Many Bitcoin enthusiasts are using one – or multiple – of the available debit cards in circulation today. But there are some drawbacks to this system and a price to pay for convenience. Moving funds out of these third-party wallets, for example, can be rather tricky.
The Downsides of Bitcoin Debit Cards
At their core, Bitcoin debit cards are not that different from dealing with the average centralized exchange. Users deposit funds to a wallet that is not in their control and use a third-party service to spend said funds. On exchanges, that service comes in the form of an order book, whereas Bitcoin debit cards are, well, cards.
But this is where the problem lies: users do not control their funds any longer. When money is sent to a third-party Bitcoin address, the financial control ends right then and there. Moving that funds back out of the Bitcoin wallet in question is a lot harder than it may seem in most cases as there are no automated withdrawals to speak of.
Similar to how exchange wallet work, Bitcoin debit card users may need to wait a few hours – or days – to get their funds out again. Platform operators move the funds out of cold storage, which can take some time. Or in the case of SnapCard, one user reported how he had to contact customer support to make a withdrawal.
Granted, the Snapcard team has apologized for this backward way of conducting business. For some reason, their service was freezing accounts after users made a purchase, and customer support has to unlock the wallets manually. This is rather inconvenient, and a sign of growing pains when it comes to Bitcoin debit cards in general.
Albeit a Bitcoin debit card is not a “pure” way of spending cryptocurrency by any means, it is a convenient solution. But users have to keep in mind these cards are just a stepping stone towards spending Bitcoin on a global scale. For the time being, there is a price to pay for this convenience factor, and that will not change anytime soon.
Source: Reddit
If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.
