Since 2008, there have been two kinds of people in the world — ones who know about Bitcoins and the ones who don’t. There is also a third kind, though a very small mass of the world population, that actually uses Bitcoins. Of those who know about Bitcoins, most know only about the illegal or dangerous aspects. But love it or hate it, there’s no denying that Bitcoins are amongst the most interesting and possibly impactful inventions of this generation. In fact, Nobel Peace Prize nominee, Leon Louw, put it aptly when he said, “Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments.”
This is exactly what Ahmedabad based Zebpay is looking to do. The company today launched Zebpay app for Android. It is the first mobile Bitcoin wallet in India and perhaps the simplest in the world. Its goal is to get more people to use Bitcoins and in order to do so, avoid all the confusion that comes with it. Registering and creating your wallet is as simple as verifying your mobile number through an automated message sent to the mobile.
According to co-founder and CTO Mahin Gupta, the company will currently be bringing offers and promotions into the app. In future, Zebpay plans to join hands with e-commerce websites etc. as a payment service provider, similar to the Oxigen and PayTM wallets. Only here you will be paying through your Bitcoins.
Currently, Zebpay is going to allow users to buy Flipkart coupons and similar other things from the app. Unlike PayTM though, Zebpay is not bound by the rupee. The Zebpay app is a global app, which means you can use it for transactions worldwide, wherever Bitcoins are allowed. That obviously makes for a select few places, but it’s a start nevertheless.
(L-R) Founders Saurabh Agrawal, Mahin Gupta, Sandeep Goenka
In fact, Zebpay is not going to be making any money for itself right now. Since Bitcoins don’t work like traditional banks, the company is buying Bitcoins from sellers and selling them back to you. So, the money you pay to buy Bitcoins, goes to the sellers and not Zebpay. Moreover, traditional banks use customer money for their regular functioning, with the promise to have it ready for the customer whenever they need it. The same is not applicable to Bitcoins, which means Zebpay can not use the Bitcoins in your account for any transactions. The company is in fact putting all these Bitcoins into cold storage, until the user asks to use them.
Lastly, the promotions and offers that the company is giving are discounted for the time being, which means it makes little to no money off them. Zebpay’s main revenue source lies in becoming a partner payment service for various websites, which the founders say they’re working on right now.
The app itself is very simple to use. The Android app can be downloaded from the Play Store, while Zebpay has already submitted the iOS app to Apple as well. Once downloaded, the user undergoes a WhatsApp like verification process, where a text message is sent to his/her mobile with the verification code. This completes the verifications process. Currently, adding Bitcoins will require you to create a wallet on iGot.com, but Zebpay plans to allow this through the app itself. The company will ask for a KYC from the customer, following which one can buy Bitcoins directly through the app.
One thing that the three founders often reiterated at the launch was the Zebpay is a ‘spend wallet’. This means it is intended to be an electronic version to your physical wallet. Just like we keep the bulk of our money in the bank and carry around physical banknotes for our regular expenses, Zebpay wants you to keep the bulk of your Bitcoins in cold storage, while only the amount you need for regular activities should be carried around in the wallet.
This makes sense, since the simplicity of the app compromises on security from your end. If you happen to lose your phone, then the thief will easily have access to all your Bitcoins. Zebpay has also put a limit on the amount of Bitcoins you can have in your wallet, with maximum transactions of 10,000 Bitcoins per day and a maximum of 50,000 Bitcoins can be kept in your wallet at any given time. Exceeding this will result in fines on the user.
In the current state of things, Bitcoins hasn’t received much more than bad press. The cryptographic currency was recently added as a payment option for Microsoft’s Xbox Live accounts and other big names like Dell, Time Inc and Overstock.com have also announced the same.
That said, 2014 wasn’t the best year for Bitcoins and Zebpay is definitely fighting an uphill battle. The problem of a simple Bitcoin wallet though is solved, since it doesn’t get much simpler than this. Zebpay may easily get more users to create wallets, but at nearly Rs. 20,000 for one Bitcoin, it’s going to be difficult.
A good idea for Zebpay would be to be something like a Coinbase for India. E-commerce websites may agree to accepting Bitcoins, if Zebpay can act as the middleman. This means when a consumer pays in Bitcoins, the middleman will convert them to cash and transfer that to the merchant. In that case, Flipkart is actually not dealing in Bitcoins and it’s business still takes regular currency. This in fact is what the big companies like Microsoft, Dell and Overstock are doing as well.