Sex & Crypto | Cointelegraph Documentary


Any kinky habit you wouldn’t like your bank
to know about? Tired of the big transaction fees on your
favorite adult web sites? Or maybe you are struggling in setting up
your online sex toys shop because of payments service restrictions. Well, crypto currencies can help you out. Anonymous, decentralized, untraceable. These are the features making crypto a natural
match for the adult entertainment industry. The adult industry has been always playing
a pioneer role in the adoption of new technology from the VHS boom in the 80s VHS to the advent
of virtual reality. And now its blockchain turn. Whether we are talking about porn sites, Web
cam sites, escorting sites or adult online shops, all these businesses have been sharing
a complicated relation with financial institutions. Traditional payment services like Visa and
MasterCard consider the adult industry a high risk environment
because of the legal gray zone, which it often operates and the high amount of disputed transactions
happening on adult Web sites. That is why adult sites are charged with high
transaction fees ranging from 5 percent to 15 percent to process payments and at times
they are outright denied these services. Visa or MasterCard treats us as a very risky
industry, in part because somebody will buy something and then decide that they don’t
want it on their credit card or they didn’t really want to pay for it. They buy it in the moment and then they regret
it and they say, I don’t want to pay for this. Or they see a statement on their bill that
says, you know, some company that they don’t understand because it’s a billing company. And so they do what are called chargebacks. And those chargebacks raise the fee for everybody. And so the fees are substantially higher with
adult content than they are with something like, you know, Amazon or a grocery store
or something like that. Consumers of adult content can also benefit
from the pseudo anonymity of crypto, which allows them to make purchases while avoiding
potentially awkward bank statements. What crypto allows is that the transaction
does not go through the bank. It’s a direct transaction. You cannot reverse it. And so you don’t have to deal with the fees
that are passed on by the billing companies and the credit card processors. You can do a direct transaction and you can
lower the fee for everybody. People who use crypto tend to spend a lot
more. So, you know, the average buy for somebody
who is using crypto to pay for something like a you know, a private chat with a cam model
on Xhamster Live is going to spend between 150 and 200 dollars. This is significantly more than what they
might spend if they were using a credit card. Having noticed the synergy of crypto and adult
entertainment, a number of crypto projects started developing at the intersection of
the two industries. Reuben Coppa is the CEO of Intimate, a blockchain
startup which aims to disrupt the adult entertainment industry. He believes that by denying their services
to adult entertainment businesses, financial institutions are illegitimately imposing their
moral standards on customers and merchants. And a lot of that’s just institutional bias. It’s down to sometimes what they call morality
clauses in the banks or in the card schemes. We’ve met with a lot of venture capital firms,
angel investors, crypto funds, and eventually most of them just have a mandate that sorry,
we can’t touch a bunch of things. Often gambling, often adults, they just have
their mandate within their fund of what they can and can’t do, which is largely driven
by more traditional investors. Who are banks to be the moral arbiters of
what we can and can’t do. Intimate is, first and foremost, a crypto
payment gateway designed for adult industry businesses. It offers both merchants and consumers a cheaper
alternative to traditional credit card payments. The platform supports its native coin, plus
a number of other popular crypto currencies. Several adult Web sites have already partnered
with Intimate. Among them, Smile Makers is a retail company
selling sex toys and lubricants whose mission is normalizing the perception of female sexuality
by bringing it fully into the open. That is why Smile Makers items cannot be found
in sex shops, but only in health and beauty stores. We want to make buying a vibrator as normal
as buying a toothbrush or buying a tampon. It should be very commonplace and also just
a normal necessity. Even though our mission is to be very open
and very public about talking about sexual health, we are aware there are people who
are still very private about that and would feel shy about buying a vibrator in a drugstore
or a department store. And so that’s why we wanted to be respective
of people’s privacy and allow there to be crypto payments on our Web site. There are these women who really believe in
sexual empowerment, but also financial independence. And that’s why they’re using crypto to buy
a vibrator. And many of them are buying a vibrator as
the first time on their first crypto purchase. Even regular sex workers have embraced crypto,
given its potential to lessen their dependency from banks, which often freeze and block their
accounts without warning. A solution to these problems is provided by
Gingr, a Switzerland-based blockchain platform that provides an end-to-end booking service
for sex workers. The platform aims to build an ecosystem in
which sex workers and their customers can interact in a secure and confidential way
while bypassing middlemen. In the past, I run into many issues to find
and book a woman of my choice for a paid date. Issues which can be easily avoid with today’s
technology. Besides, the clients experience is mostly
moderate. Also, the service providers face many problems
in the sector. This was the point when I created the concept
for the insta fuck feature. A feature where you simply open an app on
