Consumer adoption is a huge crypto roadblock however a new partnership between Microsoft, Starbucks, and New York Stock Exchange parent company ICE might change things. While projects such as the Stellar and Visa-backed Interstellar project will focus on the enterprise, new venture Bakkt has its sights set squarely on the average user. Starbucks will create the customer experience, while Microsoft runs the cloud and ICE provides liquidity.
Long time ICE employee Kelly Loeffler has been tapped as CEO to run Bakkt and said “Bakkt is designed to serve as a scalable on-ramp for institutional, merchant, and consumer participation in digital assets by promoting greater efficiency, security, and utility.” We always like to hear more about efficiency and security, but the key point here is utility.
Starbucks is known for their coffee but they are also one of the pioneers in the mobile payment space. At this point, there are not a lot of people walking around with crypto on their phones, but an estimated 23 million people will have used their phone to pay for their coffee. Self-professed “non-techie” folks have no problem swiping, tapping, or scanning their way to bonuses and rewards for using the Starbucks app.
Not only did Starbucks beat both Apple Pay and Google Pay to market, but they have done a great job of providing a friendly user experience, which is severely lacking in the crypto world. The Coinbase app itself, for example is very clean and easy to use, but you still need to know a lot about crypto in order to use it effectively. Starbucks has incentivized it’s users enough that they are past the pain points and seem more than happy to live in that ecosystem.
Bakkt may seek to leverage some of those lessons in order to jump-start not only itself, but the entire market by simply making sure that their system is easy to use. Some of the current methods of “using” crypto involve merely selling your coins on demand which creates a balance of cash that you can spend at the point of sale. This can have orderbook slippage or volatility issues as prices move up and down quickly. You also have to consider timing (people still need to buy things when the market is down) and of course there are always fees involved. By the time your point of sale transaction is completed, there might be several different hands on your money, which goes against the whole point of crypto. Spending your tokens “directly” could be another function that ICE/NYSE bring to the table with their time-tested data and settlement tools.
One way this could be accomplished is by warehousing and holding large amounts of tokens in order to stabilize things. Bundling or batching transactions can help, but is also one of the current practices that could be improved upon. Consumers may be able to swipe and go on about their day while behind the scenes technology and scaling solutions such as Bitcoin’s Lightning Network or Ethereum’s Plasma take over to speed things along.
Bitcoin and crypto had some big moments in the last year or so that keep teaching people what blockchain is, however, still not a lot of people actually use it. Games about kitties, meme internet money, and global Star Trek super computers are fun and often show a great proof of concept but no one is really using them. One thing that people are using is their Starbucks mobile wallet and app. Funding your account, tracking rewards, and quickly paying for purchases are becoming second nature to a lot of people. They may not know it yet, but they are in one of the first waves of crypto pioneers and are leading the way forward towards crypto adoption.