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Cryptocurrency 101: What every business needs to know



How to Join the Crypto Revolution
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You could be forgiven for wondering whether there’s anything actually legitimate about cryptocurrencies. 

If 2017 was the year that Bitcoin, and other cryptocurrencies such as “Ether,” broke big as mainstream phenomena, 2018 was the year crypto’s risks became commonplace. 

As ZDNet’s Charlie Osborne has related, crackers last year increasingly broke into “wallets,” the software programs that store Bitcoin and other currencies, absconding with funds, and compromised exchanges, where traders of currency meet to place buy and sell orders.

In a sign of the spread of confusion and chaos, one cryptocurrency software startup, Taylor, which has been trying to create improved programs for trading currencies, was entirely cleaned out of its investment backing, all held in virtual currency, by a cracking attack. The craze for “initial coin offerings,” or ICOs — the issuance of novel currencies — ran into serious trouble in 2018 as some efforts collapsed amidst accusations of fraud on the part of the offering parties. 

The chaos caused the price of Bitcoin, which soared at the end of 2017, to plunge in 2018, dropping from a high price for each Bitcoin equivalent to over $19,000 to a low of under $4,000. Bitcoin is the coin of the realm, as they say, and represents over half of all trades by value, so it sets the standard. Other currencies followed the decline. As of June, Bitcoin’s spot price has rebounded somewhat: it currently trades for just under $8,000. Nvidia, a computer chip maker, and competitor Advanced Micro Devices, both of whose graphics processing units are the basis of crunching the codes for crypto, saw their publicly-traded stocks buffeted in the past year by the volatility in the crypto market.  

In spite of that chaos and in spite of what seems outright fraud, a lot of activity still happens with cryptocurrencies, billions of it on a daily basis, in fact. There is an estimated $250 billion worth of all cryptocurrencies in circulation, and over $60 billion worth of the things changing hands around the world every day. Crypto potentially has tons of benefits for business: the ability to create trading technologies for conducting transactions unique to a given industry, without the need for a central authority, is one of the biggest promises.   

It makes sense to keep an eye on the action, as the sheer volume of activity means that crypto will find some role in business and society for years to come. The announcement by Facebook this week that it will introduce its own cryptocurrency, the “Libra,” some time next year, cements the significance of the field. 

What follows is a review of the basics and the leading edge of crypto that you need to know. 

Benefits: What is cryptocurrency?

The best way to think about Bitcoin, and Ether, and other currencies, is as a contract between buyer and seller. They represent tacit agreements to conduct an exchange between counterparties, just as the U.S. dollar and other fiat currencies have always been representations of the implicit promise of governments to uphold transactions. 

The big appeal is that crypto money doesn’t need to be issued by banks, and exchange rates don’t need to be controlled by a central bank. A company can create its own contracts, just like creating a new programming language. As long as counterparties will agree to uphold the contract, a whole system of transactions can be set in motion without having to be ruled by the processes of normal monetary and banking authorities.

It’s often said that Bitcoin is three things all rolled into one:

  • It’s a store of value, first, in that one can convert fiat currencies — money issued by governments, such as the U.S. dollar — into a corresponding amount of Bitcoin, as well as storing the value of other items by exchanging them for Bitcoin. 
  • It’s a means of enacting transactions, in that one can present Bitcoin in exchange for goods and services, where it is accepted. 
  • And thirdly, it’s a record of transactions, given that each Bitcoin comes out of the operation of computers that track the global flow of all transactions in Bitcoin, via the digital ledger software called blockchain. 

See: Coin Dance’s resources for getting started with 

Bitcoin and things like it are dubbed “crypto” because at the heart of the global software system of the blockchain is a cryptographic function that encodes successive transactions as “hashes,” which are codes formed with cryptographic functions that transform the data of successive transactions in such a way that no single computer can reverse the process. It is this transformation, by multiple computer users, that serves as a third set of books to keep two parties to a transaction honest without a central authority. 


The idea that started everything: all the world’s bitcoin transactions recorded one after another in a long chain of interlocking cryptographic hashes. This is the underlying technology that maintains the integrity of crypto-currencies.

