A new smartphone application available in the UK pays users to be physically active, rewarding them with digital currency that can be exchanged for goods or traded like money, reported Reuters.
Sweatcoin aims to set itself apart in the emerging fitness economy by using complex software to track movement and location to prevent cheating, as well as blockchain technology to manage transactions, said the news agency.
Currently available for Apple devices (iPhone 5s or newer), the Sweatcoin app tracks and verifies a user’s steps through their phone’s accelerometers and GPS location, according to the product website. Those steps are translated into Sweatcoins, with 1,000 verified steps equaling 1 SWC. Users can spend earned Sweatcoins in an in-app shop, where they can purchase fitness apparel and pay for workout classes.
Sweatcoin users can also donate their SWC to the company’s partnering charities, according to the website.
Oleg Fomenko, a London-based Russian serial entrepreneur who co-founded Sweatcoin, told Reuters that retailers, health insurers and corporate wellness managers are taking notice.
“This whole business is pegged to making movement valuable,” he said to the news outlet. “Eventually, sweatcoin is going to have a rate of exchange tied to the British pound.”
Fomenko told Reuters that Sweatcoin spoke with all the major health insurers but it must demonstrate it can draw users before it can hope to sign commercial agreements to use Sweatcoin metrics as a means of calculating health risks and possibly lowering policy premiums for verified physical activity.
If successful, Sweatcoin’s long-term idea is that insurers or employers might pay to take SWC off the market as a reward to users for their physical activity, said Reuters.
“Right now, movement is valued at zero,” said Fomenko to the news agency. “How much value a sweatcoin will have will be a market decision but we know it’s not zero.”
Reuters pointed out that Sweatcoin has competition in the form of Bitwalking, another British startup that’s looking to produce its own digital currency. But Sweatcoin has confidence in its software, which is carefully designed to prevent users from faking activity by cross-checking activity information and location to verify steps. Most competing apps depend simply on user-reported data.
Sweatcoin is also creating a proprietary version of blockchain anti-tampering technology to administer the distribution of its eponymous currency, similar to how bitcoin transactions operate.
Fomenko came up with the idea for Sweatcoin with Anton Derlyatka after Fomenko’s UK music app Bloom.fm folded after its sole investor pulled out.
According to Reuters, Sweatcoin has raised £610,000 ($890,000) from various investors. The company has also received a small grant and promotional support from London Sport, part of the Greater London Authority that outgoing Mayor Boris Johnson has pushed to encourage resident to boost their physical activity.
The other co-founders are Egor Khmelev, and Danil Perushev. The latter has moved to San Francisco, said Reuters, with the goal of expanding Sweatcoin into the U.S. in the coming year.