Cryptocurrency

Contrary to Recent News, Crypto is NOT Accepted at Starbucks, Amazon etc.

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A recent news article published by The Independent, UK, claims that you are not able to pay in crypto with the likes of Amazon and Starbucks (source). You can not. The article in question states that the world’s “biggest retailers” are accepting “bitcoin, ethereum, bitcoin cash and the Gemini dollar”. But that is not really the truth.

While the headline implies that you can walk into your local Starbucks and buy a latte with a few satoshis, the actual article proves it to be no more than clickbait.

The truth is that blockchain startup, Flexa, have released an app which allows USA based cryptocurrency exchange, Gemini, to act as a middleman in transactions using said app. The app in question is the ‘Spedn’, and it is Flexa’s first.

The Spedn App

The official press release from the Flexa team classes the Spedn app as a “securely custodied” crypto wallet.

For those who may not know, a “securely custodied” wallet is one which you will not own the private keys for. This means that, technically speaking, you will not own any crypto which is stored within it. It also means that, the owner of the wallet’s key could disappear at any point leaving your crypto inaccessible.

This is the first point which is contrary to the headline from The Independent. If the likes of Starbucks and Amazon were flat-out accepting crypto as a payment method you would be able to use your own crypto, with your own wallet which you control. As with fiat money.

About ‘Accepting Crypto’…

As mentioned above Flexa are now in a partnership with the Gemini crypto exchange. This partnership is what is powering the Spedn app by allowing instant crypto conversions to the Gemini USD – the native stable coin on the Gemini exchange.

If you are new to the industry you may want to know a stable coin is a cryptocurrency with a value pegged to a fiat currency. The Gemini USD is, as you probably guessed, pegged to the USD so 1 GUSD will always be worth 1 USD.

It is this Gemini USD which allows the payment to occur. When a user attempts to ‘pay with crypto’ using the Spedn app it will essentially market sell whichever crypto it is that the user wishes to use, and buy Gemini USD.

The Gemini USD is then converted to fiat USD by Gemini exchange, who then release a payment of fiat USD to the retailer. As you can see, Amazon, Starbucks or whoever else will never see a single satoshi and the user has just sold their crypto at a ridiculous price, while paying a load of fees on top.

It Isn’t Even Public Yet

According to Spedn’s official press release from the Flexa blog, the ability to use Spedn to pay for goods isn’t even publicly available yet.

The official press release clearly states that the current app was released exclusively to Consensus attendees on the 13th May 2019 and the team plans on sending out more invites in the coming weeks:

“SPEDN is being made available exclusively to Consensus attendees today, and we’ll be releasing more invites in the coming weeks through the app itself.” (source)

I would like to just finish on this by stating that the Spedn app by Flexa may well be a great app and a solid step forward for crypto in general. There is just a lot of misinformation being posted (not to the fault of Flexa) regarding it and I do not want people to be wrongly informed.

So there you have it, Amazon are not accepting Bitcoin, nor are Starbucks etc. However, you can pay a custodied wallet provider to market sell your crypto on the Gemini exchange, who will then pay for your items in fiat money and pocket your trading fees.

Love, peace and happiness.