Pubcoin

a new token for

rewards points programs

by Leanpub

Whitepaper

Pubcoin is a rewards points platform for internet commerce, powered by a permissioned blockchain built on Quorum, JPMorgan’s fork of Ethereum.

With Pubcoin, merchants can set up rewards programs where the rewards points they provide to customers can be redeemed at all other participating merchants. This means that the points we all earn no longer need to be siloed off, and merchants and consumers alike have an incentive to grow the size of the Pubcoin rewards community.

Using the power of the Quorum blockchain model, it will also be possible for merchants to set up their own branded rewards programs ("merchant coins" or MCoin tokens) and operate on the same blockchain, setting their conversion rates to the universal Quorum-based Pubcoin token, and even choosing custom conversion rates with other merchant coins to form partnerships.

From independent individuals selling arbitrary goods online, to online marketplaces including small and large merchants, Pubcoin represents an opportunity to create a new platform for building great relationships with customers around the world.

From the perspective of consumers, rewards points are great, but they tend to exist as independent programs. Even the bigger brand-name rewards programs, with multiple participating merchants, are restricted to major merchants and offer little diversity. This creates a familiar practical problem, where you need to keep track of all your rewards cards and ID numbers and dig them out of your handbag or wallet every time you go to a merchant, or try to remember how many points you have at each individual online merchant's website, and try not to forget expiry dates, amongst other structural problems.

This "fat wallet" fragmentation reflects deeper economic issues with siloed rewards points programs. For example, if a merchant with a siloed rewards points program goes under, then all the effort you have put into gaining points on their platform disappears. It makes the rewards points you earn - mostly by spending money, but also through activity that is rewarded for other reasons (like signing up for a new service) - essentially illiquid. It also sets smaller merchants and individual online sellers (like authors who set up websites to sell their books) at a huge disadvantage, since if you only have a few products to offer, an illiquid, unique rewards program makes little sense from the consumer's perspective.

How Pubcoin will work

A new world for rewarding customer loyalty

Consumers with Pubcoin.com accounts will be able to earn and redeem points at participating merchants and keep their points in one place. If they earn Pubcoin at one site, they will be able to redeem them for rewards and discounts with everyone else participating in the network. This encourages a network effect from both the consumer's and the merchant's perspective: the more merchants participate, the more incentive consumers have to earn and spend Pubcoin, and vice versa.

Where a merchant has set up their own branded rewards points coin on the Quorum-based Pubcoin blockchain, consumers will not be required to go through the step of creating a Pubcoin.com account, making merchant integration with the Pubcoin blockchain seamless. However, consumers will still have the advantage of being able to convert the merchant coin they earn into and out of Pubcoin if they choose to do so, at rates set by the merchant. This is good from the consumer's perspective, because it means coins they earn on even a branded service will be potentially be redeemable elsewhere, once converted into Pubcoin. By setting its own conversion rates to and from Pubcoin, the merchant can protect itself from arbitrage and other attempts to game the system.

Consumers will also be able to send each other Pubcoin. This will encourage people to give each other gifts redeemable across a wide range of services, instead of restricting them to a single service, which is what happens when you buy drug store gift cards.

By offering and redeeming rewards in Pubcoin, indepentent online sellers and small- to mid-size merchants will be able to participate in a large network that gives increased value to the rewards they offer.

Larger merchants will be able to set up their own branded merchant coins and still keep the advantage of having the blockchain-based backend for their rewards program maintained and supported by the Pubcoin team. They will also be able to offer conversion to and from Pubcoin, thus widening their pool of customers by being able to offer rewards to customers who have never used their service or bought something from them, thereby giving them a new tool to expand and maintain their customer base.

With the concept of convertible, liquid, branded merchant coins, the possibilites for economic creativity offered by the Pubcoin model are huge. For example, it would enable the creation of blockchain-backed community currencies, where groups of individuals and small businesses can encourage local commerce. Also, companies offering different services along the same vertical could partner together, offering rewards in a branded coin associated with customer activity in their particular industry.

Recent revolutions in book
writing and publishing

  • Desktop publishing

  • Books on screens

  • Online purchasing &
    community

  • Books on devices

The Pubcoin model is industry-agnostic by design (our logo reflects its status as an open book), but our team naturally views its potential from the perspective of the book publishing industry. In this section we will set out some examples of how Pubcoin may be implemented in association with Leanpub, our powerful platform that combines a proven writing and one-click publishing workflow with an elegant storefront.

Much of the (often controversial) focus on changes to the book publishing industry in the last twenty years has focused on the way changes in technology have changed how we read books and where we buy them. But with all the focus on where the words and the money are, one often-overlooked revolution is the way technology has enabled the establishment of massive online communities of readers. Amazon did this brilliantly through its reviews and ratings features, a strategy consistent with its acquisition of the review site Goodreads in 2013.

Offering readers universally-redeemable rewards points for their activity will help authors and publishers reach new readers and provide natural incentives for engagement with these communities on all sides. Inititally, Pubcoin rewards may be offered simply for book purchases, but the opportunity to reward readers for other types of activity remains a promising avenue for creativity and inventiveness on the part of our team.

Considering our own example, perhaps the most important factor determining our use of Pubcoin is the fact that most books on Leanpub are self-published. The self-publishing space is vast and complex, as the host of consultants and blogs and even books dedicated to helping authors and would-be authors navigate their way to success demonstrates. By allowing our authors to opt in to offering Pubcoin as extra rewards to readers, in an effort to promote their books, we are giving our authors an extra service and an edge in a competitive industry where success relies to a great extent on individual effort and inventiveness, and an ever-expanding toolbox for building your professional platform.

One key to understanding the power of the Pubcoin model can be found in viewing its possibilities from the perspective of an individual self-published author. An author could be offered Pubcoin as a reward for choosing to write and sell their book via Leanpub. They could themselves earn Pubcoin by offering their book for sale in Pubcoin, or at a discount if Pubcoin is spent by the reader when they buy a book. Furthermore, authors could of course be acquiring Pubcoin of their own elsewhere, from their own activity being rewarded by other merchants, or from their participation in the periodic Pubcoin token sales, or from others indviduals who participated in a token sale. And of course it would be a great advantage to authors operating their own sites and managing their own sales, to plug in to a massive distributed rewards program, something they could not build on their own.

As a final example, as an author builds up their stock of Pubcoin, they can offer increased rewards to readers for the purchase of their books, helping them compete for new readers.

For more information, please read our whitepaper and explore this website. To be informed of important details, like the announcement of our token sale dates, please sign up for our newsletter.