Exclusive Interview With The Folks Behind Urdubit, First Bitcoin Exchange in Pakistan
2 years ago
Tell us a bit about yourself and your team.
We are bunch of crypto enthusiasts who believe we can bring around positive change. We started out with BitcoinPk as a community organization to help educate masses and still support that theory. Lot of people gave their input and efforts to help this dream become a reality. A brief profile of all our members and advisors can be found here.
BitcoinPK, UrduBit, Paybills. Clearly you guys have your hands in a lot of pots. Tell us your overarching vision.
BitcoinPK was started back in early 2013 with an idea to educate masses about bitcoin and blockchain technology. We did our first ever meetup in IBA in may 2013. Only 4 guys attended that session. It was a heartbreaking response but we continued the journey. Later that year when bitcoin crossed 1000$, that’s when the heads started turning.
We realized at that point that in order for bitcoin to succeed in Pakistan we need a gateway, a trading platform. At which point we opened the first bitcoin web based ATM in Pakistan in Karachi. Realizing that it was only being limited to people based in a region we decided to update our settings to full blown automated trade platform in Pakistan. That is where Urdubit.com came into realization on 27t Oct 2014. Before this platform was launched we had to buy btc from users at 5% cut which we realized was unfair and unjust.
Before we launched Urdubit, we had to buy Bitcoins from users at 5% cut which we realized was unfair and unjust
Urdubit came into realization with the thought that everything should be open. Hence we utilized BlinkTrade Platform which uses the same engine as NYSE and is open source. (Other exchanges that are using Blinktrade platforms are Foxbit ‐ Brazil, chilibit ‐ Chili & Surbitcoin ‐ Venezuela). It is the perfect matchmaking engine that matches buyers to sellers.
After a few months we realized that bitcoin in Pakistan is still growing and its not just Pakistan where bitcoin is growing but throughout the world. What we saw was that usually investors and market players in cryptos needed to exchange their cryptos to fiat, just to pay for their bills. Realizing a gap in the market we decided to work on the concept of PayBill.
Paybill will help fill the gap for consumers in the cryptos industry to pay their bills without converting to fiat first. In short, we are trying to bring financial renaissance to the world starting with Pakistan and Malaysia as our test grounds.
Pakistan has lacked a payment exchange gateway. Do you think Bitcoin can fill this gap?
Bitcoin is the largest social experiment ever conducted in the world. Bitcoin is a global currency and transactions are very cheap (0.0001 btc, or about Rs 2 as per this writing) and instant (usually they take around 8 mins) and are peer to peer with no middle man.
The beauty of bitcoin actually lies in it’s under lining technology which is blockhain. We have conducted many sessions regarding this and we have been obliged to be hosted by Dot Zero, Chainak, Rehan Allawaha, and even end users that helped us to conduct these session. We already have users especially tech savy developers who use bitcoin to get paid as there is no proper gateway in Pakistan.
Can bitcoin replace traditional banking? I believe it already is on it way to doing that
Can bitcoin replace traditional banking? I believe it already is and Paybill concept will definitely make that possible once it goes live. The blockhain we believe can replace the Swift system which is redundant and outdated. Any businessman or developer who uses this system already knows the problems associated with Swift.
Just to get a better picture of the blockchain, there are now smart contracts, land deeds and decentralized marketplaces not to mention the voip based coins that run on the blockchain. This is why this decentralized database can accommodate cross border contracts and much more.
In regard to this we are seeing sites similar to Odesk and Elance which pay freelancers in bitcoin rather than online money processors, which charge a hefty percentage on every payment. We are currently in talks with Bitlancerr to develop a ‘trustfactor’ between Pakistani freelancers and urdubit.
How has the interest in Bitcoin been? Do you think people can trust such a volatile currency?
Interest in bitcoin is growing day by day. Using blockchain to make quick payment transfer is now making accountants and industrialists ask for using bitcoin as an alternate payment method. Since our launch on Oct of 27 2014 we did only around 1 btc per month trade for the first few months but as users realized how to use the system we saw new users who hadn’t worked with this platform come on board.
