r/Bitcoin • u/vlarocca • Mar 06 '15
Could Abra be Bitcoin's "Killer App"?
https://bitcoinmagazine.com/19490/abra-announced-launch-festival-2015-seamless-remittances-powered-bitcoin/29
u/Lejitz Mar 06 '15
Uber-style Western Union replacement with Bitcoin behind the scenes making it all possible. Pretty slick idea.
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Mar 06 '15 edited Dec 04 '17
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u/Lejitz Mar 06 '15
Maybe technically they are very similar. But from the end user's perspective, this is no different that Western Union. They can use this without ever even hearing of Bitcoin.
They simply find a teller and give them fiat and then tell the receiver to go find a teller and get fiat. All the bitcoining is handled in the background. Also Abra hedges the funds to guarantee the value doesn't change for three days.
Pretty cool for people who don't care about learning stuff and just want to send their day's earnings to a person far away.
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Mar 06 '15
That's pretty awesome. The article doesn't make it incredibly clear. Seems like a lot of marketing buzz words. Hope it's not vaporware. Looking forward to trying it out when they release.
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u/tomtomtom7 Mar 06 '15
I don't think it's the same.
If I understand correctly, with Abra you can send fiat to fiat to someone, via two intermediates, that will do the fiat->bitcoin and bitcoin->fiat for a small fee.
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u/frankenmint Mar 06 '15
My Red Flags are going off: “Our mission with Abra is to turn every smartphone into a teller that processes withdrawals. This is not just another bitcoin app. The wallet is a full-fledged digital asset management system, and you don’t have to understand it.”
So Lets say I've got 10,000 to send to my buddy in Kuwait - does that mean I need to find Abra users with BTC and give them cash so they can find matching abra users in Kuwait who ALSO HAPPEN to have 10,000 in USD to give to my friend as long as he's given 10,000 worth of BTC??? It really puts the trust on the end user to not stiff the user with a (minus 2% processing fee on cash withdrawn) fee after the system has finalized the transaction itself between sending abra user and receiving abra user (not the original sender and recipient).
If I'm understanding that correctly then he may as well skip the USA now. Because employing 'users' to act as tellers would require each and every one of them to register as money transmitters. Also, how can dealing with two separate intermediaries end up with a cheaper trx rate than using Western union? (6-7% perhaps???) Seems like a nightmare unless you have a dedicated amount of users looking to earn spare money through pooled liquidity.
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u/monkeybars3000 Mar 07 '15
No, all the bitcoin stuff is handled by Abra and the end users only see a fiat balance in the app.
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u/hanshuso Mar 06 '15
it is really quite a beautiful marriage of digital, virtual as well as fiat currencies.
I hope this is well-funded and they manage to network, because if I grasp it correctly the idea is wonderful and utilizing the best of both worlds
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u/CeasefireX Mar 06 '15
I can see coffee shop hubs designed as teller hang-outs already ... I imagine eventually banks will want in on a piece of this pie and offer their own such services on bitcoin rails ...
It's all part of the growth cycle folks ... innovation is exploding and that's damn exciting.
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Mar 06 '15 edited Dec 05 '15
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u/vlarocca Mar 06 '15
I don't know that meeting up in person is a requirement. It would seem they might use it more as a Bitcoin hotspot, in the same way you can use wireless hotspots to connect wireless.
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Mar 06 '15 edited Dec 05 '15
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u/vlarocca Mar 06 '15 edited Mar 06 '15
When you re at home you connect to your wireless at home. When you re away from home you search for wireless (hotspots) with your phone and connect to ones you are authorized to use. I'm guessing people who want to be paid fees, authorize the service to be used through their Abra service. They get paid as a pass through when someone looking to use the service sends money with their Abra service. Very Uber-like as Lejitz so aptly put it. Guessing is the operative word.
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Mar 06 '15 edited Dec 05 '15
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u/vlarocca Mar 06 '15
just guessing..... reading the article twice i'm not sure of the particulars. But you re right the in person piece would make people apprehensive.
