Topic: Use Case - Bitcoin intl money transfers (Read 2628 times)

I actually use Bitcoin for international money transfers, and it's cheaper and faster than any alternative I could find. I don't know about China specifically, and won't comment on that. Two things bother me, though: the lack of legal framework (is it going to hurt?) and volatility. Legal aspects will inevitably become clearer this year due to tax returns and ongoing litigation (and, if most of us behave proactively, rationally, and responsibly, they will become clearer in a good way). The volatility will become less of a problem if and when market grows (again, this depends on us to a large extent).

Interesting.  Vouchers for fertilizer will be issued to farmers in Nigeria via mobile.
 - http://allafrica.com/stories/201202140981.html

Africa has more mobile phones than homes with electricity. Towns and villages provide public phone charging stations!

I mentioned this before.

It would be nice to send bitcoins to people in China and they instantly use it, but we are not there yet.  In the mean time I have to make due by sending money via Moneygram.  It costs me $9.50 (normal price is $15) each transfer and the recipient can get the money directly into their bank account 15 minutes after I send it.  No waiting in line at the bank and no waiting selling bitcoins on an exchange and then waiting another 3 days to get the local currency transfered to their bank account.

That report described it well.  It basically summarized the advance of mobile being part of the international remittance system mostly only after mobiles gain traction as a domestic bill payments system, mobile banking and/or P2P transfers among those withing the same jurisdiction first.

So just with P2P mobile transfer it becomes easy to provide bitcoin exchange services for family members, friends or an extended circle even.  This could basically be a drop in substitute for hawala and hundi as the exchanger can function independently, without the need for any hawala partner outside the country.

That sounds way fubared I'm in China and regularly receive wire transfers. Usually I have them in the bank in 4-5 business days. The only thing that has knocked this around so far has been holidays. All that's needed if you're using a major Chinese bank is the branch swift number and the account number.

Atm I mainly use bitcoin to send cash out of China as regular peeps are atm blocked from remitting funds via wires to anything other than private individuals or educational institutions.


Btcchina are atm operating in the only sane manner for anyone trading in E/virtual products here as such trade is technically illegal here. However this illegality isn't really policed that much (at least in Northern China).

This is the current problem that faces bitcoin.  It's the chicken-and-egg problem.

At present the bitcoin economy is so small that the only broadly applicable purchase you can make with them is local fiat -- and we call a fiat shop an exchange.  Step one then is to get many exchanges running in many localities.  That's going pretty well.

It's not inconceivable that it could be bypassed though.  Many African's are already using their mobile phones (I think they exchange air time) to make payments.  Let's say half of Kenya started treating bitcoins as equivalent to their dollar value -- it's just another number on their phone's after all.  Would the bitcoins sent "back home" to Kenya still be useless?  I'd argue that they would be more useful than dollars, or indeed any paper cash.

I see a lot of talk about remittances with Bitcoin, and not much discussion of the fact that this requires a robust two-way exchange in order to support ongoing trade.  I mean, it's fine for me to live in Boston or London or San Francisco or Tokyo where I can easily buy Bitcoins to send back home, but what exactly are the recipients supposed to do with them?  We seem to be missing half of the equation here.

"Idiot" seems incredibly strong.

As it happens though, I think the more interesting stat from that article was that to send $10 it would have cost only 4.2 cents.

On large amounts; using bitcoin isn't going to compete (certainly not without some decent volume) -- but the ability to send small amounts of value anywhere in the world is a facility we are denied without bitcoin.  Try sending $10 and see how much you get to keep.

Now, as to "USABLE" -- well that's for each of us to decide for himself.  I regularly buy little bits and pieces of camera equipment on ebay from Hong Kong.  £3; £5; £10.  Both the sellers and I seem to consider those "USABLE" amounts.  I'm pretty sure they would be better off using bitcoins for those transfers.

