A truly disruptive solution that could change the entire financial services industry was just released. A new app called StartChat enables people to send Bitcoin payment via the popular encrypted messaging service Telegram.
“The future is already here — it’s just not very evenly distributed.” William Gibson.
This could be a major game changer because it could allow people to send untraceable bitcoin payments at the touch of a button. If it works as advertised; StartChat would enable a person in a nation with strict financial controls; such as China or Argentina, to move all of her money out of the country with a smartphone.
More importantly nobody; including governments, would be able to track the money transfers or stop them. Since Telegram is encrypted; government would first have to crack it to track the bitcoin transfers.
That could make it impossible for governments in those nations to use tricks such as the devaluation of currency; limits on bank transfers or official exchange rates, to control the money supply. What happens when everybody in a country simply picks up their phones and sends all their money away?
Would leaders shut down the entire financial system or turn off the internet or mobile service just to stop such transfers. That could trigger rioting, revolution or mutinies in the military.
Is Venezuela’s Inflation the reason for Bitcoin’s Price Surge?
Worse, what happens when a few tech-savvy people; who understand bitcoin, can access large amounts of good money in a nation undergoing hyperinflation? Those individuals would be in a position to buy up real estate, collectibles gold and other valuables at a fraction of their value.
It seems to be no coincidence that a bitcoin was trading at $573.98 (€504.99) on June 5, 2016, while Venezuela was under-going hyperinflation. Bloomberg reported that Venezuela’s central bank has ordered enough paper to put 10.2 billion bank notes in circulation; for a country with a population of 30 million people. In contrast the Federal Reserve has only 7.6 billion bank notes in circulation in a country of 316 million people.
The official exchange rate in Venezuela is 10 of its currency; bolivars, to the US dollar. The Sydney Morning Herald reported that the real exchange rate is 1,000 bolivars to the dollar on the black market. The International Monetary Fund expects an inflation rate of 720% this year in Venezuela, some observers think that’s optimistic and that inflation could reach 1200%.
Nor is it just Venezuela; experts have warned that hyperinflation could soon come in Russia and George Soros thinks China’s currency the Yuan could be headed for a major fall. Some observers think that Chinese buying is responsible for the recent high bitcoin prices.
Will bitcoin skyrocket in price because of StartChat?
StartChat could be the solution that takes bitcoin mainstream and causes its value to explode. It would do that by making sending money via bitcoin as easy as sending a message via WhatsApp.
It currently works with Telegram; which has 100 million users around the world, according to Statista. Telegram users were sending around 15 billion messages a day on February 23, 2016, according to ExpandedRamblings. The same blog reported that one million people a day were signing up for Telegram and 350,000 of them were in Brazil, a country where the government tried to ban WhatsApp last year.
The addition of StartChat makes Telegram a serious challenger to WhatsApp. Even greater havoc would be wreaked if somebody were to launch a StartChat for WhatsApp; because the Facebook (NASDAQ: FB)-owned solution has one billion users around the world. That makes WhatsApp the world’s largest encrypted communication solution.
Something like StartChat; combined with high-speed blockchain solution such as the Thunder Network, could make encrypted apps like Telegram and WhatsApp the world’s new network for financial transactions. This could be why companies like JPM Morgan Chase (NYSE: JPM) are rushing to launch their own blockchain based banking solutions. Chase is developing its own blockchain based money transfer platform called Juno.
Were StartChat or something like it to take off Bitcoin values could sky rocket. A major use for it would be for the sending of remittance money from people in developed countries like the USA to friends or relatives back home in developing nations.
The World Bank estimated that $440 billion in remittances were sent in 2015. The Bank also estimates that the value of remittances will rise to $459 billion in 2016 and $479 billion 2017. If StartChat could capture just a fraction of that business it would make a fortune and create a major demand for bitcoin.
If you are interested in taking a look at StartChat you can download a version for the Apple iPhone at this website. There is no word on StartChat for Android or Windows Phone yet. Telegram is available here if you want to take a look at it. Apps like StartChat might make Bitcoin the world’s currency, whether we want it or not.