Sweden-based bitcoin startup Bitrefill focused on topping up mobile phone accounts and selling gift cards has garnered some attention from the community in the recent months after implementing some innovative solutions.
Thus, back in 2017 the project’s team actively supported both bitcoin scalability solutions developed by the Bitcoin Core team and the user-activated softfork.
Moreover, in no small part thanks to the Bitrefill’s team efforts, the first ever block over 1 megabyte was mined in August after SegWit activation. And when Steam removed bitcoin payment options in December, Bitrefill was there to offer an alternative method of topping up accounts at this leading gaming platform.
Another intriguing news from Bitrefill came when the company’s developer Alex Bosworth announced the first Lightning transaction on bitcoin mainnet to pay for his mobile bill.
— Alex Bosworth (@alexbosworth) 28 December 2017
ForkLog talked with Sergej Kotliar, Bitrefill CEO, about the company’s views on the market and ecosystem of bitcoin, the company’s specific features, and the future of cryptocurrencies.
ForkLog: How did Bitrefill start? What made you come to this market segment?
Sergej Kotliar: It started in a very usual way: we just wanted to experiment with bitcoin and find out if there was a chance of selling something without physical supplies. It concerned digital goods: mobile top-ups and gift cards. Initially, it was a minor experiment but even then we received orders from countries like Bangladesh or African nations. We started realizing the prepaid phone industry covers billions of people all over the world. In some countries it’s the only thing one can do with bitcoin these days. Yes, one can exchange it for altcoins, however, when it comes to local services somehow involving local currencies, we are the only ones available in some countries after three years in operation. So it went on that way. We started studying the industry more thoroughly, as well as what it takes to operate in a certain country.
ForkLog: How does it work on technical level? Do you conclude contracts with local mobile carriers?
Sergej Kotliar: We have several different sources enabling us to maintain the connection yet we have nothing to do with any mobile carrier. In most cases they even have no idea we exist. Frankly, they shouldn’t care as we make all purchases via intermediaries. If we compare it to actual cards, it’s the same as scratch cards but the scratch code is replaced by digital refilling of accounts. More particularly, every country has its distributor companies connected to the carriers. There are international companies connected to such local distributors, and that’s how we work. It’s a continuing process of finding new partners, and we do our best to find the best prices, terms and conditions as our ultimate goal is to eliminate fees from those services around the world.
ForkLog: And how does it work for you?
Sergej Kotliar: I think we have covered around 60% of the planet so far. Say, if you’re in Ukraine and want to send 100 hryvnias to your account it will cost you 100 hryvnias. Ukraine might be a special case here as local payment terminals charge fees in most cases. So it’s what we’re aspiring to do: provide prices of local offices and remove all fees.
ForkLog: As far as I know, now it can be done with altcoins as well.
Sergej Kotliar: Yes, we added altcoin support though initially it was done via ShapeShift. Now we’re creating our own altcoin infrastructure. The problem with ShapeShift is that everything has to be converted into BTC and users still have to pay for transactions. Even if you use Litecoin, you still pay for Bitcoin transactions, and it kills the very reason to integrate altcoins. For those reasons, we’re building our system to batch the payments and eventually make payments cheaper to end users.
ForkLog: With bitcoin’s recent price rally and consequent appreciation of fees, haven’t you seen some customer outflow?
Sergej Kotliar: Yes, there was a certain decline. For that reason, we’re creating new features to attract customers. There is a new account system where one can refill the account and make transactions via the same address. It’s all operational though localization isn’t fully available. Anyway, when it comes to platforms focused on microtransactions, we’re among the industry leaders.
ForkLog: Bitrefiil was also among the first companies to add SegWit support in August 2017.