Purse.io: The DADT Business of Bitcoin

Imagine you have $100. That’s U. S. fiat dollars, mind you. You’re in a foreign country, like Morocco or France. In order to spend your money you either need to find someone that will exchange your U. S. dollars to the local currency, or find merchants that accept U. S. dollars. That’s probably not overly challenging in a world dominated by the U. S. economy. An economist might say that U. S. dollars are liquid, easily exchangeable for goods, services, or an equivalent value in other currencies. You would likely visit an exchange which would take a small percentage of the transaction, as low as 0% for interbank transfers, or as high as 13% via traditional exchange services. You could pay even more to a local business if you’re in a pinch. Now change the scenario. You’re at home on your computer, you’ve got a stack of Amazon gift cards, and you’re taking a 33% loss to convert Amazon gift cards to bitcoin, arguably moving from a liquid asset to a less liquid asset. Why would any rational person do this? Answer: They wouldn’t. Purse.io has built a business upon the grey and black market of stolen credit card information, supporting a potentially criminal clientele by laundering their proceeds.
The premise of Purse is an attractive idea for users: Receive a discount on goods you want, delivered right to your door by Amazon. The same motivation that leads consumers to clip coupons and wait for sales drives users to Purse, who doesn’t want more for less? This makes advertising Purse an easy proposition, and if the story were that simple it would end there. For Purse and its users, however, the story is much less straightforward than simply receiving a discount.

This post was published at Coin Report on 02 Sep 2016.