I got the idea for Bungeebones after realizing the near total hopelessness of getting a new website to the top of Search Engine pages in anything except some obscure and little used search term because the main search term pages are nearly always well entrenched with heavily capitalized corporate sites. That was all before Bitcoin and when I was introduced to Bitcoin at the Orlando Bitcoin Meetup (organized and, at that time, run by Tony Galippi of BitPay) I was fascinated with it. Bitcoin was fighting central banking and BungeeBones was fighting the centralizing and monopolizing of web site links and web traffic. At the time I was working as a network administrator at a small, private school for special needs students and managed to scrape together a few hundred dollars to buy some Bitcoin. It was selling for about $10 per BTC at that time and it has been a wild ride since.
Bitcoin Only Payments
After giving it some serious thought I decided to make BungeeBones a Bitcoin only payment system. I fully understood the difficulty I was creating for myself and everyone else using it because of the small number of Bitcoin users but I also had a feeling that the insight I gleaned from the thought experiment was going to be worth it as, eventually, many businesses would come to the same fork in the road and have to decide whether continuing with credit cards was worthwhile. And since I still had plenty of development work to do on BungeeBones I made the commitment to only accept Bitcoin for the service and, consequently, only pay commissions with it as well. Bitcoin is much much more than just a payment method though and I am glad I made that decision because BungeeBones now includes a number of features that could only be accomplished using ONLY Bitcoin and the blockchain.
Background - Cooperative Ad Network
Web sites that install the BungeeBones API (which is a "distributed" web directory organized into categories and links loaded from the ad server) become members in a cooperative ad network. For a better picture of what an "ad network" is you can visit this reporthttp://w3techs.com/technologies/overvie ... tising/all
but realize, too, that none of the 100 + networks listed there are cooperatives and, so, BungeeBones is a unique business model among ad networks. So how is a cooperative different than other business structures? In a cooperative the "stockholders" (more on stocks and Bungeebones and Bitcoin later) are the members and, so, the members are the owners of the network. For future reference, realize advertisers are customers and not necessarily members (but they could be). That last part can be confusing but is crucial for you to try to stay mindful to whether the discussion is about a customer or a member. The same person can be a buyer of advertising and a seller of advertising. Our network looks only after the interests of our members (i.e. the selling half of the transaction). If and/or when that same person is buying then they are "merely" customers.
If you notice the statistics in the report, an incredible portion of website owner/operators do not use an ad network to monetize the web traffic coming to their website (the report says an astounding 80% of websites do not participate). Getting right to the point, companies with names like Google, Microsoft, Yahoo, Amazon etc. have only managed to tap into 20% of the website market! What are they doing wrong? I believe the answer is simply they don't make it worthwhile for the website owners/operators to participate and, so, they don't. By using a cooperative business model and giving the members an ownership stake there will be more interest by the remaining 80% as well as the already participating 20%.
While I was looking for a "non-corporate" way to convey an ownership stake to the members I happened upon an idea I've dubbed a "collateralized invoice". The basic idea is to make sure the outer rings get paid first before the center does. In this network system all earnings and commissions of members are backed by Bitcoin but we call them either AdCoin or advertising credits (depending on context) in our accounting system. Each "AdCoin" is redeemable for a Bitcoin on a one-for-one exchange rate, each Bitcoin deposited results in an AdCoin being created on the books and each redemption results in an AdCoin coming off the books. If this were a typical centralized payment system users would accumulate credits and would redeem them for Bitcoin from the center. But by encouraging and educating members to get what is the equivalent of a Bitcoin "merchant account" it becomes trivial for us to present an invoice with their payment address instead of the center's (I am currently using GoURL.io). So once a member is set up with their own payment gateway then it become merely an accounting issue whether to send a Bitcoin deposit to pay them what they are owed or let it continue to head towards the center. Perhaps to help understand better how we accomplish this, think of the point in a purchase when an advertiser is making a payment/deposit to their pre-paid account. At that time our script will be called upon to create an invoice for them and that invoice will have a Bitcoin address on it. We simply check the member's account and IF the member is owed more from the network than the amount of the deposit then we provide GoURL.io that info (they are who actually generate the invoice) and it forwards the payment directly to the Bungeebones member. At the end of the transaction the one making the deposit gets the AdCoin/advertising credits they purchased. The member either had the same amount of AdCoin wiped off their account (and the BungeeBones' books) and received the Bitcoin in their place or their balance was left as is. In the later case the deposit continues towards the center. If the script doesn't reach an "earner" with sufficient balance to cover the deposit it reaches the center and then the new AdCoins are created for an equal number.
Bitcoin is the world's first Triple Entry Accounting System. When Double Entry was introduced it enabled wider adoption of the idea of "employment" because there was a way to make sure the employees weren't stealing. Triple Entry is, in my opinion, going to enable as drastic a change to our work relationships. Because we can take a Bitcoin payment and send it wherever we want AND track it and account for it the rulebook for what constitutes an "independent contractor" and "employee" will need to be rewritten and may even be obsolete. In the above example of the Collaterized Invoice the key is realizing that a debt is owed. It is owed by someone/something that is very often referred to in our system as an "employer". But if they are actually creating debts to employees then aren't the employees also lenders? If so, and as lenders, don't they have a business relationship and an interest in the accounts receivable of the employer/debtor? And then, aren't the two also free to contract and assign the payment from a customer in lieu of the accumulated debt and retire the debt? It seems trivial to accomplish merely by equipping the "employee" with a Bitcoin invoicing capability and simple accounting software on the business's end.
