This week, our meeting’s presentation focused on Cryptocurrency for Micro-transactions while the discussion covered an article on charitable giving through Cryptocurrency, a statement by the Coinbase CEO, Brian Armstrong.
Presentation — Cryptocurrency for Micro-transactions
(Ali Ahmed and Andy Walner)
Many people can probably agree that a huge threat against the long term adoption of cryptocurrency is an efficient way to use them in everyday transactions. This week’s presentation focused on applications of how people can spend crypto in transactions.
What are these applications?
Store owners can accept payments using two main applications.
- Point of Sale Machines
- Cryptocurrency Debit Cards — card functions as a debit card and merchants are not even aware that you are using crypto for the transaction.
Examples of Crypto debit cards and how they work:
The cards work in a very simple way. You set up an account and link up your wallet with a preferred provider of crypto cards. Next, upload the amount of BTC or ETH to the provided wallet. Next, it is converted to fiat currency at the moment of purchase. The amazing thing is you can use these in any place where VISA or Mastercard are accepted!
Another application introduced during this week’s presentation was Bitpay.
Bitpay and Litepay
Bitpay is a private company that was founded in 2011, and is not associated with the Bitcoin protocol. This is similar to the previous method explained, as you upload crypto into the card and then you can use it. The problem is that the cost of using the payment method is high (due to mining fees and network fees). The typical transaction for Bitpay can range from 1–20 hours.
Litepay is a payment processor of Litecoin where retailers can accept litecoin payments instantly from anywhere in the world. They charge a flat 1% fee per transaction to retailers, compared to standard credit card fees of 3%, which may incentivize some companies to adopt.
Some people may be thinking that these types of crypto spending applications are far out on the horizon. With that in mind, there are a lot of barriers that may serve as obstacles in this technological movement.
- Volatility of the cost of mining
- Volatility in the price of BTC
- Transactions times and poor customer service
- Regulation (Visa and WaveCrest)
- Inability to use credit card (such as developing countries with poor financial infrastructure.
Additional discussion topics
Can credit card system with crypto ever exist and are they nessesary?
Here is a real-life example: WeChat and their WePay functionality. This is already extremely efficient because the whole population is using it, causing a positive network effect. One member of our club stated, “it is weird to carry around cash when I am in China.”
Either way, crypto cards are innovative. What we need to look at next is what is the best option for the world to use?
Discussion — Charitable Giving with Crpyto
Led by Izak Fritz and Abhi Muchhal
The article brought about the newfound excitement for the potential of charitable donations within crypto (especially due to the accumulated wealth that has been achieved through the space).
A lot of the ideas argued in the article are exciting to discuss in regards to the future. For example, one idea for donations to third world countries was coin drops. Targeted people would then go collect the drop via augmented reality applications like PokemonGo.
Another proposed idea was the creation of an evergreen fund, which operates under the assumption that the amounts of crypto distributed each year will not exceed the overall growth of the fund. This would be a sustainable way to give to the poor, yet still having a self-sustaining crypto fund.
The link to the presentation and article are below:
Check back next week to find out more about what WCT is talking about!