Penetrating Porn – Why Bitcoin and the Adult Entertainment Industry Should Lust After Each Other

  • Traditional financial companies are increasingly distancing themselves from the adult entertainment industry.
  • Instead of fracturing the market with altcoins, the industry should look to bitcoin.
  • OnlyFans missed an enormous opportunity by not adopting bitcoin this summer.
  • Bitcoin’s technical attributes fulfil the porn industry’s needs.

The subject of pornography inevitably inspires wry smiles, juvenile giggling and a veritable orgy of puns, but it also pertains to fundamental personal freedom. If a consenting individual, free from psychological, physical or other constraints, wants to sell legal content of themselves to a willing consumer, then they should be free to do so. This premise naturally aligns with bitcoin’s mission and this use case was even specifically mentioned by Satoshi.

Evolution

Pornography has always readily adopted new mediums. From cave paintings to Pompeian murals to photography and the internet, consumers and creators of pornography have welcomed technological progress. Arguably, pornography may have even been responsible for making new technologies, such as VHS and the internet, mainstream. Complementing this evolution have been numerous attempts to ban it under various moral guises. The latest such effort has come from the moral beacon that is the financial industry.

In recent years, financial companies have increasingly discouraged business from the adult entertainment industry. Measures have ranged from charging high fees (sometimes four times higher than other industries) to outright bans. In November 2019, for example, PayPal banned Pornhub, and its 100,000 adult entertainment professionals, from using its services. Visa and Mastercard followed suit a year later.

The move towards a decentralised, cheap, fast, secure and discreet method of exchange, like bitcoin, thus seems like a logical progression for this multi-billion dollar industry. Although cryptocurrencies, including bitcoin, are increasingly being used, there has been a disjointed overall effort, which may have resulted in discouraging paying porn users from adopting crypto.

Experimenting

Instead of focusing on bitcoin and streamlining the user experience, the industry got involved in a number of altcoins, which wasted time and resources. In 2018, for example, Pornhub partnered with an altcoin called Verge (XVG). Verge uses networks like TOR and I2P to make transactions untraceable. Whereas the principles of an anonymous, untraceable cryptocurrency may have value, Verge has been prone to technical problems and is extremely volatile. Predictably, its use on the platform has been negligible, accounting for around 1% of transactions. Pornhub also announced a partnership with PumaPay to start accepting crypto from its users, but it took over 18 months to implement, requires the use of its PumaPay token (PMA), as well as requiring additional know-your-client procedures.

Playboy enterprises, for its part, also entered the fray and announced it would accept Vice Industry Tokens, before suing them for fraud and breach of contract. Another alternative, Spankchain, got hacked and, yet another, Fantasy Market, was the subject of a massive scam. A number of other porn-related altcoins, with absurd names, have also come and gone. The industry then missed a gigantic opportunity in August 2021.

Golden Opportunity

OnlyFans was founded in 2016. It has been lauded as a revolutionary platform in the adult entertainment industry, as it allows content creators to connect directly to their fans and take control of their work. Creators on OnlyFans get 80% of the revenue they generate and the platform retains the remaining 20%. Creators set their own subscription prices and can opt to release their content for free. While no one is under the illusion that the platform was launched for humanitarian goals, its business model may be an enormously beneficial development in an industry prone to rampant exploitation, squalid conditions and appalling inequality. The site, however, like other mainstream sites, has also inadvertently hosted illegal content.

OnlyFans became hugely successful during the pandemic and became a lifeline for many creators. Its mention by Beyoncé in Megan Thee Stallion’s “Savage” remix added fuel to the fire. According to the firm, it now hosts over 1.5 million creators and over 150 million registered users. According to information obtained by Axios, it has seven million monthly paying users and has paid out $3.2bn to creators since its founding. According to its own pitch-deck, the company estimated net revenue to rise from $375m in 2020 to $1.2bn in 2021 and $2.5bn in 2022. These astounding numbers would make it one of the most successful tech start-ups in the UK.

Despite its success, it started losing financial partners because of the nature of its business. In August 2021, it announced, to its creators’ dismay, that it would ban adult content as a result of pressure from its banks. BNY Mellon reportedly flagged any transfer linked to the company and similar hostile behaviour was carried out by Metro Bank and JP Morgan Chase. Some creators warned that this move could put them in harm’s way by forcing them into dangerous situations to keep making a living.

This threatened ban turned out to be short-lived, however, as popular outcry contributed to reversing the ban just a week later. Following the threatened ban, OnlyFans went back to its traditional banking partners in order to continue to receive payments from its users. This was an enormous missed opportunity for the industry as well as being a tactical mistake for the company. Breaking free from the pseudo-moral shackles of legacy finance could have empowered content creators, the platform and bitcoin. Tactically, furthermore, it is likely that these banking partners will start cracking down again and the platform will lose business. By adopting bitcoin, it would have been at the forefront of progress and no longer at the mercy of its banks.

Conclusion
There is an obvious synergy between bitcoin and the porn industry. Bitcoin facilitates trusted, secure and discreet transactions, while porn generates billions of dollars of turnover a month. These natural bedfellows will hopefully unite and have a happy ending!

Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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