White Hat MLM
Multi-Level-Marketing has a bad reputation. It is hard to mention such a payment arrangement without stirring up crass remarks. The most often used crass remark is the "pyramid" label. Despite the "bad rep" I've incorporated a Multi-level commission system ( slightly different than a MLM) but if it has such a bad reputation why go through all the hassle and trouble to reverse people's opinions? Because a payment system based partly on the SALES of recruits gives the members what amounts to a long-term ownership stake in the network. A member may have a lousy website and little traffic but they could be a great recruiter and grow the network. They should be entitled to their earnings for the web traffic they recruited in and for the sales they recruited in as well.
Also, I've found few understand that a multi-level payment arrangement is a perfectly legal one while a pyramid is an illegal payment arrangement. What is the difference between the two? Conventional MLM payment arrangements very often pay a reward for recruiting and, at the same time, require an entry fee from the recruit. IF the payments for recruiting are higher than the earnings that participants receive for their sales then it is reaching the "danger zone" of being defined as an illegal pyramid. Carried to extremes, high recruiting payments when no one is making any actual sales of product is certainly a road to a disaster leaving the last paying user "holding the bag" as the expression goes.
BungeeBones is a White Hat MLM payment system because members receive NOTHING for recruiting new members directly and ONLY get rewarded for the actual web advertising sales of their recruits. It is as far away from being a pyramid scheme as is possible.
There are really two things of value being used in this system: 1) There is web traffic/web advertising 2) There is Bitcoin. Because of the unique nature of the Internet, websites can be either and/or both buyers of advertising and producers of the traffic that the network sells. A member may generate earnings for a sale and can then turn right around and become a customer and buy advertising with those earnings. Both of those can occur on the very same day because the commissions are paid daily and buyers are charged daily for their advertising (the daily fee is deducted from their prepaid account). In addition to making the funds available to buy advertising immediately the daily payments also reduce the need for users to maintain large balances in their accounts thus making the network a smaller targets for hackers.
The Software IS the Contract
ALL of the above policies are coded into the network's software. Daily payments, daily commissions, Collateralized invoices are in place that create a rapid settlement and payout. Add to the above that the blockchain ledger is a record of past payments then as days turn into weeks that turn into months the earnings of a website can start to become a type of asset. What type of asset is a question that I've yet to answer. It has similarities to a stock but there is no physical asset owned. The daily payouts might be viewed as dividends however, but do stocks pay daily dividends? And if those dividends are paid out not as "money" but in advertising credits that can be used for like-kind exchanges for advertising are they dividends? And lastly, if they are effectively paid by customers directly rather than from a central "corporation" are they really even dividends?
The value of those "assets" are greatly dependent on the growth and functioning of the network. As the number of websites that join and install the API increase, then the amount of web traffic available to advertisers also increases and so too does its value. As the advertisers compete with one another by bidding for position the "dividend" or commission to the seller increases accordingly. And since the same affects the income of recruits and, consequently, affects the income of the recruiters as well then the recruiters receive an increase in their "dividend" payments as well. Every member is receiving a share in the growth and success of the portion of the cooperative their contribution and work created.
Typically, assets can be appraised for both present value and future value. This "Smart Contract" system as I've put together in the software, along with the blockchain ledger, enables the creation of an asset from wasted web traffic that is currently not monetized by 80% of the websites on the Internet. What that asset is worth in monetary terms only time will tell, or should we say only the blockchain will tell? But because it is, indeed, the blockchain that will be telling the story then the owner of that asset will be able to prove its history and its future value. Investors should be able to be found to then purchase the asset. Its value is no longer dependent on the webtraffic of the original site but on the income derived from the recruits of that original site and even of those in the future. Just like with Bitcoin, the strength of the network will help support the future value of the asset.
Who Is BungeeBones For?
I've created a number of Wordpress.com "clones" that enable users to get their own blog and each comes with their own networked monetizing system to earn Bitcoin from the web traffic their blogging generates. Starting at Blog4Bitcoin.club
you can find your way to the dozen or so "clones" I have and each have their own genre. These sites (as well as a portion of sites that eventually install the Wordpress plugin) will offer the everyday person a chance to earn Bitcoin through blogging. This will be great for Bitcoin adoption as the most often question I've been asked after talking about Bitcoin is "Where can I get some?". The current answer is quite limited to just "You have to buy them" while this system can add to that " or you can earn them".
There are many websites that use Wordpress already and many are operated by small businesses. The plugin will enable them to easily gain a whole new ecommerce product line (i.e. web advertising) AND perhaps introduce them to Bitcoin. SInce MOST are likely not monetizing their web traffic then this system will be viewed as a no-risk venture into the Bitcoin space.
And then there is the ever increasing number of businesses that are starting to accept Bitcoin. Apart from them "staying long" in Bitcoin their only option is to convert their Bitcoin earnings to fiat. This cooperative enables them the additional option to spend them on a legitimate and valuable business input (i.e. web advertising). If they decide to do that it would greatly increase the "velocity" of those Bitcoin as they continues circulating within the business community denominated as Bitcoin.