Referral Rewards Program

Flexible withdrawal permissions

The BitShares blockchain is the first smart contract platform with built-in support for recurring payments and subscription payments. This feature allows users to authorize third parties to make withdrawals from their accounts within certain limits. This is a convenient way to “set it and forget it” for monthly bills and subscriptions.

Promoting Infrastructure Development

The BitShares Referral Program is designed to promote infrastructure development. Decentralized financial networks depend upon their business partners to build an ecosystem of businesses, such as exchanges, merchant services, hosted wallets, lightweight wallets, and block explorers. With the BitShares referral program, merchants can now earn more by advertising their support for the BitShares platform. While other platforms primarily promise lower fees, the BitShares blockchain offers merchants an ongoing revenue stream.

Free market competition results in many different hosted wallet providers competing to acquire new users. Each of these providers has a financial incentive to advertise their wallets by traditional means, which in turn increases the network effect for the BitShares ecosystem.

Background – PayPal’s Referral System

Bootstrapping a new financial network is very hard, and often becomes a chicken-and-egg problem. Basically, it is difficult to attract new users, because new users will only join if other users have already joined.

To overcome this problem, we looked at what companies like PayPal did to reach critical mass.

PayPal’s big challenge was to get new customers. They tried advertising. It was too expensive. They tried Business Development (BD) deals with big banks. Bureaucratic hilarity ensued. The PayPal team reached an important conclusion: BD didn’t work. They needed organic, viral growth. They needed to give people money.

So that’s what they did. New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer. It felt like things were working and not working at the same time; 7 to 10% daily growth and 100 million users was good. No revenues and an exponentially growing cost structure were not. Things felt a little unstable. PayPal needed buzz so it could raise more capital and continue on.

Giving people money is both expensive and potentially unsustainable, but it has been proven to work.

Cost of Customer Acquisition vs Lifetime Value of Customer

The BitShares blockchain recognizes that a sustainable system must be able to cover all operating expenses from cash flow. In the article “Startup Killer: the Cost of Customer Acquisition”, David Skok shared the lessons he learned after watching many failed startups.

However after closely watching several hundred startups that have failed, I observed that a very large number of these had solved the product/market fit problem, but still failed because they had not found a way to acquire customers at a low enough cost.

A well-balanced business model must have a cost of user acquisition that is much lower than its ability to monetize its customers.

In the case of the BitShares blockchain, this means setting transaction fees that are high enough to cover all costs, including the cost of customer acquisition, while still being low enough to compete against real competitors. Most cryptocurrency networks barely charge enough in transaction fees to cover the cost of running the network. They attempt to attract users with low fees. While low fees are important, undervaluing the service provided is counter productive. For this reason, the BitShares blockchain charges a price that is much higher than competing cryptocurrencies but much lower than traditional exchanges and payment networks like Dwolla or PayPal.

To ensure the cost of customer acquisition is sustainable, the BitShares referral system is designed to always pay out apercentage of actual profits. The BitShares blockchain allows the users to draw their own conclusions about the Life Time Value (LTV) of each customer they refer, after educating them about the LTV of customers for similar businesses. It is believed that the BitShares blockchain can offer each referrer an average value of $80 per member they sign up, or $40 if they go through an affiliate. This value is realized over time based upon the actual usage of the customers. Even if a customer thinks we are overestimating by a factor of 4, the BitShares blockchain still offers a larger incentive than PayPal did.

Conclusion

The BitShares blockchain is built for viral growth, and has game-changing, industry-leading incentives.

BitShares Technology

New to the BitShares Blockchain? Read more about the BitShares Blockchain core features in the following articles. They have been posted originally at www.BitShares.org

Delegated Proof-of-Stake Consensus

Delegated Proof-of-Stake Consensus   A robust and flexible consensus protocol Delegated Proof of Stake (DPOS) is the fastest, most efficient, most decentralized, and most flexible

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Transferable Named Accounts

Transferable Named Accounts Easy and secure transactions Named accounts enable users to easily remember and communicate their account information. We don’t use IP addresses to

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Stakeholder-Approved Project Funding

Stakeholder-Approved Project Funding   A self-sustaining funding model The BitShares blockchain is designed to be self funding and self-sustaining by giving the stakeholders the power

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User-Issued Assets

User-Issued Assets   Regulation-compatible cryptoasset issuance The BitShares platform provides a feature known as “user-issued assets” to help facilitate profitable business models for certain types

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Referral Rewards Program

Referral Rewards Program Flexible withdrawal permissions The BitShares blockchain is the first smart contract platform with built-in support for recurring payments and subscription payments. This

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This website is a community based fanpage about the BitShares Blockchain. Official website is www.bitshares.foundation