I still scratch my head at brands and companies who want to compensate influencers with product. It is extremely rare that an influencer, unless they are a new influencer, will accept product in place of money. After all, an influencer is in business to pay the bills. It’s hard to do that with a toaster.
I’m closely monitoring the latest trend – paying influencers with cryptocurrency. Cryptocurrency is the creation of a monetary unit, such as bitcoin, that is stored in blockchain technology and can be transmitted as funds. With Wall Street’s continued interest in bitcoin, along with bitcoin’s recent surge in price to over $10,000, established companies are beginning to get involved. Expedia, Holiday Inn, Overstock and DISH Network have all started to accept bitcoin as a payment option. While mainstream businesses have begun to adopt this new form of currency, there remains considerable skepticism on the dependability of cryptocurrencies.
Since the inception of cryptocurrency, analysts have remained suspicious. In 2014, the renowned business magnate and investor, Warren Buffet, warned investors from purchasing bitcoin, calling it a “mirage” on CNBC. New research from Chainalysis, a bitcoin compliance company, found that nearly four million bitcoins have disappeared from the Internet. Given this demonstrable volatility, will influencers accept bitcoin as a payment solution? While influencers are typically early adopters, I am hesitant to say that bitcoin will be adopted industry-wide among influencers. Despite the inherent risk involved, one company is set to launch using cryptocurrency. Indahash, which is still in beta mode, not only intends to pay influencers with cryptocurrency, but will also allow influencers to pay their followers for liking and commenting on content using “Me Coins.” While they are clearly looking to push the boundaries with the usage of bitcoin, the renegade practice of paying followers for likes and comments has the potential to undermine influencer marketing as an industry. The value of influencer marketing is based on authentic engagement and superior content from the influencer. Bots and inauthentic followers don’t translate to customers, which is ultimately why companies hire influencers.
Beyond the skepticism of bitcoin volatility, the usability of cryptocurrencies is decidedly an uphill battle for influencers. The payment forms most frequently used by influencers are PayPal or Venmo, as they provide an easy process and platform for the user. Payment with cryptocurrency requires that the influencer find a conversion service, go through multiple steps to translate the bitcoin into cash, and then transfer the cash to a bank account or debit card. Furthermore, the conversion sites offer various rates so the influencer then must shop around for the best rates. In my experience, most influencers are looking to simplify their business processes so that they can focus on their content. The extra steps involved in using cryptocurrency make it an inconvenient and unlikely substitute for the current payment forms in place.
Let’s also stop to think about the consequences of following the Federal Trade Commission (FTC) disclosures, which state payment should be clear and conspicuous. The introduction of cryptocurrency could present an opportunity for dishonest influencers and companies to make and receive payments unable to be traced by the FTC. Bitcoin is still a currency, and influencers should be held accountable by the FTC for non-disclosure of bitcoin payments. While there is potential for cryptocurrency to be adopted by the influencer industry in the future, the potential abuses and lack of regulation remain too considerable for bitcoin to become commonplace among influencers any time soon.