Not that long ago, I was speaking with my manager about the future of cryptocurrencies. I had a miniature epiphany, which to be quite honest was probably years after other people had the same thought: we’re going to see crypto coins created by mass market producers and given away in bottle caps, chocolate bar wrappers, cereal boxes, and even supermarket receipts.
But let’s step back a little bit, and let me indulge in a childhood memory. When I was between, say, 6 and 9, the kids in my neighbourhood – read ‘kids’ as ‘boys’ – would make their own bows and arrows out of branches found on the ground and in the woods nearby. The thicker, longer branches that could bend were used as bows, and the shorter, straight branches were used as arrows. Most of the kids used thick string for the bow, but my mum occasionally would crochet one for me. The tips of the arrows were bottle caps that we found on the street.
We would bend the bottle caps around the tip of the arrow with our teeth. We were careful but only boys would be stupid enough to do something like that. Boys and girls are, indeed, very different. Having said that, I knew a girl about 15 years ago who chipped a tooth while opening a beer bottle. But, that’s a whole other subject.
So apart from art projects and collectables, bottle caps had another use, if only fleeting and superficial. But while bottle caps were made from steel, cans were made from aluminium, and aluminium was worth money. I recall machines in supermarkets where you placed a can inside a slot, and it crushed it before paying you a small coin in return.
In certain parts of the world, you see people, usually kids, collecting aluminium cans for various reasons. Some do it just for the pocket money. Some do it for environmental reasons just as much as financial ones. And some people just like the exercise.
There are all kinds of container deposit schemes in effect all over the world. The recollection of aluminium is done not only for environmental reasons, but also for economical ones: it’s cheaper to recycle the metal than to produce it. But CDS’s also cover glass and steel containers, and the main reason in those cases is to reduce litter.
In 2001, Paul’s, a dairy products manufacturer, began its Collect-a-Cap scheme. For every marked bottle cap returned, Paul’s gave 10c to a charity of the donor’s choice.
The scheme ended in 2012:
So why not take this further? There’s no reason that a packaged food manufacturer can’t create its own currency, then give it away with its products. The very first thing I thought of was ‘Pepsicoin’. No, this does not exist, but why not? It has a certain ring to it – much more so than Cokecoin, or Schweppescoin. If PepsiCo were to create Pepsicoin, I have little doubt that it would catch on, not just with its competitors, but with companies who make all sorts of packaged food. Breakfast cereal (government name: confectionery), chocolate bars, lollies, caramels, biscuits, etc.
The primary function of the coin would be to redeem it for more product. But if the coin is able to be mined or staked, or even traded on exchanges, its use would extend outside the ability to simply buy more product. And, as a side-effect, the coin would be a stablecoin. If, for example, PepsiCo determined that the value of one coin was US$0.02, then there would be little incentive for the market to disagree. The market would treat it as a stablecoin with a face value of $0.02.
The other factors which will determine the success of something like Pepsicoin are its maximum supply, and whether it is inflationary or (passively) deflationary. Too few coins would discourage consumers from collecting large amounts, while too many coins might conceivably reduce PepsiCo’s net earnings. Perhaps a slight reduction in net earnings might be a good trade-off, but that is a decision that the manufacturer has to consider.
All of this could apply to retailers or service providers, particularly supermarkets, many of which offer rewards points. Instead of rewards points, why not just offer crypto coins? Rewards points can only be used within the issuer’s ecosystem. But a crypto coin, no matter what its worth, has universal application. Same goes for Frequent Flyer programs and so on. Either way, ditch the points, bring on the crypto.
In finance, cryptocurrency is where the fun is. And it could be that way indefinitely. There isn’t an IT department that wouldn’t like to set up a cryptocurrency for its organization. Consumer-level crypto may not be limited to packaged foods or retailers. It could extend to education and even to governments themselves. Time will tell, as always.
Just for fun, I purchased the pepsicoin.co domain name. I might use it to encourage companies to get going with their crypto projects. I don’t expect PepsiCo to buy it from me, but I do expect them to pay attention.