Netkoin is a new blockchain-based digital advertising platform powered by the NTK token.
The team at Netkoin plan to release a location-based mobile advertising application which will allow customers to access deals and earn NKT for interacting with retailer stores.
Customers will be able to browse through promotions and deals from stores on the mobile application based on their current or any location.
Customers will earn and collect NTK tokens from stores by completing specific tasks:
- Customers will receive NTK tokens automatically when stepping into a store which is listed on the Netkoin location-based mobile application.
- Customers can earn NTK tokens by scanning certain product barcodes as indicated on the businesses’ store profile. For example, a customer will be able to earn NTK token by scanning the barcode of certain product on a store shelf in the store they are in, following the instructions and conditions set by the business.
- Customers can redeem goods and services offered by stores with the NTK tokens they have collected from stepping-in and scanning barcodes, the goods and services available for purchase with NTK tokens will be directly managed and decided by each store.
Netkoin have created 200 billion NTK, which are currently trading at US$0.000034c giving Netkoin a market cap of US$7m.
Loyalty & Reward Co see a few challenges for the Netkoin team.
Firstly, the business strategy is a classic chicken-and-egg model. Merchants won’t engage with the program unless there’s members, and members won’t be attracted to the program without merchant offers. This is the same challenge facing loyalty program start-ups all around the world, and it will likely be even more challenging for Netkoin because they have a new and unusual engagement offering. It will be interesting to see how many merchants they can attract to participate in their launch. Ideally, they will be clustered in an area which allows members to easily interact with multiple merchants that are of appeal to them.
Secondly, there’s the question of scarcity. Unlike points programs, where as many points as are required can be created, a blockchain loyalty operator creates a finite amount of cryptotokens, thereby establishing scarcity into the economic equation. As demand increases and outstrips supply, the value of the cryptotoken should increase. With 200 billion NTK, it’s hard to see where the scarcity exists to make this model work, even if the value is a fraction of a cent. (For more information on the commercial business model to support a blockchain loyalty program, read this article)
Thirdly, the value equation appears to be thin. To be an effective rewards program, it needs to deliver meaningful tangible value. Members join a program because they believe they’ll access value and they continue to engage with a program because they perceive they’re accessing value. If the main way Netkoin allows members to earn NTK is via visiting stores and scanning barcodes it will be very difficult for members to build up a decent NTK balance, unless the merchants are being excessively generous.
We hope Netkoin achieve success with this new venture, but believe these strategic challenges need to be addressed if they’re to gain traction in an increasingly tough crypto market
Philip Shelper is a specialist loyalty consultant based in Sydney, Australia who obsesses about everything to do with loyalty and rewards. His company Loyalty & Reward Co are a leading loyalty consulting firm.
Phil is the author of “Blockchain Loyalty: Disrupting loyalty and reinventing marketing using cryptocurrencies.”
www.blockchainloyalty.io is a global resource centre for everything blockchain loyalty.
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