- CEO George Harrap predicts bitcoin will soon be replaced
- Harrap blames the crypto’s volatility and liquidity
Hong Kong-based cryptocurrency cross-border payments firm Bitspark has explained why it decided in September last year to stop using bitcoin in any of its operations, which extend throughout the Asia-Pacific region, including Hong Kong, Indonesia, the Philippines and Australia.
This was a significant move for a company that was known from its launch in 2014 as a bitcoin remittance service. As of last year, it switched instead to BitShares, a decentralised, open-source platform that issues its own “BTS” cryptocurrency.
In an interview last week with the Hong Kong Economic Journal, Bitspark’s CEO George Harrap predicted that bitcoin would be replaced with improved, faster and less expensive cryptocurrencies in the foreseeable future as a direct result of its persistent volatility. And he’s clearly of the view that when an improvement does come into view, it should be seized, as it’s likely to become the digital currency of choice among consumers.
Bitspark can be credited with changing, or at least disrupting, the conventional payments methods of international money transfer businesses, making cross-border payments an instantaneous phenomenon.
But it didn’t only save time. It saved customers money, too, by charging just 1% of the transaction amount as a service fee. When you consider that money transfers giants like Western Union and MoneyGram charge a hefty 80% of the service fees, you begin to see the scale of the savings for customers.
Bitspark accounts must first be funded by customers, following which the cryptocurrency is purchased and then sent to foreign recipients in a process that takes minutes at most. Receiving banks simply exchange the crypto-tokens for the local currency and transfer it to the designated recipient.
While Bitspark remains a relative newcomer to the cross-border payments business space, its blockchain-based remittance service is enjoying modest but growing success. It now boasts more than 5,000 customers, which include 12 money transfers firms.
But according to Harrap, the company began to see that bitcoin, which it has used since its inception, had intractable limitations which were beginning to impede its business. Amongst these were bitcoin’s legendary volatility (which shows little sign of going away), liquidity and delayed transaction times. Several of Bitspark’s local partners in places such as Cambodia and Sri Lanka faced considerable difficulty in converting bitcoin into their local currency.
BitShares promises to eradicate these shortcomings. Its “bitAssets” token has proven considerably steadier than bitcoin and as a result is exposed to considerably less risk of devaluation of assets due to price fluctuations. bitAssets can be issued easily to Bitspark users and it is pegged to a real-word currency such as USD.
Harrap is now of the opinion that the stubborn volatility and slow transaction times of bitcoin suggest that it may never become a cryptocurrency. He said: “If you want to buy a cup of coffee with a cryptocurrency, you can use other faster, cheaper cryptocurrencies, not bitcoin. Bitcoin is just marketing.”
And he’s eyeing up another cryptocurrency, too: Dash.
He added: “I could hold Dash for its store of value. You know Dash’s price ran up 50 times in the last two years, the value has increased, so it is a store of value. With Dash, I can do really cheap payment, instant payment, I can do a lot of stuff.”
