One of the main disadvantages with Bitcoin and other crypto-currencies has been that there have not been any mainstream places to spend them; they have been purchased merely as an investment for most buyers. Now, we suddenly get an indication pointing in a slightly more optimistic direction, as we will see.
As we have recently indicated in both the Mistbreaker Trendwatch articles “The Large List of Technologies that will go BIG in 2015” and “FrogDesign’s Respected Trends of 2015 List Released (Part 2)” respectively, digital currency is set for a comeback with a (minor) vengeance. Despite being dubbed the worst investment of 2014 Bitcoin currency has incrementally begun to recover, although only reputation-wise among credible tech profiles at the moment, since the price is still continuously falling rapidly. In any case, what type of initiatives could further improve on the reputation and, above all, make people actually spend their digital coins?
One man who has set out to spur our (or at least Germany’s) usage of Bitcoin is the serial entrepreneur Ricardo Ferrer Rivero, founder of cloud service Doctape. The company was sold to software development company Atlassian, which provided Rivero with a lot of time and money on his hands. He set out on his new venture PEY after having simply asked merchants what it would take for them to accept Bitcoin instead of cash only.
You see, in the city where Rivero is based (Hanover, Germany) most restaurants and stores only accept cash. This reality is present in many of the other cities in the country, as well as in a variety of countries in southern Europe. The situation is due to the comparably high fees merchants have to pay in order to accept debit cards. Thus, Rivero wanted another viable option as to carry cash around all the time (which is almost considered ancient in some nations, for example Sweden), but he did not want to work with banks.
Consequently, Rivero decided that Bitcoin might constitute a viable alternative to credit cards. However, merchants worried greatly about the previously mentioned volatility of the digital currency. This did not stop the entrepreneur from starting working towards a solution that the merchants would eventually accept. According to VentureBeat, the idea he came up with was to develop a Bitcoin standard that every wallet could integrate with, so it would be easy to use for consumers. Additionally, the product had to be simple and low risk for merchants.
Rivero tells VentureBeat that his team wanted to reach an Apple Pay standard of usability, but noticed that it was not going to be possible through the normal channels. So how did he go about to create such an experience? Actually, Rivero and his team installed an iBeacon on terminals, so that when consumers get within a few feet of the iBeacon, a push notification gets sent to their phone. Clicking on the link automatically opens an app to facilitate the transaction. The PEY app has been developed to launch whatever Bitcoin wallet the prospective user has linked to it.
At the moment, the 3D-printed Bitcoin terminals are given away for free to merchants and no fees are charged. According to 3DPrint.com, PEY is not only handing the terminal and the software, they are also throwing in the cost of the necessary Internet connection in the bargain. Eventually the terminals might be purchased or leased, but right now the company wants to learn from the terminals currently coming in place. This far, around 50 Hanover merchants have already agreed to accept Bitcoin whereas 12 units have already been installed in stores.
If PEY could expand to significant scale, or if similar initiatives in other countries could see the light of day, the inherent realm of banks and payment schemes might be challenged by something resembling disruption. In any case, competition most often favors consumers, and many cities and countries evidentially do not have large-scale viable alternatives to cash at moment. Let’s at least hope for technology to change all that, one way or another.
As a last note, amidst all the glorification and impressive venture initiatives, we must pause for a second and ask ourselves a final pivotal question. Will the Bitcoin miners think that it is worth their time and effort to produce something that is drastically depreciating in value? During 2015, we will see.