Monday , March 25, 2019

Eye on Crypto: Fit Pay Readies Its Flip; Expedia Cancels Bitcoin; Lightning’s Woes; Facebook’s About-Face

It has been a busy week in the cryptocurrency business. On Thursday, technology vendor Fit Pay Inc. announced it is closer to shipping a contactless coin-shaped device called Flip that allows consumers to convert their Bitcoin to U.S. dollars so they can make purchases.

Earlier, news emerged that the online travel broker Expedia Inc., which has accepted Bitcoin since 2014, has stopped taking the cryptocurrency, and a report on a promising project called the Lightning Network, developed to cure Bitcoin’s scalability issues, emerged with some sobering news about the nascent network’s reliability. Meanwhile, on a more optimistic note, Facebook Inc. rescinded a ban the giant social network imposed in January on cryptocurrency advertising, though it still bars ads for initial coin offerings and so-called binary options.

Fit Pay, Inc. (PRNewsfoto/NXT-ID, Inc.)

San Francisco-based Fit Pay says its Flip device has been through an initial production run and has completed initial testing of its digital wallet and Bitcoin-exchange integration. The device, which will sell for $29, still awaits approvals from the card networks, however. “We have been working hard to secure those approvals and now expect to ship the initial pre-orders within the coming weeks and go into mass production soon after,” said Michael Orlando, president of Fit Pay, in a statement.

The Flip device, which does not require charging, allows users to convert Bitcoin from an existing account into dollars and then make a payment at any store that accepts contactless transactions. The device’s digital wallet allows users to set how much value they’d like to keep in the device and when they’d like to reload.

Fit Pay is a unit of Melbourne, Fla.-based NXT-ID Inc., a specialist in technology for the Internet of Things. The company first announced Flip in February, when it began accepting pre-orders.

On some other fronts, however, the Bitcoin news was somewhat less sanguine. Cointelegraph, a cryptocurrency news site, reported late Wednesday that the major online travel agency Expedia confirmed it dropped Bitcoin acceptance for airline and lodging payments. Contacted by Digital Transactions News, an Expedia spokeswoman said the company discontinued Bitcoin acceptance May 10. “Currently, we do not feel that we are able to offer the best experience for those using Bitcoin, but will continue to evaluate various options in order to offer travelers flexible payment solutions,” she said by email.

Expedia was one of the early e-commerce players to sign on for Bitcoin acceptance, but it remains unclear how important the payment method was in comparison to the flow of card and PayPal transactions at the site.

Another sobering development came in the form of a report indicating that the Lightning Network, a project that promises to make Bitcoin transactions faster and less expensive, may have run into problems with reliability. The Lightning Network project emerged as volume on the Bitcoin blockchain grew, causing congestion and exacting a price in confirmation times and transaction cost, though these issues have calmed down in recent months.

A beta version of the network launched in March, and since then it has grown to more than 2,500 nodes and 7,800 channels, according to the report, which was posted by Diar.co, a weekly news site covering cryptocurrency. But success rates are not promising so far, the site reports, particularly for any transaction of a significant sum. The success rate for a payment of any more than “a few dollars” between random nodes is 70%, for example, the report says. “[T]he reliability of successfully routing a payment on the Lightning Network is still quite low,” the report notes.

Solutions to the problem could lie in ideas to split large payments into many smaller ones, then combining them later, according to the report. Another idea is to increase funding from supporting organizations while the network remains in its beta phase, Diar says.

Still, Facebook’s about-face Wednesday on crypto advertising earlier in the week sparked optimism among some observers that the coins may yet find an avenue to mainstream use. Bitcoin’s price, $6,147 at mid-morning Thursday, according to Coinmarketcap.com, remained little changed since Facebook’s announcement.

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