Bitcoin alternatives

Although Bitcoin dominates cryptocurrency activity, like any software program, it has strengths and weaknesses; some would prefer a contract between participants that has different attributes from what Bitcoin has. Some don’t like it as a store of value, or a means of transactions, and so alternatives have been proposed. There are now thousands of new currencies, and more keep being made, including another version of Bitcoin, called “Bitcoin Cash“; Ether, introduced in 2014 by a developer Vitaly Dmitriyevich as part of a new distributed application platform; “EOS,” a coin that comes with a new computing protocol, from the Hong Kong-based startup; “Litecoin,” created by a Google engineer; and “Ripple,” created by startup Ripple Labs, to name just a few of the most prominent. 

See: A tiny tutorial on cryptocurrencies

Each of these has its appeal, the same way one or another programming language attracts followers. According to data gathered by popular news site CoinDesk in its “Crypto-Economics Explorer,” a kind of almanac of crypto, there are only a few currencies whose volume of trading, total value, and interest by developers comes anywhere close to Bitcoin, among them EOS, Ether, and Ripple. Most others have tiny fractions of the market capitalization as measured in dollar-denominated assets placed into them. The various offerings can have different advantages, such as being able to transact faster. 

One big thing to keep in mind is that less-popular currencies will naturally have lower liquidity in cryptocurrency exchanges. As a result, it may be harder to cash out of them when you want to exchange them back for fiat currencies. 

Accepting Bitcoin at some point will be an important decision for many businesses simply because of the sheer volume of fiat currencies placed into these instruments. $260 billion or so worth of dollars and euros and pounds sterling means there is opportunity for a business that accepts payment in crypto to reap some of the money looking to be transacted.

Getting started with wallets

The easiest way to get involved with Bitcoin, Ether or another currency is to get some digital wallet software. The wallet program gives you a unique “public key,” a string of characters, which serves as an address you can give to a counter-party to which they can send you Bitcoin or other money, much the way you would give out an email address. Wallets such as Mycelium and Coinomi are available on mobile devices running Android and iOS. 

There are also desktop programs such as Electrum, and web-based wallets you can use through a browser, such as the one offered for free by a Google-backed, Silicon Valley startup named Blockchain. (Blockchain also has a mobile app version of the wallet.)

Facebook’s forthcoming wallet software, for use with its proposed Libra currency, will be called “Calibra,” the company said this week. It’s useful to try out some wallets to get a sense of what’s involved before Facebook’s offering lands.

Because you can load these wallets up with tiny amounts of money, you try several of them for a nominal expense and see how you like the user interface. Testing the user interface is an important element in selecting a program given that you want to be very clear about how and when you are placing orders to purchase or sell crypto. 

In the wallet you will see a list of accounts. This starts with an initial public key address, but you can have the program create new public keys if you want to store money received in separate keys. Some wallets, in fact, propose generating multiple addresses as a way to separate and to cloak transactions, a practice that will be useful to anyone wanting to obscure their total record of transactions, given that the global blockchain records transactions by public key address. 


Splash screen for the Coinomi mobile wallet for iOS. The first task will be to create the wallet words that will secure your wallet and then to back them up. 


Coinomi generation of random wallet words — record them somewhere else so you can always recall them if needed, and don’t show them to anyone! (Unlike this article is doing!)

When you first install a wallet program such as Mycelium or Coinomi, they will ask you to record a unique string of several words whose combination will be used if you ever need to recover a wallet, such as if you lose your phone with the program on it. You should carefully note the words and record them in a safe place, as these words are the only way to recover a wallet, and without them, your wallet account and any money you have in the wallet will be lost. Once you’re through that procedure, you will create a password of your own invention, which is the normal kind of procedure. The password is what you use with the wallet on a day-to-day basis, and is separate from your recovery set of words. 

To receive bitcoin, you give someone your public key or keys, a string of characters you can see in the program. To send money, you enter into the program a public key that someone provides to you. In this way, you can also use multiple wallet programs and transfer funds between them. 

With each transaction, either sending or receiving, a fee is extracted. The fee goes to the global “mining” community, those computer users who form the third party, the blockchain, that participate in verifying all transactions for a given currency. When you send or receive, it takes some time for the amounts to be verified by miners, hence, your wallet may show grayed-out amounts until they are final. This can take up to several minutes for each transaction. 


The public key, which you give to a counter-party, either by reading off the combinations of characters at the top of the screen or by having them scan the barcode. 

