Ethereum creator Vitalik Buterin took to Twitter today to suggest a new way to promote the adoption of cryptocurrency: make preloaded cryptocurrency cards (essentially, crypto gift cards) available at corner stores:
I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption.
— Vitalik Non-giver of Ether (@VitalikButerin) July 29, 2018
Buterin suggests that the cards would not be intended to be spent at the store. Instead, they would be used “to pay for transaction fees, and micropayments in applications.” In other words, the cards would simply be an accessible way of obtaining cryptocurrency.
Gift cards that aren’t redeemable in a physical location are very common: many gift cards sold in stores apply only to an online store, such as Steam or iTunes. Furthermore, gift cards always need to be activated. This means that preloaded crypto cards would likely be attached to an online broker and would not simply be paper wallets with a Bitcoin balance inside.
The issue is anonymity: gift cards do not typically involve identification, but most cryptocurrency brokers are required to collect identity from their customers. In a sense, a preloaded card is just window dressing: if a card must be redeemed with an online broker that can demand full identification, the card is simply adding a step to the purchasing process.
Nevertheless, various commenters have reported that preloaded cards of the type that Buterin describes are already available in some places. In Spain, Bitnovo has started selling preloaded Bitcoin cards in some stores. In Hong Kong, Pundi X is installing point-of-sale card readers in addition to creating their own cards. In Canada, Flexepin is widely used as a voucher by various crypto brokers. Additionally, there is a substantial market for swapping gift cards for crypto and vice versa on peer exchanges such as Paxful.
It’s also worthwhile to look at precursors to this idea. Bitcoin ATMs are close relatives to crypto cards. Although ATMs were once touted as a straightforward way to buy Bitcoin, they do require SMS verification, and now often require full identity checks. It seems likely that if crypto gift cards were to become widely available, they would also be subject to increasing restrictions over time. Perhaps convenience is closely related to obscurity.