Why I got into the penny business

This post originally appeared on the Unbounded Enterprise website, and we republished with permission from its author Jackson Laskey.

Pennies get a bad rap. Heavily associated with the factoid that the cost of their production exceeds their value, pennies have been in the crosshairs of legislators keen on their destruction for some time now. I’m not here to argue that these copper coins are worth continued creation, but as a business, turning down a penny could become a costly error.

My company, Unbounded Enterprise, recently released a game called BSV2048 through our R&D arm, Unbounded Labs. Unbounded Enterprise is a blockchain infrastructure company making it easier to build on Bitcoin SV (BSV), the blockchain we believe has the greatest commercial potential. Unbounded Labs explores BSV design patterns to better serve infrastructure clients by creating consumer facing applications which can help to drive adoption. 

BSV2048 is an extension of the popular puzzle game 2048, a game which has been downloaded over 40 million times. While it peaked in 2014, it was still downloaded 300,000 times in January 2021 and earned $6,000 in worldwide revenue, presumably via an active user base in the millions or tens of millions.

BSV2048 adds a new dimension to 2048 by embracing the penny business. 2048, like most games, is played for free. These sorts of games generate revenue from in-app purchases (typically of a dollar or more with 40% going to Apple or Google), paid app downloads, or ads. BSV2048 takes a different approach. We charge an entry fee for each game. We have two tiers—1 penny, and 1 dollar. The score for each entry gets recorded on the leaderboard for 24 hours. While a score is on the leaderboard, if it is high enough, it qualifies for a cut of entry fees. Unbounded Labs takes 20% of the entry fee.

The numbers speak for themselves. We launched on Wednesday February 24, 2021. In our first two days, we have had about 600 total users. We have generated $40 in revenue. This may not seem like a lot, but compare it to 2048’s numbers. For millions of users, they are generating $6000 a month. If we had 1000 times as many users, we would still have far fewer than 2048, but we would be generating $600,000 a month. 

The revenue potential is clear for businesses, but how are users affected? Is the penny a burden, or an opportunity? A penny is a very small price to pay for a game that can provide up to an hour of entertainment. It’s a change in user behavior, no small thing, but it isn’t a significant cost. In fact, I think many games would improve their UX just by substituting ads for direct payment. What’s a penny to save 20 seconds of time waiting for an ad to play? A penny every twenty seconds is $1.80 an hour—a number few would accept for the job of watching ads.

Perhaps most importantly, the leaderboard model can really make a game more interesting and provide players with a tangible goal and reward. I ended up benefiting from my practice testing the app by generating the high score right away. From that 1 cent investment, I ended up making over $10—a career-best ROI by far. Had my score held up on a scale of players 1000x larger, that could have been a $10,000 bounty on a 1 cent investment. This mechanism gets powerful at scale without introducing the destructiveness of gambling. Even a totally addicted player would have a hard time spending $100 a year on BSV2048 at the 1c level.

So, how is this possible? This can’t be done with credit cards which have a minimum fee that typically starts between 15 and 30 cents. Beyond the fee, the UX of entering credit card information is a non-starter. Our magic ingredient—BSV transactions. BSV has transaction fees of 1/100th of a cent and transaction throughput such that we never need to worry about hitting a scale ceiling. These transactions also transfer immediately. There is no waiting time for confirmation—we can forward the penny anywhere in the world immediately upon receipt. 

Just as importantly, BSV has amazing businesses which make using BSV technology extremely simple. We used technology from HandCash, a Spanish company that created a wallet for Bitcoin SV that makes this type of game possible. Our users can create a HandCash wallet with an email and phone number in the browser. This HandCash account allows users to spend and earn Bitcoin with a simple click of a button. It also makes logging into BSV2048 and similar apps extremely easy, akin to single sign on with Google or Facebook. Using HandCash, we were able to build BSV2048 in a couple of weeks – and we could build a similar game much more quickly with our experience.

I know my experience with BSV2048 will have me hooked for life on the penny business. If you want to learn more about how to utilize BSV payments in your business, please get in touch with us here. And if you want to try out the game, head to BSV2048.com. No BSV needed, first 10 pennies are on us!

See also: Jackson Laskey’s presentation at CoinGeek Live, Transaction Processing: A Key to Drive Adoption of BSV Businesses

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.