The announcement followed in the wake of last month’s disappointing news that LitePay, a company purporting to offer a LTC processor for merchants in addition to debit cards for spenders, had shuttered just weeks before the official launch.
What is TenX?
TenX is a global iOS and Android based company working to improve the ease of spending of virtual currencies around the world–which has primarily been made up of cryptocurrencies to this point. While the official announcement of the partnership took place this week, Litecoin had quietly been added to TenX’s selection of Bitcoin and Ethereum weeks ago, and was undergoing a trial process to implement the currency. TenX, much like Coinbase, is targeting the mainstream appeal of crypto-based applications. While the debit card they are hoping to release will work the same as traditional cards, they are also in position to create a mobile-only feature similar to Apple Pay.
Just Another Middle Man?
There is a substantial group of crypto-enthusiasts who are distraught over the growing popularity of intermediary figures in the transaction space. It started with BitPay, which offers many of the same merchant and debit solutions to Bitcoin holders that LitePay was attempting to implement for LTC. All of these transaction intermediates–Aliant, BitPay, TenX, etc.–constitute an unnecessary step in the transfer of cryptocurrency.
Litecoin is a currency. Like cash, it can be sent and received as-is, without the need for a conversion to fiat or having an arbitrary middleman. In addition, many of these intermediary figures, TenX included, are skimming their share of fees off the transaction, increasing the cost of conducting crypto-related commerce. While sending Litecoin to another wallet necessitates a miner fee being paid, it’s unnecessary to compensate a third party in the process. One of the primary arguments for greater cryptocurrency adoption is to eliminate the added costs imposed on consumers by banks and card companies like Visa.
However, there are advantages to having debit cards that can be used anywhere.
Increased liquidity in the Litecoin market. LTC is a cryptocurrency. It doesn’t take much imagination to figure out that part of the stagnation in crypto is due to the lack of actual spending. Too many newcomers and long-time holders in the industry have adopted the mindset that crypto is an asset, like stocks, real-estate and precious metals, to be stored for appreciative gains and sold at a profit. Instead, more people should take the view that crypto is like any other currency, with the added benefit of deflationary gains. Rather than being a ponzi scheme, investors are exchanging their fiat for crypto at a favorable exchange rate, and one that looks to improve over time. Increased spending in Litecoin increases market liquidity, with more people exchanging the currency at market rates. This not only creates a real world need for LTC (as opposed to the artificial value imposed by speculative trading), but also gives investors an incentive to use their currency despite the FOMO of deflationary gains.
Greater potential interaction. Not every merchant is going to want to accept cryptocurrency. At this point, the vast majority are steering away from the volatility of the market and uncertainty surrounding the industry. That’s okay. The purpose of decentralization is the ability to go around the gatekeepers and nay-sayers. The principles of crypto were built upon creating a currency that could subvert government influence. The same should apply to mercantile influence. If Amazon doesn’t want to take Litecoin, fine. But LTC holders should have the option to spend their coins on Amazon as they would traditional fiat.
LTC Spending and Organic Litecoin Adoption
Let’s say you take a trip to Jamaica for a week. You know you’ll need cash, so you exchange some of your U.S. dollars for Jamaican dollars. At the end of your trip, when you are attempting to pay the taxi driver who drove you back from the airport, you pull out your leftover Jamaican bills. You give the taxi driver 3700 Jamaican dollars (worth about 30 USD). He doesn’t take it. Regardless of how much you may impart upon the driver the superiority of the JMD over the USD (hypothetical here), the driver is still unwilling to accept your currency.
That scenario is not all that dissimilar from growing cryptocurrency adoption. You can’t force people to use and accept crypto in place of fiat, and attempting to do so only limits the availability of cryptocurrency use and adoption. The way to grow crypto is through superior usability and increased exposure. The former is inherent in the technology while the latter falls upon the actions of both the community and investment base. Some people only like crypto for its feature as a speculative market. Some see the social and political ramifications of a decentralized currency. Others are simply utilitarian, and view traditional fiat as outdated in a digital age.
Either way, the only route for greater Litecoin adoption is through increased exposure and and self-converting interest. When you force an idea on to another person, particularly one that is entangled in long-standing tradition and ideology, they overwhelmingly resist and pushback. There is a significant segment of the population (concentrated in older generations) who are serving as gatekeepers for greater cryptocurrency use. These are people who are going to resist using, receiving and spending Litecoin in place of their chosen fiat given the many negative connotations associated with crypto. But if they are exposed to the technology and given the chance to explore the uses and background of crypto on their own, they could begin to see what many in our industry have already realized: that cryptocurrency, while controversial, is going to play a role in the future of money.
Having access to on the go, ready-anywhere crypto debit cards is just one way to get the ball rolling.