Gyft and bitcoin API developer Chain have partnered to create Gyft Block, a trading platform aiming to make gift cards easier to exchange.
Announced at Belfast’s MoneyConf, the news marks Gyft CEO Vinny Lingham‘s latest step in transitioning his mobile gift card company from one of bitcoin’s most active merchants to a more direct supporter of its underlying technology.
Gyft Block is part of Gyft’s broader mission to digitize gift cards so that they can be securely traded using bitcoin’s public ledger, the blockchain. Termed ‘gift cards 2.0’, the ambitious project was first revealed at SXSW in March and followed Lingham’s own involvement as an advisor and investor in so-called ‘crypto 2.0’ firms, including Koinify and Trustatom.
A statement from Gyft implied that the platform could solve real problems for the $100bn gift card market:
“Consumers can redeem different forms of digital value in a single transaction: for example, a consumer can buy a cup of coffee by combining a gift card, branded reward point, and coupon, since all blockchain-based digital assets operate on the same open standards.”
In an accompanying white paper, Gyft’s head of special projects Guillaume Lebleu suggests Gyft Block would seek to establish a common API for gift card issuers that more closely replicates those of credit and debit networks.
New white paper
Lebleu’s follow-up provides an overview of the technological building blocks on which gift cards have been based, and how Gyft believes migrating these attributes to the blockchain could be beneficial.
“Credit and debit cards require a standard infrastructure between thousands of financials institutions and millions of merchants … A gift card, on the other hand, is a singular instrument typically redeemed only with the merchant who issued it,” he explains.
In the post, Lebleu goes on to describe the ways in which Gyft Block will allow providers to issue gift cards on the blockchain that can be programmatically compliant with local laws.
For example, multisig technology would allow the keys to a bitcoin wallet for a gift card asset to be distributed among multiple parties including the issuer, the cardholder and a third-party to help enforce necessary rules.
“The co-signing program manager is trusted to enforce the terms and regulations of the assets, including daily spending limits and unauthorized transfers, by rejecting any non-compliant transactions,” he continues.
The costs of issuing gift cards on the blockchain are also favorable to the cost of printing plastic gift cards, Lebleu says.
His post concludes:
“Ultimately, intelligent wallets will be able to connect to marketplaces, identify arbitrage opportunities and perform in the background complex chains of trade that maximizes the consumer’s purchasing power without compromising their privacy or control.”