Given that the spot price for a single Bitcoin is around $8,000 today, your first purchase will show only a fraction of one bitcoin in your wallet, something like “0.001” Bitcoin for a $10 purchase, after fees. Other currencies are cheaper but it still can cost hundreds of dollars for a single coin of any currency. 

Be aware that that software wallets can be hacked. Crackers have used approaches such as sending false notice of software updates, to install malicious code. A wallet can be secured via two-factor authentication, such as a one-time passcode sent to a phone, however, crackers have compromised such authentication by what’s known as “SIM swapping,” getting a phone company to assign your cellular account to them, so that they can intercept such one-time codes. There’s no way to absolutely prevent such attacks, one just has to be vigilant for any sign of things irregular, such as sudden notices of password renewal messages or sudden interruptions in phone service. As explained in the next section, such attacks can be limited or they can be exacerbated by the use of crypto exchanges. 

The world of Bitcoin ATMs

Wallets only allow you to send and receive the crypto-currencies, they are not for converting fiat money into crypto. If you don’t have a counter-party from whom to receive your first Bitcoins or Ether coins, an easy way to get some is to locate one of the several thousand crypto ATMs installed in various cities, which will convert bills of fiat currency into crypto of your choice, depending on what the machine offers. These things often hang out in small shops, such as grocery stores, similar to normal ATMs.


A General Bytes Bitcoin ATM.

A directory of such machines is maintained by CoinATMRdar, with details about the features of the machines and whether a machine is in working order, updated by crowd-sourced reports. Using the machine starts with inserting money just like a slot machine. You then take out your smartphone wallet and bring up the bar code in the app that represents your public key. You hold the screen of the phone up to the machine’s barcode reader for it to be scanned. Within a few seconds, your crypto shows up in the wallet, with a record of the details of the transaction including the fees charge, and lots of technical details about the blockchain process that probably will not be that interesting to you in the beginning. 

Such machines can vary quite a bit, but you can get a sense of the features by checking out the product literature of one popular manufacturer, General Bytes. Most machines are one-way, bills to crypto only, so you can’t cash out of Bitcoin and the rest, although newer machines from General Bytes incorporate that option. 

The cold storage alternative

Because accounts can be compromised, you may want to consider turning to what’s known as “cold storage,” a device that’s not connected to a network. Startups have created physical USB tokens, similar to a thumb drive, such as Trezor and KeepKey that you plug into a computer, and that ingest your crypto assets, acting as a hardware wallet that can be kept physically remote from your day-to-day activities. 

Bear in mind that the companies offering such devices have somewhat vague and incomplete user documentation, which means knowing who is selling you the device and all the details about how it works can involve some extra web searches or Reddit discussions. 


The Denarium gold coin comes pre-loaded with specified amounts of Bitcoin, as a “hard wallet” that’s off the grid, for cold storage of your money. 

Finnish startup Prasos has a somewhat unique take on the whole matter: silver, platinum and gold coins, called “Denarium,” that are shipped by the company with an embedded hologram that counts as the tamper-resistant record of your collected coins. These are one-time devices, as once you rip open the cover of the hologram, if you want to spend it, the physical token loses its crypto value (though it’s still precious metal, for what that’s worth.)

Another curious artifact is the “CryptoSteel,” from British firm Sword Ltd. The $79 steel slab, about the size of a credit card, comes with a set of tiny metal characters. You assemble the wallet words for your digital wallet by placing the type pieces into the grooves in the slab, rather like an old-fashioned type-setter laying out a print newspaper. It’s a durable, simple way to make a record of wallet words that secures your wallet. 

Working with exchanges 

At some point, being strictly peer-to-peer, exchanging Bitcoin and the other money with single individuals, may seem too limiting. You may be ready to check out one of the numerous exchanges that bring together buyers and sellers, places such as Bitstamp, Kraken, and Coinbase. (Bitcoincharts is one starting place to see the selection of exchanges out there.)

These institutions theoretically inject liquidity into the system, by making it possible for counter-parties to come together, although they carry a whole other set of risks as well.  

Connecting from your wallet to an exchange is a matter of setting up an account on the exchange and then copying a unique public key address as the address to use in the wallet as the target for transferring your coins.

You may have to wait up to two months to deposit fiat currencies while your identity is verified by the exchange. This is so the exchange can comply with anti-money laundering and similar rules. For individuals, it’s a matter of standard proof of identification, proof of bank account, and proof of address.  


