Sending money across domestic and international borders is a regular hassle for literally billions of people around the world.
According to the World Bank, 2018 was a record year for remittances.
However, most people pay exorbitant fees to send money. If you’re among these people, it’s probably because you don’t know that in recent years, cryptocurrency has changed the game where remittances are concerned.
Bitcoin Value Proposition 101: Remittances
For a fraction of the money people spend on fees now, you can send virtually unlimited sums.
Large settlements will still require some form of banking integration.
For amounts most people transfer using Western Union or MoneyGram now, Bitcoin or other cryptocurrencies can be fast, cheap, and easy. There are a number of hurdles, but the fees and frictions associated with crypto don’t help any.
In cryptocurrency, several companies want to attract “newbie” users. People who otherwise might not be able to use cryptocurrency at all.
Coinbase is best known for this. For smaller fish in the US, it’s probably one of the best possible options.
A massive retail exchange, it makes it dirt simple to buy cryptocurrency. To boot, Coinbase supports a variety of debit and credit cards, and allows you to send directly from their simple-to-use wallet.
You will pay fees buying at Coinbase, but they will be less than your other US-based option (assuming you haven’t yet considered alternative exchanges), which is a crypto ATM.
ATMs, just like their fiat equivalent, typically charge a premium. Just as regular ones do the same for access to fiat currency.
Suppose you wanted to send money to a relative across the world. In this example, you take cash and put it into a Bitcoin ATM.
It’s likely to be cheaper doing this than it will be to go and send money through Western Union, MoneyGram, Walmart, PayPal, a bank, or any other means.
Welcome to Blockchain Airlines, You Are Now Free to Transact Around the Planet
Most of them charge a fee based on the amount you’re sending. Limited exceptions include when you and the recipient share the same bank. In that case it’s trivial to transfer money into their account.
Using Bitcoin, depending on certain factors that decrease as cryptocurrency spreads generally (there are more ATMs around the globe over time), your recipient across the world can have fiat cash in a matter of minutes.
They could also have Bitcoin, which they can hold and appreciate the value of, or they can get it wired into their bank from an exchange if they so choose. In some cases this might be the only option, if the recipient’s banking infrastructure doesn’t allow for international transfers, for example.
Europe, by far, has the most options for acquiring and sending money, especially cryptocurrency. A lesser-known wallet solution called Aximetria is licensed by Swiss regulators, but that’s the least of its news for people looking to use Bitcoin.
The company recently announced that much of its services are free for smaller users — exactly the sort of people who currently use Western Union. Notably, their new AxiDrop feature makes it possible to send money, including cryptocurrency, without the recipient needing any more than a cell phone.
Both Bitcoin and Ethereum can be bought and sent with no fees going to the wallet provider. While there’s a limit, for small-time users looking to send money the way most people do with Western Union et al, it’s a perfect alternative that will save money. It’s also exactly what we mean when we say “using Bitcoin” instead of speculating on it.
Blockchain Value Proposition 101: Immutability
There are many cases where Bitcoin, or blockchains generally, are the solution to problems previously thought unsolvable, such as a government’s unwillingness to allow its people to transact.
Cryptocurrency has a number of value propositions, but remittances remain a key area of focus. While some in the community insist that crypto is meant as a “store of value,” plenty of blockchains, including Ethereum and Bitcoin Cash, support microtransactions in ways that aren’t currently possible on the native Bitcoin chain.
Fortunately, the Lightning Network has made it possible to again send small amounts of Bitcoin. Wallets, including Coinbase, will have to support the network over time for it to grow and its use to spread.
Then it will be possible, for example, to buy your friend in Beijing a beer at a bar that may or may not know its accepting cryptocurrency.
As crypto ATMs and new wallet services proliferate, the prospects for the “unbanked” billions who still have financial needs improve exponentially.