“PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.” – Peter Thiel, co-founder Paypal
There’s a growing rate of cryptocurrency fans and believers out there. But the truth is, even the biggest crypto advocates must face these three harsh realities of the currency system: it’s unstable, overly complex to use, and the perception is it just won’t last.
A fad turns into something universally accepted once it hits the average consumer. For example, in the computing world, when personal computers went from a geek thing, to a thing in every home. Or when mobile phones went from a thing that seemed unnecessary, to how we view our smart phones now.
Cryptocurrency will either be the next wave of the future, or a fad of today. If we want cryptocurrency to last, we have to bring it to the average consumer. And if we truly expect the average consumer to embrace crypto, there must be a solution to make it easy, seamless and trustworthy.
Below are these three issues, and solutions, for how to bring crypto into every home:
1. Volatility is destroying entrepreneurship, and making it impossible to support consumer transactions
The single biggest issue that we simply must solve for in cryptocurrencies is their market volatility. By this I mean, you simply cannot expect the average consumer to transact in the equivalent of $40 USD for a meal, when their cryptocurrency account has dropped down by 40% by the time the bill arrives. It’s the equivalent of doing business in an unstable economy likened to developing countries.
Here’s another example. As an entrepreneur, you receive $1000 equivalency in bitcoin from a vendor. You complete the project, and when it’s time to pay your team, that money has dropped to $800. Your profit is gone. Maybe large companies can support this risk portfolio, but for the average entrepreneur and solopreneur in today’s gig economy, it’s just not a feasible system of currency.
Yes, there are big upswings, but also big downswings. The average person doesn’t day trade for the same reason the average person doesn’t transact cryptocurrency. Humans need stability and safety. We simply want to know the money we earn or spend is stable.
What to do about this?
If you want your mom consuming sandwiches with cryptocurrency, she simply must be able to transact in a stable environment. This is exactly why our company has created The Hedge Lending Network, a payment platform based on smart contracts, that essentially locks in your payment amount at the moment of transaction. Your $40 swipe stays at $40 a week, month, and years from now. The Hedge Lending Network hedges the upswings from the downturns to be able to stabilize this currency system.
Once the smart contract initiates, it can’t change by any amount of market volatility. This creates a secure transaction environment for businesses, who often take a few days to process their transactions. No smart business will transact crypto if today’s payment may drop (or rise) in these crazy market swings. The Hedge Lending Network creates a stable currency environment, no different than our USD.
2. Transacting in cryptocurrency is a complex process that the average person just won’t embrace
We humans like simple and seamless. The cryptocurrency transaction process doesn’t fit into either of these categories. Transacting in cryptocurrencies involves generating a long code of letters and numbers, copying and pasting that code manually, and forwarding it along to your payee. If the code is altered, for whatever reason, as you’re emailing or texting it, the money disappears and the transaction can’t be recovered. If the email or text is picked up by a third party, then the types of hacking and theft may occur that we’ve been hearing about in the news lately.
This is so risky. I can’t even manually type in my own credit card number correctly half the time when I want to buy vitamins online. With Apple Pay and other payment systems making it easier to chip, swipe, or hold up our phones, we’re kidding ourselves if we think the average customer is going to sign up for a complex manual transaction system.
Swiping has to be easy, and seamless. Ben Way, an entrepreneur in payments processing, has developed an app that brings cryptocurrencies onto every one of your credit and debit cards. This means that no new card is issued, you simply download an app and the Visa or AMEX in your wallet connects to your coinbase account, so you’re ready to swipe and pay.
When this app is backed by The Hedge Lending Network, you suddenly get a pretty easy payment system that works just like fiat currency. You swipe your debit or credit card, your vendor gets instantly paid at a locked in rate, and neither party knows, or cares, which currency was used.
This brings up an important point. Because the vendor already accepts your Visa or American Express, they don’t know, and can’t object to, a cryptocurrency payment. All they know is that currency was transacted, locked in at a rate, and that the money hits their bank account.
This may seem like we’re serving a bad deal to businesses who don’t want to transact in crypto, but it’s not. When currency comes onto a debit card, there are no direct relationships associated with any specific currency and the card. That means it’s auto-converted into the preferred payment method so that consumers can’t object to you paying in foreign currencies, so long as they receive their currency at the right rate. It does not matter if you’re swiping euros or dollars, and when this app releases in September of 2018, cryptos.
3. The consumer perception of cryptocurrency is that its dark-web craziness or fake
The average consumer thinks that cryptocurrency is some dark-web creation, probably powered by those Winklevoss twins, and no person in their good old-fashioned mind would touch the stuff.
In 1995, Newsweek published an article similar to this thinking, entitled Why The Internet Will Fail. A whole slew of tech entrepreneurs predicted that personal computing wouldn’t be a thing in the early 2000’s.
The point is, none of us can predict the future. What we can do is look at the past and make a set of reasonable assumptions about what’s coming. We experienced the personal computing transformation, the transformation to mobile-first life, and we are now smack in the middle of the big data transformation. All of this big data is made possible by blockchain storage systems.
Much like trying to explain the internet to someone in 1995, let’s just say that all you need to know is this stuff isn’t going away, you’re eventually going to use it, and you probably won’t even think about it. Just like everything else in the tech world, once it makes our lives easier and more seamless, it just becomes a thing.
Download the app that brings crypto onto your debit cards and credit cards, powered by The Hedge Lending Network, by visiting digits.io and signing up for beta access. This app will be released in September of 2018.