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Video Startup Can’t Outspend YouTube, So It Created a New Currency to Pay Creators

YouNow is the latest company to build a business model around the cryptocurrency craze.
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Adi Sideman, the chief executive officer of the live-streaming startup YouNow, spends his days hawking a new form of digital currency. The tokens are called Props—as in what you’re giving when you offer someone a fist-bump—and Sideman wants people who stream video online to accept them as a form of payment. Creating an economy based on Props is the centerpiece of Sideman’s plan to loosen YouTube’s hold on the internet. It’s a hopelessly audacious idea by any standard—except perhaps by the standards of those who trade in digital currencies, where YouNow’s long-shot makes perfect sense.  

The first place the Props economy will exist is within Rize, a new live-streaming app that YouNow is releasing in January. People who use Rize will earn the tokens based on a mathematical formula determining how valuable their contribution to the service is. They can convert them into dollars or hold onto them as a bet that Props will increase in value over time. Sideman is offering Props for free to other developers willing to distribute the currency to the services of their own users. In theory, this will create a flywheel, where demand for Props gets people to use the apps, which further increases demand for Props, until a self-sustaining economy emerges.