What Is a Bounty?

The term bounty can refer to any of the following:

  1. A generous amount of something
  2. A reward for capturing or even killing an undesirable person
  3. A reward from an organization that incentives a specific action(s)

Key Takeaways

  • The term bounty can refer to a generous amount of something, a reward for capturing or even killing an undesirable person, or a reward, premium, or subsidy meant to incentivize a specific action(s).
  • In the world of cryptocurrency, bounty programs are used by coin developers to incentive actions before the initial coin offering (ICO).
  • Bug bounty programs are deals offered by websites and organizations by which coders are incentivized to detect and report bugs; particularly those related to security weaknesses.
  • The U.S. Securities and Exchange Commission uses a bounty program, officially called its "Whistleblower Program," that incentivizes whistleblowers to report possible securities law violations.
  • Bounty hunting is legal in the United States, but the specific laws regarding the rights of bounty hunters vary by state.

Understanding a Bounty

A bounty can mean an abundance of fresh produce, in the sense of "the season's bounty" or "nature's bounty." As a result, it can also mean something that is given generously.

A bounty can be a reward by a local government to help track criminals. Someone who makes a living by locating wanted persons is called a bounty hunter. A bounty hunter might track down someone who skips bail and get paid a percentage of the bail when they catch the criminal.

Some governments might offer a bounty or a subsidy to an individual who enlists in that country's armed forces. A bounty can also be a grant paid by the government to encourage certain industries.

Bounties and Cryptocurrencies

In the world of cryptocurrency, bounty programs are used by coin developers to incentive actions before the initial coin offering (ICO).

An ICO is the crypto equivalent of an initial public offering (IPO), and it's used for the exact same purpose: to raise funds. A bounty program essentially gives out rewards or tokens for those who undertake specific tasks in order to promote the ICO.

In the pre-ICO stage, people like social medial influencers, bloggers, and digital marketers promote the ICO on their platforms, receiving compensation based on the amount of audience engagement. Meanwhile, developers often receive bounties in the form of tokens for their part in coding the project.

In the post-ICO stage, bounties are used to incentivize programmers to detect bugs and give feedback on other issues. These are called "bug bounties," as coders are rewarded to specifically test for flaws in the system.

Bug Bounties

Bug bounty programs are deals offered by websites and organizations by which coders are incentivized to detect and report bugs; particularly those related to security weaknesses.

Generally speaking, the purpose of these programs is to find and fix bugs before the greater public is aware of them, in order to prevent large-scale hacking abuse. Several technology giants use bug bounties, including the likes of Facebook, Google, Apple, AOL, Yahoo!, Microsoft, and Reddit.

Outside of the technology industry, Wall Street firms like Goldman Sachs and even the United States Department of Defense have implemented bug bounty programs.

Bug bounty programs allow organizations to leverage the power of a large group of coders and hackers—not just in-house hires. In other words, it increases both their chances of finding bugs and the speed at which they're reported, in order to prevent hackers from exploiting the weaknesses.

According to HackerOne, which hosts bug bounty programs for large businesses, the top five public bounty programs (in terms of total amount awarded) come from Verizon Media, Uber, PayPal, Shopify, and Twitter.

The SEC and Bounties

The U.S. Securities and Exchange Commission uses a bounty program, officially called its "Whistleblower Program," that incentivizes whistleblowers to report possible securities law violations.

Whistleblowers help the SEC identify possible fraud and other violations much sooner than otherwise have been possible, ultimately limiting the damage done to investors.

According to the current rules, the SEC is authorized to provide monetary rewards for those who report high-quality information that leads to an enforcement action in which over $1,000,000 in sanctions is ordered. The range of rewards is between 10% and 30% of the money collected.

Under the bounty program, the SEC has awarded roughly $901 million to 163 individuals since issuing its first award in 2012.

Encouraging Trade

There are various forms of bounties and subsidies paid to industries and taxpayers in the U.S. There are farm subsidies to help support farms and sugar subsidies to bolster the agriculture industry.

The energy industry has received subsidies for years, which totaled over $14 billion in 2016 according to the U.S. Energy Information Administration.

The subsidies or bounties included loan guarantees for clean energy, tax credits for expenditures, as well as research and development.

A bounty or subsidy can help industries invest in capital equipment designed to better the country or reach a desired outcome like cleaner-burning fuel.

The coal, nuclear, wind, solar, oil, and gas industries all receive subsidies or bounties from the U.S. government each year.

Bounty FAQs

Is Bounty Hunting Legal?

Bounty hunting is legal in the United States, but the specific laws regarding the rights of bounty hunters vary by state. Typically, bounty hunters are legally permitted to carry firearms for protection or self-defense.

Can You Pay Off a Bounty in Real Life?

Unlike the fictional world in certain video games, you cannot "pay off" your own bounty in order to avoid arrest.

What Is the Highest Bounty Ever?

In October of 2020, the SEC announced a record award of $114 million, consisting of about $52 million from the SEC and roughly $62 million from another agency. The next highest award is $50 million made to an individual in June 2020.