Bitcoin — On Its Way to Success

In our modern society, almost everyone has heard of bitcoin and synonymously associates it as the ‘digital currency of the Internet’. Many people know that bitcoin is valuable and can be used as a medium of exchange for real-life products and services. This is true — at last count, there were at least a couple dozen bitcoin payment processors helping merchants process bitcoin transactions. The bitcoin retail POS (point of sale) infrastructure is growing. There are over 600 bitcoin ATMs all over the world. Most importantly, if the increasing frequency of pop culture references to bitcoin is any indication, bitcoin is in the early stages of entering mainstream culture.

Despite this, it is still relatively hard to find merchants that accept it as payment. Why is bitcoin facing difficulty in getting merchants to accept it? The failure of merchant adoption is one of the biggest hurdles towards widespread consumer adoption, and leads to a chickenand-egg situation — if merchants won’t accept bitcoin, consumers have less incentive to hold the cryptocurrency in the first place, which further reduces all around adoption. Problems with merchant adoption that no one likes to talk about Globally, it is estimated that around 3 to 12 million people hold about $6.4 billion worth of bitcoin. As of 2015, an estimated 100,000 retail merchants accept Bitcoin as payment. This includes big companies like Microsoft, Expedia and Zynga, among others.

However, the reality is that the average merchant processes so little in bitcoin sales that it’s usually not even worth the extra effort and cost to enlist the services of a bitcoin payment processor and train staff in brick and mortar shops on how to accept it. The numbers show: bitcoin adoption by merchants has decreased significantly from more than 16,000 new businesses that started accepting it in early 2014 to less than 2,000 new businesses that chose to start accepting it in early 2015. Anecdotal testimonies also come from less-than-enthusiastic merchants who have contemplated — if they haven’t done so already — stopping their acceptance of Bitcoin as payment altogether. A similar (though not equal) comparison can be made with cheques. Too few people use bitcoin, so it is not practical nor costeffective for merchants to keep the systems to accept it running. The solution — the cards network One of the biggest reasons why merchants don’t find Bitcoin appealing as a form of payment, aside from the extra costs and work, is because it’s still considered hard to understand. The concept of global, Internet-based currency that is barely 7 years old can deter many merchants from using Bitcoin — On its way to success Wirex is the new and improved hybrid personal banking solution. We are the first company to combine the speed and flexibility of blockchain finance with the acceptance of traditional currency in one account.

Additionally, we integrate secure bitcoin wallets linked to Visa and MasterCard debit cards with the convenience of mobile banking. it altogether. To put it simply, Bitcoin’s newness makes it unfamiliar to many merchants. So it makes sense to combine Bitcoin with another payment method with established presence — the cards network — which also lends a physical form to bitcoin. The familiarity and the assurance of the cards infrastructure is the solution towards wider bitcoin adoption. By linking bitcoin to the cards network, merchants do not need to implement any extra and specialised bitcoin payment processors. They can accept it within the existing credit card payment system. This is not a perfect solution. It does nothing for bitcoin visibility. However in terms of ease of use, simplicity, and acceptance, taking advantage of the existent infrastructure for cards is the best and most cost-effective method for increasing bitcoin adoption and usage. The four big advantages of the bitcoin debit card As a payment method, bitcoin debit cards hold multiple advantages over fiat currencies and even traditional bank-issued cards. For one, the cards are linked to Visa or MasterCard, which means that they offer the benefit of almost universal acceptance at online and offline shops and ATMs. This is in contrast to fiat currencies, where you can’t use one country’s currency in another country, despite both technically being recognised as money. Secondly, bitcoin debit cards offer more freedom, as they are not tied to banks, which can block users’ cards at anytime. For this reason, bitcoin debit cards have been called ‘the best companion of the tourists’. Additionally, beyond being a travel accessory, bitcoin’s non-attachment to banks also means that card providers have to ensure the best possible digital security for their users. The added security — multisig technology, twofactor authentication, email confirmations, pins, and other security features — make it almost impossible for funds to be stolen. The third advantage is that bitcoin as a currency has continued potential to appreciate. It was the best performing currency in 2015 when its value increased by 35%. However, this poses a problem, because the reverse can also be true. Cryptocurrencies can be volatile. The best way for users to protect bitcoin’s appreciation potential while minimising risk is to use 2-way bitcoin debit cards, which allow on-demand conversion between bitcoin and fiat. This way, users can benefit by using the stronger currency between the two at any given time. Fourthly, and perhaps the most important advantage of all, is that the cards network make bitcoin spending significantly easier for both seller and buyer. Merchants do not need to add extra steps in order to include bitcoin payment processors, and bitcoin users do not need to limit themselves to the small number of bitcoin-accepting merchants (just 100,000 out of millions). It can be argued that this relatively new product is the next step in Bitcoin evolution, as a currency is only as good as its payment infrastructure. Where bitcoin payment processors have failed, the card network helps Bitcoin to adapt to the current system and be more user-friendly. Without this step, Bitcoin could face a slow death into obscurity, limited to usage by early adopters, and never making it to the mainstream public. The future of Bitcoin is the cards network As the world gets more globalised, so do her inhabitants.

There is high demand for a global money like bitcoin. It is secure, accessible to the underbanked and unbanked, cloud-based, and allows fast and affordable remittances without geographical limitations. As smartphone ownership has become commonplace in developed countries, and increasingly in developing countries, companies like Wirex offer a complete banking platform that requires nothing more than a smartphone and a debit card. Given this demand, the future of bitcoin integration into the cards infrastructure looks bright. Applied together with mobile banking infrastructure, it will disrupt the financial industry as we know it.

Originally written by Pavel Matveev.

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