Bitcoin Dividends: The Next Wave In Business?

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UnitedCorp sent this correspondent an email about paying shareholders with hash. You read that right. Instead of receiving only their traditional cash dividend from investing in the company’s infrastructure, investors can now receive an asset, hashpower in the company’s growing mining facilities.

Bitcoin Hash Dividend

A representative writes:

Increased capitalization via our Data Center Domes has allowed us to create a new generation of special dividend wherein UnitedCorp will provide a sustained 0.5 Gigahash per second per share to net new unrestricted stock shareholdings (of record as of February 13, 2020). Shareholders will be able to direct their hashing to the Bitcoin mining pool of their choice and maintain full custody of any Bitcoin SV, Bitcoin Core or Bitcoin Cash assets earned within their chosen mining pools and transferred to their cryptocurrency wallet.

UnitedCorp is notable for two reasons. One, they recently had a high-profile lawsuit against Roger Ver, Bitmain, and others dismissed. The crux of that suit was that Ver and his compatriots had hijacked the Bitcoin Cash network instead of allowing Craig Wright’s ideas to play out. Part of the suit hinged on the fact that hashpower which was meant to go to Bitcoin was actually directed at Bitcoin Cash (ABC) in order to prevent a takeover from Calvin Ayre and Craig Wright’s Coingeek mining pool.

The other reason UnitedCorp is notable is its Blockchain Domes. It is from these domes that the company will be paying a hashpower dividend. While paying in hashpower is a novel idea, it brings to mind a possible road to mass adoption for cryptocurrency.

What if everyday shareholders were also given Bitcoin with their dividends? An appreciating asset, arguably more valuable than the cash used to acquire it.

The way it would work is simple enough. Companies create an agreement with their shareholders, and use some of their cash piles to purchase crypto. Then the crypto is paid out just like any other dividend. It’s a novel idea that hasn’t been tried anywhere yet. While there are a lot of ways to interact with Bitcoin, including things like the Grayscale Bitcoin Investment Trust, there’s no way to get into it without having a more explicit goal.

Bitcoin Dividend

What I’m thinking of here is like Lawnmower, an app that converts change from credit card purchases into cryptocurrency, but for investments.

The question of why might arise, and the answer is simple enough. From the perspective of the companies offering the dividend, they are offering a more attractive investment. From the perspective of the investors, they are signing onto to potentially endless gains. And even when the underlying stock itself loses value, the Bitcoin dividends might make up for that.

Beyond simply assigning value cryptocurrency based on shares, there are more advanced ways to issue dividends via the blockchain. All major blockchains now support some form of secondary token, including Bitcoin with its Liquid Protocol and others. Roger Ver made a tutorial about issuing dividends on Bitcoin Cash, which supports Simple Ledger Protocol.

Not Another Token Scheme

In a tokenized scenario, the dividend tokens need to carry value on their own. It’s a lot more like simply issuing stocks and shares on a blockchain, and not quite what we’re looking for here. If the value of a company goes down, so too does the value of the associated token, just like a regular stock.

The idea is that the intangible BTC might float an entire portfolio. There are imaginable scenarios where having the crypto dividend could offset a bloodbath in the market. Some might argue that it would be better to simply pay the investors in cash, and then they can buy cryptocurrency if they choose. It might be true that they could, but there could be tax benefits in acquiring cryptocurrency this way. When applied to existing investor relationships, the acquisitions could be considered more like airdrop coins than like those you go out and buy on purpose.

Perhaps it’s a bit hyperbolic to call Bitcoin dividends the “next wave” – being that no companies have started doing it yet – but certainly, it’s a strategy to consider, especially for companies looking to attract investors during the next Bitcoin hype cycle.