As outlined in my previous post, there are several stores that accept cryptocurrencies. Since Black Friday is almost here, I wanted to cover one of the most interesting and economically beneficial uses of cryptocurrency, Purse.io. When you use this platform you can easily save between 5-20% and if you are patient and willing to wait a week, up to 30%!
Too good to be true?
That’s what I thought when I first heard about Purse.io in 2014. In order to quell my skepticism, I had to first seek to understand how the value was transferred in these Purse transactions. Remember as I outlined in my post, “The Real to Potential Wealth Ratio”, value is not created or destroyed; it is transferred.
To perform an analysis on whether a certain service is genuine and not fraudulent, one should understand where the offered value originates. Nothing is just free and there are no magical discounts that are not beneficial to both parties. For example, businesses offer discounts during Black Friday because it is a way to get people to come into their store and purchase additional items. You may have noticed in most cases, the stuff on sale tends to be older products that needed to move anyway. This is also why Amazon created their Prime Day sale in July too, they want to get rid of undersold items while also leveraging their excess warehouse network capacity to get more sales. In these cases, the customer and the business benefits. The business pays the customer to take their product so they can make room for future stuff to sell. It’s a win-win!
While I was searching for the value offered by Purse, I discovered Amazon’s Mechanical Turk (MTurk) where you can earn anywhere from 2 cents to a couple dollars by accomplishing specific tasks. As I outlined in a previous post, The 3rd Revolution of Workplace Automation, Artificial Intelligence is not a real thing and Machine Learning will drive the increase in workplace automation. However, for these computers to learn, they need millions of data points. Therefore we still need humans to provide human-generated information. Amazon and other companies use the MTurk platform as a way to easily gather human intelligence. They even joke about this aspect; their tagline is “Artificial Artificial Intelligence”.
Upon finding their payment method I came to understand where the value of Purse’s service is being derived. If you are an international worker on MTurk, your only payout option is via an Amazon Gift Card. For individuals in the developing world that have access to the internet, this can be a significant income. However, after the income is earned it sits as a balance on an Amazon Gift Card where you only have the option to purchase items from Amazon. If Amazon does not support a certain country or locale then those earnings are illiquid, meaning they cannot be exchanged for anything.
The majority of folks at one point in their life have received a gift card or rewards for a specific store. Stores issue gift cards for several reasons to include finding new customers who would not otherwise shop there and for the issuing business to earn something from nothing. According to Investopedia, 6 percent of all gift cards go unused. This is free money for card issuing companies. While there may be no expiration dates on the cards, at a certain point it can be assumed that the cards are lost by using historical redemption data. Gift cards are demonstratively restrictive because of this nature and the fact you cannot redeem it directly for cash. However, if you can find someone who will purchase it from you, you may be able to sell it to them for 10-20 percent of the value. There are even kiosks in grocery stores that offer this same value proposition: Give up your gift card and receive 80-90 percent of the card’s value in cash.
The value savings behind Purse originates from the Amazon Gift Card payout option. Most people in developing counties may not desire or have the ability to purchase items off Amazon.com with the Amazon Gift Card. What they want is money that can be spent anywhere so they can have the ability to spend and save locally because they can only afford goods and services in their local economy. Individuals in countries like Venezuela and Zimbabwe leverage this service. Making 5 USD in a single day on MTurk may not seem like much, but to those in these poor countries, 5 USD may be close to their entire month's income. Using MTurk may be their only option to make this kind of money and normally would be impossible to get any of the value out of the Amazon Gift cards because they cannot be redeemed for traditional fiat currency or money.
This is where Purse’s service acts to support the transfer of value. Purse matches 2 individuals, one is the “earner” that has an Amazon Gift Card balance and the other who is the “shopper” that wishes to save money on their Amazon purchase. The shopper who is looking to save on Amazon will simply search through the Purse website (which uses Amazon’s API to pull the current product stock) and add the items to their Purse cart. Purse even has a chrome extension which allows you add products to your Purse cart directly from the Amazon website.
The shopper’s cost savings will vary based on market demand. During the checkout process, each shopper sets their own discount which can be anywhere from 5-33%. An earner then reviews the list of offers and decides which offer gives them the most value. Most orders are fulfilled quickly in the 5-15% range in under 6 hours. After the earner agrees to purchase an order, Purse presents the earner with an Amazon wishlist link; the earner then purchases items from the wishlist and Amazon ships the contents of the wishlist to your home.
For those who are concerned about privacy, your shipping information remains securely with Purse and Amazon since orders are purchased via an Amazon wishlist; the earner has no visibility of your address. If you already shop on Amazon, you are only giving your information to Purse. When the order is delivered, the shopper marks the order complete and the bitcoins are transferred to the earner.
On the surface it may be absurd for individuals to give up to 20% of their potential value to convert their Amazon balance, but what are their alternatives? They have none; a liquid balance that is 20% less than an illiquid balance is much more valuable to an individual living in a poor developing or struggling country. When individuals have Bitcoin, they are no longer restricted to any platform and can transact freely anywhere in the world.
The remittance market has fees that typically range from 5-15 percent according to the World Bank. Compare this range to the average discount on Purse and you will start to appreciate the reason why individuals may choose to give up a significant amount of value.
Cryptocurrencies have opened up many possibilities to those in the developing world. Now workers do not need to travel to other countries to earn a living, but can do so from any computer connected to the internet. When you participate on the Purse platform you are connecting to this new culture that I spoke of in my introductory post, What is a CryptoCoach?. The new culture where individuals directly exchange and are not restricted by borders. Today, crypto is disintermediating western union, and allowing individuals to take a direct part in helping those in developed nations transfer their stored labor (money). Tomorrow, crypto will allow for the direct transfer of money to anyone without permission. Purse’s service won’t be around forever once the new culture has matured, but today early adopters can benefit by playing a part to move that needle forward.
Web: http://www.cryptocoach.cc
Memo.Cash: https://memo.cash/profile/16A3J6ZCj3udFABRVc2zRK9fkWMZD5czJ7
Minds: https://www.minds.com/richellis
Yours: https://www.yours.org/@richfromcryptocoach