Example trading screen from exchange Bitstamp. 

Once your account is set up, depositing money with which to buy and sell on the exchange introduces its own wait time. A wire transfer is required to put U.S. dollars and other fiat currencies into your exchange account. It can take 48 hours to submit the paperwork just to get the ball rolling, and another five business days for the wire transfer to actually go through and the funds to show up in your account. 

The exchange method can vary quite a bit. Places such as Bitstamp feature “Buy” and “Sell” buttons for placing trades, much like online trading software. These exchanges support trading in a variety of different coins, not just Bitcoin, and they offer different quotes for both the spot price of a given coin — its value in fiat currency — as well as the fees that will be charged for each transaction.

Also: Want a job in bitcoin or blockchain? These 10 companies have the most openings TechRepublic 

A somewhat different approach is a service called LocalBitcoins. It’s a kind of marketplace of buyers and sellers rather than a true exchange. It lets sellers of currency post listings of what currencies they will sell and for how much. When you go to buy the currency, or if you become a seller, any exchange of fiat currency with the other party is done via a variety of transfer mechanisms that can include Western Union, MoneyGram, or traditional bank transfers, so it expands your options for funding your trades. You can drill down into details about the counter-parties as well, if you want to geek out on the reputations of the other party. 

Taking out funds when you want to cash out to fiat currencies can take a week to two weeks, depending on the internal processes of the exchange you use. It’s especially important to keep in mind these time frames for opening, funding, and cashing out, as they will be a drag to your momentum.

In addition to individual trading, exchanges have been adding capabilities for enterprise accounts. These can include dedicated network connections and co-located server equipment for trade processing. 

How to pick exchanges

There are tons of different exchanges, and picking one will involve a mix of assessing features and assessing operating history. On the first score, exchanges vary by the currencies they support, the prices they list for buying and selling, the volume of trading they offer (a proxy of liquidity), and, for companies, the enterprise features they offer. 

In the latter case, some time spent with the exchanges is required to get a sense of the true security they can offer over time.

Exchanges bring both safety and risk. On the one hand, professionals who manage infrastructure could keep your holdings safer than you would as an individual or a company, because it’s their job. And some exchanges can insure deposits as a practice. 

See: Will blockchain be mainstream by 2025?

One the other hand, it is possible for the virtual currencies of exchanges to be compromised, something that has happened with many exchanges on numerous occasions. Just last month, an exchange named Binance was cleaned out of $41 million worth of Bitcoin because of a massive security breach, echoing attacks in past such as the 2013, $350-million theft that shut down exchange Mt. Gox.

In many cases, exchanges continue to function, despite past problems. The example of Bitfinex, an operation run by Hong Kong-based iFinex Inc., is salutary. The company in the summer of 2016 suffered a loss of over $60 million in customer funds. Bitfinex has also been accused of artificially inflating the price of Bitcoin, and the New York Attorney General obtained a court order in April against parent iFinex enjoining the company against continuing certain actions that may have defrauded customers.

Risks: How to make cryptocurrency safer

Given risks to both individual wallets and exchanges, it’s important to consider best practices to mitigate the disasters that can happen. Those best practices include starting with only nominal amounts in crypto, to gain a convincing history of the quality of both wallet software and trading platforms. Consider experimenting with the offerings over a period of time that may be several months to a year. As a contract, a cryptocurrency, including both Bitcoin and newer offerings, is established via the evidence of stability over time. 

Given that the biggest risks have come from things that are all too common in the software world, such as cracked passwords and backdoor software installs, it’s important to both observe best practices in the maintenance of secrets but also to test out various offerings to establish the quality of programs and platforms.

And perhaps the best thing one can do is to avoid the mindless urge known as “fear of missing out,” or FOMO. A good part of the danger in crypto comes from the continually shifting nature of currencies and technologies. Jumping into anything increases risk. Avoiding rushing into anything crypto that is new simply because it is new will most likely greatly reduce the headaches and the heartache.

The future of crypto: An evolving landscape

Understanding the landscape of crypto is only ever partial, as things continue to evolve. The currencies are evolving, the technology is evolving, and the rule of law is trying to evolve. 

On the currency front, people continue to come up with new coins, especially for the purposes of supposed stability. Startup Tether, Ltd., which is owned by iFinex, promised to back all “Tether” coins in circulation with more hard currency than the dollar value of the coins, over $2 billion in assets. With the A.G.’s action in New York, others are rushing in to propose alternative ways to make such “stable coins,” as they’re called.

