Crypto Bounties: A Brief History
Crypto bounties - where they came from
Almost anyone with some familiarity in the crypto sphere will have, at some point, come across the term “bounty”, usually accompanying crypto announcements or advertisements. At AmaZix, bounty programs are a significant part of the work we do with our ICO parters.
The term itself saw use within crypto almost at the same time the earliest cryptocurrencies were introduced towards the end of the 21st century’s first decade, with significant attention of security.
Bounties, as the term itself suggests, were rewards typically given to people willing to invest time and research into discovering bugs or flaws in a new product or technology, or to recover lost or stolen access. If you found a software bug or a critical backdoor, or helped someone recover a corrupted wallet, for example, and were able to provide evidence, project developers would reward you, usually with a cash value or Bitcoin equivalent.
Because of the highly technical complexity of these “tasks”, those winning those bounties tended to be computer security experts or “ethical” (white hat) hackers.
Famous crypto bounties
Some of the web’s oldest crypto services still offer these bounties today, as part of successful vulnerability and security strategies.
Coinbase, one of the oldest cryptocurrency exchanges around, has had a history of successful bounties since 2012 and continues to see bug bounty as crucial to staying ahead in security. To date, it has paid out $176,031 in bounties to more than 200 researchers across 346 valid reports.
Its head of security Philip Martin recently blogged that bounties “de-criminalize the actions of good-faith security researchers, while still forbidding malicious hacking.”
Other examples of bounties:
- The bounty page of Localbitcoin (the world’s largest P2P Bitcoin trading platform)
- Bitcoin.com’s bounty page, which includes a 20 BTC bounty for capture of a Bitcoin extortionist and a 37.6 BTC bounty for identifying a hacker who allegedly hacked email accounts of Satoshi Nakamoto, Hal Finney and Roger Ver.
The modern crypto bounty – from security to marketing
Today, a lot has changed with crypto bounties. They still exist for their original purposes, but in the last couple of years, the bounties have become associated more with promotional and marketing purposes.
Unless you’ve been hiding under a rock, you might have noticed the incredible growth of new projects and cryptocurrencies. Each day, new developers are launching projects, with dreams of becoming the next token or altcoin to gain recognition, adoption and, eventually, the holy grail of their crypto token/coin goin “to the moon” in price.
But it is an increasingly crowded crypto market that today exceeds $730 million in market capitalisation, with over 1,300 different digital assets, tokens and cryptocurrencies seeing a daily trading volume of $43 million.
With the proliferation of new crypto projects needing to raise capital, typically through a crowdsourced funding model in the shape of Initial Coin Offerings (ICOs) – the fight for the attentions and interest of the crypto community and investors has meant that developers are turning to several promotional and marketing strategies to spread awareness of their project.
And here, we arrive at the most used, most effective marketing strategy for ICOs and project developers: bounty programs. But how did this strategy come to be so popular? Check out the next section: Part 2: Why Are Bounty Programs So Popular?