Beer and Crypto – There’s nothing better right?
It looks like people have been trying to release alcohol related cryptocurrencies for some time now. There was QYKbar which attempted to sell drinks via blockchain so that you could purchase your drinks using the QYK currency and consume them at any bar or restaurant that agreed to accept the token. Work on this project appears to have ceased as of April this year and their Telegram channel has been deleted.
And then there have been the various beer coins. I’ve been able to find this one and this one that didn’t appear to make much progress at all. They both seem to have had similar goals which solely consisted of taking peoples money via whatever means possible.
Is there a legit booze based currency?
There is hope, and for good reason. The alcoholic beverages industry in the US alone is is a 220 billion dollar industry. This is an industry that is ripe for disruption so blockchain technology has a real opportunity here.
I recently stumbled across Beerchain though the weekly Beer Drinking competition that I participate in on Steemit. Beerchain have created their own Beercoin (an ERC20 token) and they’ve actually put a decent amount of work into getting the project off the ground.
The coins are quite literally mined through the consumption of beer, which is both awesome and very unique. Essentially, a merchant (typically a brewery) will order QR codes from Beerchain who will then provide the codes for printing on the inside of bottle caps. The brewer then distributes the beers, with Beercoin bottle caps fitted, to bars and other places where this golden fluid of the gods is sold.
The QR codes aren’t limited to just bottle caps however. Bars and restaurants can also print the QR codes onto beer coasters and receipts as well, which is a nice way to ensure that this coin doesn’t only need to rely on brewers for the success of this coin.
Consumers who purchase these beers will then scan the bottle caps using the Beercoin app. The QR code will then release whatever quantity of currency is assigned to that particular QR code.
The quantity of coins distributed via QR codes ranges from 1 coin to 10,000 coins. Obtaining a high value QR code is rare (0.01% chance of discovery) however the potential to find a QR code with a high value QR code definitely adds some excitement to the “mining” process.
Beerchain envisions that the value of the coins will centre around the price of a standard beer. They plan to peg the price so that 100 Beercoins will typically purchase 1 beer. Pegging the price means that Beerchain will be required to purchase, burn and distribute the coins as they need to in order to ensure the price of the coin enables a user to purchase a standard beer with just 100 coins.
How will the Beerchain founders and staff get paid?
Beerchain plan to generate their income via advertising revenue and by collecting user data (which I imagine they’ll use to advertise products and services to). This is a bit of a shame given that one of the things I personally love about blockchain technologies is that it gives us a chance to create businesses that don’t rely on selling advertisements as an income stream. However, Beerchain is absorbing all transaction costs. Given that this coin is an ERC20 token, there are small fees for transactions. Beerchain will not be passing these transactions on to users which is quite a positive for the project.
What can you buy using Beercoins?
The founders believe that users will not only be able to purchase beer from participating vendors using this coin, but they’ll also be able to buy merchandise via the app and donate to charities.
The founders plan to peg the value of the coin so trading it on exchanges won’t be particularly attractive. Does this approach limit the potential of the coin? Maybe, and maybe not. I don’t think the founders see this coin as being a multi-million dollar business venture for themselves. They seem to be working hard just to get the currency being adopted by breweries and gamifying the currency to make it highly attractive to the every day person.
One of their recent tweets shows that a brewery in Colorado has now started including Beercoin QR codes on all of their beers, which is awesome news and shows that we have a functioning blockchain here.
There are also plans to literally add games into the Beerchain app which could make the whole package even more attractive.
My verdict on this currency
The ICO for Beercoin came to a close at the end of June and sadly it didn’t reach the soft cap. It seems that there were mixed feelings about this currency. The team behind it don’t have a lot of blockchain experience and it’s application didn’t seem to bring a lot of excitement to the space.
But the team are pushing ahead and seeing that they have breweries getting on board now is excellent. Their social media presence is still very active, they are speaking at events, and they’ve released their Yellow Paper which are all good signs.
Personally, I think the concept is awesome. And I’d love to see Beercoin become a big deal. But the currency isn’t without its flaws. One review of the coin mentioned that this application doesn’t need blockchain technology and I agree that is probably one weakness here. All we really have here is a system for scoring points, and those points can be accumulated in such a way that allows for redemption for beer or other products and services. This is much like the rewards points given out by certain retailers. So is there really a need for blockchain technology here? Possibly not.
I’ve also noticed that the app is only available on Android devices at the moment and cannot find it for my iPhone. The lack of an iPhone app must surely be hurting Beerchain right now, and I find it odd that they’d claim that the app is available for iPhones when it clearly isn’t.
I do love the idea though, and will definitely support Beercoin if I see it in my local bottle shops or bars. It would be awesome to see people earning this currency in Australia, so hopefully we see it here one day.
Check out the Whitepaper here if you’d like to learn more about this coin. And while it’s probably obvious, I am in no way affiliated with Beerchain or own any of their currency.