In the world of cryptocurrency and blockchain interoperability, there is a lot of discussion about fragmented currencies and the need for security across multiple layers. One example of this is Ethereum (ETH), which provides security across various layers. Additionally, there are multiple non-fungible wrapped versions of the stablecoin USDC, such as abcUSDC and xyzUSDC.
However, it’s not just digital currencies that experience fragmentation. Real-world assets, like the US dollar, also face similar challenges. For instance, a dollar in your pocket is not the same as a dollar in the bank. This fragmentation is evident in the case of gift cards. After the holidays, many people find themselves holding unused gift cards. According to a Bankrate survey, an estimated $21 billion is sitting in unused gift cards across the US, which accounts for about 1% of the money supply.
Gift cards are essentially a number that provides access to a digital equivalent of cash. They are somewhere between cryptocurrency and a debit card. While they are not as secure or uncensorable as bitcoin or ether, they do not require a bank account to use and can be bought and sold with minimal information exchanged. This opens up interesting possibilities in the world of online commerce.
Recently, I stumbled upon an interesting issue involving metaverse activities and unbanked members of my household. As a parent, I often deal with metaverse currencies, specifically Fortnite V-Bucks. These in-game currencies are essential for young players, and the virtual goods they can purchase hold significant value. To fulfill their requests, I usually add dollars from my credit card to the Microsoft account for Xbox in-game purchases.
However, one day, my child found a workaround that cut me out of the flow – the Fortnite V-Bucks gift card. These gift cards are available at many retail stores and can be purchased with physical cash. However, the process of converting the gift card into in-game currency was not straightforward. The in-game form required a 12-digit code, while the code on the back of the physical gift card was only 16 digits. There was no explanation provided, and it took some internet searching to find a separate webform where the 16-digit code could be converted into the required 12-digit code after logging in with a player account.
As someone who has worked in the cryptocurrency industry for several years, I am no stranger to bad user experiences. However, the convoluted user experience for converting V-Bucks gift cards surprised me. The crux of the issue lies in the requirement to log in on a third-party site to complete the conversion. While this login process could be made more seamless with better instructions or an integrated form, it is clear that the login is necessary to prevent fraud and money laundering.
This brings us to the comparison between gift card fraud and cryptocurrency fraud. The need for a login on a third-party site adds a layer of security to the gift card system, preventing fraudulent activities. On the other hand, cryptocurrencies like bitcoin and ether do not have similar constraints, making them more susceptible to extralegal uses, such as money laundering or funding dissident movements.
In conclusion, the issue of fragmented currencies and interoperability extends beyond the realm of digital assets. Real-world assets, like gift cards, also face challenges in terms of usability and security. While the convoluted user experience of converting V-Bucks gift cards may be frustrating, it serves as a reminder of the importance of security measures in preventing fraud and illegal activities.