As the Los Angeles Times reported on Aug. 14, Playboy — one of the pioneers in global erotica — is suing the Canadian firm Global Blockchain Technologies (BLOC), claiming that it failed to integrate blockchain technology into Playboy’s online media channels.

Playboy Enterprises has filed a lawsuit in the Los Angeles County Superior Court, and the accusations include fraud and breach of contract, which the two companies drew up in March. BLOC representatives dismissed the lawsuit as a “normal dispute” between the two businesses, rejected the charge of fraud as “frivolous” and claimed it has “a strong defence to the action.”

The blockchains system that BLOC has failed to implement in Playboy’s sites is the Vice Industry Token — a promising token reward concept with a mission to create the network of affiliates, of whom PlayboyTV is with a little doubt the most renowned one. Now, the Vice Industry Token blames Playboy for taking ‘‘the equivalent of millions of dollars’’ and giving absolutely nothing.

Get paid for watching porn or for interacting with it?

The Vice Industry Token (VIT) is basically a utility token designed to be used in the universe of adult industry websites. Its foundation is built on a fork of the Steem open-source blockchain that was modified “to meet the specific needs of the adult content industry.” The project’s mechanics is described in the catchy motto “Get Paid to Watch Porn” and suggests the reward for those who engage in social activities on porn sites. As the VIT white paper declares, “in order to create rewards, the viewer is prompted to perform PoB [proof-of-brain] and PoV [proof-of-view] functions by liking content, upvoting it [and] making comments.”

Despite focusing on adult content, Vice Industry Token’s ambitions are far larger — its main page also mentions the cannabis and gambling industries, somehow promising a brand new tool to consume goods and services which are often inaccessible “in developing countries” due to the moral reasons. As the VIT statement goes:

“Our goal is to level the playing field internationally and make all sorts of content not currently available outside of developed countries available to anyone from any country anytime and anyplace.”

The official list of the affiliates at this point doesn’t fully correspond to this global framework, as it is still limited to the number of adult sites such as AnalX, DDBusty, Exxxtasy and even StormyDaniels.com — not to mention PlayboyTV. It’s important to note that VIT claimed to be integrated with popular porn streaming Tube8 — with more than six million visits daily — by Aug. 1. And on Aug. 10, Tube8 confirmed this claim by announcing that it has entered into an agreement with VIT to tokenize its platform.

VIT raised $22 million in Ethereum in the first 24 hours of its Initial Coin Offering (ICO). Now it stands at the rank of 760 on Coinmarketcap, with its market cap priced at $1.36 million (by the press time).

A partnership went wrong

Global Blockchain Technologies, a Vancouver-based company that specializes in collaboration with existing businesses to build blockchain applications and cryptocurrencies base, announced its partnership with the Playboy Enterprise on May 31. Back then, BLOC chairman Steven Nerayoff said:

“As one of the earliest adopters of blockchain technology, this is a thrilling project to be part of. Most cryptocurrencies fail because they are unable to match up with a real-world use case, which resigns them to a fate of being nothing more than an experiment of speculation and baseless hype-building. In this situation, Playboy specifically benefits from having a cryptocurrency like VIT on its side. [...] For VIT, being part of Playboy is a huge step in real-world cryptocurrency use that will translate to success.”

Per the terms of the agreement, BLOC obliged to integrate the digital wallet for VIT on Playboy’s media sites, provide the technical assistance and rebrand the VIT landing page with any mention of porn removed. Also, the blockchain developer would pay Playboy $4 million by July 16 for using the famous brand in its marketing activities. None of these obligations were fulfilled, according to Playboy lawsuit.

Playboy.TV was expected to be the first of the company’s platforms to feature the new wallet, which would enable the online platform to accept VIT and other cryptocurrency tokens.

The third side of the conflict

On Aug. 15, adult news outlet AVN reported that the Vice Industry Token, as a company, plans to seek restitution of its own after “purportedly losing millions of crypto tokens in a crumbling deal between Playboy Enterprises and Canadian-based Global Blockchain Technologies.” The blockchain company is strategizing with lawyers to take action within the coming week for remuneration of its losses. As VIT CEO Stuart Duncan told AVN:

“I've read the complaint that Playboy has with Global Blockchain, and I'm really disappointed in Playboy. because we gave them millions and millions and millions of tokens, [and] they've never reached out to us once to try and get anything tokenized with their website[...] It makes me think that maybe we've got a case for a lawsuit against them, because they've taken the equivalent of millions of dollars from us, and we've received absolutely nothing and no benefit from it whatsoever.”

Duncan called himself “the collateral damage in this thing,” and stated that he doesn’t know the details of agreement between Playboy and BLOC. VIT’s CEO also specified that it is solely Playboy he’s planning to sue in the first place:

“I will be doing something, I just don't know what it is I'll be doing yet. If those two companies can't resolve their problems and fix things with me, Playboy's going to have a big problem.”

Cointelegraph have contacted Scott Duncan to clarify the aspects of VIT’s relationship with the Playboy Enterprise. We hope to get back with more details in our next piece on the subject. The reason why VIT’s — a blockchain company itself — site should have been rebranded by a blockchain contractor of Playboy remains a serious question.

Adult industry takes it slow with crypto

The adult entertainment industry is known as an unexpectedly influential player when it comes to the new technologies. It has pioneered the internet and played a major role in creating a demand for fast broadband connections while the bright future of the web remained undecided after the crash of the dotcom bubble. As Pornhub Vice President Corey Price righteously stated:

“History has proven that the adult entertainment industry plays a critical role in adoption for innovative technology. We saw that with VHS, Beta Max, credit card payment icons and, most recently, VR goggles. We expect to see widespread adoption of crypto and blockchain in short order.”

This statement by Price came on April 17, with an announcement of the big partnership between Pornhub as the absolute leader of adult content streaming and cryptocurrency Verge (XVG). From the time, Verge became a method of payment on Pornhub — as well as its sister sites, Brazzers and Nutaku. Pornhub called the move “critical” for crypto adoption, though it didn’t save XVG from two major hacks in one month and consistent price falls.

Apart from that, the adult entertainment industry can’t impress with a major involvement into the crypto. Pornhub also started to accept Tron and ZenCash, while there is a number of other adult sites that accept Bitcoin and altcoins as a payment method — Naughty America and Chaturbate among them. There’s also a number of ICOs that are claiming to provide the solutions for the different branches of the industry, but the Vice Industry Token remains the first and last project initiated by the big and well-renowned adult enterprise. And regardless of the Los Angeles Supreme Court’s decision, the creation of the VIT network could still become an important precedent, if it is to happen.