Also: Your systems, their profit: How IT rights can be abused for shadow mining of cryptocurrency TechRepublic 

A competitor, Anchor AG, claims the real challenge is to make trading more stable. It proposes to do so by tying its novel currency, the “Anchor” coin, to the total economic production of the world. Anchor is promoting something called the “Monetary Measurement Unit,” or MMU, which the company claims is calculated based on global gross domestic product using a unique, proprietary algorithm. 

That’s all well and good, but as mentioned with Facebook’s Libra, larger parties are getting into the crypto game. The company’s blog post claims Libra will be “stable” because it is “backed by a reserve.” 

A companion white paper offers a lot more detail. The reserve will be created via a private placement of a second class of coin, which is a way to inject initial funds into the reserve. Facebook says this reserve will limit the extent of the fluctuations in Libra, though whether it prevents the wild swings seen with Bitcoin and the rest is an open question.

There are whole other bunch of changes coming with Libra. Facebook’s crypto will come with a whole new programming language, called “Move,” and there will be an association of founding member companies, such as Visa and Mastercard and Vodafone, that will control the mining of new coins, unlike Bitcoin, where anyone with enough computing power can mint new currency.

Bottom line, Facebook’s entry looks to be a seminal event for crypto, and will have an impact on the other coins in circulation and the future directions for existing wallet software and exchanges. With other tech giants besides Facebook offering technology related to crypto, such as Amazon’s blockchain service, and Apple’s “CryptoKit,” there could be a wave of major-party crypto offerings. After all, cryptocurrencies are little more than a digital contract, something big tech should be able to provide to its loyal user base. That could lead to a fractured landscape, or perhaps some organization like Libra’s will unite the various efforts.

See: Amazon Managed Blockchain now generally available

The evolution of the mining community, those computer users who spend compute cycles on maintaining the blockchain, will be another continuing matter in coming years. Recent years have seen the concentration of compute power in the hands of single parties such as AntPool, Bixin, and CoinGeek. Their dominance of the blockchain for currencies feels long in the tooth and ripe for innovation. 

Regulation and taxes

And then there’s regulation. The wave of popularity in 2018 has resulted in a wave of scrutiny. The city of Vancouver, British Columbia, the site of the very first Bitcoin ATM, is considering a ban on crypto ATMs, which police say is an “ideal money-laundering vehicle,” following a raft of theft incidents with the machines. 

China, whose government has banned crypto trading, is reportedly considering outlawing mining activity, which would be a big development, given that China is where the majority of mining takes place. 

And don’t forget taxes. Crypto today is treated as capital gains, which basically means a 15% tax on users’ profits. The U.S. Internal Revenue Service is expected to release further guidelines this year to ease the complex process of calculating a “cost basis” for holdings in virtual currency. But it’s entirely possible that tax rates will change as legislation evolves to reflect the expanding practice of trading in crypto.  

When it comes to crypto, keep an open mind but be careful. This is an immature technology, and an immature marketplace, so keeping your head amidst the chaos is essential. 

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5 tips for brands that want to succeed in the new era of influencer marketing – TechCrunch



If I told you a decade ago that a spin bike would be a social community, you’d have had a good laugh. But that’s precisely what Peloton is: A spin bike with a social community where the instructors are the influencers.

Peloton is just one example of how social is being integrated into every aspect of the customer experience in an increasingly digital world. Whether it’s considering a new restaurant to check out, a movie to see or a product to buy, most people look at reviews before making a final decision. They want social proof as an indicator of quality and relevance.

Influencers are a natural byproduct of this desire for social validation, and as social permeates the customer journey, creators have become an essential source of validation and trust.

Influencers are a natural byproduct of this desire for social validation, and as social permeates the customer journey, creators have become an essential source of validation and trust. Indeed, social validation is what social platforms are built on, so it’s a significant component of how we derive relevance online — and the deeper integration of social is changing the dynamic between brands and digital creators.

The shifting economy of creator monetization

Brand sponsorships are the holy grail for creators hoping to monetize their online influence. According to an eMarketer report, brand partnerships are still the No. 1 source of revenue for most digital creators.

