Most people use social media platforms like Facebook and Twitter to communicate with friends, families and even strangers.  As much as each of these platforms provides an important service allowing us all to stay connected, they’re also public companies who must monetize their platforms.

For Facebook, this includes those “promoted posts” that you see in your timeline.  Twitter is playing with numerous methods to gain revenue and advertising dollars, albeit with less success than Facebook currently.

When a user of these platforms encounters one of these revenue sources for the company, that revenue goes to Facebook or Twitter, but it’s the users’ attention that’s being bought.

This has been the model that we’ve all seen with television and it continues to be the model with the widespread use of YouTube creating 5-10 second advertising “bumps” before we can view the video we desire.

In 1971, Nobel Laureate Herbert A. Simon wrote the following – “...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it" (Simon 1971, pp. 40–41).

This comment became the first articulation of something that has become known as the “attention economy”.

What is the Attention Economy?

As defined on Wikipedia, the attention economy is an approach to the management of information that treats human attention as a scarce commodity and applies economic theory to solve various information management problems. Put simply by Matthew Crawford, "Attention is a resource—a person has only so much of it."[1]

What Facebook and Twitter are doing is to utilize the attention economy and are monetizing it for their benefit (and yes, their shareholders as well).  This is a powerful concept and is in fact, something that writers such as Goldhaber wrote about last century when they speculated that “attention transactions” could replace financial transactions as the focus of our economic system.

Does the success of Facebook and Twitter mean that the benefits of the “attention economy” will only be for companies and not directly for the individuals who are providing their attention?

A New Startup Wants to Pay Users

Have you ever thought that the user should get paid directly for the attention that they’re giving to apps like Facebook and Twitter?

A young startup company out of Israel is using digital currency to disrupt the current “attention economy” and seeking to do just that.

GetGems is a young company that began with the vision that users, not platforms should be rewarded for interacting with advertising.  Seeing an opportunity to provide users an alternative to the “bombardment” of ads encountered on Twitter and Facebook, the company created a social messaging platform that provides rewards in the form of virtual currency, called Gemz for doing the daily things that a user does each day – watching ads, encouraging friends to sign up and just being part of the social network.

The company, created by 29 year-old Israeli Daniel Peled, found funding through bitcoin crowdsourcing and has been working feverishly with a wide range of beta testers to solidify a social messaging platform that also allows for the easy transfer of photos, files, messages and the creation of groups for up to 200 people.  The application is available for iOS, Android and the desktop, and has users worldwide on their small, but growing platform.

The “attention economy” is with us.  Every day, we’re providing our attention for the benefits of others.  Could the potential success of GetGems and its use of a digital currency move the power of this “attention economy” back to the user?

Bitcoin is proving that it's not only for techies. The growth in value of the digital currency known as bitcoin over the last year has caught the eye of investors as well.

The value of one bitcoin was about $1 in 2011 until it reached its first "bubble" in July at $31 then dropped down. It got to $100 in 2013, and upon finding its footing, it rose to an astounding value of $1,000 in November of that year.

After briefly hitting $1,000 again in 2014, it dropped down and found itself as low as $200 in 2015. The price of bitcoin reached around $600 in 2016. That's a significant return over the last year and when that happens, investors of all types take note. In 2017, bitcoin prices skyrocketed.

But the roller coaster ride of bitcoin is not for every investor. It's traded on exchanges throughout the world and that makes it a liquid investment, but obviously, there's a significant level of risk.

Bitcoin as an Alternative Investment

We've written in the past about how evaluating bitcoin as an investment requires that investors consider it as an "alternative investment" and thus should only utilize a small portion of their portfolios for this asset. Because of bitcoin's lack of correlation to other assets like stocks or bonds, placing a small percentage into these “non-correlated” assets can allow a portfolio to better weather a storm created by market volatility.

In this way, these assets and their consideration as an “alternative investment” actually create less overall risk for a portfolio and the use of these investments have come to play a role in prudent portfolio asset allocation.