your smartphone and book your favorite person with only a few clicks. All of this in a secure and verified environment. For me, that was a revolutionizing idea to
follow up on. I was instantly hyped of the potential of
the market. Still, I’m fully convinced to provide a fair
and transparent solution for service providers in the prostitution industry. With the introduction of blockchain technology
the launch of our own payment currency, GGC and the business development in the past years,
we finally have reached matureness to achieve impact. The official currency of the Gingr ecosystem,
GG Coin, will be used to close the remaining gaps in the business model and provide an
alternative solution for payments all around the globe. The nature of the market is inviting to issue
a cryptocurrency to be able to offer worldwide payments without being dependent to mostly
conservative banks and institutions. Besides this, we can make use of technical
features as smart contracts for escrow, transparent distribution of commission, earnings and refunds. But I guess most important for the clients
is that there is no invoice for bookings. Also, our user base is verified. The client acts anonymously with the application
without being tracked in the real world. Buying and selling sex online became particularly
difficult in the US when last March, the anti-sex trafficking FOSTA – SESTA bill package came
into force. Since then, adult internet services became
liable for the content that users post on their sites and therefore are easy targets
for lawsuits for promoting online sex trafficking. Many in the adult industry claimed that the
FOSTA-SESTA was in fact an attack on free speech. As a consequence of the new legislation, the
ad Web site Backpage.com, also known as the world’s biggest online brothel, was shut down
by the FBI. There was a big struggle after FOSTA and SESTA
bills were passed here in the US. The industry changed. We’re no longer allowed to use Skype. The terms of service have changed on that. A lot of the payment apps were also not allowed
to use, and that was the biggest problem. Shortly after the new regulation came into
force, River Sunshine started performing on SpankChain, an Ethereum-based payment platform
allowing cam performers to bypass middlemen when receiving payments, thus increasing revenues
and control over their savings. And then I actually it changed my life completely. The site keeps only 5 percent, which that’s
a major thing for us performers. All the other sites take at least 50 percent. I’m still fairly new. There’s still things that I’m not completely
familiar with. After raising six million dollars in an ICO
in 2017, SpankChain recently launched a native dollar-pegged stable coin called Booty, which
can be used to tip performers on the SpankChain camsite. Performers on the site claim to earn much
more in SpankChain than on traditional cam sites. In the first six months since the launch of
the platform, 31 performers allegedly received over seventy thousand dollars in tips. The average person probably tips 10 to 20
Booty which would be 10 to 20 dollars equivalent in fiat. I’ve noticed the traffic fluctuates as the
price of crypto changes as well too. When it drops, there’s less traffic, but when
it goes up, there’s way more traffic. I am still making more through crypto than
I am on the other sites and I don’t use them as much anymore. Given the small fees charged to the performers,
SpankChain plans to sustain itself in the long term by selling its crypto payment system
to other adult sites. Ameen Soleimani, CEO at SpankChain envisions
a future when individual performers will adopt Booty as a payment system on their personal
cam sites. When all of the performers have an Ethereum
address or a Bitcoin address listed on their Twitter profile that links to an account that
they control, then people will be able to pay them without any middlemen and intermediary. And that’s what everybody is going to start
competing against. I think it’s going to be a grassroots sort
of bottom up movement. A major breakthrough seemed to happen last
year when the world’s most popular porn Web site, PornHub, started accepting crypto payment
with Verge, an anonymity-focused token. Back then, Litecoin CEO Charlie Lee welcomed
the opening of the porn industry to crypto and a number of other porn sites have been
following PornHub’s examples since then. The future has finally come. However, crypto currencies are still far from
reaching mass adoption in the adult industry. As of 2018, only 470 adult websites, 50 webcam
platforms and 35 sex shops all around the world accept crypto, which is a tiny figure
compared to the multi-billion dollar size of the industry. Consumers are apathetic and lazy in general. And if I can tap my credit card to pay in
most of the world, then I don’t really want to go through the somewhat difficult process
of acquiring crypto understanding, managing my own keys, understanding confirmation times. There’s this whole educational barrier where
we have to like learn what this is, get an exchange account. There’s a lot of stuff to figure out. And then eventually you’re like, oh, you know
what? I don’t want to get paid in something that
fluctuates. What you see in adult is that we will get
it to a certain level and then you’ll see other mainstream companies start adding it
as well. And then it will explode for all of us. It was very scary at first. Crypto, big bad crypto seems like, oh, I don’t
know about this. So it’s a maze. And once you go through that maze once or
twice, you know how to do it. It’s really not that scary. The adult industry proved itself to be an
excellent training ground for crypto, even though the high volatility affecting digital
currencies and the lack of knowledge of blockchain technology is still preventing it to reach
mass scale adoption. However, crypto adoption is a slow but steady
process and it seems just a matter of time until it will spark a revolution in the adult
industry.

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