What’s a bounty?
A sum of money paid by a government or business to reward specific actions or behavior is referred to as a bounty. A bounty aims to achieve a financial objective or solve a problem. Bounties are frequently used to aid in the detection of criminals and their activities. They can also be used to boost and encourage growth in particular economic sectors and industries.
The most important takeaways
- A bounty is a sum of money paid by governments or businesses to encourage specific behavior.
To track criminals and their activities, bounty payments are frequently made. - In the cryptocurrency market, coin developers use bounty programs to encourage actions prior to the initial coin offering
- Websites and organizations offer bug bounty programs that pay coders to find and report bugs, especially those that are related to security flaws.
- A bounty program known as the “Whistleblower Program” is used by the Securities and Exchange Commission to encourage people to report violations of securities law.
Understanding a Bounty
As previously stated, a bounty is a financial incentive or reward provided by governments and businesses in exchange for specific actions or behaviors. To track criminals and illegal activities, for instance, governments may offer bounties to individuals. A reward or subsidy may be offered by some governments to those who join the armed forces.
Grants are another possible form of bounty. Governments typically pay for these to encourage players in particular industries. They may also be paid as subsidies to encourage market entrepreneurs. As a result, the cryptocurrency market and the technology industry frequently employ bounties and related economic awards to track and combat hackers.
Bounties and Cryptocurrencies
In the cryptocurrency market, bounty programs are frequently utilized by coin developers to encourage actions prior to the initial coin offering (ICO). Participants in a bounty program receive tokens or rewards for completing specific tasks to promote the ICO. Compensation for individuals can occur in two stages:
- The Stage Before ICO: Digital marketers, bloggers, and social media influencers promote the ICO on their respective platforms and are compensated in proportion to audience engagement. In the meantime, developers frequently receive token bounties for their contribution to the project’s coding.
- The Stage After the ICO: Programmers are rewarded with bonuses for spotting flaws and providing feedback on other issues. Because coders are rewarded for specifically testing for system flaws, these are referred to as bug bounties.
Bug Bounties
Websites and organizations that pay developers to find and report bugs, especially those that are related to security flaws, offer bug bounty programs. These programs are made to stop widespread hacking and find and fix bugs before the general public finds them. The power of a large group of coders and hackers can be used by organizations.
Bounties and the Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) uses a bounty program, which is officially known as its Whistleblower Program. Bounties and the SEC Whistleblowers are encouraged to report potential securities law violations by this program.
Investor losses are minimized because whistleblowers assist the SEC in identifying potential fraud and other violations. Those who report high-quality information that leads to an enforcement action that results in the imposition of sanctions totaling more than $1,000,000 are eligible to receive financial compensation from the SEC. The rewards range from 10% to 30% of the collected funds.
Anyone who submits a tip is also protected by the program from being the target of retaliation. If a whistleblower believes that their employer has retaliated against them, they can file a complaint in federal court. Whistleblowers may seek restitution in the form of double back pay, reinstatement, attorney’s fees, and other costs if the courts agree with them.
What is the SEC’s highest compensation?
The SEC announced a record award of $114 million in October 2020, with the SEC contributing approximately $52 million and another agency contributing approximately $62 million. The individual who receives the next-highest award, $50 million, in June 2020.5 Where Did Crypto Bounty Programs Begin?
The world of digital video gaming is the origin of bounty programs, which reward gamers who help with game development, particularly those who find bugs in the game.
What are the necessary abilities to be a bug bounty?
The fundamentals of inter-networking, IP addresses, MAC addresses, the OSI stack, and the TCP/IP stack are among the computer and software technical skills required to be a bug bounty.
The Bottom Line
A government or business pays a bounty to reward specific actions that help solve a problem. In the world of cryptocurrencies, bounty programs are utilized by coin developers to incentivize activity prior to an initial coin offering. The SEC pays bounties through its whistleblower program.