The use of these alternative investments for investors' portfolio has been rising since the financial crisis of 2008.

Many large wealth management firms such as Morgan Stanley and Merrill Lynch recommend prudent asset allocation models of 10 to 20 percent of an overall portfolio into alternative investments such as gold, real estate or hedge funds. As of yet, they're not recommending bitcoin and blockchain assets into this mix, but that's not stopping some investors from taking the leap with small portions of their portfolios.

Background on Bitcoin

If you're not familiar with bitcoin, I'll give you the quick history of the asset. Satoshi Nakamoto, an anonymous “entity” or individual, produced a white paper outlining a new currency called bitcoin in 2008. At the time, the white paper and Satoshi’s creation resonated primarily with those in the tech world or those who believed that the current monetary systems needed change. Satoshi’s ideas held relevance and potential to change things. Although there are now many who liken Satoshi’s declaration of bitcoin as being similar to Martin Luther’s theses (as an example of the times, Luther posted his to a door and Satoshi posted his on the internet), the appeal and interest in the digital currency was slow to take hold or gain interest at the time.

The road to acceptance of bitcoin has been bumpy and is still not fully completed.

However, we’ve moved far from the days of the famous pizza purchase of May 22, 2010. This is actually a day that is celebrated by many in the bitcoin world and it's known as Bitcoin Pizza Day.

At that time, bitcoin was being used more as a barter instrument among those in the developing and programming world. Bitcoins were being created through computers that ran the program and these were used to pay other programmers for their work.

Bitcoin Pizza Day

When the technology was about a year old, Laszlo Hanyecz, a programmer, made the leap of paying a fellow user on an Internet forum 10,000 BTC for two Papa John’s pizzas. Considering that bitcoin had reached a high price of over $1,000 in November 2013, the value of those pizzas was over $10 million. Now that truly warrants its own holiday!

The period between the pizza purchase in 2010 and the $1,000 high in 2013 was a time in which bitcoin became more widely used as a form of currency.

This was primarily due to the ability to own bitcoin through an exchange rather than the previous manner of gaining them exclusively through mining for them. The first exchange that allowed for these bitcoin transactions was called Mt. Gox, which had originally begun as a site to sell and trade cards from "Magic The Gathering," thus the name of the exchange.

We’re now at a time when bitcoin finds itself being written about in the mainstream press and the digital currency is traded on a 24-hour basis on exchanges around the world. You can buy computers, furniture, coffee and just about anything else with a digital currency that is not backed by gold and doesn’t exist in physical form.

Bitcoin as Part of a Larger Blockchain Asset Market

The creation and functioning of these exchanges are an important reason why bitcoin is not only gaining acceptance. People are using the digital currency as an investment vehicle as well. These exchanges and the awareness of value being created by digital currencies has led to the creation of other currencies, referred to as cryptocurrencies or blockchain assets.

According to Crypto Currency Market Capitalizations, the total value of these blockchain assets was nearly $12 billion in August 2016. Although bitcoin constitutes nearly 80 percent of this valuation –it’s the only one worth over $1 billion, sitting at over $9 billion market value –the overall market covers nearly 700 digital currencies. On a 24-hour basis, there is nearly $80 million in volume among the various exchanges throughout the world.

Think of that!

This market didn’t exist prior to 2008 and the creation of bitcoin. Actually, bitcoin was the only blockchain asset until 2011 when Litecoin and Namecoin were created. During that time, this creation of blockchain assets has funded new companies, developed new technologies and allowed people to both make and lose money trading them on worldwide exchanges.

Blockchain Assets to Follow

Another valued blockchain asset is Ethereum, which saw its value increase over 1000 percent only a few months after its creation. The rapid growth of interest in Ethereum actually led directly to the creation of other blockchain assets. One of these was something known as The DAO (distributed autonomous organization) and its premise was to hold Ether (the cryptocurrency for Ethereum) and to institute an organization that would decide what to do with this supply. Members of The DAO would vote for proposed projects and share the benefit from the success of these efforts.

