Are gift cards a step forward in the usability of cryptocurrencies?

For those who, beyond price speculation, use cryptocurrencies for what they were thought of, that is, buying goods and services, gift card services are a very important option to consider. Services like Bitrefill, Bitcoin Superstore, Coincards.ca and GiftOff offer the option of buying from thousands of suppliers around the world with various cryptocurrencies, without going through the cumbersome and sometimes expensive step of converting them into fiat money.

CRYPTONS AND GIFT CARDS ARE CONDEMNED TO GO FROM THE HAND

Although it is difficult to find these cards in shops, more and more they are imposing themselves when converting our coins into tangible things, they present a series of not insignificant advantages

One of the key challenges that gift cards must overcome is the limitation of the available payment systems. Credit cards, PayPal and other methods used in online commerce have reversible transactions. Because of this, it is intrinsically risky to sell a gift card that can be spent instantaneously, while the payment used to buy it can be reversed later. In most cryptocurrencies transactions are irreversible once confirmed in the network and are only reversible with the mutual agreement of both parties. This makes the online purchase of gift cards for cryptocurrencies a much safer trading system.

The gift cards have a very clear operation. Suppliers buy gift cards at a nominal value discount, through block orders (for companies that provide goods and services, this is a guaranteed pre-sale of merchandise), sellers who, having received the cards and gifts, can dispose of their money to spend on other things or through sellers willing to sell at a discount to acquire cryptocurrencies in private. Then, the vendors resell the cards to the users of cryptocurrencies, earning profits by selling at face value or a reduced discount. Buyers can use cryptocurrencies in goods and services that are not accepted as a form of payment, or can transfer value from cryptocurrencies without having to deal with costly and slow exchanges or reveal their financial identity.

THE ROLE OF THE GIFT CARDS IN THE USABILITY OF BITCOIN

During the last part of the Bitcoin adoption process from 2014 until the end of 2016, gift card services played an important role for the Bitcoin user. In a very remarkable way, Gyft and Purse became important elements in the field of Bitcoin usability. Gyft allowed Bitcoin users to buy from thousands of retailers around the world, and for a long time this process was instantaneous due to the low perceived risk of double spending or other transaction failures, which means that a user could receive a card gift after entering a store and use it for a purchase moments later. Purse created a complete economy due to the great liquidity and usefulness of Amazon gift codes, effectively creating a unique shopping experience for Bitcoin users.

However, the long confirmation times of the Bitcoin network and the high tariffs significantly reduced the profitability of this business model. Gift card services began requiring transactions to be confirmed before cards were released, while multi-dollar rates reduced, or even eliminated, profit margins.

One of the most common arguments against cryptocurrencies is that nobody accepts them in stores. While this continues to be the case, gift cards are another step towards the usability of cryptocurrencies on the street.

LAST MOVEMENTS IN THE GIFT CARDS MARKET

The exchange Coinbase has partnered with digital gift card provider WeGift to offer a direct way for customers to convert funds into their wallets in current currency.

It is a seemingly simple process. The user has to go to the website of WeGift Coinbase and select the wallet from which he wants to spend, select the amount and the gift card, press buy and ready: he has real money, available for some of his favorite stores.

On the other hand the cryptocurrency Dash through its service Instantsend promises to be one of the most used coins in gift cards, thanks to some added functions.

Dash’s ability to block transactions in seconds ensures instant and secure delivery of gift cards in all cases. This can create the similar experience to buy directly with Dash. For example, by using Bitrefill to buy Amazon gift codes, using InstantSend processes the order instantly, allowing users to buy Amazon products with Dash as quickly as writing a credit card number.

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff…on rehab

Enric Martí

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff...on rehab