Summary: For those that
have been living under a rock are unaware, Purse.io is a marketplace website that acts as an escrow agent between those with Amazon.com gift cards (or a credit card) and those with Bitcoin. In a reverse-auction style, a user will post an Amazon wishlist along with a desired discount they wish to receive and then give the full purchase amount in Bitcoin to Purse.io to hold in escrow. On the other end, someone with an Amazon gift card balance or any other ability to pay on Amazon.com can then purchase the wishlist items for the full price, and receive the discounted amount of Bitcoin in return. Users save an average of 20% off full priced Amazon purchases. How can this be? Why would anyone want to do that? Luckily, Purse.io recently outlined the process on their blog.
The simple answer is that Amazon gift cards are largely illiquid outside of actual Amazon.com purchases. While you can purchase almost anything on Amazon.com, sometimes you need something that Amazon doesn’t sell, or simply want to hold on to cash. You can’t simply go to the bank and exchange a $50 Amazon gift card for $50 in cash. Amazon gift cards are also widely used as a form of payment around the world in placed where other forms of payment are less convenient. The result? There is a multi-billion dollar amount of unspent Amazon gift cards around the world with no way easy to convert into cash.
Purse.io connects those with Amazon gift card balances with those who have Bitcoins. Bitcoins are much easier to convert to cash (e.g. multiple online exchanges around the world), and thus are a convenient way to cash out of Amazon gift cards from anywhere in the world. The person that is trading their Bitcoins does not need to worry about the gift card being real / having the promised balance, because the person on the other side of the trade is actually buying a product on Amazon.com and shipping it to the Bitcoiner’s address. The person with the Amazon gift card balance does not need to worry about the Bitcoiner fulfilling their side of the bargain, because Purse.io acts as an escrow agent and holds the Bitcoins until the Amazon purchase is confirmed.
That’s the short version. For a much better description, hear it from the horse’s mouth over at Purse.io’s blog post on the subject.
Image Credit: Bitcoin.com