I want to buy Bitcoin, but it seems very complicated!
“I want to buy Bitcoin, but it seems very complicated”, I have heard this expression time and time again. I can’t believe that I am writing about this in 2019 ! However, the sad fact is : the average consumer is still facing many hurdles to purchase his/her first cryptocurrency. I can even comfortably claim, that it is hard for tech savvy people to get their head around it the first time. This article tries to highlight these issues, and maybe find a tangible solution.
There are presently five models to buy cryptocurrencies [1,4]:
- ATM
Dedicated ATM machines to obtain cryptocurrencies. Usually, they require cash but the user can pay with credit or debit cards. Canada has 15% of all Bitcoin ATMs in the world.
Pros Fast, Easy to use, no/light KYC
Cons Very limited locations and offered cryptocurrencies (usually restricted to Bitcoin), high fees ,3–6 percent or more. - Exchange platforms
A platform to buy/sell regularly cryptocurrencies through preset orders. Exchanges behave like an online stock-brokers where the user can set the price, order limit, quantities, etc. On the platform, the client can save both cryptocurrencies and Fiat-money.
Pros Trade regularly in big volumes, Multiple crypto choices, relatively low fees
Cons slow process to join, privacy discloser, full KYC for most, complicated to use - Direct online platform
It is an online vendor between the client and an exchange. The service (like Coinbase) buys cryptocurrencies from an exchange and sells it to customers for a fixed price. For most of them, the client needs his own wallet.
Pros Fast, Easy to use, light to full KYC, multiple payment methods
Cons high fees, fixed prices, a limited amount - P2P-Markets
On P2P marketplaces buyers and sellers of cryptocurrencies meet and trade with each other.
Pros Fast, Easy to use, no KYC
Cons medium fees, limited amounts - Redeemable undedicated Gift Cards/Voucher
Customer buys an undedicated and pre-listed gift card (i.e. amazon’s), visits the service website (like Paxful or Coincards )where he can exchange the card for cryptocurrencies
Pros Fast, Easy
Cons high fees
In a tweet last year, Ethereum co-founder, Vitalik Buterin said “I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption”
At demystify, we couldn’t agree more, as we share the same views with one of the greatest minds of the crypto world. We have been working since May 2017 to develop an “entry point” for consumers to buy cryptocurrencies through “gift cards”.
But why gift cards?
The market speaks; gift cards are big business. In 2016, more than $112.3 billion in gift card value was activated in the US and Canada alone. This represents approximately 1% of the entire retail sector in the US. 52% of US businesses use gift cards as an incentive. 87% of businesses running non-cash programs include gift cards as a reward. By the end of 2024, approximately US$ 698 billion worth of gift cards will be sold across the globe. The Compound Annual Growth Rate (CAGR) is expected to be 15% and the Revenue almost USD 19 billion by 2022. The EMEA Region would see 35% of market growth and the increase in Australia is expected to reach 20%. The current segment of “cryptocurrency gift cards” with respect to the global “gift card” market is near 0% [2,3,4].
Aside from its huge niche and opportunity, a crypto gift card is one of the most direct and commonly accessible entrance avenues but has remained surprisingly underutilized and underdeveloped. The concept of the presence of cryptocurrency gift card as a solid product at local shops for immediate purchase is appealing more than an abstract and purely number-based online transaction.
The market desperately needs a dedicated crypto gift card. It is a huge niche and opportunity that is not being used. Additionally, in a more important matter, it would significantly boost the adoption of cryptocurrencies. As a tangible product would be present in shops and could be used by your average consumer.
The existing services, like Paxful or Coincards, are only offering to exchange cryptocurrencies for third parties Gift Cards (Amazon, Play Store, etc.). We found an article talking about an old Canadian company called CoinTap that offers dedicated gift cards to purchase Bitcoin. However, the company and the website aren’t active any longer. Also, a French company named Bitit, that offers multiple ways to buy Bitcoin, (via VISA card, wire transfer ..etc) one of which is their claimed physical Bitit Gif cards. All the links to purchase the card are either down or the card is discontinuous [3]. Based on those facts, we can claim that Demystify Platform one-click crypto card, would be the only physical active closed-loop gift card dedicated to purchasing cryptocurrencies currently in the World.
By the combination of the “arbitrage algorithm, “the use of a tangible product like gift cards” and “integrated Wallets”, Demystify offers an elegant solution for the discussed issues. We envision a future with absolute freedom of cryptocurrency entry, a future where a grandma walks into a corner/convenience store ( or a supercenter) and remembers that her grandchild was talking about bitcoin and cryptocurrencies. She sees our gift card on the rack and grabs it! it is that simple. We bridge the gap between the general public and cryptocurrencies.
[1]persistencemarketresearch.com/market-research/gift-card-market.asp,retrieved Between 2017–2018
[2]worldpay.com/sites/default/files/gift_cards_they_are_good_for_business.pdf, Retrieved Between 2017–2018.
[3] coindesk.com/cointap-is-a-canadian-startup-offering-bitcoin-gift-cards, 2017.
[4] blockgeeks.com/guides/how-to-buy-bitcoin, Retrieved Between 2017–2018.
