The problem

Many dismiss the real-world utility and benefits of cryptocurrency based on an assumption that the money system works the same around the world as it does in America.

Many critics, including influential U.S. lawmakers, cite the convenience provided by services such as PayPal or credit cards to prove that cryptocurrency is not useful. This ignores the real differences in financial infrastructures between countries, and how PayPal or other services are not available everywhere.

These barriers are more apparent to those who make a lot small dollar international transactions. For example, immigrants sending money home. The use of traditional financial infrastructure to send money back home relies heavily on the complex and trust-filled relationships between banks. This complexity has allowed conventional remittances to charge fees that are sometimes very high.

According to the World Bank the average cost of sending money to Nigeria over the last decade has been close to 8%. This adds up: In the years 2020 and 2021 alone, almost $3 billion were spent on remittances to Nigeria. Nigeria has a GDP of $440 billion, so that is a lot of money.

Nigeria may be a large recipient of remittances but it is only a small part of the pie. Global remittances will total $626 billion in 2022. Just a 1% reduction in fees would put $60 billion more into the pockets of those who are most in need.

Projects to Watch: Reclaiming Purpose for Crypto

(Send Globally)

Sending Globally is a great idea

The crypto industry was talking a lot as crypto winter settled in 2022. They talked about the “pivot to building” which often occurs when the industry’s most degenerate elements are blown up, and things quieten down for a while. Strike’s Send Globally service was launched in December of 2022 and embodies many of the promises that came with this bear-market impulse.

Send Globally uses cryptocurrency to solve a real world problem. It uses the Lightning Network and the Bitcoin Blockchain to provide international cash transfers which are quicker, more flexible and less expensive than traditional financial services. It is designed to be simple to use and understand by people who have no prior knowledge of crypto.

Send Globally is a business that has a real, honest-to-god model. It’s a way to generate revenue through the exchange of real services instead of speculative coins or crazy financial engineering. It’s important that projects focus on paying, real end users, given the current regulatory crackdowns and post-bubble skepticism surrounding crypto.

You send dollars that you think of as coming from the United States and they receive it on the other end. Manuela Rios explains that they receive the money in their own currency in either a bank account or a mobile phone. Rios is a seasoned remittance expert, having joined Strike in December 2021 from Robinhood Markets. Rios’ grandmother lives in Colombia and she describes the difficulty of sending her abuela birthday money every year.

Bitcoin is a solution in itself to this problem. transaction costs of $2 for any amount of BTC are already reasonable. It still poses challenges for trust and usability.

Rios says, “I will have to work hard to convince my Grandma to accept bitcoin if I want to send her money.”

Send Globally splits the difference and gives people who don’t know anything about crypto some of its advantages in terms of speed, cost, and flexibility. Strike has partnered up with local businesses to connect Bitcoin Lightning Network and local banking services. These include Pouch , GetBit, in Vietnam and .

Send Globally’s Bitcoin transactions are largely the same as a traditional wire transfer because it connects directly to local financial services. It reduces bitcoin volatility by a large margin, as the BTC are held on both ends for only a short time.

Send Globally began operating in December with service to Ghana Kenya and Nigeria. Send Globally’s seamless integration in these regions allows it to send funds to both conventional bank accounts and “mobile money” providers, such as M Pesa. M-Pesa, which was launched in 2007, allows users to access money via flip phones. It has since become an integral part of the financial landscape across much of Africa.

Since then, Strike has expanded its service to include the Philippines, and most recently Vietnam. Rios estimates that Send Globally is available to approximately 500 million people living outside of the U.S. Send Globally is currently only one-way. You can send dollars to countries receiving them, but not the other way around.

Bitcoin’s Lightning Network can be used as a payment rail to drastically reduce the cost of Bitcoin transactions. Sending via Lightning only costs pennies, or less. The convenience of using local bank connections, and the automatic conversion of bitcoins to fiat, does come with its own costs. Strike does not claim that Send Globally will always be cheaper than other options. It cites temporary “teaser” rates for conventional remittance service as being cheaper in some cases. Send Globally generates revenue for Strike in the form an exchange rate spread.

Rios claims that Strike’s involvement with El Salvador’s bitcoin push has influenced the basic design of Send Globally. Strike launched its Lightning-based payment app in El Salvador that year in conjunction with bitcoin becoming legal tender in the country. Strike’s app differs from the “Chivo”, the app that was released by the Salvadoran Government.

Rios says that “Send Globally is different in El Salvador because [funds] are sent to the Strike app.” Send Globally sends money directly to their bank accounts, which is a completely different experience. We’ve discovered that there’s a lower barrier of entry.

Send Globally has other benefits that set it apart from traditional remittances services. Send Globally is a great option for small transactions because it uses Lightning and a revenue model based on remittance spreads. This is not possible with Western Union, which charges flat fees on remittances. Smaller sends are therefore economically unfeasible.

Rios says that you can send as low as $1. It’s so simple to use, and opens up many new applications.

Rios describes pitching Send Globally casually to an influential Nigerian based in the U.S. “He tried it and within two minutes, he sent back a message in disbelief. He was blown away by how easy it was. For now, Strike is relying on word-of-mouth rather than paid marketing to promote its service.

Send Globally has another major advantage over traditional remittances, and that is speed. Rios says that the money reaches its recipient “instantly”, which is between a couple of seconds and minutes. In many jurisdictions, this includes settlements made by fiat even after normal banking hours or on weekends.

Rios believes that Send Globally will grow rapidly, partly because so many companies already use the Lightning Network.

“We thought there weren’t many. We started receiving messages as soon as we launched our service in these three African countries. ‘We are a Lightning company in Columbia. Lightning is an open-source project. “We almost couldn’t build fast.”

Rios said that while Strike CEO Jack Mallers made headlines for being a passionate bitcoiner, Strike wasn’t interested explicitly in leveraging Send Globally in order to convert new bitcoiners.

She says, “Our mission is to make money better.” The app makes the difference between bitcoin and cash balances very clear. It doesn’t push people to use the other.

In the long term, this aligns with an ideal crypto future, which even diehards are in favor of: a world in which crypto is widely used and has many benefits, yet many users don’t know they use it at all.

Jeanhee Kim is the editor.