The path to mainstream cryptocurrency adoption starts with creating easier methods for people to buy these digital assets. Currently, most methods require many hoops for the average user to jump through. They have to register on the exchanges, open crypto wallets, undergo complex verification procedures and wait for their fiat money to be transferred.
Cryptopoints is aiming to change all of that by providing a simple solution that allows users to purchase Bitcoin, Ethereum, Bitcoin Cash or Litecoin with just two clicks.
Using the gift card model, Cryptopoints offers a prepaid card that you can purchase at any desired denomination (though fixed denominations are in USD). With this card, you can get cryptocurrencies in your wallet, and begin shopping at a rate that’s at least 5% below the market. The cards work without Cryptopoints storing any of your data or money, and you can reduce the time needed to track prices and withdraw funds from exchanges.
The company is less than two years old, has already sold 10,000 cards with an average turnover volume of 100 BTC per day. Also, Cryptopoints is partnered with hundreds of merchants around the world, whereas it’s customers performed transactions of over 10,000 BTC the past year.
How Crypto Points works
Using Cryptopoints seems like a straightforward process. First, users can purchase a card by entering their information directly on the platform or through one of Cryptopoints retail partners’ websites. Next, users activate the card by removing a secure layer and entering the private passcode. Then finally, the card can use used to buy Bitcoin, Ethereum, Litecoin or Bitcoin Cash. Cards are also offered and can be used in all countries around the world.
The minimum withdrawal amount is $250 or in its cryptocurrency equivalent, though the company is working to reduce this number down to $100 to make it more convenient for the most number of users.
The regulation concerns
Cryptopoints does employ a strict KYC/AML policy. According to their terms:
“Cryptopoints identity verification procedure requires users to provide reliable, independent source documents, data or information (e.g., national ID, international passport, bank statement, utility bill). The company also reserves the right to verify User’s identity in an on-going basis, especially when their identification information has been changed, or their activity seems to be. At any time, up-to-date documents can be requested from the users, even if they have already passed their identity verification.”
This process is essential for CryptoPoints to be able to operate legally around the world. However, for those in the crypto space who place a hefty premium on privacy, these KYC/AML processes might act as a deterrent for them to join the service.
Cryptopoints also offers deals to distributors in order to spread the services around the world. Distributors can earn a percentage of the cards sold, but they must provide a monthly minimum purchase volume of the Cryptopoints cards for an amount not less than $50,000 the price set by the company.
Reducing the barriers to purchasing crypto is essential to achieving mass scale adoption. CryptoPoints seems to be well positioned to aiding this cause through their card distribution service. There is, however, room for improvement:
It looks like the company still has an uphill battle in marketing before it can become the preferred method of purchasing crypto, certain users may be deterred by the KYC/AML processes, and the limited option of cryptocurrencies may put them at a disadvantage compared to other crypto purchasing services like Shapeshift and Changelly or just a regular exchange like Binance.
Ultimately, if Cryptopoints can overcome these challenges, then they will be a welcome addition to the industry-wide challenge to achieve large-scale cryptocurrency adoption.