Tackling the Issues in the Apps Economy

Blockchain technology has the potential to disrupt existing ecosystems in ways we’ve never seen before. That goes for long-standing industries like healthcare and finance and also newer ecosystems spurred from more recent technological developments. AppCoins seeks to disrupt one of those newer ecosystems, app stores. BlockTelegraph chatted with Carolina Marcalo, Executive Director of the App Store Foundation and the AppCoins team, to learn more about the platform and how they intend to change how developers, advertisers, and users interact.

What is the AppCoins protocol and what will it bring to the apps market that doesn’t currently exist within the mainstream?

AppCoins is an open and distributed protocol for app stores. It proposes to move to the blockchain three of the most critical flows of app stores: advertising, in-app purchases and developer’s approval. By redesigning the transactions inside an app store, creates efficiencies by disintermediation and redistributes the value released in a way that creates incentives for the AppCoins supported stores dissemination.

The AppCoins protocol has many advantages. Otherwise, there are no incentives for adoption. Blockchain technology as all it takes to align incentives in a supply chain. The AppCoins protocol addresses the managing of incentives between Developers, Users, and App Stores. The first result of the protocol is a standard and efficient way to acquire users and monetize In-App Purchases across app stores for the first time in history.

AppCoin tokens can be used to obtain services on any app store that supports the AppCoins protocol as well as to reward users. Some examples:

Developers can invest in advertising to promote their apps

Users can be rewarded with AppCoins by installing and using sponsored apps

Developers can sell, and users can buy digital goods using in-app billing

Can you explain Proof-of-Attention and how that will impact how the app economy currently works?

Proof-of-Attention is the smart contract that will enable AppCoins’ advertising solution, which we call CPAt (cost-per-attention). When app developers want to invest in user acquisition for their app and want more visibility in an app store, they can use the CPAt model. Their app is placed in the sponsored section of the app store, giving incentives to the user, if they download the app, and spend at least 2 minutes of “attention” inside the app – thus, converting the users’ attention and the app’s conversion rate. Not only it reduces fraud and intermediation, but it also guarantees that the users at least try the app, increasing the chances of retention. With AppCoins, 85% of your advertising investment is transferred to the users so that they can use it to purchase digital goods in mobile apps with in-app-purchases.

Will the protocol’s integration into the app economy require consumers to operate any differently than they currently do? In other words, how blockchain savvy do everyday users have to be? Or will any transition be seamless?

AppCoins mission is to give more flexibility and access to users, especially those in markets where they have a mobile phone, but don’t have access to a credit card or PayPal account. So, users will (and already can see in Aptoide App Store) sponsored apps that reward them with APPC tokens if they download and spend time. They will automatically download an AppCoins compatible wallet into their phone three store their APPC tokens and re-use them in other in-app items.

At first and because crypto is still not accessible to the everyday person, Aptoide App Store, for example, will offer top up with other payment methods with FIAT. AppCoins will also provide easy peer to peer value transfers, where parents can transfer money using the digital wallets to their children without the need to put their credit card in their tablets, users without payment methods can ask friends to exchange for them.

AppCoin would support a circular economy in the space. How will incentivizing users to use apps change how they use or respond to in app purchases (IAP)?

Some advertising traffic of CPAt could be considered incentivized. However, the AppCoins provided when a user installs a game, cannot be cashed out and only can be used in a game or an app, thus creating a circular economy because the value is being “injected” back into the system. When properly integrated, incentivized traffic, especially rewarded ones, have a positive impact on the player’s experience and can help developers monetize their games and increase player engagement. According to a Unity Ads report, click-through rates for rewarded ads range between 20% and 35%, according to in-app monetization and user acquisition platform providers (Supersonic in their case). So, these stats show that rewarded ads may provide significant value for mobile game developers.

Issues such as fraud often riddle digital platforms, and even the most low-skilled hackers have discovered ways to break into apps and steal paywalled content easily. How does leveraging the blockchain remove the possibility of this happening, or at least make it more difficult?

