Everyone from Nick Szabo, who developed the concept of smart contracts, to Blockchain Capital Managing Partner Brock Pierce has been touting Bitcoin’s value as a vehicle for international money transfers lately, but it appears that TransferWise CEO Taavet Hinrikus has not received the memo. Hinrikus was recently on a panel with MasterCard President of International Markets Ann Cairns at the World Economic Forum in Davos, and he did not seem threatened when asked about the new Bitcoin-based alternatives to his service, such as Align Commerce, that have popped up over the past year.
Although Hinrikus appeared to be bullish on blockchain technology, he said the Bitcoin experiment is nearly over.
Bitcoin Is “Becoming Dead”
When asked directly for his thoughts on using Bitcoin for international money transfers, Hinrikus conceded that the idea sounds exciting in theory; however, the TransferWise CEO believes this digital peer-to-peer cash system will work only if more people have bitcoin wallets. He explained:
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I think [Bitcoin-powered money transfers] are super exciting, and in a world where we all have a bitcoin wallet in our phones, that actually might work. But how do we go from a world where nobody has a bitcoin wallet to a world where everyone has a bitcoin wallet? That’s the question that I haven’t been able to figure out
When viewing Bitcoin as a system for money transfers, Hinrikus noted the costs associated with each end of the process. In his view, these added costs make the idea more expensive than originally thought. He stated:
“If you think about it today, getting money into Bitcoin is a pain in the ass. Getting money out of Bitcoin is similarly a huge pain. You end up paying typically half a percent or one percent on both ends. It’s a process which takes multiple days, so I think Bitcoin – I’m kind of sorry to say it but – it seems that experiment is becoming dead pretty quickly.”
This response from the TransferWise CEO does not sound dissimilar from a Medium post made by former Rebit.ph Head of Product Luis Buenaventura. After co-founding and working at Rebit.ph for over a year, Buenaventura came to the conclusion that Bitcoin does not make international remittances cheaper due to the costs associated with the “last mile” on the recipient’s end.
https://bitcoinmagazine.com/articles/transferwise-on-bitcoin-and-the-battle-for-international-money-transfers-1453996516