Adoption of cryptocurrency on Main Street?

Vitalik Buterin, Toronto compatriot and co-founder of Ethereum, tweeted this week:

“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.”

So, the question we need to ask now is, how do we drive the adoption of cryptocurrency on Main Street?

Cryptocurrencies have a real-world spending problem

While “Bitcoin Accepted Here” plaques are presented as a retail gimmick at restaurants globally, can Bitcoin and Ethereum become an everyday use case?

There is certainly an advantage to the blockchain. The distributed ledger technology that underpins the blockchain ensures that all transactions are visible, and that once information is recorded, it cannot be altered. Payments processed through blockchain can therefore be tracked by users at every stage in the process. Each transaction will have a unique ID, so users can verify the integrity of the payment process without intermediary assistance.

Under the current system of payment processing, merchants face high transaction fees, risks of chargebacks, and long reconciliation times. In addition, as money passes from bank to bank through the payment process, each institution takes a cut. In response to these challenges, cryptocurrency startups have tried to bypass the existing system. TenX tried to solve the problem by issuing a debit card. Consumers downloaded the app, loaded it with some crypto assets, and were told to swipe away — or tap — at retailers around the globe.

Could it really be that simple? Unfortunately, it seems not. Earlier this year, Wavecrest, the intermediary between the crypto debit cards and Visa, abruptly suspended service due to non-compliance with Visa regulations. This shut down TenX, as well as crypto-related cards issued by Bitwalla, Bitpay, Cryptopay, WIREX, and Xapo.[1] In the aftermath, damaging the credibility of the crypto payment ecosystem.

Can new solutions work with old systems?

There are many innovative solutions that solve for high transaction fees, risks of chargebacks, and long reconciliation times. The problem is that these new solutions rely on the old infrastructure. The solutions are merely a Band-Aid. Being dependent on a third party to enable a blockchain payment system is never a good idea.

There are solutions, however. PayMagnet, for example, has developed a blockchain-based payment solution that enables merchants to accept Bitcoin, Ethereum, and other cryptocurrencies and settle in either Euros or US dollars.[2] This is done through the consumer’s phone, using an NFC tag. The solution uses the transaction ID issued on the blockchain as payment authorization. PayMagnet does what the blockchain evangelizes: it cuts out the old payment hardware, the inefficient middleware, and the slow and costly intermediaries.

Unlike the internet, the blockchain is built on a transactional model. Every action on the blockchain costs its users something. Naval Ravikant, an authority on blockchain, famously tweeted: “blockchains will replace networks with markets.” The need for cost-efficient payment, faster technology and networks, and more transparent transactions is leading companies away from the traditional payment ecosystem.

Unquestionably, blockchain will take advantage of and amplify many of the values we already attach to the most effective payment processing technologies: security, speed, efficiency, user satisfaction, and trust. Industries in the payment processing space should therefore consider that blockchain has much to offer and should be planning ways to adopt the technology. Rather than changing payment technology and networks, the emphasis will be on driving efficiency.

For more information contact Gary Schwartz at or visit