Is there a run on bitcoin? Before you panic, know that the answer is “certainly not yet.”
But after last week’s DDoS attack, there is some increased interest in hoarding them, specifically by banks. Some British banks are allegedly stockpiling bitcoin because they know that DDoS hackers will steer clear after being paid off.
For the average consumer who may or not be aware of the value of the bitcoin — which today is hovering around $682 — or where they can access them, that could change.
Coinsource, America’s largest bitcoin ATM provider, just announced proudly that the company now has 55 ATM kiosks, after adding six new ones in California — four in Los Angeles and two in San Francisco. The average rate of a new bitcoin ATM? The math comes out to one per week. Not to make them out to be a toast attraction, but the other kiosks can be checked out in New York, New Jersey, Pennsylvania, Texas, Louisiana and Nevada.
Could this really show bitcoin’s supply, demand and overall popularity? Just because there are kiosks, doesn’t necessarily mean people will frequent them. Or does it?
“We have learned many lessons as a company while growing so quickly in a booming industry. Coinsource has built an organization that’s built to scale and to do so while meeting or exceeding varying levels of compliance,” said Coinsource CEO and Cofounder Sheffield Clark. “It’s clear to us that more and more people are using bitcoin as an alternative to fiat, and we want to support that movement as much as possible.”
By the end of the year, Coinsource said it will have more than 60 bitcoin ATMs across the U.S.
But maybe ATMs won’t indeed be the way that people access bitcoin. What about gift cards? Research says millennials love gift cards, so that may be a way to create a budding bitcoin trend. But other research says to forget millennials and focus on ourselves, as many of us enjoy buying eGift cards for me, myself and I — and, sometimes, you.
Turns out, former Amazon executive Gene Kavner’s already on the bitcoin gift card ball. This week, he launched a bitcoin gift card integration with certain top retailers through digital wallet iPayYou.io. The Seattle-based company said it aims to make bitcoin an accessible and useful payment method.
“Even after years of effort and hundreds of millions in VC capital invested, digital currency continues to have one major weakness: The world of bitcoin is desolate. The lack of fully integrated, seamless ways to spend bitcoin for everyday goods and services is what iPayYou aims to fix,” said Kavner. “Everyone knows that bitcoin is just too difficult for most consumers to use, but most people don’t think about how hard it is to spend. Integrating a gift card marketplace with our wallet platform helps solve that problem.”
Andy Schmidt, principal executive advisor at CEB, said there is potential here.
“Traditionally, the terms ‘user-friendly’ and ‘bitcoin wallet’ have rarely appeared in the same sentence because of the complexity of transacting via bitcoin, whether it’s through your computer or your mobile device,” said Schmidt. “By adding the ability to use bitcoin to purchase gift cards at major big-box retailers as one of the features of the wallet, iPayYou.io is solving one of the biggest challenges that bitcoin has — translating this digital currency into physical goods.”
Schmidt gave Kavner some credit, but there are still some questions for how this gift card adoption could play out.
“Although this may demystify bitcoin — at least somewhat — for consumers, the question becomes whether this would encourage new consumers to adopt bitcoin if they have not done so already,” said Schmidt. “If anything, it seems like an efficient way to transfer existing bitcoin holdings into more stable stores of value.”
James Methe, principal of payments and transaction banking at Capgemini, also has some hesitancies.
“The jury is still out on this one, as the bitcoin user communities will understand but the majority of consumers are used to purchasing the same services without bitcoin — and, in many cases, not understanding the whole cryptocurrency space — so it may go unnoticed,” said Methe. “It is unclear whether the announcement will ‘pull’ consumers toward more use of bitcoins.”
Of course, the success of a currency is dependent on who uses it. Looking ahead to a few years down the line, experts say bitcoin and blockchain are going to intermarry even more so, to ever become the popular kids at school.
“The growing familiarity with blockchain technology in general will help the case for bitcoin indirectly as cryptocurrencies achieve more awareness in the industry,” said Methe. “The original blockchain deployment did suffer a few years back from reports of losses, fluctuating values and being delisted from country exchanges that seem to have leveled out. With the growth of iPayYou service usage and the addition of complementary bitcoin-backed services over the next five years, the drive toward ubiquity, ease of use and perceptions of security should reflect a steep positive curve of acceptance and growth rate from where it is today.”
In the interim, your bitcoin are now available by ATM and gift card. Just like cash.
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