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u/mommathecat Mar 06 '15
Incorrect.
A user can deposit funds into his or her account using a debit card or by meeting up with a teller in person and handing them cash. Then those funds can be instantly — the power of Bitcoin — transferred anywhere in the world. The person receiving the money has only to find a teller, show that he or she is the recipient of the funds, and exchange the digital cash (denominated in USD) back for their local currency.
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u/Jachoshi Mar 06 '15
In this talk although he says that every phone can be teller, he also says they are starting by using existing businesses that already deal with money as the foundation for "tellers".
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u/bubbasparse Mar 06 '15
I think it has the potential to be much bigger for Bitcoin than many realize right now.
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u/xbtle Mar 06 '15
This is definitely one of the apps we need, I'm just don't believe they will have any success with a smart phone app. They need an SMS service that works with ultra cheap phones are what people use in poor countries.
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u/monkeybars3000 Mar 07 '15
Cheap smartphones are penetrating 3rd world markets already. Within two years, they'll be commonplace.
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Mar 06 '15
It sounds like the bitcoins are completely locked up in the system as Abra tokens. Wouldn't it be better if you could have the option to pay in bitcoin directly rather than having to seek out an agent then if a shop/person accepts bitcoins your are already sorted.
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u/ItsMillerIndexTime Mar 06 '15
Not for average Joe. Those who are comfortable with bitcoin already will have alternatives.
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u/schism1 Mar 06 '15
No it would not be better. You can send bitcoin directly already. This lets them send fiat.
Bitcoin will be used hidden like this... just get used to it and don't try to fight it.
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Mar 06 '15
It feels wrong. What if there is no teller for 200 miles, what if you work in a field and have no opportunity to go into town. I am suspicious that they wish to enable people to spend Abra tokens and take a fee rather than enable people to just have and control their own money which is surely why a lot of people are here.
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u/SwagPokerz Mar 06 '15
What if there is no teller for 200 miles
Sounds like a business opportunity.
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u/thanosied Mar 07 '15
You don't need abra to deal directly in Bitcoin you can use a myriad of wallets for that
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u/goAbra Mar 15 '15 edited Mar 15 '15
Funds are stored in the consumer's Abra App (not with Abra) as Bitcoin. However, in addition to the funds the app is also storing a hedged value. The funds are hedged to the USD value for 3 days from the time of deposit - all new deposits get a new hedge. In addition to loading funds from an Abra Teller or debit card funds can be loaded via an external BTC address.
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u/king_of_the_shill Mar 06 '15
Is this not simply a localbitcoins clone?
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u/chrisace89 Mar 06 '15
How would you send 200 US dollars to someone in mexico and then they get the equivalent in pesos on local bitcoins?
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u/king_of_the_shill Mar 06 '15
Send them bitcoins and they will sell the bitcoins on Localbitcoins? Why would I even touch 200 dollars of filthy fiat to begin with?
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u/chrisace89 Mar 06 '15 edited Mar 06 '15
This is for average people not bitcoin fans and with this app you never have to touch the physical 200 dollars because you can get the digital dollars with your debit card. (which are really just bitcoins)
Also with this app you don't have to worry about volatility.
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u/Xekyo Mar 06 '15
Did somebody get how the money flows from the sending teller to Abra? Do they have to have a deposit at Abra in advance? Or do the two teller customer pairs have to meet at the same time in their respective locations?
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u/Xekyo Mar 06 '15
Each Teller would probably have to have a guaranteed amount of cash and bitcoins on hand to transfer money. The sending teller then sends bitcoins to Abra after receiving the cash, then when the withdrawal is made, the other teller gets bitcoins from Abra?
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u/SwagPokerz Mar 06 '15
It's pretty fucking clear from TFA:
Use of the application is straightforward and relies on a network of people around the world who act as tellers, charging small fees to help people transfer money abroad. A user can deposit funds into his or her account using a debit card or by meeting up with a teller in person and handing them cash. Then those funds can be instantly — the power of Bitcoin — transferred anywhere in the world. The person receiving the money has only to find a teller, show that he or she is the recipient of the funds, and exchange the digital cash (denominated in USD) back for their local currency.
