Can Bitcoin Remittances Really Work?

Over the last few weeks, even hardcore believers in Bitcoin have had a difficult time keeping positive as they watched the price of Bitcoin plunge through support line after support line. For a while, as it looked like we might once more find ourselves in single digits, suicide hotline numbers began to appear on Reddit along with a slew of “I’m Out” posts.

Now it’s long been our argument that the price of Bitcoin is irrelevant in the short term because all of the fundamental strengths of Bitcoin will only be recognized over time as the infrastructure get built out. In the short term, we believe that the best way to view Bitcoin is as a commodity that will accrue in value when the conditions are right and not before. As a matter of fact, it’s downright unhealthy to watch the price short term since Bitcoin is traded at very low volumes and the actions of a single, bitcoin-rich individual can severely affect the price. This will change, but it makes technical analysis of Bitcoin charts worthless given that they’re based on large-scale psychology and price watching unnecessarily gut-wrenching.

The good news is that, as many others have also noted, that the basic infrastructure of Bitcoin does continue to be built and is getting stronger every day. We may now finally be getting reports of Bitcoin really finding it’s use cases for average people. Once that happens, a single triggering event, or none at all, could bring about mass Bitcoin adoption in some part of the world. And, once we see some country or region go all-in for Bitcoin, and we begin to see the benefits it can have on a large scale, the dominoes will be begin to fall until Bitcoin takes its place as the world’s de facto international currency.

This morning our eye was caught by a post by Redditor Jinwoonlee who trumpets how successful he’s been using Bitcoin as a tool for remittances.

As described in his post, Jinwoonlee lives in Korea and has to send money home every month to pay off student loans in the US. Previously he would use his Korean bank to send money to his American bank. He says that he would be charged 18,000 won from the Korean bank, 12 dollars from his local bank, and what he describes as a 20 dollar ‘mystery fee,’ which is really the charge of the one or more international clearing banks these remittances must pass through.

To use Bitcoin, Jinwoonlee opened a Korbit account and did a domestic transfer to the exchange. He bought 596,250 won worth of Bitcoin, or $553.10. He then sent those Bitcoins to Circle and withdrew to his American bank for no fee.

The final tally, if he sent via the banks, he would have ended up with 504.41, but due to the lack of fees and a slight upswing in the price of Bitcoin during the transfer, he withdrew 568.77 into his bank account for a $64.36 difference.

The biggest challenge for using Bitcoin for remittances is getting the money into and out of Bitcoin, and it seems like the difficulty is finally getting low enough that people can do this.

A few more stories like this, and we may be seeing some real movement in the Bitcoin space.