By CCN: You’ve likely heard the buzz about a new Chrome extension that will allow people to make purchases on Amazon using the Lightning Network, Moon. The buzz shouldn’t confuse you, hopefully: Amazon isn’t accepting any form of bitcoin, and they’re not integrating the Lightning Network. The extension does some ninja work in the background to get your crypto into fiat and then gives that to Amazon or other e-commerce sites.
Amazon, in particular, has long been a target of crypto-payment projects. A company called Purse.io has for years allowed people to turn their Prime memberships and Amazon Gift Cards into crypto – at a steep mark-up. Crypto users can spend money on Purse, selecting a discount, and then users on the other side can accept the offers. You can get up to 30% off this way, which is the incentive to spend crypto. There’s no similar incentive with apps like Moon, which is part of why they won’t be the “killer app” that leads to mass adoption.
Former Bitcoin Core developer Jeff Garzik isn’t very impressed with the idea, saying that it probably won’t get Grandpa using crypto.
Adoption is the Holy Grail of cryptocurrency expansion, and it’s one of the hardest nuts to crack. As we reported earlier today, people have had their crypto stolen without even doing anything wrong – an attacker has been able to guess private keys for years and drain it. The advent of quantum computing might push the limits of such attacks to the point of destabilizing unprepared blockchains.
But that’s only the existential problem of using crypto that could perhaps discourage adoption. In the end, it’s challenging to understand crypto right away. It’s not some paper notes or numbers in a bank account. It’s not the same as writing a check or handing over some bills. There are complex usability issues that organizations like The Foundation for Interwallet Operability are tackling. Eventually sending crypto might be as easy as sending an e-mail, and holding it securely might be as easy as flipping a switch. But will it be desirable?
Until then, as Garzik points out, startups like Moon are swimming in a crowded sea of companies competing for a tiny portion of the population. Speculation has made these people monied, but there is a mentality in the bitcoin community which discourages the spending of funds anyway. For everyday transactions, some have even posited the notion that it makes a lot more sense to use credit cards.
Use of bitcoin implies a need to use it. There are several organizations and individuals who, blacklisted from traditional finance, use it out of necessity. The implication is that had they not been blacklisted, they might not. Recently, this reporter heard an unverified report that around 20% of Americans have no regular bank account. This would be a 100% increase from 2011 when the federal government published findings on the issue of unbanked Americans. At the same time, bitcoin is expensive to use, costly to acquire, and acquiring with cash via a bitcoin ATM incurs even more fees than usual.
Thus, Garzik is probably right. There is no reason to expect a hyped up browser extension to increase adoption. It presents a handy utility for those already in the space, but if people want to shop on Amazon, they can always use the variety of payment methods that Amazon accepts directly.
Disclaimer: the views expressed in this article belong to the author and should not be attributed to CCN.
Last modified (UTC): April 23, 2019 5:22 PM