With Microsoft, Dell and the NYSE and NASDAQ investing in bitcoin, the digital currency is fast gaining public trust
Alhumdulilah we are doing about 1.5btc daily trade volume over the past month and a half. Volatility has been some what eliminated in the market with the new exchanges poping up daily people can accept payments and convert to fiat almost instantly. Surprisingly, some people now tend to hold on to some of their bitcoins just to play with in the market. We see new services poping up daily like Acceptance of bitcoin by Microsoft, Dell, Namecheap, Overstock and now with NYSE and NASDAQ also investing in bitcoin, it has brought the trust back to the people.
With the launch of Paybill we envision a future where you will be able to simply pay your bills, no matter where ever you are, in bitcoin without converting to fiat. This eliminates a big barrier.
Tell us about UrduBit. Why should an average man be interested in a local Bitcoin exchange?
Before starting Urdubit there was no way people could buy bitcoins in Pakistan from end users. The local exchanges were charging exorbitant amount of fees and through BitcoinPk, we were not able to cater larger audience with over the counter trades.
So we have to think for a solution. We have to realize people want quick transactions and secure transactions. And bitcoin help achieve that. With local exchanges now going live worldwide, we eliminate expensive transfers via bank where people can simply deposit PKR in Pakistan, buy bitcoins, pay accordingly and vice versa. We want Pakistan to accept bitcoin as a currency so that the gaps left by payment gateways can be fulfilled in peer to peer method.
Urdubit is a marketplace a trading platform where users are assured that when they make a trade the other user cant run away.
Urdubit is a marketplace a trading platform where users are assured that when they make a trade the other user cant run away. We do not set the rates of bitcoin. Prices are set by buyers and sellers accordingly. We thought giving more people access to bitcoin will play an important role in growth and adoption of bitcoin in the region where there is no Paypal.
Right now local websites have to use outdated methods such as Cash on Delievery which are very risky and costly to merchants. Once you have bitcoin in the middle, you will not need worry about this and the seller can be assured of payments before actually making the delivery. This can also help these companies go global by offering friends and family abroad to simply pay for gifts to their loved ones in Pakistan.
Cash on delivery is a hassle for merchants and credit cards end up costing the buyer around 7 to 12%
Some acceptance of credit card has now started but the fee of around 3% plus the interbank rates (for overseas Pakistanis) usually ends up costing the buyer around 7 to 12%. I know online business that have to wait months even after paying 12% fee to services such as 2checkout to receive payments hence causing them to become very costly.
Whereas bitcoin transactions (from one account to another) are nearly free. With Conversion to PKR (using urdubit) and getting cash in your account, the whole process costs 1.75% which is actually cutting the costs greatly. Bitcoin is the future of money. A method where your currency is not redundant.
The success of Easypaisa and Upaisa bodes well for Bitcoin, which has even more upsides
Think about it this way. If a person is to travel to different countries they have to first pay over the counter cost of Dollar then convert dollar to the local currency in that country again paying the fees. Wouldn’t it be easier to just have one currency that you can use everywhere? That is bound to eventually happen and is already happening. Online payment gateways such as Paypal set out to this and this is what bitcoin will achieve. Even Paypal is testing the bitcoin setup just to not be left behind. Think about the success of Easypaisa and Upaisa. Bitcoin is that and much more and much cheaper rates.
What’s different about UrduBit? What did you have to localize in order to operate in Pakistan?
Urdubit is designed on the NYSE trade engine hence trades are very fast and can handle huge volumes. We are dealing only in PKR and strictly following KYC policy as described by State Bank of Pakistan. As a company, we are registered as a software house because we make possible buying and selling of bitcoin, which essentially is an open source software. Currently no laws are violated that prohibit buying and selling of bitcoins.
You don’t hear about startups that deal with money and finance in Pakistan. Why do you think that is?
This is a very valid question. I believe that most folks are financially bound and do not have the means of launching such a startup. Plus the expertise is just not there. We recently were at a flashy incubator in Karachi where people were pitching great ideas.
But most great ideas were not catered; instead, “trendy” ideas were given more importance. Ideas that were simply related to online shopping websites that could generate some income based on excessive advertising in about 2 to 4 months were incubated. Here is where I think new ideas will brew. Bitcoin can take these incubators out of the picture and help great startups to achieve their dreams with international investor support.