The DAO became the largest crowdfunded effort, receiving over $160 million of ETHER. This interest displayed that not only was there an appetite for investment in blockchain assets, but that the method of using blockchain assets for crowdfunding new businesses could be a wave of the future.

The other blockchain asset that was directly created from Ethereum is known as Ethereum Classic. This new blockchain asset was created in reaction to the reality that soon after The DAO was created, it was hacked and over $50 million was taken. This essentially killed The DAO and the reaction of the Ethereum team was to implement what’s known as a hard fork to return the money to its investors. This led to the creation of Ethereum Classic.

A young startup company named Lawnmower became noted as creating one of the "easiest ways to buy bitcoin" with its mobile app. The company has expanded to provide information, education and analyst reports on the various cryptocurrencies that can also be bought and sold on the exchanges. Alex Sunnarborg, CFO of the company, points out, "there are currently over 20 blockchain assets with a market capitalization of over $10 million, 10 with a market cap over $25 million, two over $1 billion and one (bitcoin) with a market capitalization of over $10 billion."

Lawnmower recently prepared a roadmap detailing the major blockchain assets.

Lawnmower Blockchain Index

Lawnmower is planning to expand their easy way to buy bitcoin to include many of these other blockchain assets as well. They've created one of the first indices for these markets to allow users and investors to track these assets and the overall market as well. They call it the Lawnmower Blockchain Index and it tracks those blockchain assets that have above a $50 million market capitalization.

The volatility of the blockchain asset machine has forced them to add and remove a number of assets from the Index since it was first released. The immediate valuation of The DAO found it securely on the Index only to be removed a few weeks later after its hack and ultimate demise. Similarly, assets such as STEEM and Monero seemingly came from "out of the blue" to valuations that warranted their placement on the Index. Whether they or others stay on the Lawnmower Blockchain Index is still worth watching, but the Index is allowing investors and observers to follow the movements of this upcoming and volatile market.

Because of the explosion of the blockchain asset market over the last several years, we now have a market that once didn’t exist that’s worth nearly $12 billion. New companies can become funded with over $160 million of a blockchain asset!

Whether it's an appropriate investment for you and your portfolio is up to you and your financial advisor. You may find however that your financial advisor may not be knowledgeable or even aware of these assets and how you can invest in them. Until Lawnmower builds out its capabilities to make buying these other blockchain assets as easy as it is on their app to buy bitcoin, the reality is that it's not yet that easy to invest in blockchain assets besides Bitcoin.

Can You Discuss This With Your Financial Advisor?

An advisor or investor can buy an investment called GBTC from the over-the-counter market. This is an ETF-like investment that is a pure bitcoin investment. Its underlying value is 1/10 the value of bitcoin. It trades at a steep premium, however, which shows the appetite that investors have for this type of investment.

The rise of this market will eventually warrant the need for all financial advisors, money managers, and financial professionals to become educated and knowledgeable about these assets so they can have appropriate discussions with their clients. Until then, risky investors may be willing to take the dive into blockchain assets, but should do so by educating themselves on these markets and assets. We're still in the early stages, and although profits can be made, an investor must tread lightly to find the right "alternative investment" for his or her portfolio.

DISCLOSURE: The author is an advisor and investor at Lawnmower and does own GBTC and numerous blockchain assets such as bitcoin, ETHER, and others.

The impact of the financial crisis of 2008 wasn't limited to just the United States. Its impact was felt worldwide and had a substantial impact on the small island country of Iceland.

Prior to the crisis, Iceland became home to newly bought Range Rovers traversing the beautiful and remote countryside, and free flowing credit that created a prosperity that was unfamiliar to the small country. When the crisis hit, it resonated like one of the country's many active volcanoes and led to a huge drop in the value of the country's currency, banks becoming nationalized and the jailing of executives and officials deemed responsible for the crisis.

