Opinion The Concept of Crypto Rewards on Fiat Transactions is Gaining Strength

The Concept of Crypto Rewards on Fiat Transactions is Gaining Strength

March 27, 2021

The overall growth of the cryptocurrency domain brought about in 2021 a renewed interest in not just bitcoin, but all other digital currencies. That includes ethereum as the second-biggest network, all of the rest top 10 crypto tokens, and many additional smaller altcoins. Unlike during the 2016-2017 crypto bull run, the focus this time is not on the creation and launching of new digital currency networks, especially because of the cutoff of the easily accessible ICO campaigns. Instead, a lot of parties are trying to ride the present wave of crypto interest with the existing digital currencies and their potential. In the case of DeFi systems, that is naturally the ETH token and its technical possibilities.

When it comes to bitcoin, the focus remains on attracting as many users, both from the corporate domain and the retail level of ordinary individuals. In the second group, there is a new initiative that looks to merge the traditional financial setting with the possibilities and excitement of the crypto market. That is the rising number of chances to gain crypto benefits and cashback options through the use of regular credit and debit cards. The same process is not too evident for the mainstream media cycle but holds important potential for stronger growth in end-user adoption.

Incentive Payments

Credit cards that offer crypto rewards seem like the newest addition to the incentives market. It aims to reward users through the act of getting, or better said earning, cryptocurrencies. However, while the concept is not new – Lolie is a company that provides crypto cashback for some time now, for example – the traditional fiat cards that do the same are not even available on the market. Instead, several of them should launch somewhere this year. But, even now, experts believe that they can be a huge advantage for crypto adoption, mainly because they cater to all manner of crypto enthusiasts.

These include that essential group of people who are very much interested in crypto but did not want to enter the actual cryptocurrency market. However, this also includes the group of users who are already very much in the market but seek to accumulate more crypto in their digital wallets. They might be sold on the longevity of the bitcoin’s BTC token and other digital currencies, but still, use fiat services like credit and debit cards. Here, incentive crypto payments would be, at least in theory, able to accommodate all of them just as effectively, along with anyone in between in terms of crypto leanings.

History of Crypto Rewards

The basic premise of electronic money came about in the 1980s, near the start of the new decade. Back then, home computers were gaining popularity and so have the means of connecting them through telephone lines. Even though rudimentary and crude by modern standards, they still offered a glimpse into the world where everyone could have access to their numerous ledgers, including financial ones. Before that, even something resembling that idea could only be found at illegal bookies and shady remittance organizations that might even span the globe in their effort to connect a particular community financially but were nothing like the cryptocurrencies of today. But, it still took the IT sector 20 years to finally give rise to the wonder cryptocurrencies, first as the start of the bitcoin network in 2009.

At that moment, the first truly decentralized digital currency began working and did so without much media attention. At first, bitcoin tokens had a value that was practically – and literally, in the beginning – nothing. But, it began catching on, with many individuals coming about to its true potential. A year later, one token was worth less than 0.001 of a US cent. Yet, 11 years later, the same token could be sold for 60,0000 USD. Along with it, other digital currency networks grew as well. Today, it is estimated that some 4,000 cryptocurrencies exist in domains like esports, marketing, and many more niches, while all of them are present on the global fiat-to-crypto market as well. The interest for the same cryptocurrencies, along with the minor ones, new additions, and practically any other working blockchain network, is only going up each year.

Mechanism of Giving

With plenty of room for media attention, the fiat cards with crypto rewards still present a dubious prospect for many ordinary users. What does the use of these cards actually include? For example, a Mastercard or Visa card with crypto rewards will still facilitate payments through its regular processing networks. That includes the ability of the same cards to perform the exact same processes as any other regular card. However, when a payment is made, the card also sends a signal to a third-party crypto company, noting the amount of money in the transaction.

The same money is then calculated into some form of cryptocurrency reward. That could come in the form of percentage cashback, some kind of loyalty crypto points, or any other form that the company determines works for them. The same crypto funds are then deposited directly to a card holder’s crypto wallet. In theory, the same wallet also communicates with the card’s bank and users can exchange the crypto funds for fiat, or send them to someone else. Essentially, it includes a dual account process, one fiat, one crypto, but which work in unison.

Here to Stay

2021 is entering its fourth month and now it is almost impossible to say that crypto is a technological fad. Instead, it is clearly here to stay, but its future like always is murky and full of potential issues and misgiving from the general public. Crypto rewards from fiat debit and credit cards are a form of new user acquisition that is clearly a big step forward, no matter who implements it first. Also, as stated earlier, the offer can entice anyone who is even remotely interested in cryptocurrencies, either as a small addition to their present crypto holding or a way to start their use of bitcoin or any other digital currency. That makes it a potentially powerful tool for the next crypto chapter.