My chosen method of depositing money at Mt.Gox is: buy bitcoins for GBP on Intersango.  Sell coins at Mt.Gox.  Costs me a couple of percent to depost £50 worth of dollars.   The fee for doing the same thing via the banking system is about £12 just for doing an international transfer, and then about 2.5% from the crappy exchange rate I'm given.  It's simply not worth it unless I'm transferring thousands.

Small, fast clearing transactions, at any distance, to any locality are where bitcoin is strong.  It certainly doesn't seem idiotic to recognise that fact and be pleased about it.

I agree that the bid-ask spread is a very important factor but even currently for transfers where the timing is more flexible (say a week or even more) the (although admittedly not as much just recently) constantly moving price of BTC can make this much less of an issue (i.e. send the currency with the tighter spread when BTC is lower and wait to exchange to the other currency when BTC is higher).

I think the critical thing to keep an eye on at is the bid-ask spread on the bitcoin exchanges.

Say you want to exchange USD for A.N.Other currency.
When you can do TWO separate deals:

1) Sell USD on first exchange. Buy bitcoin.
2) Go to second exchange. Transfer bitcoin from trade 1. Sell bitcoin, buy currency A.N.Other.


If/when the combined bid-ask spread for the two exchanges is less than the remittance fees elsewhere then bitcoin can capture a significant proportion of international transfers.

I *think* that will happen when:
+ it is relatively easy to set up accounts on multiple exchanges.
+ it is relatively easy to deal on multiple exchanges effectively simultaneously.
+ people who have access to the "real" forex market then start arbitraging bitcoin exchange rates to close the bid-ask spread.


At that point people totally disinteresting in crypto-this-and-that will start looking at it as it will save them money.

Although using btcchina is somewhat risky (it may just disappear one day) the fact that they only charge % fees (and about the lowest of any exchange) would mean that you could divide up the transfer into smaller units (say 5-10 BTC perhaps) to reduce that risk (although the transfer would take a lot longer).

Remittances to developing countries were estimated at about $351 billion for 2011,

This is an excellent paper on the international remittance markets:

Titled: What do International Remittances mean for Mobile Money?
 - http://technology.cgap.org/2012/03/21/what-do-international-remittances-mean-for-mobile-money-cgap-releases-study-on-remittances
 - http://www.cgap.org/gm/document-1.9.57119/CGAP_Landscape_Study_International_Remittances.pdf

Bitcoin-Alibaba.com ... 'We bring the suckers to the scammers.'

Idea: Get alibaba.com to accept bitcoins.  Easy money.  Or someone else build an bitcoin version of alibaba.

not quite as extreme as the above poster. i recently received a cheuque for $25 USD i paid this into my bank who converted it to £17 GBP and charged me £5 GBP. leaving me with £12 for my $25.

I recently found out that one of the friends i knew from when i lived China has got cancer, and i decided to send her some money to help her out. So i tried to wire $450 to her. Was immediately charged a fee of about $50 (more than 10% of the transfer amount), and now almost 4 weeks later she still hasnt received the transfer and in the meantime she doesn't have money to pay for her medicine or even food. I phoned up my bank and asked them whats up, and they replied that if i wanted them to do an inquiry about the transfers current ETA, it would cost me another $50. fuck that shit

I paid someone 20 BTC in China ($100 at the time) to help me translate some bitcoin material.  It was so easy.  I would not have been able to do this with PayPal, Visa, Mastercard, or even cash.

You're an idiot. The risk is too high to send any USABLE amount of USD. Ask your chinese friend, when was their last time to send $100 to family in China.

Also if you're Chinese (which i'm sure you're not), you will know there are Money transferring service with lower fee. I can send $100 with only $5 fee. I can send $10,000 with $150 in fee. These services are legal business. Western Union and bank wiring arent the only ways.


Good luck with BTC-exchange in China.

China is a good example. It is silly hard to pay someone in China from abroad.
Imagine what would happen if bicoin captured the remittance market. Huge amounts of money are moved by foreign workers who support families in their home country.