AppCoins’ security is accomplished by design. The blockchain that stores the transactional data ensures that it is protected by strong cryptography. The transactions go through open and independent smart contracts executed in the blockchain providing trust to developers. Also, blockchain offers the advantage of offering a neutral standard and consolidating app stores with one billing system. Developers integrate one SDK that can be used in different AppCoins compliant app stores.

Explain how the ranking system works and how that will promote reliability and transparency within the protocol.

The developers ranking system will only start to be developed in Q4 (towards the end). All app stores have different ranking systems when developers upload their app into the platform. When an app is uploaded, there will be three ranks, Trusted, Critical, and unknown. The popularity of apps will influence the trusted ranking of developers.

Example: A developer uploads an app for the first time and is classified as Unknown. By creating an advertising campaign to acquire users, thus creating a transaction flow, the ranking moves from Unknown to Trusted. Users purchase in-app items and, by creating more transactions, increase the level of trust of the developer process.

Regarding deployment, where does the platform currently stand and where will it be heading in the near future?

On the 2nd of September, we’ve released the biggest release of the AppCoins project so far. This release included a billing system developed by Blockchain Distribution Services (BDS), which enables developers to integrate a billing system that manages purchases, inventory, and payments for them. For developers that already had Google Play Billing integrated, the transition to BDS Billing became as smooth as possible.

Also included is the possibility for users to pay for in-app items using credit cards. This is done using the AppCoins BDS Wallet. Not only is this a familiar pattern to users, but it also shatters one of the biggest friction points of adoption that is acquiring cryptocurrencies. For users to pay using APPC directly, they would need to buy ETH or BTC with fiat currency (a process that can take days), send the ETH or BTC to an exchange like Binance or Huobi, trade it for APPC, and finally, send the APPC to the wallet address they are using in the AppCoins BDS Wallet. With the possibility to pay using credit cards, users only need to have the AppCoins BDS Wallet installed and input their credit cards details. The purchase occurs in a matter of seconds, which is orders of magnitude better than the current latency of Ethereum transactions.

Next, the team will be working on the user acquisition flow which is their developers create the flow where users can get rewarded with APPC for giving attention to apps, given a campaign for apps.

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Should all plans go off without a hitch, what will a fully deployed and integrated AppCoins platform look like to consumers, developers, and advertisers, respectively.

AppCoins mission is to provide the crypto token to power 40% of the financial transactions in the Android ecosystem by 2021. There are at least ten relevant app stores outside of Google Play, accounting for more than 1 billion users. AppCoins is driven mostly by the need for solving the lack of transparency and monetization in the app industry. Mainly in the developers’ case, they expect app stores to provide monetization through two main streams which are in-app purchases and a good user acquisition channel, which is advertising.

Developers will have one SDK to integrate across all app stores (instead of multiple), fair revenue share directly to their wallet, no intermediaries

Users who don’t have a credit card or PayPal account can pay in APPC, and there are peer-to-peer transfers and get rewarded for using apps

App Stores will reach out to more users who can engage in the app economy, and revenue shares directly to the wallet.

What are you most personally excited about regarding the potential for AppCoins?

Personally, what I feel most excited about at the moment is actually seeing the development and integration that app developers are already doing with AppCoins.

Through https://appcexplorer.io/ we are already able to see all of AppCoins transactions, transfers between wallets, all apps that have integrated, in-app purchases and future advertising. So transparency is key, so is giving users access to technology.

App developers feel the need to partner with other app stores to distribute their app and get a fair cut (ex. Fortnite app and Samsung apps). In the billing system, the blockchain and cryptocurrencies will support a significant part of the transactions (subscriptions, in-app purchases, etc.) outside Google Play / Apple App Store and will be the driver of change. The new use cases, especially in the emergent countries, can bring billions of new users to the app economy.

The App Store foundation will support the protocol and developments in order to create more trust, having transactions go through open and independent smart contracts executed in the blockchain; one neutral standard to be used in all different app stores, and an incentives alignment where there is a revenue-share distribution and advertising attribution also coded in the smart contract.