The merits of Bitcoin and other cryptocurrencies (also known as “digital currencies” or “alternative currencies”) have been an ongoing debate in the adult entertainment industry in 2015. Earlier this year, Porn.com reported that Bitcoin was accounting for about 5% of all sales at its flagship website — and that is in addition to sales from other cryptocurrencies that Porn.com has accepted, which include Litecoin, Dogecoin and the adult-oriented WankCoin.
Two-thousand-fifteen has also seen the launch of Bacchus Entertainment, which has described itself as the world’s first Bitcoin-only adult membership website and is operated by the husband-and-wife team of Dennis and Saffron Bacchus. Nonetheless, cryptocurrencies continue to have both their supporters and skeptics in the adult payment realm.
While I think there is a place and time for digital currency, the unregulated nature of Bitcoin makes it risky and not stable. -Cathy Beardsley, SegPay
Mia Hyun, president and CEO of Mobius Payments, is fairly bullish on cryptocurrencies as an adult payment option and cited the more developed countries as places where cryptocurrencies are showing the most growth.
“The more receptive countries have been in North America and Europe,” Hyun told XBIZ. “Bitcoin’s popularity is increasing. Purchasing a Bitcoin is becoming easier and more attainable for the average consumer via Bitcoin ATMs. With the security and no chargebacks the cryptocurrencies offer, there has been an increase in popularity.”
The merits of cryptocurrencies have also been debated in mainstream e-commerce. The mainstream e-commerce giant Overstock.com reported Bitcoin sales of $3 million for 2014, but that was well below the $10-15 million in Bitcoin sales that had been projected for last year. And in June, Overstock reported Bitcoin-related losses of over $100,000 for 2015’s first quarter.
Security is one of the main reasons why some people in the adult industry have shied away from cryptocurrencies. In 2014, the Tokyo-based Mt. Gox (which had been the world’s largest Bitcoin exchange) filed for bankruptcy after roughly $460 million was stolen by hackers.
Nonetheless, a long list of adult companies began offering Bitcoin as a payment option last year, including Wicked Pictures, Playboy Plus, the SCORE Group, DominicFord.com and SKWEEZ Media. MetArt.com has accepted both Bitcoin and Litecoin, and in July 2014, Hustler announced an arrangement with the digital currency payment processor GoCoin (which allowed Hustler.com customers to start paying with Bitcoin, Litecoin or Dogecoin). And in August of this year, Shopmaker.com added Bitcoin as a payment option.
Cathy Beardsley, CEO and president of SegPay, noted that cryptocurrencies can be convenient for one-time adult purchases. But for adult membership websites that bill members on a recurring basis, Beardsley said, consumers still seem to prefer traditional currencies such as dollars, pounds or euros.
“Bitcoin and other digital currency seemed to be all of the rage a year or so ago,” Beardsley told XBIZ. “While I think there is a place and time for digital currency, the unregulated nature of Bitcoin makes it risky and not stable. I don’t see consumers using Bitcoin to pay $29 per month for a membership. I see Bitcoin being used for high-ticket items and for those that truly want to be anonymous. It has also been the payment option of choice for the darknet and Silk Road, which was targeted by the FBI and other law enforcement agencies.”
While Bitcoin, Litecoin and Dogecoin have been used for both mainstream and adult e-commerce, WankCoin and Titcoin (both of which debuted in 2014) have marketed themselves as adult-only cryptocurrencies and catered to adult transactions exclusively. The webcam platform OnWebcam.com was among the first adult sites to accept WankCoin.
Some billing specialists haven’t committed to using cryptocurrencies but haven’t ruled out the possibility either. Rand Pate, director of communications for Epoch, indicated that Epoch is still taking a wait-and-see approach.
“Epoch does not currently accept Bitcoin or any other type of cryptocurrency,” Pate told XBIZ. “However, we do monitor the developments in this arena and stand ready to implement new payment options when we feel the time is right.”
The debate over the use of cryptocurrencies in the adult industry rages on, and what will transpire with them in late 2015 and 2016 remains to be seen.
“The volatility of the value of the cryptocurrency may be a deterrent for some consumers,” Mobius’ Hyun commented, “but not enough to prevent the steady growth of this method of payment.”