However, digital creators have a lot more monetization options to choose from, thanks to Patreon, affiliate platforms, paid content platforms and platform revenue sharing, making it easier to earn a living without relying so heavily on brand sponsorships.

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As a result, creators are diversifying their revenue streams, which, for some creators, allows them to be more selective about the brands they work with. What’s more, creators aren’t reliant on just one channel or one form of revenue.

YouTube creators probably have the most diversified revenue, often combining brand sponsorships, subscription models, affiliate deals, tipping/donations, their line of branded products and revenue share. However, it’s important to note that not all monetization options apply to every creator. But with so many options to choose from, making a living as a digital creator is more accessible than ever.

Here are a few of the ways online creators can monetize their content:

Ad revenue sharing: Advertising is the most traditional form of revenue for online creators. With this model, ads are injected into and around the creator’s content, and they make a certain percentage of revenue based on impressions. However, the revenue split can vary based on the platform, and some platforms have a specific threshold creators must hit before they can participate in ad revenue sharing.

Affiliate marketing: Similar to advertising or a brand sponsorship, affiliate marketing is an agreement for a share of revenue based on products sold. This kind of arrangement generally works best when the creator has a blog, website or YouTube account. Affiliate links allow the influencer to proactively choose the products they want to talk about and earn from, rather than having to wait for a brand deal to come their way.

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Instagram’s TikTok rival, Reels, rolls out ads worldwide – TechCrunch



Instagram Reels are getting ads. The company announced today it’s launching ads in its short-form video platform and TikTok rival, Reels, to businesses and advertisers worldwide. The ads will be up to 30 seconds in length, like Reels themselves, and vertical in format, similar to ads found in Instagram Stories. Also like Reels, the new ads will loop, and people will be able to like, comment, and save them, the same as other Reels videos.

The company had previously tested Reels ads in select markets earlier this year, including India, Brazil, Germany, and Australia, then expanded those tests to Canada, France, the U.K. and the U.S. more recently. Early adopters of the new format have included brands like BMW, Nestlé (Nespresso), Louis Vuitton, Netflix, Uber, and others.

Instagram tells us the ads will appear in most places users view Reels content, including on the Reels tab, Reels in Stories, Reels in Explore, and Reels in your Instagram Feed, and will appear in between individual Reels posted by users. However, in order to be served a Reels ad, the user first needs to be in the immersive, full-screen Reels viewer.

Image Credits: Instagram

The company couldn’t say how often a user might see a Reels ad, noting that the number of ads a viewer may encounter will vary based on how they use Instagram. But the company is monitoring user sentiment around ads themselves, and the overall commercially of Reels, it says.

Like Instagram’s other advertising products, Reels ads will launch with an auction-based model. But so far, Instagram is declining to share any sort of performance metrics around how those ads are doing, based on tests. Nor is it yet offering advertisers any creator tools or templates that could help them get started with Reels ads. Instead, Instagram likey assumes advertisers already have creative assets on hand or know how to make them, because of Reels ads’ similarities to other vertical video ads found elsewhere, including on Instagram’s competitors.

While vertical video has already shown the potential for driving consumers to e-commerce shopping sites, Instagram hasn’t yet taken advantage of Reels ads to drive users to its built-in Instagram Shops, though that seems like a natural next step as it attempts to tie the different parts of its app together.

But perhaps ahead of that step, Instagram needs to make Reels a more compelling destination — something other TikTok rivals, which now include both Snap and YouTube — have done by funding creator content directly. Instagram, meanwhile, had made offers to select TikTok stars directly.

The launch of Instagram Reels ads follows news of TikTok’s climbing ad prices. Bloomberg reported this month that TikTok is now asking for more than $1.4 million for a home page takeover ad in the U.S., as of the third quarter, which will jump to $1.8 million by Q4 and more than $2 million on a holiday. Though the company is still building its ads team and advertisers haven’t yet allocated large portions of their video budget to the app, that tends to follow user growth — and TikTok now has over 100 million monthly active users in the U.S.

Both apps, Instagram and TikTok, now have over a billion monthly active users on a global basis, though Reels is only a part of the larger Instagram platform. For comparison, Instagram Stories is used by some 500 million users, which demonstrates Instagram’s ability to drive traffic to different areas of its app. Instagram declined to share how many users Reels has as of today.