For an American, the thought of people actually going to jail for the crisis that ruined the savings and lives of many may seem unique. For most Americans the best explanation for the 2008 financial crisis is found in the movie, 'The Big Short', and although 'Occupy Wall Street' brought some Americans to the streets, it pales in comparison to the fact that after the crisis, Iceland's Parliament was faced with daily protests from a large percentage of the population until change was effected (when you have 20,000 people coming out to protest regularly out of a country with 300,000 residents, that percentage of unhappy people seeking change is staggering).

It's this kind of outrage and constructive nationalism that ultimately helped Iceland to correct its situation, create change and return to a cohesive country after the crisis. It shows the Icelandic values of independence, pride and finding solutions in the face of problems (a must have in a country that has brutal and strange weather patterns as well as extended periods of darkness during the day and light at night), that I've come to recognize in my travels there and my experiences with the people there.

One of the results of this Icelandic thinking after the crisis was the creation of a digital currency that was not seen to be THE solution to the country's financial woes, but a way for Icelanders to experiment with a new concept that many felt would have a significant impact on the way banking and financial transactions would be done in the near future.

The devaluation of the Icelandic currency, the krona, and restrictions of currency flight out of the country (which caused confusion regarding bitcoin and cryptocurrencies for residents), and the severe restrictions of currency flight out of the country were actions that the Icelandic government took that ultimately led to the creation of a bitcoin-like digital currency called Auroracoin, specific for Icelanders.

Auroracoin was influenced by the launch and success of Bitcoin. They both shared an anonymous creator. For Bitcoin, it was the Japanese Satoshi. In Iceland, the home of Sagas and Nordic legends, Auroracoin's creator was Baldur Friggjar Óðinsson, which is based on Norse mythology, referencing Baldur, his mother Frigg, and his father Odin.

The coin followed the Bitcoin creation methodology and employed a proof-of-workalgorithm proof of work based on Litecoin.  

Auroracoin for all Icelanders

Because of Iceland's financial problems and its nationalistic pride to transcend the crisis, the creators of Auroracoin decided to give the digital currency to all of Iceland's residents.  An "air drop" of the currency was released to all Icelanders, with the intent of providing 50% of the created Auroracoin to residents.

They were able to achieve this because of their ability to use the government's national identification system.

The coins were released with a USD value of about $12 and Icelanders initially received the equivalent of $385 each (31.8 AUR each). As the "air drop" continued, the price of Auroracoin dropped drastically. When the final stage of the air drops happened on March 24, 2015 (the final step of “burning” the remaining coins took place after this), nearly 1.7 million coins were claimed by more than 2,600 Icelanders. The price of the coin had fallen to a price level that created a payout of 636 coins to every resident.

"The expectations were huge," said Pétur Árnason , who is a leader with the current Auroracoin Foundation. "There were really unrealistic expectations and a misunderstanding that the Icelandic government was involved."

Along with the drop in price, was a loss of confidence and enthusiasm for the new digital currency. Few, if any, retailers were willing to accept the digital currency and it was soon considered a "failed experiment".

A curious software developer

Pétur (Icelanders are referred to by their first name) was among those Icelanders who had become aware of Auroracoin after the “air drop” started, but it was months later that a conversation with a co-worker about it got him more interested in it and actively looking into how they were created. A computer scientist and software designer, Pétur soon learned that the coin could be mined by individuals.

"There were just small amounts of gritty miners that came to it in the beginning." Pétur discovered that the infrastructure of the coin was based upon Litecoin and its algorithm allowed for mining. "People with a graphic card could mine for it. So that got me interested."

Pétur dove into mining for Auroracoin and this led him to trading Auroracoin and other cryptocurrencies as well.  He soon began to work with others on an effort that led to the launch of the first cryptocurrency exchange in Iceland. But for Pétur, the concept of Auroracoin and these other cryptocurrencies wasn't just about the technology. "So in the end, I was just sitting up with the question of why?”

He, like many other Icelanders, had seen the disasters that the current monetary system in Iceland had brought to its residents and he began to understand what cryptocurrencies, such as Auroracoin could do for society and specifically, his country and its residents. “This is the point I realized how brilliant the Auroracoin project really was. How it had better chances of success than most all of the other cryptocurrency projects out there and felt that without a doubt, it could be successful in a shorter amount of time than any of the other.”

