “manifest list of beneficiaries”. Users of the cryptocurrency, expected to be released in the next two months, will determine these nonprofit causes by online voting.

“I think that there’s a great demand for a charity coin like this,” Dickson said by phone from his downtown office. “I really think people are going to dig it when they see the democratic voting process of choosing the causes. I mean, the whole picture for this creates a really unique opportunity for people in need all over the world.”

Newnote, Canada’s first publicly traded Bitcoin company, is one out of a handful of British Columbia–based firms creating cryptocurrencies, some of which have been designed with social or environmental goals in mind.

In Kelowna, Arterran Renewables has developed a solid biofuel—from wood, municipal garbage, animal manure, and agricultural waste—which it is marketing as a sustainable replacement for the thermal coal used in power plants. Instead of issuing convertible bonds, the company released the commodity-backed cryptocurrency GENERcoin on June 11 in hopes of raising US$2 million to build a larger production plant.

Arterran plans to sell 30 million coins, starting at 6.2 cents each (in Bitcoin). When Arterran’s product is ready to ship, each coin will be redeemable for one pound of the biofuel, containing 10,000 British thermal units of energy.

David Tiessen, who created GENERcoin for Arterran, told the Straight this method of crowdfunding gives backers the option of trading their coins in the meantime. He believes many companies will conduct similar crowd sales in the future.

“It’s very interesting, because now it gives people that do purchase the fuel via GENERcoin a means to change their mind and sell their product,” Tiessen said by phone from Peachland. “It’s kind of like a glorified pawn ticket, really. You’ve got these cryptocurrencies, and you’ve got liquidity if you want it.”

Arterran Renewables is selling GENERcoin to raise money for a biofuel production plant.

GENERcoin is inspired by the same white paper as SolarCoin, an offshoot of Litecoin—a leading altcoin based on the Bitcoin protocol—that offers an incentive for solar-electricity generation. However, GENERcoin is built on the Mastercoin protocol, which is layered on top of Bitcoin.

According to Tiessen, sales of GENERcoin have been “actually pretty slow”, but it’s “starting to get traction” with investors.

“We’re only the second coin to come out on Mastercoin,” Tiessen said. “The first one was MaidSafe [a decentralized Internet platform], and they actually raised pretty much US$8 million in six hours, so I had delusions of grandeur that would be exactly the same for us.”

The B.C. Securities Commission doesn’t have a position on cryptocurrencies. Michael Moretto, the securities regulator’s acting director of corporate finance, advises people to “do their research” when considering investments offered by any company.

“Right now, I think cryptocurrency is a bit of a market trend, and people should be careful when looking at those market trends,” Moretto told the Straight by phone from the BCSC’s downtown office.

CryptØMiners is a Vancouver-based Bitcoin consulting firm whose CryptØYouth subsidiary aims to use cryptocurrencies to fund scholarships for kids. In February, CryptØYouth released Kailakoin, a Litecoin fork, in hopes of raising funds through mining.

Nathan Wosnack, founder and CEO of CryptØMiners, told the Straight that Kailakoin hit a snag when they weren’t able to get it listed on exchanges. But he still has plans to revive the altcoin and encourages other organizations to copy the idea.

“The thing about any currency is it doesn’t matter if it has a store of value or it’s a medium of exchange,” Wosnack said by phone from his Vancouver home. “If no one’s using it and no one knows about it, then it’s basically worthless.”

Paul Dickson is the president and CEO of Newnote Financial Corporation.

Newnote’s CryptoAid is also a Litecoin fork. A maximum of 100 million coins will be mined over 20 years. Newnote plans to list the altcoin on its forthcoming Puretrade exchange so users can trade it for Bitcoin and vice versa.

While CryptoAid was conceived as a philanthropic endeavour, Newnote earns revenue by making cryptocurrencies for businesses. In early July, Newnote helped Las Vegas–based Anthem Vault launch INNCoin, a gold-backed altcoin.

Dickson envisions breweries and musicians issuing cryptocurrencies that create a “viral presence” and can be redeemed for merchandise.

“I believe that it makes an excellent rewards program for, you know, people under 30 at the moment,” Dickson said. “Because we’re all early adopters here, right? This is a forward-looking project that we’re doing here, and we’ve received an enormous amount of interest from companies that are inquiring about how this all works and how they can do it.”

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