Bitspark: The New, Blockchain-Powered Remittance System
Remittance and a Global Economy and Technology Apps
Blockchain is innovating our currency, banking, and commerce, but there’s another industry set for major disruption.
Natives of a particular country may not be familiar with how remittance works, but for migrants, it’s as common as sending a letter.
For those who don’t know, remittance is when a foreign worker sends money back to relatives in their home country. In countries with developing economies, remittance is sometimes the only way to support “unbanked” family members.
Remittance is seriously lucrative. According to the Pew Research Center, the global remittance industry reached $574 billion in 2016. Among the countries with the highest remittances are Mexico, China, India, and the Philippines, with upwards of $10 billion sent each year.
The Problem with Remittance Today
There’s nothing inherently wrong with sending money back to a home country, in fact, for many people it’s the only way to survive. Instead, the main issue is with the intermediaries. For a person to remit money, they must use a money transfer operator (MTO) to send their money, which in turn relies on a network of banks.
MTOs don’t always have adequate cash supply (particularly for certain foreign currencies), so banks come in and fill the gaps. Because of this, banks tend to charge a premium, and sometimes delay the transaction by weeks.
There is an alternative, and it involves harnessing the power of blockchain to upend a whole industry.
One of the first projects to use blockchain and cryptocurrency for remittance is Bitspark, sometimes called just Spark for short. Bitspark has planned remittance services to over 100,000 locations around the world, without having to rely on a banking institution.
But precisely how can Bitspark help unbanked families prosper? Here are just a few ways.
Say goodbye to month-long delays and lengthy processes. Last August, Bitspark joined the BitShares Exchange, the fastest blockchain network in the world. In order to compete with banks, Bitspark needed a dynamic, highly-efficient, and scalable system. With BitShares, Bitspark can achieve 100,000 transactions per second, with fees as low as a few cents. In an industry that involves millions of users around the world, speed is of the essence. Finally, someone in London can send money to her mother in Manila without worrying if it will arrive on time (or in some cases, at all).
Banks have run the global economy for far too long. Bitspark represents one of the first true challenges to the status quo. Users don’t need to have a bank, and they don’t need to give up their details or pay high transaction fees. Everything is carried out on a completely decentralized exchange.
Bitspark will use a pegged fiat cryptocurrency (similar to bitUSD) exchanged at MTOs at minimal cost. That means neither party has to wait on a bank to fill the supply, there will always be enough to circulate. One medium post outlined how it would work:
“A user has a digital balance of 100 bitUSD in their app and would like to make some money. They visit an MTO and offer to sell their digital 100 bitUSD to the MTO for $101 in Cash. The MTO accepts this offer and exchanges $101 in cash for 100 bitUSD. The MTO now has reduced their cash on hand and also received a digital balance to be used for future transactions.”
Yes, you read that right. Bitspark has its own app, Sendy, which has been in the Google Play store since 2017. Recently, Sendy’s developers have been working on a completely revamped app, which just went into closed beta last week. Sendy is an all in one financial app that will be powered by Bitshares, allowing users to send and receive money, but also earn, and invest. Sendy will usher in a new generation of financial apps and remittance services, with convenience at the center of its design.
Earn and Invest
Not content with basic transfer features, the developers of Bitspark and Sendy implemented the ability to earn money and reinvest it. Users can earn through the Sendy app by becoming a “top up agent” and providing an MTO service. Local entrepreneurs can also get in on the action by offering liquidity by charging a custom service fee. Finally, regardless of whether you send or receive, any Spark user can earn ZEPH, a token for saving, investing, or cashing out. You decide!
The developers are currently working on creating a more user-friendly interface and notifications system, as well as the onboarding and verification process. The closed beta is not available for public investors, but anyone holding 500k or more of $ZEPH are welcome to join by emailing email@example.com. Closed beta is expected to run until July 1.
Stay up to date on BitShares Telegram here.
The author is not an attorney or financial advisor. None of the content presented should be construed as investment advice or as legal advice.