While he doesn’t like calling it a “pivot,” Wyre CEO Michael Dunworth revealed the evolutionary process of turning bitcoin payment processor Snapcard into a blockchain-based money transfer system on the most recent episode of the Boost VC Podcast with Adam Draper.
On the podcast, Dunworth explained that, unlike something like online photo sharing, there is no blueprint for building a successful blockchain technology company. “We adapted to our surroundings,” Dunworth told Draper when explaining the evolution from Snapcard to Wyre.
During the conversation, Dunworth explained why the team behind Wyre were not confident in the market for bitcoin-based consumer payments, among other topics.
Not Comfortable in the Bitcoin Payment Processing Market
In 2015, Dunworth was meeting with the Central Bank of Brazil and making the argument that the country would be a serious area of growth for the technology in 2016. At the time, Dunworth claimed Snapcard was the most popular wallet in Brazil, and the company had recently partnered with mobile payments startup PagPop to enable bitcoin payments for 12,000 merchants in the country.
Now, Snapcard has moved away from consumer payments and rebranded as Wyre with a focus on international money transfers.
“We had to look at the writing on the wall,” said Dunworth during the recent podcast. “We had a lot of competitors at the start — we were competing directly with BitPay — and they were very good at what they did. But we just didn’t feel as confident in that market.”
Dunworth added that Snapcard was “doing very well” according to various adoption metrics; however, in regard to the adoption of bitcoin for consumer payments, Dunworth stated, “We kind of bet on that, and it didn’t work.”
Dunworth went on to explain that the acceptance of bitcoin payments by merchants has more of a “novelty effect” than anything else, at least when it comes to buying pizza in California. In the past, Dunworth has noted that bitcoin makes more sense for consumer payments in the developing world.
A Pivot to International Money Transfers
Dunworth claimed, after the pivot to Wyre, that the company is now the “largest money transfer platform built on blockchain technology hands down.”
According to a company press release from December 2016, there was $35 million worth of international money transfers being processed per month at the time, and Wyre accounted for 90 percent of that volume.
“We know better than anyone what this value proposition is for in terms of remittances, which obviously is touted as a pretty common use case,” Dunworth said. “For us, we definitely are seeing a huge amount of value add.”
Bitcoin Vs. Private Blockchains
While there was a lot of hype regarding private, permissioned ledger systems in 2015 and 2016, Dunworth has been consistent with his preference for public, permissionless systems such as Bitcoin. “I don’t believe private blockchains are going to be successful,” he told Draper during the recent interview.
Dunworth also compared private ledger technology to the Wall Street Journal, the New York Times and other popular publications pooling their resources and charging a subscription fee for access to their network of instant information rather than having everyone simply connect to the open internet. In Dunworth’s view, the prospect of the New York Times competing with a kid blogging in a small town in Norway is a much more exciting scenario.
“We build our [platform] on open ledgers — like proper, public blockchains,” Dunworth said. “We don’t do private blockchains because I want to make the blockchain easy to take advantage of, and right now, us as Wyre, we’re doing that for companies, but eventually, we’ll be able to open up to anyone.”