Here are several ways to think about and resolve the “spending crypto” problem

What are the incentives to spending crypto at merchants? \ \ I want to support the Flexa network, and be able to say I'd spent crypto at retail, but it's going to be a stretch to see the average consumer adopting anytime soon. \ \ Right now most people use credit cards, which is a 30-day interest free loan w/ fraud protection on the consumer side. You can typically get 1 to 3% cash back when using a credit card. \ \ So there are a few incentives right there. 30-day interest free loan, consumer fraud protection, and cash back. \ \ If you don't pay via a stable coin, you're creating a taxable event that we're supposed to track. There's no cash back. There's no free loan period. \ \ I've got to wait for my funds to settle before being able to spend crypto-- e.g. transfer fiat from bank to exchange, wait for it to settle, then can spend crypto at retail. \ \ For better widespread adoption of spending crypto at retail, the consumers are going to need incentives. Discounts, better tax laws so we can spend non-stable coins and not have to worry about tracking cost basis, something... \ \ Right now, comparing the two, it seems like too much of a hassle to spend crypto at retail and there's more incentives to use credit cards.

• u/benbjamin

There are several ways to think about and resolve your question.

Firstly, widespread consumer retail adoption. You are correct to infer that Flexa/Amp utility via widespread consumer/merchant transacting will not be meaningful until regulation normalizes the phenomenon. In this sense it is a medium term hodl (and a buying opportunity nonetheless) because governments generally move slower than tech.

However, secondly, there are a growing number of crypto rich who truly no longer trust dealing with fiat in any kind of way. This is a fact, insofar as religion is a real powerful phenomenon in this world. This new wealth is essentially stuck or perhaps more accurately sheltering in crypto. Fiat is already toxic if not dead to them. And so Flexa/Amp becomes the solution, regardless of incentive.

Thirdly, the incentives as designed by Flexa were from the beginning always intended for the merchants, not the consumer. Hence the low txn fees, relative and in contrast to the ridiculous charges by Visa and co. Already we are seeing the consequences of this disparity, as both the US Department of Justice as well as Amazon itself essentially cancel if not threaten to cancel legacy networks now that cheaper/better options are emerging. Still, for the consumer, the incentives will of course trickle down, as lower fees to merchants should improve prices/service etc. to promote that cheaper txn avenue to consumers. In other words, merchants (and hard to fathom currently but not illogical to speculate that the government itself) will be the ones incentivizing crypto spending to consumers — because they would prefer paying less in fees, and the gov would enjoy seeing the pickup in economic growth as a result of this alleviation.

Fourthly, and this one is a little more speculative if not outright controversial, but inflation. Loss of faith in fiat is something that historically has happened relatively quickly — in some cases even overnight. There are a growing number of both legacy as well as crypto pundits who fear/believe fiat is nearing its end. The Fed and central banks the world over for nearly half a century now but increasingly so more recently have distorted the markets and economies to the point of zombiefication. Some think fiat has been dead for a while now and the illusion is nearing its last, dissipating visage. What will the people immediately turn to when the smoke finally clears? Some think crypto, with its value agnostically and impregnably tethered to decentralized code, not a mortal/aging government with all its inherent foibles.

In any case, and lastly, Flexa/Amp’s use case extends beyond “consumer/merchant” adoption. An example of this exists today, with BancoAgricola in El Salvador, where at least a million people currently have the ability to and do pay off their credit card bills and bank loans with bitcoin, all thanks to Flexa and Amp serving as collateral for those txns. So while not directly related to your original question, it’s important to note that Flexa and more so Amp is by no means limited to simple retail purchases but so much more.