South America has had its share of novel crypto projects, and Bitso is no exception. A Mexican bitcoin exchange, it effectively acts as a crypto publicist for the whole subcontinent. The company has been particularly well received, and its focus on regional Spanish-speaking countries is swelling user ranks. Launched in 2014, the exchange has had some unusual dynamics at play in its host country that have also enabled its success to date.
Calling itself “the bridge to the new digital economy,” a part of Bitso’s success stems from their facilitation of residents being able to buy bitcoin with fiat currency. Mexico’s particular vantage point has been one of a falling Peso against the USD.
In part due to the plummeting Peso, many Mexicans sought alternative hedges with which to maintain some kind of currency value, several subsequently finding their way onto the Bitso exchange.
Due to the rising popularity of bitcoin, in a time of financial uncertainty, Bitso did scoop users from a combination of contributing factors, yet with that said, the exchange certainly stands on its own merits and presents a polished presence online. Its higher-than-average uptake during 2017/2018 is a product of particular Mexican economic realities, but it is a sleek exchange in its own right.
Another contributing factor is seen in Mexico’s population dynamics. Of approximately 120 million people, only about 40 million enjoy typical financial services. The vast majority, however – some 100 million people – have mobile phones.
As most of these units are smartphones, a digital currency is in many ways more attractive than a plummeting fiat system. This single factor has made Mexico comparatively very enthusiastic about bitcoin, which is saying something, after 2017’s global carnage. With large-scale bitcoin adoption in Mexico over the last few years, Bitso has had fertile beginnings.
How Does Bitso Work?
Bitso is the world’s biggest digital exchange for trading BTC with the Mexican Peso (MXN). Launched as an exclusive bitcoin exchange, the platform now hosts LTC, ETH and others. The company boasts another dynamic offering in the form of BitsoPay, a payment platform for merchants that allows them to accept cryptocurrency payments. Far from stultified by economic depression, the Mexican crypto scene is one of bolstering ecommerce and a blockchain lifestyle.
A major pleasure for locals has been that users can fund their Bitso account from any 7-Eleven or Oxxo store in Mexico. Few other exchanges in the world can boast of over 135,000 locations at which residents can fund their trading accounts, in fiat.
There are no deposit fees or transaction fees between a user’s bank account and Bitso. The platform charges trading fees only, plus a small withdrawal fee. Again a welcoming home for a great swathe of unbanked, fiat-deprived people, those who employ their trading account as a traditional banking account sing the platform’s praises.
The exchange is secure and actively works against making the news. Getting past the adspeak, the exchange sports baseline security on a par with its peers. The platform also has a popular user feature in Bitso Transfer, namely a protocol that allows users to transfer digital currencies instantly – with no network delays or mining fees.
Bitso has three levels of membership. Level One asks for no more than a mobile number and email address. Level Two requires the submission of passport and other residency documents, and Level Three is something of a secret VIP club. Users will need existing Level Two status in order to apply for Level Three status, the full details of which are only available upon request.
In a country where the vast majority of users will employ a smartphone to access the platform, the February 2018 launch of the mobile app generated enormous fanfare. The free app emulates the website and is available for both iOS and Android.
As a merchant platform, BitsoPay allows users to accept bitcoin while incurring zero fees. BitsoPay accepts bitcoin at a real-world retail location and works just as well for ecommerce. Showing an enviable ease of use, a vendor can be accepting payments on the day they set up their account. A boon for commerce overall, local vendors can also broaden their horizons and accept international payments because of the platform
Concerns about transaction speeds and currency values are all voided for merchants using the platform, as Bitso has done much to answer the immediate needs of local businesses as well as the population at large.
The service does away with chargeback risks while enabling super fast payments through the Mexican SPEI banking transfer system. Apart from its API, its savvy shows up in its shopping cart interface too, compatible as it is with almost every ecommerce app.
With support often a pernicious sore point of digital exchanges, Bitso has distinguished itself after experiencing site issues. The company CEO, Pablo Gonzalez, posted blogs apologizing to users after the most publicized incident the site has experienced wherein a user claimed that their BTC was paid over to a random wallet address. The recipient actually refunded the BTC, but it remains unclear what exactly transpired.
Notwithstanding that it appears to have been a relatively minor technical issue, such transparency and immediacy is seldom encountered elsewhere. It also appears that no user funds were exposed to risk, and the exchange has never experienced a successful hack or dire loss of funds.
The Bitso Help Center makes an attempt at a 24-48 hour response time, but it does seem that serious concerns are given priority, which is not wholly bad. New users and any issue not related to funds do take a backseat although, overall, support is good, if somewhat Spanish! The company would do well to trade on its willingness and transparency by building a more proactive and directed, user-facing communication channel.
Bitso Exchange Conclusion
Launched in 2014 under exciting and unusual local and international circumstances, Bitso on paper is a glowing success story. When the figures tally with the attitude at the top, it becomes more apparent as to why the exchange has proven so popular.
Unlike exchanges in other countries, Bitso is also addressing, through cryptocurrencies, the lack of a stable financial services network in many parts of the country. This gives it an edge, a legitimacy and a respectability other exchanges cannot hope for.
Daily traders will probably enjoy the platform’s fee structure, but in reality most users are employing BTC and others as true daily living currency. This too is a unique theme on the exchange, and it resonates strongly with the original aims of Nakamoto when bitcoin was founded in 2009.
Bitso is ambitious and knows its territory well. Having read the market and married its potential to existing economic conditions, the company has shrewdly ballooned its future potential. Not only for citizens looking to shed their Pesos, but for potentially any trader in the world, Bitso is a polished and intuitive offering. The fees absorbed or homogenized here and there by the exchange is advertising money can’t buy. With poor banking infrastructure and stagnant fintech for the purposes of the average citizen, Bitso is also seeking to become the default merchant platform.