At this week's North American Bitcoin Conference, P2P digital cash startup Abra announced that, starting next month, it will begin its long-awaited global rollout.
Notably, the latest news provided new details on what this long-held plan might look like in action.
In a blog post published this week, Abra revealed that, at launch, its wallets will support the buying, selling and storing of bitcoin, as well as over 50 traditional currencies, which it said can also be sent peer-to-peer using the service.
According to Barhydt, the system is now ready for primetime.
He told CoinDesk:
The Silicon Valley-based startup will begin gradually launching the service in select markets, where users send digital cash via their phone number.
As previously detailed, users can also act as tellers, providing liquidity to the system along with the startup's exchange partners. Abra users can find a teller nearby and carry out a cash transaction in exchange for bitcoin or fiat currency in the app.
"I hand that teller $500, he accepts the $500, pushes whatever currency is on his phone to my phone, it automatically gets converted to bitcoin regardless of which currency in their Abra wallet they're holding," Barhydt explained. "The Abra system is capable of doing a dual foreign exchange transaction on the fly."
This feature is still being finalized, but if the on-boarding works with little or no hiccups, the firm will "flip the switch globally," he said.
Focus on usability
At the core of the product is usability. Barhydt likes to point out how his mother, in her 70s, can use the Abra app with no issue.
But in spite of the boasts, the CEO remained tight-lipped about the company's user numbers and teller numbers. He claimed the company will begin publishing statistics in late spring, but told CoinDesk that in the Philippines there are a few thousand tellers and a backlog of people applying to take on the role.
It's a clichéd comparison, but the CEO likens the Abra system to Uber. Location and fees are some factors in choosing a teller, but so too are the ratings, which generate trust.
The primary motivation for becoming a teller is, of course, making money. Tellers can set their own rates for transactions (from which the startup will take a cut of around 20%), so the cost for users will vary.
"If you're in Mexico City, the teller is going to get away with 1–2.5% for money in and money out and be very competitive with ATMs," he said.
On the other hand, he said someone in a rural location with fewer users around, you may get away with rates as high as 3–5%.
However, Barhydt believes some tellers will use the app in settings like relief work and charities to help people get access to money. In these cases, no rate is charged and Abra takes no cut.
"Their motivation is helping people help themselves, like giving them access to financial services that they normally wouldn’t have access to," he said. "Think about Somalia, think about the African refugees that are coming to Europe."
Hurdles to overcome
Abra is pushing the teller system hard, and it wants everyday people to sign up and become tellers to help grow the network. Yet, according to some technology observers, the ability for such a network to take off remains in question.
To Dr Paul Ennis, assistant professor at University College Dublin, it's still difficult to tell if this teller model will work at scale, but not just because it's built on the bitcoin network.
"As novel as human ATMs sound, I think all that will matter to most people are the fundamentals – namely, are they cheaper than Western Union when it comes to remittances?" he said.
Ennis emphasized that the cost factor would like be an issue for any user, even those who had previously used only an open-source wallet on top of bitcoin. He called it a challenge, but potentially an "exceptionally rewarding one".
Still, Barhydt envisions that, in the short term, most Abra users will be using tellers, but eventually more people will integrate their bank accounts too.
"My prediction is that 50% will use Abra via bank accounts using our exchange partner integration, and 50% will use the teller network," he said.
The main barrier to that right now is the paucity of exchange partners in major markets.
It currently has no such partners in Europe, so if the app launches there soon, only the teller system will be available. Barhydt said it is working on deals in this area to facilitate more people linking their bank accounts.
"We've been working with exchanges all over the world for some time and expect to see lots of announcements in that area," he said.
All in all, Barhydt has plenty of lofty ideas about what Abra can become, but expectations may need to be managed.
Currently, the startup is letting a select number of merchants accept payments with a view to selling merchant APIs in the future.
Once again it sounds all very simple, but it’s going to take time. The reality is that Abra still needs to build up its network of tellers, get more liquidity in the system and constantly improve the usability to make it attractive to merchants in the first place.
Some observers have been positive about the firm's plan.
"I believe Abra's model is potentially viable," Dr Garrick Hileman, senior research associate at the Cambridge Centre for Alternative Finance, told CoinDesk.
It's a work in progress, but next month’s global launch marks a significant step for the startup, which has raised $14m in VC funding so far.
Barhydt concludes by saying he believes the world hasn't seen anything like Abra before:
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