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 It's the latest initiative in an emerging fitness economy that
includes all manner of monitoring devices, apps that reward activity
with vouchers and even experiments in offering cheap insurance to
people who can demonstrate they exercise.
Sweatcoin aims to differentiate itself by using complex software to
measure movement and location to prevent cheating, and by using the
technology behind virtual currency bitcoin to manage transactions.
Retailers, health insurers and corporate wellness managers are
taking notice, according to Oleg Fomenko, one of the serial,
London-based Russian entrepreneurs who founded Sweatcoin.
"This whole business is pegged to making movement valuable," he told
Reuters. "Eventually, sweatcoin is going to have a rate of exchange
tied to the British pound."
Sweatcoin, available in Britain in Apple's app store with an Android
app to follow in months, offers one coin for every 1,000 steps.
Within weeks users can have enough to exchange for fitness products
or services in its marketplace.
Rewards include Vivobarefoot running shoes, Kymira infra-red
clothing and fitness classes from Wonderush or BOOMCycle.
The company has signed up four London start-ups to offer Sweatcoin
as part of an employee rewards program that will offer extra days
off, subsidized healthy meals or free massages for sweatcoins they
accumulate through activity.
Fomenko said his company had talked to all the major health insurers
but must prove it can attract users before it can hope to sign
commercial deals to use Sweatcoin metrics as a way of calculating
health risks and potentially lowering policy premiums for verified
physical activity.
If Sweatcoin succeeds, the long-term idea is that insurers or
employers might pay to take sweatcoins off the market as a reward to
users for their physical activity.
"Right now, movement is valued at zero," Fomenko said. "How much
value a sweatcoin will have will be a market decision but we know
it's not zero."
There will be competition. Another British start-up, Bitwalking, is
also seeking to launch its own digital currency.
But Sweatcoin is confident in its software, which is carefully
calibrated to prevent slouchers from faking activity by
cross-checking data on activity and location to verify steps. Most
rival apps rely simply on user-reported information.
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The company is also developing a proprietary version of blockchain
anti-tampering technology to manage the distribution of its
currency, akin to how bitcoin transactions work.
It's an elaborate second act for Fomenko, whose last start-up,
Bloom.fm, a UK music app launched in 2013, drew 1.3 million
downloads before imploding when its sole investor, a unit of Gazprom
Media, pulled out after Russia's invasion of Crimea and he failed to
find fresh funding.
Depressed by his failure, Fomenko said he started studying
blockchain technology. Meanwhile, his friend and fellow Sweatcoin
founder, Anton Derlyatka, was getting going on a fitness start-up.
The epiphany came when the two went for a run. "I got my buzz back,"
Fomenko said. The question they asked themselves was what could
motivate them to sustain that feeling.
This time round, Fomenko is taking money from a diverse set of
London start-up investors and undisclosed music industry
heavyweights. Sweatcoin has raised 610,000 pounds ($890,000).
It has also landed a small grant and promotional support from London
Sport, an arm of the Greater London Authority that outgoing Mayor
Boris Johnson has pushed to encourage Londoners to become more
active.
Its two other co-founders are Egor Khmelev and Danil Perushev. Each
previously sold their firms to Dream Industries, a Moscow-based
start-up technology holding company.
Perushev has moved to San Francisco with the aim of expanding
Sweatcoin into the United States in the coming year.
(Editing by Mark Potter)
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