I’ve been using and getting familiar with a handful of up-and-coming banking applications which allow users such as myself to spend cryptocurrency via debit card or Apple Pay at online and in-person retail outlets of various sorts. In fact, I’ve registered for at least four such ways in various stages of development — and more are certainly coming soon. I decided to write this article to explain what I love and hate about each of these new and exciting ventures, and I’ll do a little review of each one as well.
The three major and operational payment methods I’ll discuss here are the Ternio Blockcard, the Bitpay Card, and the Uphold Card. These three apps represent very different approaches to the same fundamental problem; i.e., how to increase the liquidity of your crypto assets. Each of them has certain benefits such as cash back, asset appreciation, or real-time asset sale and thus universal spending power. There are a few others on the way which deserve an honorable mention despite not being quite ready yet or not letting users spend their crypto directly. These are Nexo.io and Kava.
Honorable Mention: Nexo.io and Kava
This section is just a quick glance at the features and benefits of two transformative finance applications from the DeFi segment which are already providing users the opportunity to earn returns on their money and may one day allow us to translate those gains into purchasing power without selling our appreciating cryptocurrency assets. Kava is a truly interoperable DeFi platform which is still being developed, as is Nexo, but Nexo already has a debit card on the way. I’m on the wait list but haven’t been informed of my eligibility to receive the Nexo card yet, so I don’t consider it to truly be on the market yet.
Kava allows users to stake crypto tokens to mint USDX tokens which only exist for the duration of the loan before being burned, which is a crypto jargon term for the removal of a token from circulation. The KAVA token is used to pay fees incurred in this process, so it seems relatively likely that the price of KAVA tokens will increase in future months — though it has taken an absolute shellacking since I bought mine and is currently down over 50%!
Soon it will be possible to build applications on top of the Kava protocol which will allow users to participate in fiat currency economies by buying and selling goods and services without selling their tokens — and Kava seems to be one of the best of these applications, with plans in the works to support all tokens and not simply Ethereum-based ERC-20 tokens. Kava is built on the Cosmos blockchain, which is faster and markedly less expensive to use than Ethereum has been for the last little bit here, so it will be interesting to watch the development as it moves forward.
Nexo is a lending platform designed to allow users to spend their money without selling their tokens. Two major possibilities are already available via the Nexo App or the Nexo.io website:
- withdrawals in USD and stablecoins pegged to the US Dollar
- overleveraging of crypto-backed collateral based loans
To withdraw in USD, Nexo allows a rapid bank transfer for amounts over $500 — so you just simply request your money, wait a day or two, and then spend it. You can withdraw any amount of USDT or USDC over $10.
To participate in increased asset exposure by overleveraging an asset, you simply choose an asset Nexo supports such as Chainlink (LINK) and buy it. Then you withdraw your available loan and send it (fee-free!) to the wallet of your choice to purchase more LINK. At that point, you can add the new LINK to your existing Nexo LINK wallet and wait until it appreciates beyond the 5.99% APR available to those who stake NEXO tokens, then click the “repay loan” button to sell it when that makes sense, i.e., after your asset has appreciated enough to make you happy.
Imagine getting in at a low price and seeing that price double, except you overleveraged 30% of your asset exposure and hence have made a return of 130% instead of a measly 100%! Your maximum loss is still only the initial investment — which will be liquidated by Nexo as the price falls, if it does, to repay the loan.
I’m going to present these in the order in which I encountered and signed up for them. Ternio’s Blockcard is first up, and it is a very interesting concept. The basic idea is that you send your crypto to your Blockcard account and into the native currency there, TERN. TERN prices fluctuate, but the minimum exchange price is $.008 if you transfer in a token that is not TERN via the Blockcard UI.