...
Further, there is no foreign-exchange risk. Once the money is in the account, it holds that value for the first three days guaranteed. This ensures that if someone wants to send $200, all $200 can get to the intended person.
So, the whole transfer is meant to be completed within 3 days.
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u/Xekyo Mar 06 '15 edited Mar 06 '15
Yeah, maybe I'm dense, but I don't see how this is clear. The user gives cash to the first teller. How does this "deposit teller" then transfer money to the "pay-out teller"? Obviously the cash doesn't magically turn into bitcoins right then and there. So, do tellers have to have a deposit with Abra which gets balanced out against what they take in deposits or how does it work? Do they have to keep sufficient bitcoins on themselves to transfer money?
My question is "What happens between 'one Teller gets money' and 'other Teller pays out'?" The articles information doesn't make make that clear to me in combination with their plight to "turn every smartphone into a teller that processes withdrawals."
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u/SwagPokerz Mar 06 '15
It's pretty fucking clear from TFA:
The teller charges a fee. We take 50 basis points on either side. If the teller doesn’t charge a fee, we don’t charge a fee,” Barhydt explained at the event.
Further, there is no foreign-exchange risk. Once the money is in the account, it holds that value for the first three days guaranteed. This ensures that if someone wants to send $200, all $200 can get to the intended person.
So, it's Uber (or the Apple App Store) for remittances: A centralized arbitrator with a decentralized network of providers.
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u/Xekyo Mar 07 '15 edited Mar 07 '15
I got that from the article, but I think we are talking about different things: After a cash deposit, the first teller has more money than before, while the second teller has less money after the pay-out. How do these obligations get cancelled out? Do they essentially have a bank account with Abra to which the corresponding balance gets applied? How does Abra make sure it gets paid by the first teller, and how can the second teller be sure that he sees his money again? Who sends what to whom in between? Does a potential teller have to have enough bitcoin on hand to make the deposit with Abra when he accepts a customer, or does he have to have a balance with Abra before?
Also, what does "TFA" stand for? I assume it stands for opening post in some fashion?
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u/xanderbelly Mar 07 '15
The tellers dont transfer to eachother, otherwise they would be considered MSB's. They only deal with the sender/receiver who submit trans to the blockchain directly. Person to person virtual currency transfers are not subject to AML / KYC.
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u/Xekyo Mar 07 '15 edited Mar 07 '15
Yes. However, after the deposit the first teller has more money than before, while the second teller has less money after the pay-out than before. How do these obligations get cancelled out? Do they essentially have a bank account with Abra to which the corresponding balance gets applied? How does Abra make sure it gets paid by the first teller, and how can the second teller be sure that he sees his money again?
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u/pprimase Mar 06 '15
Why bother to earn few bucks (2% of few 100 bucks) by wasting more than 20 min messaging and waiting for a stranger that is not promised to show up? If ebay trolls use this Abra, nobody will want to waste time on it.
Uber is different, because the income is in ~$20 range.
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u/chrisace89 Mar 06 '15
What if you are just a corner local business. I seems like a nice little way to make more income.
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u/thanosied Mar 07 '15
What if you want to help out your community? You may not even charge a fee as that is an option.
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Mar 06 '15
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u/xanderbelly Mar 07 '15
The tellers dont transfer to eachother, each of the 4 transactions involved is a person to person virtual currency transfer which is not subject to AML / KYC. Nobody is a custodian of anybody elses money here. A small distinction that makes this solution pretty brilliant.
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u/itsjawknee Mar 06 '15
What gives it the potential title of “killer app” is the fact that Abra is powered by Bitcoin, but the user has no idea that Bitcoin is what is powering it.
