NY-based startup Bitinstant hopes to launch Bitcoin as a debit card system. Bitcoin was originally a virtual monetary system that allowed users to pay anonymously, bypass bank regulations, and avoid transfer and withdrawal fees. The system crashed after a security breach that made it nearly worthless. Now, Bitinstant will act like a prepaid card that can be used to make every day purchases, withdraw money, or transfer amounts to friends and merchants.
The card holds a max of $1000 in Bitcoin credit and a QR code to link users to their accounts. Bitinstant is meant to attract those who have had success at mining Bitcoin. This process also bypasses transfer fees if friends do not bank with the same company, though users are allowed to keep each money transfer as BTU or convert them into US dollars, in which case a conversion fee would be charged.