QuickBitcoin

22 January 2014 by Guy Halford-Thompson

Use Case: Bitcoin for affiliate schemes

When people talk about the pros and cons of Bitcoin, it is usually in relation to its potential as an alternative currency. This, in my opinion, is a bit narrow minded, as the potential for Bitcoin stretches far beyond its use as common tender. An example of this is the use of Bitcoins for affiliate schemes.

Whats broken about the current system?

Affiliate schemes are a core part of the modern internet. While affiliate schemes (especially in recent years) have a certain stigma associated with them, they nevertheless provide a relatively passive income for a lot of recreational bloggers, and small companies. The all, however, have some common traits:

They require you to sign up for an account

For some, all that is required is a name and email address, but others require a more lengthy registration process (and may even require your account to be verified). Out of all the issues I am listing here, this is probably the least severe, but it is still an inconvenience and requires you to keep track of multiple accounts across multiple sites (btw, you should check out lastpass if this is the case for you).

They require you to have a payment method on file

Different affiliate schemes pay out in different ways, but they all need some way to pay you, and this means you need to provide them with sensitive information. In the case of a cheque, or paypal account, the the risks are relatively low, but some of the bigger affiliate schemes will pay directly into your bank account and require your personal bank details. Not in itself enough to steal money from you, but not the sort of information you want floating round the internet.

They require a minimum balance before allowing you to cash out

For me, this is the biggest bugbear. Affiliate schemes tend to be very low earners for the majority of people using them, and one of the ways that companies profit from this is by setting a high minimum cash out (usually between $50 and $100). Since a lot of people will never reach that threshold, they are effectively getting users to promote their links for free. You also don't have to venture far on the internet to find forums full of people complaining they never received their money from (insert here) affiliate scheme. Sending money by cheque or bank transfer can sometimes take weeks, and its easy for the companies behind the scheme to use it as an excuse for late or non payment.

How does Bitcoin solve this?

Bitcoin is by no means the golden ticket, but Bitcoin affiliate marketing schemes can solve a lot of the existing problems, and make them much friendlier to the end user.

No account signup

Since your Bitcoin address is also your payment identifier, there is no need to sign up for an account. All the affiliate company needs is a valid bitcoin address. Although you may also want to provide an email address so they can contact you (maybe for monthly reports), this certainly shouldn't be a hard requirement.

Simple payments

Bitcoin payments are easy. Very easy. And there are no (or minimal) transaction fees. The Bitcoin API is also very easy to use, so there is very little overhead to processing cash outs.

No minimum balance to cash out

Since there is very little overhead to sending Bitcoin payments, there is no reason to require a minimum balance to cash out. Whether a Bitcoin affiliate has earned 1 mBTC, or 10 BTC, the effort (cost and human) required to pay them is the same. Payments are instant, and transactional. There cannot be any dispute around non payments, as anyone can take a look at the wallet in question and see if a payment has been made to it or not.

How this works in practice

A few days ago, we launched a Bitcoin affiliate marketing program on QuickBitcoin. We require no signup, and there are no minimum payments.

Affiliate links take the form of
http://quickbitcoin.co.uk/?r=wallet-address. When a user access this link, the server verifies that the wallet address is valid, then checks to see if an affiliate account exists for this wallet. If an account does not already exist it immediately creates one. This means you can be a QuickBitcoin affiliate without ever even visiting our site, or registering a wallet with us.

At the end of each month, we run a report which compiles a list of all completed orders which have an affiliate wallet-address associated with them, and automatically pay out to each bitcoin wallet. Not only is the affiliate scheme very simple to an end user, from a technical perspective, it was also extremely easy to implement.

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