The crypto payment startup Fold, made rounds in the crypto space back in February of this year when it offered service of purchasing Domino’s Pizza with bitcoin. Adding spice to its ecosystem, Fold is now offering cash-back bitcoin rewards to the users who opt to buy at Amazon, Starbucks, Burger King, Target and a few more with the company’s application.
With the pizza service still going strong, another step towards mainstreaming bitcoin spending in the real-world has now been taken by Fold. With more purchasing, the rewards gained in bitcoin can be sent to an external wallet specified by the user. Talking about this feature, Fold’s product lead Will Reaves stated:
It’s akin to accruing rewards points, just these are denominated in satoshis,…They can be used for purchases within Fold or withdrawn to an actual bitcoin wallet.
One of the prime features that Fold brings to the table is its compatibility with the lightning network where transactions can take place faster than usual. Bitcoin has been suffering from the problem of scalability from day one due to the consensus architecture that it brings to the table as bitcoin transaction confirmation takes about one hour of time.
If someone is out shopping or is ordering a Pizza, an hour of wait before the order confirmation is not quite desirable. This also bottlenecks the decentralized network and stops bitcoin from becoming a preferred payment source.
The emergence of the lightning network has provided an alternative route for bitcoin transactions to take place at a rapid pace, though the overall record still ultimately goes to the main bitcoin blockchain. It opens a channel between two parties where small transactions that don’t need to go on the main bitcoin blockchain are handled locally.
This results in faster transactions and avoidance of on-chain fees. Nominal transactions of everyday life such as purchasing a pizza or paying for an uber ride do not need to go on the main blockchain otherwise the entire network would be flooded with transactions with a scalability limit already in effect. Lightening solves this issue and opens up the bitcoin world for broader mainstream adoption as a payment method. Fold has already capitalized on its services. Reaves also said:
Soon, Fold users will be able to spend any currency they choose directly with these retailers and get free bitcoin for doing so…Beneath all the fun of shopping and rewards we intend to introduce a whole new paradigm to consumer spending.
Bitcoin emerged on the global financial scene as an electronic peer-to-peer cash system. Carrying the intent of becoming a global currency, bitcoin has been facing a lot of troubles, both technological and legislative. Since the primary use-case of cryptocurrencies was largely driven by their usage in illegal activities, governments and financial institutions across the globe have been hesitant in adopting digital crypto assets.
The lack of regulatory requirements around this technological innovation has allowed for negative elements to seep in. Besides, there are not many opportunities on the ground in the physical world to spend bitcoins and shop.
Bitcoin price volatility has remained to be one of the biggest issue. Due to erratic price fluctuations, the focus in the bitcoin ecosystem has largely shifted to the asset’s price rather than its ability to act as a payment system for everyday users. People largely store, or HODL, this asset to gain monetary rewards. It has become more of a “digital gold” than “digital dollar”.
Over the past few years, things have started to get a lot healthier in the bitcoin ecosystem than before. Regulators are stepping in to streamline this space for better adoption and a lot of intellectual capital is flowing into it from across the globe. Seeing the potential carried by bitcoin and its counterparts, even the social media giant Facebook has announced its own cryptocurrency Libra, which is currently undergoing scrutiny from the U.S. lawmakers.
The entire bitcoin global network is just a decade old and just like every technological innovation, it is taking its time to mature. There are negative elements associated with it such as money laundering and usage in illegal marketplaces, but with the passage of time, its proponents believe things will get much better and bitcoin will be in the race against the banks for global financial dominance. Startups like Fold are just laying the track for this race to pace up, if everything goes well on both regulatory and technological ends for bitcoin.