Local company Moonlighting embraces Bitcoin-esque currency
Dec. 16, 2017
CHARLOTTESVILLE, Va. (AP) — A Charlottesville-based company that's seen growing success since it launched three years ago is preparing to equip its digital platform with its own Bitcoin-esque currency.
Founded in late 2014, Moonlighting operates as an online marketplace where users can seek out verified freelancers for a variety of services, from tasks as simple as dog walking or as technical as accounting. Originally conceived as a disrupter to LinkedIn, the mobile app now boasts more than 600,000 freelancers using the platform to "promote their skills, find new clients and get discovered," according to founder Jeff Tennery.
"They can interact with new clients, send them proposals and get paid right from their mobile phone," Tennery said. "The idea is that it's a Swiss army knife for people who want to start their own business, entrepreneurs, or anyone just trying to make a little extra cash on the side."
Sometimes called "Craigslist without the creepiness," Moonlighting has expanded into a variety of regions and has partnered with three of the largest news media companies in the country to act as a "21st-century classifieds platform" for well-known newspapers and other online marketplaces, Tennery said. Now, they're looking to throw their hat into the booming, albeit cryptic, arena of cryptocurrency.
In the first quarter of 2018, Moonlighting will launch an initial coin offering for its own token, dubbed Moonbit. The launch will make Moonlighting the first freelance marketplace to incorporate a form of blockchain technology into its platform.
Blockchain technology is a relatively new concept. Conceptualized in 2008 by an anonymous person or group known as Satoshi Nakamoto, the technology was implemented in early 2009 with the inaugural mining of the first 50 bitcoins.
The concept itself is rather complex, but Robert Parham, a professor at the University of Virginia's McIntire School of Commerce, summarizes cryptocurrency as an "immutable" form of currency that remembers each of its former transactions via the blockchain, which serves as a public ledger of sorts. That currency is maintained in a "trustless, peer-to-peer" way, Parham said, using a decentralized network of thousands of computers. There is no central authority, meaning the network itself manages the transactions and issues cryptocurrency.
The most commonly known form of cryptocurrency is Bitcoin, the pioneering system invented by Satoshi Nakamoto. While it's been circulating for nearly nine years, Bitcoin has dominated headlines this year as its price skyrocketed from less than $800 per coin in January to more than $14,000 in early December. Its closest rival currency in value and public exposure, Ethereum, sits at a little more than $400 per coin.
While cryptocurrency can be used for transactions, Parham said Bitcoin was designed primarily as a store of value, with the closest substitute being gold.
"In that sense, what do people use gold for? To hedge against inflation — as a store of value that will not decrease in value," Parham said. "Bitcoin just does that better, assuming you trust it."
That said, cryptocurrency does have transactional benefits. Payments that use blockchain technology have no interaction with third parties such as the government, banks or other financial intermediaries. As such, purchases are not taxed, and often have very low transaction fees.
Those features are among the chief reasons Moonlighting is seeking to have its own version of cryptocurrency. The app is anticipating expansion into Latin America, the United Kingdom and Canada next year.
"We wanted to get our freelancers to show up in more marketplaces, and by having the token, we can help people internationally, and remove the currency fees and bank fees that typically eat into commissions and into freelancer's paychecks," Tennery said.
While Bitcoin has been a phenomenon in valuation and popularity this year, Tennery said the system isn't set up to support token programs like Moonbit, so the company has instead opted to back Moonbit with Ethereum. Users can purchase Ethereum coins using the currency of their choice, such as U.S. dollars, and then use Ethereum to purchase Moonbit, which can then be used to make purchases on the Moonlighting platform.
According to Parham, there are hundreds of cryptocurrencies and tokens in existence, with new ones popping up every day and plenty of rotten eggs. To ensure everything is done "legitimately and credibly" with Moonbit, Moonlighting is working with Seattle-based advisory group New Alchemy to guide the company toward its token offering and create a token with what is known as a "smart contract," which Tennery explains is a "fancy word for code that supports the token, so that it's secure and safe." The company also has retained the law firm Cooley LLP to assist in the launch.
"Unlike many of the bad actors launching risky initial coin offerings with nothing more than a white paper and a PowerPoint presentation, Moonlighting is a legitimate company with a solid track record," said Christian A. Hendricks, a former media executive with The McClatchy Co. and a Moonlighting board member. "With a credible and experienced management team in place, Moonlighting has built a game-changing platform that will only get better with blockchain and the issuance of their cryptocurrency."
Tennery is looking at a February launch, but said that date may change, as the company wants to ensure the token is fully functional before it is rolled out. Moonlighting also will introduce discounts and incentives to encourage use of the platform and Moonbit, which the company intends to be used more for its utility and less as an investment, like Bitcoin.
The proceeds of the initial coin offering will go toward expanding Moonlighting's user base, Tennery said. Last year, the app had 100,000 users; this year, it's at more than 600,000. Tennery hopes to push that number to 7 million by the end of 2018. That explosive growth would only serve to drive up Moonbit's value. Tennery said the opening price point of a Moonbit token is still undetermined, but will be released publicly closer to the launch.
Information from: The Daily Progress, http://www.dailyprogress.com