Nigeria’s Bitstake builds on bitcoin remittance services

Nigerian startup Bitstake, which offers remittances through bitcoin at a flat rate of one per cent, is hoping its additional value added services will help it stand out in what is becoming an increasingly busy field in Africa.

Bitstake, in allowing users to remit money using bitcoin which is then converted into Nigerian naira at a cost lower than money sending firms such as MoneyGram and Western Union, is ostensibly similar to Ghana’s Beam and Kenya’s BitPesa.

But chief technology officer (CTO) Alex Christian told Disrupt Africa the Bitstake platform offers a variety of other financial tools that it hopes will attract users, including an exchange for the trading of bitcoin and naira, and peer to peer lending functionality, which allows people to find or provide loans on an individual basis.

“These are generally catered for SMEs or personal loans. Users can negotiate on a personal basis so that they can receive loans for family matters or businesses instantly through other users,” Christian said.

Multi-staking is another financial tool on the service, allowing users to gain interest on digital currencies, while Bitstake also allows bitcoin to be sent via SMS, without the use of internet architecture.

“Only a telecommunications network is needed in order to access or send digital currency, phone numbers can also be used to send and receive digital currency easily,” Christian said.

Development of Bitstake began at the end of last year, with Christian saying the team had seen the “big potential” in the remittance market for digital currencies.

“The Nigerian market is as yet unaware of digital currencies so we are aiming to get a strong foothold in the market and compete with other remittance providers for the country, and then continually expand,” he said. The rest of Africa and then South America are likely destinations.

The response to this marketing effort has been positive thus far.

“Educating the populace about this technology is one of the most important factors to adoption. I think the real issue is that people go to other countries to work for their families and send funds back for business and personal reasons so reducing the fees on these sort of transactions can give many a better life and more prosperity,” Christian said.

“Securing and gaining interest on personal funds without them being changed is also a very important characteristic of the platform we have created, so many can feel safe and have access to their funds from any location, position or on any network.”

The startup is currently self-funded, but Bitstake is looking for individuals or venture capitalists to invest in the project. Its revenues comes from fees charged on transactions, but Christian said at a one per cent flat rate Bistake is cheaper than both traditional remittance service providers and its competitors using bitcoin, which charge fees of around three per cent.

“With our scope of financial products and services along with our low fees we are primed for this market,” he said.

Bitstake is currently marketing through social media platforms, while also doing giveaways to those who sign up for the service.

“We are culminating relationships with the people of Nigeria and we have staff members that are from Nigeria so we will build together. This is the critical thinking that we need and at the end of the day we believe in this sort of financial freedom for the people of Nigeria, they believe in it too,” Christian said.

The startup feels the potential of bitcoin in Africa is “huge”.

“Not just for the safe storage of funds, but also remittances, and blockchain technology can be used for the delegation of land assets, oil assets and other developments,” Christian said.

“It is also open and transparent so it can be applied to many financial sectors in Nigeria.”

He said the international controversy surrounding bitcoin does not really apply to Nigeria, where the benefits of the technology are more evident.

“Nigerians see more of the benefits of the technology as the technological standard of the country is still yet to reach its peak. They recognise that bitcoin can definitely aid the people of Nigeria,” he said.

“Generally bitcoin has not even slightly penetrated mainstream news and media yet so it’s really in its infancy in Nigeria. What the people of Nigeria really crave are business opportunities and development, which is what bitcoin and other digital currencies can help with, along with the accompanying technology that comes with it.”