What is Abra?
Simple answers: Abra is a Bitcoin wallet that lets you deposit fiat currency (USD, Phillipine Pesos) and buy 20 different cryptocurrencies and over 50 fiat currencies.
Technical answer: Abra is a Bitcoin wallet that utilizes P2SH to convert fiat currencies to smart contracts based that peg Bitcoin to the agreed upon conversion rate (Ex: 1 Bitcoin = $10,000 USD), creating a “synthetic currency”. You can then redeem these smart contracts (synthetic currency) and exchange them for cryptocurrencies of your choice by entering into a new smart contract that peg Bitcoin to the agreed upon conversion rate (Ex: 1 Bitcoin = 10 Ether).
What is P2SH?
https://en.bitcoin.it/wiki/Pay_to_script_hash
Do they charge any fees?
Right now, they are not charging for exchanging to another crypto/fiat even though each exchange creates a new P2SH transaction which requires mining. They are only charging a withdrawal fees.
Positives for Abra
- Simple to use
- Allows multiple ways to deposit (Bank via ACH, Credit Card, BTC)
- No fees
- Requires verification of passphrase
Negatives for Abra
- Counterparty risk (Abracadabra Abra disappears, so does your money), they will fix this eventually when they implement 2 of 3 multi-sig instead of the current 2 of 2 multi-sig setup
- Abra spread is a bit high(1 Bitcoin = $8,370 even though CMC and GDAX had it at 1 Bitcoin = ~$8,500)
- You can only withdrawal in USD/Bitcoin/Philippine Pesos
Breaking News - Abra uses Litecoin
Abra will run their network off Bitcoin and Litecoin, providing lower mining fees for smaller transactions (using Litecoin) while maintaining security with larger transactions (using Bitcoin).
Bottom Line: Abra is an awesome wallet that has the ability to ease the learning curve of cryptocurrencies for new users. The ability to expose the user to alt-coin price actions without actually buying the alt-coins are a novel concept. I really look forward to Abra being used by more people and them bringing the “Abra Teller” concept (think Local Bitcoins, currently only available in Philippines) world-wide.
Links:
https://www.cryptocurrencychart.com/
https://www.abra.com/
https://www.abra.com/blog/20-new-cryptocurrencies/
https://support.abra.com/hc/en-us/categories/203973548-Fees
https://twitter.com/AbraGlobal
https://en.bitcoin.it/wiki/Pay_to_script_hash
https://medium.com/@hrobeers/p2sh-bitcoin-script-puzzle-explained-26c8cb03ff90
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