For those just recently entering the crypto space, the idea of major corporations accepting Bitcoin and other cryptocurrencies must be exciting.
Your BTC Doesn’t Gain Value Because Walmart Wants It…
Over the 11 years since the Bitcoin whitepaper dropped, the word has fallen out of the mouths of a variety of presidents and other world leaders.
Fear of missing out combined with the excitement of a wild west has driven blockchain and Bitcoin madness to heights we never dreamed imaginable, and some believe the coming IEO wave might take it a pitch or two higher.
Merchant adoption has been steadily growing. According to AcceptBitcoin.cash, nearly 2,000 merchants worldwide, at a minimum, intentionally accept cryptocurrency.
One problem best noted by Edge Wallet’s Paul Puey is the reality of companies dropping support of cryptocurrency soon after adopting it.
Puey and David Gold from the Foundation for Interwallet Operability both believe that merchants also struggle to maintain their processes by integrating cryptocurrency, and so eventually give up due to lack of profit incentive.
The limited benefits of blockchain technology for merchants don’t necessarily offset the costs of installing new systems, training staff, and hoping for the best. Imagine if Visa or Mastercard required so much of its merchant class, who happily kick up a percentage, rather than a work-based transaction fee, to both companies all day, every day.
… But Your Portfolio Will Spike When Wall Street Wants Your Bitcoin
Merchants necessarily see limited benefits from blockchain technology.
Chargebacks? Rare problem.
Cash heavy? Only if you’re in cannabis or, apparently, Venezuela, is that a real concern.
Perhaps the best legitimate reason a merchant would integate blockchain products on top of existing processes, with another middleman such as Coinbase Commerce or Bitpay added to the mix, is for the public relations effect and/or to satisfy customer complaints.
Companies doing digital commerce benefit the most, of course, especially those trafficking in high-chargeback areas such as digital content like e-books.
So the reality is that if both Amazon and Walmart accepted cryptocurrency tomorrow, there’s no rational reason to expect to see that lead the industry to mass adoption. Without significant benefits to using cryptocurrency (such as the model invented by Purse.io), many customers prefer the volatility utility of cryptocurrency — the off chance that it might make them rich.
Thus, rather than spend it at stores, which some cryptos encourage, many tokens sit on exchanges or in wallets entirely unused, lending value to the rest, but limiting merchant and everyday user adoption.
Don’t believe it?
One of the most famous examples of such tepid support was Expedia, who quietly killed its Bitcoin acceptance program one day.
Another big name to do that? Japanese retail giant Rakuten, who own the popular e-book app Kobo and are an Asian equivalent of Amazon.
There are multiple reasons for it, most of which we outlined above.
With the negatives out of the way, let’s consider a new idea: rather than going to the store with the impetus to sell your cryptocurrency for goods, you go there with the idea that you’ll leave with cryptocurrency.
The last few years have proven pretty decisively that consumers don't want to buy things with bitcoin. But the trend of customers earning bitcoin is growing like wildfire.
Starbucks doesn't need to accept bitcoin.
They should give it.— Zack Voell (@zackvoell) October 29, 2019
The idea is rather old in terms of financial applications. “Keep the change,” “round it up,” and so forth — programs that aim to build the user a small nestegg while encouraging certain behaviors.
Companies understand more than anything that loyalty programs work, and tens of thousands of them exist around the world. But what if one day, rather than thinking about how you might afford your next purchase of cryptocurrency, you just received your change in Bitcoin Cash or even a stablecoin? Or even, your change + your rewards points, which are redeemable in store.
Would You Like Some Sats With That?
Rewards programs are mighty popular. According to Statista, the average American is enrolled in more than a dozen loyalty programs, and most participate in a handful.
As regional distribution becomes less important, we can expect online retailers to compete by offering better and better rewards.
Today, at least one company is already doing what Zack Voell suggests above — Lolli.
Lolli leverages the same cash back programs used by Samsung Pay, PayPal, and other mainstream financial firms, purchases BTC with the proceeds, and offers the user the choice of a fiat or crypto withdrawal when they’re done stacking satoshis.
free satoshis are like some bagels in that they are everything
— Lolli ? (@trylolli) October 30, 2019
Perhaps the road to mass adoption is paved with Walgreen’s rewards receipts? One thing’s for sure. The Bitcoin revolution was literally started by people such as Gavin Andresen and Roger Ver giving the viral currency to family and colleagues. The name “Bitcoin Jesus” comes from literally preaching the gospel of cryptocurrency.
This is right, but…since adding support for fiat we’ve seen an explosion in bitcoin transactions via lightning. Why? Because people earn 3-5% more #satsback per transaction when using bitcoin. This insight should not be overlooked.
— Will Reeves (@wlrvs) October 29, 2019
Therefore a successful adoption campaign probably will involve people, who by and large have little to no extra earned income for investment purposes in the first place, getting their first taste for free at the register or checkout screen. It’s the AOL Disk approach, but it’s far from the worst idea we’ve ever heard.
Imagine thinking, as Ripple supporters do, that banks set, rather than follow, consumer trends. (And, in their view, Ripple’s top-down approach is the only possible way to succeed.)
Disclaimer: any views deemed controversial presented within this article belong solely to the author and should not be attributed to BSN, its owners, nor affiliates.
