The One Way Street of Bitcoin Adoption: Why Prepaid Cards are Just a Temporary Solution - #210
TL;DR - Prepaid Bitcoin debit cards may not be perfect, but they offer a way to use fiat currency when needed. The ultimate goal is to support Bitcoin merchants.
Dear reader,
I traveled this week and Bitcoin was not always useful.
Many places in the USA do not accept Bitcoin. Gift cards were a good use, but not for everything I needed. In those instances, it was going to be using a prepaid card or cash. However, since PayWithMoon was KIA, new solutions were needed.
I found some alternatives, though. The Bitcoin Company and Bitrefill offer prepaid Visa and Mastercards. With The Bitcoin Company, you can buy up to $1,000 USD without KYC. Bitrefill allows up to $200 without KYC.
To use BitRefill…
Select the Mastercard prepaid card option. Non-KYC card values range from $1 to $200. For anything above $200, you need to register with KYC. Once you've bought the card, you get a verification number. To use the card, you'll need to register a user profile with your full name, address, phone number, and email. You can use pseudonyms and a burner number and email. Once you're registered, you'll get the card number, expiration date, and security code. Load it onto your mobile wallet, and you're done in 5-7 minutes. It's best to purchase the card ahead of time.
The Bitcoin Company is similar…
But instead of registering with a name, phone number, and email, you'll get a challenge code number. Use it to activate the card and check card balances. Load it onto your mobile wallet, and you're done.
One drawback…
Is that you might not be able to spend the entire contents of the prepaid card. You might be stuck with fiat dust. You can use leftover fiat dust on a friend or family member's purchase, or you can ask the cashier to use multiple prepaid cards for a single transaction.
Something to note: Relying on a single service provider as a workaround exposes vulnerabilities. Moving forward, it’ll be prudent to decentralize where you acquire goods and services.
A better alternative is to support Bitcoin businesses.
When you buy from them, they earn Bitcoin. They can use it to pay their workers and buy goods and services from other vendors who accept Bitcoin. Keeping everything within the Bitcoin economy increases the velocity of each Satoshi unit, which in turn increases the value and purchasing power of every Sat.
This disrupts the fee market that card issuers and banks rely on. People and merchants keep more of their funds, which they can use on other goods and services. Banks make their earnings on fees and interest rates. It's usury against its own customers, which doesn't add a net benefit to people and producers. If they lose business because more people use Bitcoin, then banking institutions will need to adapt or go out of business.
Right now, the Bitcoin economy is decentralized.
There aren't as many one-stop shops as there are in the fiat world. Buying from independent merchants and vendors helps to grow a truly global economy and market.
Buying coffee from a merchant in El Salvador supports the Bitcoin economy in El Salvador. They can use the funds to pay their citizens, who can then use those funds to purchase goods and services elsewhere in the world. As velocity increases, more coins are circulated, which can help drive the price of goods and services down over time.
Using Bitcoin helps drive adoption. This is how we do it.
Conclusion
On the road to adoption, Bitcoin should be seen as a one way street.
There is no doubt that we are in the “they fight you” stage of adoption.
The fiat on and off ramps are slowly being closed. There may come a point when it is no longer possible to go back into fiat once you’ve gone into Bitcoin. So while prepaid Bitcoin debit cards can be a useful option for those who need to use fiat currency, the ultimate goal should be to support Bitcoin businesses and merchants. By doing so, we can contribute to a more decentralized and global economy, increase the value and purchasing power of Bitcoin, and ultimately drive adoption of this revolutionary technology.
Until next time…