Yesterday, much like any other day, I received dozens of press releases from blockchain companies and crypto public relations firms, the bulk of which were anything but newsworthy. However, given my personal interest in hunting and shooting sports, one immediately piqued my interest: GunBroker will start accepting cryptocurrency payments.
GunBroker, for non-shooting sports aficionados, is one of the most popular online platforms for third-party firearm sales. Using the platform, buyers and sellers throughout the United States can easily execute gun transactions across state lines. Every transfer must go through a Federal Firearms License (FFL) holder, who performs a background check on the buyer before allowing them to take custody of the firearm. It’s quite literally the eBay of gun sales, given that it’s where most sellers migrated when eBay placed heavy restrictions on the sale of firearms and related components more than a decade ago.
Upon closer inspection, however, my grin tipped downwards into a frown. GunBroker isn’t just accepting cryptocurrency — they’re launching a new cryptocurrency, initial coin offering-style.
It’s called “FreedomCoin,” and its creator — the publicly-traded ICOx Innovations Inc. — boasts that it could become the “most retail transacted cryptocurrency in the US.”
“We are excited to bring the over 4.7 million customers GunBroker.com has in its network the ability to buy and sell products with a corporate cryptocurrency and blockchain-enabled infrastructure,” said Bruce Elliott, President of ICOx Innovations.
This is…one of the first use cases that I’m aware of where a compliant cryptocurrency can truly replace the need for other costly and time-consuming payment options which is something of extreme value to GunBroker’s users. With hundreds of millions of dollars transacted annually on GunBroker.com, this may potentially become the most retail transacted cryptocurrency in the US.
ICOx Innovations Inc., incidentally, is the same company that created has-been photography giant Kodak’s cryptocurrency, KODAKOne. In addition to up to $2 million in design, development fees, the ICOx will also charge monthly license and maintenance fees and receive as much as 20 percent of FreedomCoin’s total equity.
Quoted in the press release, GunBroker CEO and CTO Steven F. Urvan said that cryptocurrency is a solution to the mounting discrimination that firearms buyers and sellers face from the financial industry.
“Anyone who has purchased a firearm knows how painstakingly brutal it can be to deal with traditional credit card companies and other financial institutions,” he said.
He has a point. The firearms industry faces increasing scrutiny from banks and payment processors. That’s one reason why you’ll never see a PayPal button when you order a gun online or a Square kiosk at your local gun dealer, and it could get worse if banks follow through on plans to monitor their customers’ firearm purchases.
As a shooting sports enthusiast, I’m glad to see the industry taking a proactive approach to addressing this trend rather than waiting until its back is against the wall. However, this FreedomCoin initiative strikes me as a bit of misfire.
You see, I’ve actually used cryptocurrency to purchase firearms. A few years ago I sent a bitcoin payment to Central Texas Gunworks, a licensed dealer (video below), and there was nothing about the experience that made me think it would have been improved if I only had access to a crypto token developed exclusively for the gun industry.
Bitcoin has name recognition, liquidity, and a decade-long track record of security. Though not always the case throughout its history, the network also currently boasts low fees, certainly less than the 3 percent credit card surcharge you’d normally expect to pay when ordering a gun online.
According to one estimate, the median bitcoin transaction fee is just a bit more than a quarter for a median transaction value of around $175. That works out to a median fee of less than one-fifth-of-one percent. Given that the vast majority of firearms cost $300 or more, the actual fee percentage on GunBroker bitcoin transactions would likely be even less.
GunBroker, I think it’s great that you have recognized the value of cryptocurrency payments for industries that face discrimination from mainstream financial institutions and payment processors.
However, speaking as one of the gun-toting bitcoin users you’re hoping to attract to the platform, this isn’t the cryptocurrency we are looking for.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.
Featured Image from Shutterstock
Last modified: June 14, 2020 11:05 AM UTC