Cryptocurrencies may be making worldwide headlines as high volatility assets that have seen dazzling stretches of growth and stunning falls, but the CEO of Tokyo Otaku Mode Inc. believes they have a different kind of potential.
Naomitsu Kodaka says cryptocurrencies can serve as cross-border digital cash for smaller communities, such as hobbyists, that can be used within the group to build closer bonds and exchange assets.
The startup’s plan is to target hardcore anime, manga and game lovers — or otaku (geeks) — with a new cryptocurrency called Otaku Coin.
“We think this is going to be quite an experiment,” Kodaka, who also co-founded the firm, said in an interview last month.
Tokyo Otaku Mode runs an e-commerce site selling goods related to anime, manga and video game titles. Its Otaku Coins are likely to be launched as early as this summer, and unlike many cryptocurrencies, Kodaka does not plan to make the new coins an investment tool with wildly fluctuating values.
The coins are expected to be accepted at stores geared toward otaku, such as anime shops.
“When you think about how cryptocurrencies can spread, I think it won’t be on a countrywide scale. … it will be on more of a communitywide scale,” he said.
As opposed to traditional currencies, virtual coins can easily be traded across international borders, helping them become a de facto currency for members of multinational communities.
“I think it is worthwhile to have an Otaku Coin that anime, manga and game fans can use. There can also be, for instance, a Sake Coin for sake lovers,” Kodaka said.
The first batch of about 5 billion Otaku Coins, or 5 percent of the planned 100 billion coins to be issued, is scheduled to be released sometime this summer or fall. Users will be able to get their first coins for free but how many they’ll receive is not yet known.
Eventually, Otaku Coins will be listed on virtual-currency exchanges, which will be the main channel for people to purchase the coins.
To avoid roller-coaster highs and lows seen with other cryptocurrencies, the Otaku Coin Preparation Committee, which designed the coin’s blueprint, is working on a system that would keep their volatility low. But details are not ready to be disclosed at this point, said Kodaka, a former banker at Merrill Lynch and chief financial officer at social media firm Gaiax Co.
Experts in various fields, including accounting, digital money and cybersecurity, are advising the committee to come up with a valid system.
The committee will keep 39 percent of the total coins to cover operating costs.
After the committee unveiled their plan earlier this month, it triggered mixed opinions online, with some expressing interest in the new virtual currency and others greeting the news with tepid enthusiasm.
A major reason why Tokyo Otaku Mode is betting on their coins is the rising expectation of a move toward blockchain, Kodaka said. Blockchain is an underlying technology for cryptocurrencies and an online ledger of virtual-coin transactions.
“We believe that blockchain will be more commonly used in society. It’s like how the internet has come into our lives,” Kodaka said.
Blockchain works on a peer-to-peer network that links people’s computers directly without the use of a central server and records each transaction from the beginning. The data can be mutually and simultaneously monitored by individuals called “miners,” which makes falsification effectively impossible.
The technology is seen as an important innovation due to its traceability and immunity from data forgery, so many believe it can be applied to various record-keeping tasks in addition to currency transactions, such as voting.
Taking advantage of blockchain’s technological prowess, Kodaka also wants to launch a voting platform that will allow creators to pitch their project ideas on anime, manga and games.
There, Otaku Coins are expected to serve as voting rights, with the number of ballots being equivalent to how many coins a given user has.
To prevent large coin holders from becoming too powerful, the number of coins that can be used as votes will likely be capped, said Kodaka.
The project that gets the most votes will receive a reward in the form of Otaku Coins from the committee so that the creator can launch their initiative.
“I really like the concept of running a voting system via blockchain,” Kodaka said, noting that it would realize more secure voting.
“It would also facilitate content production (in anime, manga and game industries) while making fans feel they are more involved with the process,” he said.
Kodaka said Tokyo Otaku Mode is unlikely to benefit financially from the Otaku Coin experiment with the firm believing that it will help improve its brand.
“Tokyo Otaku Mode is proposing this whole concept, so I think it’ll help spread our name more widely. Some people may think that our company is ahead of the trend,” said Kodaka. The coin project may eventually lead more people to come to the company’s e-commerce site, he added.
One key incentive that could drive people toward Otaku Coins is to make sure the currency can be used at real stores as a payment method. Otherwise, users won’t see tangible value in them, Kodaka noted.
“A key is to increase the number of stores that accept Otaku Coins,” he said.
In the meantime, regulations on cryptocurrencies differ by country. Some nations, including China, are strict about people dealing with cryptocurrencies, so this might hamper Otaku Coins’ prevalence worldwide.
Kodaka agrees that’s a possibility, “But in the mid- to long-term, people will have more understanding (of cryptocurrencies and blockchain).”