Was Bitspark another blockchain-based bubble?

by Lumai Mubanga

When it comes to adopting blockchain applications, there is usually a cultural lag in many societies. It took several years for millions of people to start using the internet and its various services. However, it appears blockchain adoption may take a similar root, with some countries catching up perhaps decades from now.

Could the adoption and use bitspark as a preferred money remittance service prove that wrong? Are we seeing trends proving that bitspark could become one of the most preferred services? If so, why could that be the case?

AS pointed out in an earlier article on this platform, bitspark is a company set up in Hong Kong to assist mainly migrant workers to send money back home to their relatives. It was created to solve the following challenges:

– High commission charges. Many migrant workers get little wages and some commercialized financial service providers took advantage to exploit them through high commissions.

– Long delays. It usually takes longer time for money remitting service providers to clear transactions of money from one country to another.

– Laborious. Many migrant workers had to travel long distances on both ends to send and receive money from relatives because they are un banked.

Bitspark, in conjunction with another company partnered to create a solution, were migrant workers in Hong Kong will send money to their families in the Philippians using fiat currency. However, the company converts the fiat likely the Hong Kong dollar into bitcoins at a carefully selected exchanges rate and then guarantees to preserve the value until when it is received.

What made this remittance service appealing?

Global workers provide funds for economies and families alike. For example, according to the World Bank report, close to $6 billion is transacted globally in remittances to families worldwide. This is close to four times more than the total amount of international development aid. These funds support essential expenses like food, education, health and housing. These are basic needs for humans and no wonder these services are among the most sought after especially by migrant workers.

However, the main reasons why this service became popular were the following:

• Users did not need to understand bitcoins to have their money sent through that option.
• The service took less than 24 hours to complete the transactions
• The commission charges were too low, about 1%, leaving a higher percentage for families.

Was it becoming Global?

The company opened many remittance shops all over the world. These shops seemingly acted as active agents and had eliminated intermediaries. These remittance shops were available in Hong Kong, Ghana, Nigeria, Vietnam and Malaysia. According to reports, performance of the company increased after its release of the Cash point product by 400% MoM growth.

The Bubble busted

In March 2020, in the midst of Corona virus and Hong Kong protests, The CEO of the company announced the closure of bitspark citing internal concerns. Was it just another blockchain bubble?