[ad_1]
Lightning developer and founder of Zap, Inc. Jack Mallers announced Thursday that his startup’s Strike product, which allows people to receive bitcoins as dollars through direct bank deposits, is finally entering public beta.
A Visa card is also in the works.
“Zap, Inc. has joined Visa’s Fast Track program,” Mallers said in an email about the startup’s plan for 2020. “Visa is partnering with Fast Track program members to help them enter the market the way as efficient as possible, providing them with support and resources every step of the way. ”
He said his main focus this year is launching a Strike card for consumer app users and integrating Visa Direct into the consumer app, which is the program that makes Venmo payments so fast. There is no date yet for the next Strike card.
“They [Visa] they are a partner for our consumer emissions offering and are not involved in our commercial offering at all, ”added Mallers.
Visa appears to be doubling down on partnerships with crypto companies this year. For example, the Fold shopping reward app (also a Fast Track member) and the Coinbase exchange both offer matching Visa cards as well. These are generally used by crypto advocates who prefer to earn crypto rewards rather than other types of points. There are also crypto debit cards, which allow people to spend dollars. It remains to be seen what specific options will be available to Zap cardholders in 2020.
Visa confirmed the deal but offered no additional comment at press time.
Fragmented approach
Although Jack Dorsey’s Cash App and Coinbase exchange unicorn are widely considered the more traditional apps for buying and selling bitcoin, Mallers is looking to offer an app of the same caliber, at a fraction of the cost.
Mallers said his two-year startup, with several people on staff, will take a three-pronged approach to the recession. To get started, Strike offers each user a unique public website where people can send bitcoins simply by scanning a QR code. This is comparable to what Ethereum’s name service offers with .ETH public wallet addresses.
Read more: Zap’s new product allows merchants to bring dollars to the Lightning Network
However, Zap’s Strike is not a crypto wallet. Instead, the startup does a trade on the backend and sends dollars to the user’s account.
“Traditional tax rules would apply to the financial transaction and the exchange would bear the taxable cost of selling bitcoin, not the individual,” DLT Law Group attorney Sasha Hodder said in an interview, describing a potential benefit of the bitcoin. Strike installation.
Advantages for privacy
Anyone in the world can now anonymously send bitcoins to people with US bank accounts or credit cards.
Strike offers a public identifier that is not associated with your personal bitcoin address. Instead, the startup manages these wallet addresses. This means that someone can pay content creators, for example, without revealing personal information to each other.
So far, the Strike configuration is mainly used by small businesses and their customers. One such user, a US Army programmer and veteran named Rick in Colorado, uses Strike to purchase medicine to help with his seizures. Another user, named Tyler, buys gift cards with Strike.
“He’s very responsive, there’s never a delay or anything like that. It’s like Twitter or something, “Rick said in a phone interview, describing how intuitive Strike was.
The startup offers two different services, the merchant offer for companies and the free mobile app for consumers. For users who prefer to receive bitcoins, they can use Zap’s eponymous product, a Lightning-friendly bitcoin wallet. The Zap wallet offers self-storage for bitcoins while the Strike custodial wallet can only receive value in fiat.
Taxes
Zap now offers two complementary wallet apps, plus it has a third ace up its sleeve.
Attorney Lisa Zarlenga of Steptoe & Johnson LLP said custodial services like Strike can reduce obstacles for both buyers and merchants during the economic slump by taking “the burden” of channel and relationship management because ” the person who transfers the bitcoin must keep track of the value. “
Bitcoin advocates often say they would like to use bitcoin, particularly with Lightning transactions, to anonymously pay for products and services such as multimedia content. There are ecommerce sellers who accept bitcoins, although few buyers use these options. Now it is possible for creators and traders with almost all levels of technical skill. In addition to cyber literacy, tax requirements are another major obstacle that bitcoin users may face.
Read more: The COVID-19 ecommerce boom hasn’t moved on to Bitcoin, despite the benefits
Over the past three years, the nonprofit Coin Center has repeatedly proposed changing tax regulations to reduce documentation requirements for small purchases made directly with cryptocurrencies, but Hodder said lawmakers don’t prioritize those issues. tax during the COVID-19 crisis.
Omri Marian, a law professor at the University of California, Irvine, pointed out that most foreign exchange services like Coinbase “still calculate your taxable income”, so Strike may not solve any “administrative problems” for some users.
“Why not just pay in dollars?” Marian asked.
Someone can easily pay their rent or buy groceries with bitcoin-derived value, using these free apps and a Visa card. The question remains whether the bitcoiners will use the system enough to fuel the startup’s behind-the-scenes trading earnings. If so, Zap doesn’t need to become a unicorn to make a healthy profit.
Read more: Lightning Wallet Zap launches in-app OTC desk for Bitcoin buyers
Strike user Tyler said he hopes the service “will allow merchants to accept and use bitcoin with Lightning without their customers knowing or spending bitcoins.”
“This app allows me to interface with Lightning so easily,” Tyler said, noting how the scaling solution operates silently in the background.