That said, you can use StellarTerm to trade Stellar Lumens (XLM) or Bitcoin (BTC) or a handful of other digital assets for Ternio (TERN) and transfer TERN you get this way to your Blockcard for a fee so low it may as well be free. I recommend timing your transactions involving TERN to take place when the market is low, and making purchases of goods and services with your Blockcard when the price goes up. This will allow you to effectively give yourself a discount on anything you can buy anywhere Visa or Apple Pay can be used. StellarTerm allows limit orders, so one acceptable way to acquire TERN is to buy some XLM and place limit orders at various points on the price chart. When the price falls a bit, your orders will complete and you will end up with plenty of TERN to transfer to your Blockcard and use for your purchasing needs.
Ternio somehow also manages to offer a very strong cashback rewards program (6.38% when you stake 145,000 TERN!) in a relatively transparent attempt to stabilize the market by increasing transaction volume. A massive volume increase should still see an increase in the price of TERN as well. Thus, I view my staked TERN as an investment which I hope will end up appreciating significantly as the platform is adopted.
- Appreciation of TERN.
It is possible to buy into TERN via an exchange and use the tokens you receive this way as cash, which means you can buy TERN at the market price and spend it there as well. If the price increases, you may end up with significantly more spending power than you started with.
- Speed of transactions.
TERN liquidation is basically instant — you swipe your card and get a notification that you made a payment right away. It just works. This is probably the biggest advantage of the Blockcard — it’s the first real-world solution that reliably and predictably allows us to make blockchain purchases anywhere we like.
- Universality of TERN.
If you travel, you’ll be familiar with the difficulties involved with various different local currencies — except with Blockcard, this is all irrelevant. You’ll never need to pay an exchange fee again. The TERN blockchain will talk to the local payment system and instantly convert your cryptocurrency into whatever form the merchant wants.
- Ease of use.
For a beginner in the crypto markets such as myself, Ternio is an intuitive and remarkably easy system to use. I got it up and running — with no prior experience — within a few minutes, and it integrated flawlessly with Apple Pay to enable me to easily make purchases that first day.
- Up to 6.38% cash back on all purchases.
This one speaks for itself. You can time your purchases to cost you less money, and whatever you do end up paying nets you industry-leading cash back.
- Possible depreciation of TERN.
Every time you buy in through the Blockcard UI, you pay either market value or $.008 — whichever is higher. This is painful for me, since I’m a numbers guy. I actively curtail my spending when the TERN price is below $.0075 or so. But then again, I usually buy in between $.006 and $.0065, so I’m spending more money than I started with. I’m not a wealthy guy, so this is a huge opportunity for me to increase my spending power and I take it as seriously as I can.
A little more detail on how that works: I was able to sign up for an account at StellarTerm (a decentralized XLM exchange) and can trade the XLM-TERN pair for virtually no fee. This effectively means that I can send XLM from another wallet to StellarTerm, then transfer my TERN for virtually free to my Blockcard.
StellarTerm also offers a Venmo-like solution which features a simple and easily-remembered username that people can send money to.
A screenshot of my StellarTerm federation address, which only took a few seconds to set up.
- Not all tokens are accepted.
This results in fees as you swap your ATOM for XLM, for example, to then swap to TERN so that you can send the money to your Blockcard to increase your spending power. Totally not a Blockcard-specific problem, but we need to remain watchful when we trade because a few high fees can really eat into the proceeds of even successful token investments.
The fees for these transactions are only a few percent usually, but once I lost about 10% of my money simply by putting it where I could spend it and I’ve definitely spent thousands of dollars in the past eight months simply executing trades and swaps.
All in all, I’m a very satisfied Blockcard customer, and even beyond that, I’ve become an active promoter of their technology because it makes my life so much easier. I fully expect all of the wrinkles to get ironed out in the coming months and years, and I expect great things from the Ternio team and the Blockcard ecosystem.
I signed up for Bitpay after hearing they had raised $50M from prominent investors. More similar to Nexo than Ternio, I was able to integrate my Coinbase wallet with my Bitpay app in a few easy steps on my phone — but there are only a few tokens accepted presently and the effort strikes me as still under development.
- Ripple (XRP), Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH) accepted.
Similar to the Ternio wallet, you’re able to directly spend cryptocurrency via real-time market sale to USD. However, instead of the novel TERN token, you’re spending established cryptocurrencies with higher market caps — this helps to minimize the fluctuation of the balance of money you’re able to spend and it helps to minimize fees too.
