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Bounty. In plain English, a bounty has two meanings. It can mean generosity or it can be a payment as a reward for hunting down somebody.
The definition of this word in cryptocurrency is far from the above-mentioned meanings. It has a more positive denotation and one that beginner cryptocurrency enthusiasts may earn from.
What is Crypto Bounty?
Cryptocurrency bounties are rewards that a blockchain project or crypto companies give to their users who advertise their tokens and raise public awareness about their services or products.
One way to think of it is that it can be a marketing strategy where they make their new projects more visible to a broader audience.
Human psychology has always emphasized that people behave more positively when activities involve incentives. This is what crypto start-ups leverage on. They use their bounty programs to market their initial coin offerings (ICO) and create awareness through reward mechanisms.
Bounty programs eventually gave rise to crypto bounty hunters. These are crypto enthusiasts who actively pursue reward campaigns and reap incentives from them simultaneously.
Short History of Crypto Bounties
Similar to some cryptocurrency slang terms, bounty programs get their origins from digital video games. Gaming companies offer various types of rewards to gamers who can help them further develop the game. For instance, reporting bugs found in a specific game corresponds to a certain reward.
Kinds of Crypto Bounty Programs
There are different types of bounty programs that active crypto users can participate in. All these tasks offer tokenized incentives to the users.
Bug Bounty Programs
This targets developers and security researchers to identify and report bugs and other flaws in the blockchain infrastructures. Bug bounties are the reward for bug reporting campaigns. The value of bug bounties depend on the interest level and intensity of the reported bugs.
Bitcointalk Signature Campaigns
Bitcointalk signature campaigns are exclusively for Bitcointalk Forum members. In this task, they need to affix their official ICO signatures to their profiles. The participant’s rank determines the number of stakes that they will receive. Although, it is common that only those with junior member rank or higher can join this event.
Social Media Campaigns
The primary aim of social media campaigns is to raise awareness among people about the ICO project using the social media accounts of crypto users. Participants can share, repost, like or comment any content about the new crypto project in social media platforms such as Youtube, Twitter, Facebook, Whatsapp and Telegram.
Since many companies want to have a global reach, they offer incentives for translation events. This refers to translating important documents that explain the crypto project. It often includes the official website, ICO whitepaper, and Bitcointalk ANN thread.
Content Creation Campaigns
This campaign is for people who are bloggers, video content creators, or someone who likes to make both blog posts or videos. It involves creating content such as announcing a promotional campaign that will be published in multiple social media platforms. The amount for content creation bounties depends on the engagement that you have created through your content.
Are These Programs Helpful?
First, we need to understand that there are two stages to an initial coin offering (ICO). In the pre-ICO, incentives target individuals who can complete tasks and invest in the new project simultaneously. Usually, the desired participants in the pre-ICO phase are blog writers, marketers, computer programmers, and social media influencers. These are people capable of making the crypto start-up visible to the public.
Next, we have the post-ICO phase where the bug bounty programs take the spotlight. This is when developers receive rewards if they successfully provide their feedback about bugs and the blockchain’s design. Also, coders receive incentives for testing and identifying bugs in the blockchain.
From the announcement and promotion process, the ICO moves to fine-tuning the blockchain for its public launching.
Bounty programs are helpful in raising public support and funds for the developers and providing crypto income to the participants.
Flaws of the Crypto Bounty Program
There was a frenzy surrounding bounty rewards campaigns in 2017 and 2018. Some people and crypto experts criticized the ICO bounty programs as similar to pump and dump schemes.
Many investors criticize people who pretend to be disinterested in a particular crypto project but then promote it and get secretly paid for that promotion. They believe that action, if not illegal, is highly unethical.
Robert A. Cohen, Chief of the Security and Exchange Commission’s Cyber Unit warned scammers and investors in 2018 that:
“Investors should be alert to the risk of old-school frauds, like oil and gas schemes masquerading as innovative blockchain-based ICOs.”
The oil and gas schemes come from David T. Laurance and Tomahawk Exploration LLC’s attempt at fundraising an oil exploration and drilling through a digital currency called “Tomahawkcoins”.
In conclusion, crypto bounty programs are very useful for developers to endorse their crypto projects. However, there is still a high possibility that the project might become a rug pull or pump and dump scheme.
As we always remind our dearest CryptoCoin Believers, don’t get carried away by the hype. Before deciding to participate in a bounty program, check the authenticity of the developers and their goals.