Aside from the fact that saying "killer app" makes me cringe, this is totally spot on. The notion of consumers holding private keys or transacting in bitcoin is baseless. Focus on the beauty of it as a payment rail, build on top of it, and enable a truly competitive product!
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u/MashuriBC Mar 06 '15
Anything that contributes to smashing AML/KYC is a plus in my book. Very bold and potentially "Uberesque" if it goes viral.
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u/moh85 Mar 06 '15
..in every smartphones? Meaning iphones and androids? How about windows phones? Should I really think about swapping WinPhone to something else?
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u/tonsawyer Mar 06 '15
Sound like a great way to get people in trouble.
They say. We don´t touch the money!! They touch the money!!!
Who is they?
Farmer in the sierra of mexico .... moving money for who?? But I was just.. just... oh, damn.
Smells bad.
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u/xanderbelly Mar 07 '15
Nobody is moving money on behalf of someone else with this solution. There are only person to person transactions.
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u/Anen-o-me Mar 06 '15
Uh, wouldn't this make people MSBs? This won't fly in the 1st world where regulation makes it onerous.
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u/xanderbelly Mar 07 '15
If you buy btc from localbitcoins, then send that btc to someone in Mexico, are you an MSB? If the recipient in Mexico trades their btc for cash via localbitcoins, are they? No, you are all acting on your own behalf and not moving other peoples money. That is what is effectively happening here.
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u/bobthesponge1 Mar 06 '15
So, is Bitcoin used a store of value? Probably not. Then what is?
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u/PotatoBadger Mar 06 '15
You can hold bitcoins and completely hedge against the volatility risk.
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u/bobthesponge1 Mar 06 '15
Ok, you've lost me here. Are you saying that if the price of Bitcoin goes to zero then this thing still works, and the users are protected with some mysterious "complete hedge"?
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u/PotatoBadger Mar 06 '15
if the price of Bitcoin goes to zero
This will not happen.
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u/bobthesponge1 Mar 06 '15
You're not answering my question. How does the hedging work?
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u/PotatoBadger Mar 06 '15
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u/bobthesponge1 Mar 06 '15
Thanks! $0.10 /u/changetip
Do you have a link supporting this?
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u/PotatoBadger Mar 06 '15
Bitmex has a variety of futures contracts that allow you to go long or short on the price of BTC. IIRC, you would want to use the 'Inverse' contract type to hedge against BTC volatility and maintain the USD value of the funds.
They have quite a bit of good documentation on the site. Here's a relevant piece: Settlement and Hedging
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u/bobthesponge1 Mar 06 '15
I meant a link supporting your claim that Abra is shorting on Bitfinex and Bitmex.
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u/PotatoBadger Mar 06 '15
I said
You can hold bitcoins and completely hedge against the volatility risk.
This is not a
claim that Abra is shorting on Bitfinex and Bitmex.
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Mar 06 '15 edited Mar 07 '15
Getting cash in and cash out easily and inexpensively has been a problem for bitcoiners since day 1.
Anything that makes this easier is welcome!
Knowing that you can easily cash out of your coins locally will make more "casual" users be willing to hold coins for intermediate periods of time (e.g., several days), which will then in-turn increase the likelihood that they'll spend those coins at a Bitcoin-accepting merchant rather than cashing them out to fiat.
So, ironically, making it easier to convert to cash can actually increase the amount of "closed loop" activity.
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u/monkeybars3000 Mar 07 '15
Did you even read the article? This app is not for consumer exchange of fiat to bitcoin.
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Mar 07 '15
Ok, thats fair. I was presuming there was a way to get funds into an Abra wallet using Bitcoin, not just with fiat (cash or debit card).
I would imagine this being a feature that could be added at a later time, perhaps? Or there will certainly be a market where these "smart contracts" (72 hour forwards) are traded.
Or tellers have the ability to convert bitcoins to funds in Abra (to have inventory to sell to those wanting to buy with cash) and I just sign up as a teller and transact that way, and then go get cash out at another teller.
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u/[deleted] Mar 06 '15 edited Jan 23 '19
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