Sweatcoin is founded on the simple principle: physical activity has value. With 50+ million users, and 600+ partner brands who exchanged, in the last quarter, $55 million worth of products and services for user exposure and step data, the principle has been validated. Sweatcoin’s vast adoption has been largely organic: a product that captures the value of physical activity has resonated with individuals, institutions, and brands.
While it may be evident to some that physical activity has value, quantifying the value can be difficult. While there is no aggregate number to demonstrate the value of physical activity, there are a variety of data points that show the cost of its corollary: the lack of physical activity. McKinsey estimates the cost to the world economy at $2 trillion per annum.
A UK government report estimates the cost of obesity at £27Bn per annum with £6.1Bn directly spent by the NHS.
When you become active, you create a positive externality. This means that the benefit you produce is greater than the personal benefits you experience. There is an ‘external’ benefit, which can be captured.
“Physical activity has significant health benefits for hearts, bodies and minds. [It] contributes to preventing and managing noncommunicable diseases such as cardiovascular diseases, cancer and diabetes.”World Health Organization
“It can reduce your risk of major illnesses, such as coronary heart disease, stroke, type 2 diabetes and cancer and lower your risk of early death by up to 30%.”NHS
Physical exercise not only lowers the chance of illness, but increases overall productivity — not simply because it contributes to fewer sick days, but because physical activity is associated with quality of thinking, judgement, learning, and creativity.
- Healthcare providers — lowers the cost of care.
- Health insurers — lowers the cost of care (and of cover). Some insurers, such as Vitality, already reward active clients, essentially purchasing physical activity.
- Employer — increased focus and productivity, fewer sick days, improvements in mental health, lowers the cost of healthcare cover.
- Government — the benefit to the government is the benefit to the groups above. There is a reason the UK has many tax exemptions for employers who promote exercise amongst their employees.
The benefit is both a cost saved and a productivity gained. The monetary value of this has been, for the first time, demonstrated by Sweatcoin, whose partners include Bupa and the NHS.
The cost of congestion. An increase in walking, running or cycling (to work, or more generally) will lower congestion rates. The INRIX traffic scorecard indicates the cost of congestion derived from the wasted hours spent by workers in cars when “the demand for road space exceed[s] supply”. In the US in 2019 alone, $88 billion were lost. Even if this statistic is taken with a pinch of salt, it highlights a very real cost for employers, governments, and employees (particularly those who earn by the hour).
The problem of pollution. An increase in walking, running, or cycling (to work, or more generally) will lower pollution rates. While governments increase taxes on polluting vehicles, and incentivize the adoption of electric cars, there is a supporting solution: to incentivize physical activity.
Mental health. While outlined above as part of the externalities of general health, the far ranging impacts of improving mental health deserve recognition. Not only has this been objectively verified by research, it touches upon a less immediately quantifiable point that is worth considering. If physical activity makes people feel good, makes people feel better, then it has value. Beyond insurance discounts, and productivity increases, the more abstract benefits must be appreciated to comprehend the full value of physical activity.
How is the value of the externality captured?
The physical activity of an individual or group must be tracked and verified to facilitate a true reward-incentive mechanism. By measuring an individual’s steps, you register the resource which can then be valued by a market.
Beyond externalities, indexing and recording who is active on an individual and global level is valuable information to brands, institutions, and investors.
Wellness and activity brands
The following brands have entered the Sweatcoin marketplace as vendors.
- Fitness apparel and equipment (Reebok, Adidas, Pursue Fitness)
- Health food and nutrition (The Protein Works, MyProtein, Raze)
- Fitness Apps (Daily Burn, Auro, FitOn)
- Health Product Subscriptions (Dollar Shave Club, Lumin, Noom, Smile Direct Club)
To these brands, knowing who is active is a huge part of their marketing requirements. Customer acquisition is about targeting the audience. To brands, an app that measures steps is invaluable: it offers a network of engaged, physically active customers.
In Sweatcoin’s marketplace $55m worth of goods and services has been exchanged for physical activity, in the last quarter alone (Q3 2021). Why? While there are many contributing factors, it is primarily because the vendor saves on the cost of customer acquisition and, perhaps, most importantly, they create a strong brand that does not demand physical activity, but rewards it.
It is not only sports and health brands who want access to the Sweatcoin marketplace.
- Digital entertainments subscriptions (e.g. Amazon Prime, Audible, Deezer, Pandora)
- Financial partners (e.g. Curve, Cleo, Stash)
- Technology products and gadgets (e.g. Adidas Earphones, Gadget Discovery Club)
A global index
Sweatcoin could become the first global index of physical activity: an invaluable source of information for anyone. For example, it could be used to analyse global trends to inform broader business decisions.
We will update this section regularly with any new research on the topic. Equally, if you have read any interesting research, please get in touch.