Spending Bitcoin is a critical part of making the digital currency a mainstream form of payment over the next few years. Up until this point, consumers had very little options to spend Bitcoin in physical locations, unless they own a Bitcoin debit card. That situation has come to change, now that mobile app Plutus lets people tap & pay with Bitcoin wherever NFC payments are accepted.
Bitcoin Use-Case With Decentralized Exchange Technology
Contactless payments are gaining popularity all over the world, as mobile solutions – such as Apple Pay and Android Pay – rely on NFC communication to transmit payment details. Additionally, plastic card issuers are active in the contactless payment sector as well, as various banks around the world are now issuing bank cards with NFC capabilities.
Using contactless payments would be impossible unless merchants and locations deploy NFC-enabled hardware. At the time of publication, there are over 32 million NFC-enabled terminals all over the world, and that number will increase as NFC technology becomes more widely available at retail locations.
Plutus is entering this market with a different idea in mind, as the team wants to make Bitcoin more approachable for everyday consumers. The Plutus mobile application lets anyone in the world pay with Bitcoin wherever contactless payments are accepted on the condition of the location using NFC terminals.
Plutus CEO & Co-Founder, Danial Daychopan, told Bitcoin.com:
“There is a growing number of people who earn bitcoin through work, trading, remittance, mining, gaming and more. But unfortunately, brick and mortar merchant adoption is not accelerating at a quick enough pace to keep up. With Plutus, you don’t have to wait for merchants to get around to accepting bitcoin on their own. You can go to your favorite store, and simply Tap & Pay.”
But there is more to Plutus than “just” enabling widespread usage of Bitcoin as a payment method. There is a decentralized, peer-to-peer exchange network powering these NFC payments, and converting the Bitcoin value to fiat currency rates on the go. For the retailer, they will still receive the payment in their local fiat currency, without ever knowing the user paid in Bitcoin.
In a way, the service offered by Plutus solves one critical issue that has been plaguing the Bitcoin ecosystem for quite some time now: merchant adoption. Far too many retailers are not keen on accepting Bitcoin payments, as they don’t see the value in doing so just yet. Services like Plutus eliminate the need for direct bitcoin adoption by merchants, even though that remains the end goal for digital currency enthusiasts.
How It Works – Technical Explanation
Using the Plutus mobile application is fairly simple: send an amount of bitcoins to the address displayed in the application, which are then forward to verified traders on the underlying decentralized exchange. Plutus uses a smart contract (DEX) on the Ethereum platform to verify the transaction between the sender and traders, which then releases the equivalent fiat currency to the Plutus user’s virtual debit card balance. Once this step has been completed, users can pay with the app anywhere NFC payments are accepted.
By combining the power of smart contracts, blockchain technology, and prepaid virtual debit cards, Plutus packs a powerful financial punch. Considering how the entire process is fully automated, users will only have to send funds, while the underlying Plutus software takes care of the rest.
As you may have guessed by now, Plutus prides itself on being a useful and practical solution to spend Bitcoin anywhere in the world. Plugging into existing infrastructure is an interesting way to boost Bitcoin adoption, as it takes away part of the disruptive element associated with digital currency. However, this solution should be considered as a stepping stone towards achieving global Bitcoin adoption, while providing a practical use case at the same time.
Additionally, it is important to keep in mind that using Bitcoin wherever NFC payments are accepted is not the real innovation on display here. Instead, the underlying DEX technology creates a fully decentralized cryptocurrency/fiat exchange, which does not hold user’s coins at any step along the way.
What are your thoughts on this use case presented by Plutus? Are you looking forward to giving the application a try? Let us know in the comments below!
Images courtesy of Shutterstock, Plutus