For him, he saw the solution was to harness the wealth of talent that existed in the country in the form of programmers, computer technicians and others interested in the potential of the new digital currency to create more opportunities for the Auroracoin ecosystem and focus on the adoption of the coin in Iceland.

“Our main focus has always been to get people to adopt the coin. If you get enough people using the coin you will get more people to develop and improve the coin and ecosystem. This is, however, the opposite of what most other coins are doing. They are focusing the majority of their efforts on improving the technology in the hope that the new technology will drive adoption. I believe this to be the wrong approach,” Pétur said, “I think adoption will drive the technology advancement of the coin.”

A chance meeting

Although Pétur was spending a fair amount of time working with Auroracoin, he had no direct involvement with the coin and its developers until a chance meeting brought him directly into the world of Auroracoin, where he now plays such an important role (this is not rare in Iceland, where it often seems that everyone knows each other).

"I met with a guy who was selling me a motherboard for my mining process who had actually been the spokesman for the Auroracoin," Pétur  recalls. During the transaction of buying the motherboard, it was a glance at the person's desk where he saw a paper about cryptocurrencies that led Pétur to enter into a lengthy discussion about it with the person. It was then that he recognized that Auroracoin was not only about an "experiment" for Iceland but that these types of digital currencies could actually change and benefit the societies that utilize them.

Pétur recognized the value in Auroracoin and what it was trying to do, so he took advantage of the chance meeting to seek a role with the players behind the digital coin. He soon realized that the obstacles to success for the coin in the country were many.

Merchants weren't accepting it as currency. There wasn't an exchange available for holders of the coin to transfer it into the Icelandic currency, krona. Officials in the government were calling it a "financial scam." A web wallet that was intended to hold Auroracoin turned out to be a scam. There was little if any confidence in Auroracoin and Pétur soon recognized that there was really no infrastructure for informing, educating or publicizing the efforts around the coin.

The rebirth of Auroracoin

This didn't deter Pétur, who soon was now actively connecting with the people, Icelanders and foreigners, who were involved with the coin from the beginning. "I started to gather up supporters of the coin and that took quite awhile. I created a new forum because their official forum had been hacked, and that was when we started to regroup," he recalls.

He soon found that the anonymous creator of Auroracoin had disappeared, which was intentional. "He just wanted the community to take over and continue the work. He didn't want to be in that position," Pétur said. However, Pétur's work and enthusiasm were soon recognized and the anonymous creator actually came forward to support Pétur's efforts (he also soon burned the remainder of the coins, as he had planned). Additionally, the Auroracoin Foundation was created and one million Auroracoins were donated to it by its creator to continue its work.

The foundation is now working to raise awareness of Auroracoin throughout Iceland and herald the progress and openness that exists around the coin's resurgence. A recent campaign by the foundation included advertisements around the country that simply showed the Auroracoin logo in an effort to show that it still survives. Pétur recently posted his ability to buy a beer at a downtown Reykjavik establishment with Auroracoin. Regular open developer meetings are being held to bring in Icelandic's top computer and programming talent to enhance and improve the coin's infrastructure.

The recent governmental scandal due to the Panama Papers has led to Iceland's leading political party now being the Pirate Party. Its leader and potentially, future Prime Minister is Birgitta Jónsdóttir, who has voiced her support for digital currencies. This leads some to believe that the small country of Iceland may soon find its way to seeing Auroracoin rise like the mythical phoenix and play a role as the first national digital currency.

If you know the history and sagas of Iceland, you realize that many things are possible in the small country. I got a glimpse of this when upon completing my interview with Pétur, he pointed across the street from my hotel to a flag that was flying high above an office building. It was the Auroracoin logo on the flag and the impending storm (another one?) from the north was causing it to wave proudly as if to say, we're still here, to Iceland and the world.