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Twine raises $3.3M to add networking features to virtual events – TechCrunch



Twine, a video chat startup that launched amid the pandemic as a sort of “Zoom for meeting new people,” shifted its focus to online events and, as a result, has now closed on $3.3 million in seed funding. To date, twine’s events customers have included names like Microsoft, Amazon, Forrester, and others, and the service is on track to do $1 million in bookings in 2021, the company says.

The new round was led by Moment Ventures, and included participation from Coelius Capital, AltaIR Capital, Mentors Fund, Rosecliff Ventures, AltaClub, and Bloom Venture Partners. Clint Chao, founding Partner at Moment, will join twine’s board of directors with the round’s close.

The shift into the online events space makes sense, given twine’s co-founders —  Lawrence Coburn, Diana Rau, and Taylor McLoughlin — hail from DoubleDutch, the mobile events technology provider acquired by Cvent in 2019.

Coburn, previously CEO of DoubleDutch, had been under a non-compete with its acquirer until December 2020, which is one reason why he didn’t first attempt a return to the events space.

The team’s original idea was to help people who were missing out on social connections under Covid lockdowns find a way to meet others and chat online. This early version of twine saw some small amount of traction, as 10% of its users were even willing to pay. But many more were nervous about being connected to random online strangers, twine found.

So the company shifted its focus to the familiar events space, with a specific focus on online events which grew in popularity due to the pandemic. While setting up live streams, text chats and Q&A has been possible, what’s been missing from many online events was the casual and unexpected networking that used to happen in-person.

“The hardest thing to bring to virtual events was the networking and the serendipity — like the conversations that used to happen in an elevator, in the bar, the lobby — these kinds of things,” explains Coburn. “So we began testing a group space version of twine — bringing twine to existing communities as opposed to trying to build our own, new community. And that showed a lot more legs,” he says.

By January 2021, the new events-focused version of twine was up-and-running, offering a set of professional networking tools for event owners. Unlike one-to-many or few-to-many video broadcasts, twine connects a small number of people for more intimate conversations.

“We did a lot of research with our customers and users, and beyond five [people in a chat], it turns into a webinar,” notes Coburn, of the limitations on twine’s video chat. In twine, a small handful of people are dropped into a video chat experience– and now, they’re not random online strangers. They’re fellow event attendees. That generally keeps user behavior professional and the conversations productive.

Event owners can use the product for free on twine’s website for small events with up to 30 users, but to scale up any further requires a license. Twine charges on a per attendee basis, where customers buy packs of attendees on a software-as-a-service model.

The company’s customers can then embed twine directly in their own website or add a link that pops open the twine website in a separate browser tab.

Coburn says twine has found a sweet spot with big corporate event programs. The company has around 25 customers, but some of those have already used twine for 10 or 15 events after first testing out the product for something smaller.

“We’re working with five or six of the biggest companies in the world right now,” noted Coburn.

Image Credits: twine

Because the matches are digital, twine can offer other tools like digital “business card” exchanges and analytics and reports for the event hosts and attendees alike.

Despite the cautious return to normal in the U.S., which may see in-person events return in the year ahead, twine believes there’s still a future in online events. Due to the pandemic’s lasting impacts, organizations are likely to adopt a hybrid approach to their events going forward.

“I don’t think there’s ever been an industry that has gone through a 15 months like the events industry just went through,” Coburn says. “These companies went to zero, their revenue went to zero and some of them were coming from hundreds of millions of dollars. So what happened was a digital transformation like the world has never seen,” he adds.

Now, there are tens of thousands of event planners who have gotten really good at tech and online events. And they saw the potential in online, which would sometimes deliver 4x or 5x the attendance of virtual, Coburn points out.

“This is why you see LinkedIn drop $50 million on Hopin,” he says, referring to the recent fundraise for the virtual conference technology business. (The deal was reportedly for less than $50 million). “This is why you see the rounds of funding that are going into Hoppin and Bizzabo and Hubilo and all the others. This is the taxi market, pre-Uber.”

Of course, virtual events may end up less concerned with social features when they can offer an in-person experience. And those who want to host online events may be looking for a broader solution than Zoom + twine, for example.

But twine has ideas about what it wants to do next, including asynchronous matchmaking, which could end up being more valuable as it could lead to better matches since it wouldn’t be limited to only who’s online now.

With the funding, twine is hiring in sales and customer success, working on accessibility improvements, and expanding its platform. To date, twine has raised $4.7 million.

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