Gift-cards, once a thoughtful way to show someone you care, have become a financial burden for many

With an estimated $23 billion sitting unused in the United States alone, it's clear that gift cards have a fragmentation problem.

But what if we looked at gift cards through a different lens? What if they weren't just a physical number, but an unexpected parallel to the crypto world?

In an article by Coindesk

Danny Bradbury explores the similarities between gift cards and cryptocurrency. Like cryptocurrencies, gift cards are a digital equivalent of cash, providing access to a specific amount of funds. They're also somewhere between uncensorable and secure, like Bitcoin or Ether, but without the need for a bank account. But that's where the similarities end, as gift cards are not as secure or uncensorable as cryptocurrencies.

Bradbury notes that gift cards are not decentralized, meaning they're not as secure as cryptocurrencies in the event of a security breach. Additionally, gift cards are not as flexible as cryptocurrencies, as they're limited to the specific store or merchant they were purchased for. But despite these limitations, gift cards are still a popular way to give and receive money, with 60% of Americans owning at least one gift card.

This highlights the challenges of gift card fragmentation, with different merchants and issuers using different technologies and systems, making it difficult to use gift cards across different platforms. This fragmentation is similar to the challenges faced in the cryptocurrency world, where different blockchain networks and protocols can create interoperability issues.

Additional Information:

• According to a survey by Bankrate, the average American has $130 in unused gift cards.

• Gift cards are not as secure as cryptocurrencies, as they can be lost, stolen, or damaged in transit.

• Gift cards are not as flexible as cryptocurrencies, as they're limited to the specific store or merchant they were purchased for.

So what can be done to address these challenges?

Bradbury suggests that more education and awareness are needed to promote the use of gift cards and encourage people to use them more frequently. This could involve working with merchants and issuers to create more flexible and interoperable gift card systems, as well as promoting the use of digital wallets and other technologies that can make gift cards more convenient and secure.

While gift cards may not be the most secure or flexible financial instrument, they do offer some interesting parallels to the crypto world.

By understanding these parallels, we can better appreciate the challenges and opportunities facing both gift cards and cryptocurrencies, and work towards creating more secure and interoperable financial systems for everyone.


References:

Moore, G. (2024, January 19). Gaming Gift Cards Are Like Crypto – and Not in a Good Way. Retrieved from https://www.coindesk.com/consensus-magazine/2024/01/19/gaming-gift-cards-are-like-crypto-and-not-in-a-good-way/

elegant_solution. (n.d.). Retrieved January 13, 2024, from https://www.freepik.com/author/user28432665

Freepik - Goodstudiominsk. (n.d.). Retrieved January 5, 2024, from https://www.freepik.com/author/goodstudiominsk

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