- Mastercard backed.
Anywhere they take Mastercard, Bitpay will talk to the local payment system and instantly convert your cryptocurrency into whatever form the merchant wants.
- Advancing development, major funding, and big time partnerships.
Bitpay seems an easy read right now — it’s only going to receive major adoption and become widely used.
- Card available now.
I haven’t yet ordered my Bitpay card because it costs $10 and I have to pay in assets I don’t typically trade, but I’m planning to get that figured out shortly and see how that goes.
- User friendly.
Setup takes a few minutes even for a novice like me. The Coinbase integration makes it extremely easy to for any Coinbase user to get started.
- Still in development.
More tokens becoming accepted will make it much easier for me to get involved with Bitpay and make a fair evaluation of the convenience and power of the solution.
- Centralized control.
In contrast to Ternio, Bitpay offers no native token. This means that the application is owned by a private company and the market favors decentralized solutions for the moment. In fact, it may become necessary in the future for Bitpay to make some changes and become more decentralized.
Bitpay is an exciting solution that offers a surprisingly different set of features from Ternio or Nexo.io — it seems slightly more transparent, but could potentially offer slightly less upside in terms of new investment opportunities.
I’ve actually been an Uphold member longer than Ternio or Bitpay, but only recently thought to begin using them to process transactions. They’re third on the list because they’re the third platform I’ve adopted. I began using them to receive my BAT tokens and manage my Cent account, but the user interface seemed rather unclear to me and I opted to transfer tokens out of Uphold to other platforms to manage them. Things seem to be improving here, too, however — the platform now features an exchange, making it a competitor to the Coinbase+Bitpay solution I’m beginning to experiment with, and the exchange has zero fees advertised. Low or no fees could be a major advantage in the exchange market.
- Uphold supports a variety of altcoins in addition to fiat currencies.
Each is assigned to a “card” which seems to be a freestanding Uphold account, but each card does not have its own crypto wallet address. Simply transfer your assets to whichever card you wish to use, and you can make online transactions.
Uphold could be a one-stop shop for trading, holding, and spending cryptocurrencies. I am currently not the biggest fan of the system, but, with that having been said, I see tremendous potential here.
- Debit card.
I haven’t ordered mine yet, but I believe Uphold intends to allow users to select an Uphold card from their account and then spend money out of that card account directly. Uphold does not have a native token either.
- Brave Browser interoperability.
I opened my Uphold account when prompted to by the Brave Browser, and the BAT tokens I receive for using that browser every month automatically show up in my Uphold account. This is very convenient.
- 1% or 2% cash back.
- User interface.
It isn’t very transparent. Plus, I’m not really sure why I don’t get wallet addresses for each new card I set up. I may begin to understand it better, but it seems like the intuitiveness of the UI is lacking for the moment.
The lack of a crypto address-Uphold card correlation makes it a bit more difficult than it should be to flip assets between Uphold and other wallets. Uphold seems to be going for a one-stop shop solution, but I’m not really sure that is an appropriate vision for the cryptocurrency space right now.
Of the three debit cards reviewed in this article, I have to say that I understand Uphold the least and have perhaps been slightly unfair toward it in this review. However, this is not the last article I will write on this subject and if Uphold — or I — improve, I’ll be sure to make mention of it in the future.
The Best Cryptocurrency Debit Card
At the moment, and for my money, I think the clear winner right now is the Blockcard. The TERN currency strikes me as a stroke of genius — after all, many cryptocurrency investors have massive appetite for risk and are more than willing to make speculative bets on the basis of what might happen in the future. Combining the possibility of upside with convenience and interoperability between various solutions makes it very simple to connect the endpoints here and end up getting rewarded for participating in a futuristic cryptocurrency ecosystem.
Nothing in this article constitutes financial advice. Content provided only for entertainment and informational purposes. All investments carry risk and the author of this article assumes no responsibility for any gain or loss incurred by a reader under any circumstances.
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