On its surface, Abra is an idiot proof app that should be about as functional and easy to use as Venmo. Open it up, enter your pin, add money from your account. But in practice, it is a goddamn nightmare that seems to violate everything the crypto world holds dear—transparency, anonymity, and fluidity.
This is the story about an app that I would very much like to punch in the face.
Even though crypto is supposed to free us from banking restrictions, you still very much get what you pay for on exchange platforms. Sites with relatively high fees like Coinbase can take a week to verify your hard earned cash transactions. I’ve written about how Changelly can charge up to 15 percent. Meanwhile their big competitors like Bitstamp and Gemini charge a fraction of that (0.25 percent) but it can take six weeks to verify your account.
Six weeks was how long it took Bitcoin to go from $5,800 to $20,000 in December. Enter Abra.
For no fee, they would trade fiat from your bank account to bitcoin. Like right then. They say one to two business days,but I’m talking about taking $100 from your bank account and getting it later that night in BTC. And by the time you get ahold of it, you have an account value of $101.
They also do lightning-quick transactions via American Express. Don’t get paid until Friday but you see a price you like? For a 4 percent fee, you can use your Amex and buy it right now. Forget one to two business days. If Bitcoin goes up 1 percent before you get your Amex bill, you’ve gotten a better deal than you would with the ole Coinbase 3 percent fee and you’re high-fiving strangers in the street.
This is typical bull market bad thinking. “If the market never goes down then who cares about the fees?”
In reality it comes down to two things: time and money. When you’ve read a thousand stories about crypto people who got in at just the right time you’re gonna feel like you’re short on time. And if you saw the average transaction times, you would probably choose Abra over another app.
You should never, ever do that.
The reality is an infuriating bit of illusionism. In Abra, you can buy in bitcoin and transfer it to another exchange, but only for super-high fees.
Here’s me trying to transfer something like $50 to my GDAX account for a network fee of $34.19. That’s essentially paying a transaction fee of 68 percent.
Granted, Bitcoin tends to have higher network fees on heavy trading days (a.k.a., “the day you want your money right now”). But ether is usually easier to move around and trade. On Abra you can trade for ETH. You can even send that ether to a friend on Abra. But you can’t send it to another ETH wallet.
Annoyed, I reached out to an Abra operations specialist who only identified himself as Ryan C. He takes the chipper tech-support attitude of being happy to hear from his customers. He didn’t give me any feedback on the way that I shared my frustrations with this app which is—how can I put this?—the app equivalent of a “shitcoin”.
“As of now, you’d only be able to hedge your BTC into ETH. So we do not natively support ETH (no deposits or withdrawals), only conversions,” he wrote me.
Here he finally admitted what little you can do with this app.
Look, as recently as July 2015, this app would be king. Buy some bitcoin, trade it for some ether, HODL, then sell it for some cash. But the what you can do with it portion of the app is left in the dust. It’s just a bank disguised as a crypto wallet. The only thing you can do with the cryptocurrencies in this app is to send them to other unfortunate Abra users.
And while the app is marketed as essentially free to use, the architecture of the platform means that if you want to do anything with your currencies you will lose money to mining fees. “The fee goes to the miners to confirm the transaction on the blockchain. We do not make a profit from it.”
How did anyone fund this app? Wondering, I asked Ryan C. directly: How do you guys make money?
“Abra makes profit from our convenience fee from AMEX transactions and partner transactions (i.e. Master Tellers in the Philippines) as well as currency exchanges (small mark up or mark down, depends on whether a user is buying or selling).”
So there it is. Abra sells you marked up crypto. It forces you to keep it in their wallet or send to other users on their platform. Then you can sell it at wildly deflated price while being able to claim it was done for no fee.
That’s kind of how the game is played everywhere. But Abra’s “Cryptocurrency investing. Simplified” platform means its interface hides all this from you.
In contrast, $100 worth of bitcoin on Coinbase as of now would cost you a $2.99 fee to buy at a price of $10,854.01. It would then cost another $2.99 fee to sell at $10,751.75. You would end up with $93.10. But in Coinbase you can at least make a free transfer to their GDAX platform, trade your brains out for ether, Litecoin, and Bitcoin Cash, keep the money in a U.S. dollar-denominated wallet and then transfer it back to your bank account for no fee.
I did ask Ryan C. about their “Master Tellers” in the Philippines. That’s where about a third of their customers are. And it turns out that for a 2 percent fee, you can send money to anyone in the Philippines and they can get it out at any Tambunting branch—a sort of check cashing station/pawn shop with locations all over the country. He sent me some nice photos.
So if you’ve always dreamed of having an account with a Filipino pawn shop, Abra is the app for you.
I will say I’m really glad I took the time to review this app. In the process,I had to re-download it to make the screenshots you see above and I found $46 in my account. There are relatively low fees today in the bitcoin markets so I can send that to another wallet for $3.78 (8 percent fee) or I can pretend my editor gave me a $46 bonus to write this piece.