As CEO of Abra, a global app that will soon enable users to make fractional investments in stocks such as Facebook, Apple, Netflix, Google and more for as little as $5 USD, Bill and his team have been on a mission to democratize financial access to every individual in the world. This is entirely possible now thanks to the convergence of a number of technologies and the emergence of Bitcoin and public blockchains.
There are myriad options for financial services that most of us take for granted, but across the world, billions of people aren’t as fortunate. Our global financial system has created massive wealth but its centralized nature has resulted in the spoils going to those who are best connected to the financial centers of the world, resulting in significant financial inequality.
We recently sat down with Abra CEO, Bill Barhydt, to have a chat with him about their latest developments in crypto & stock investments.
What is Abra’s big announcement?
We are adding the ability to invest in traditional assets like stocks and ETFs to the Abra app!
Now, Abra users in over 150 countries will have the ability to gain exposure to valuable stocks like Apple, Amazon, Tesla and Uber, or a gold ETF, right from the app. These new offerings of stock and ETFs will be available alongside the 30 cryptocurrencies and 50 fiat currencies already available on Abra for investors outside of the United States.
This is just the next step in our larger vision of providing a full array of financial services, all available through a couple of clicks on a smartphone.
On the backend, this new technology is based on a non-custodial bitcoin wallet, and the exposure to assets like stocks and ETFs happens via a crypto-collateralized contract.
Why are you doing this?
Abra’s mission is to democratize access to all financial services for everyone. Most consumers globally are shut out of traditional investment products for many reasons including geography, income level, education, fear, etc., which can be categorized as issues stemming from access, trust, and complexity. Abra is going to fix these problems.
We believe in financial inclusion, both from the standpoint of making finance simple and straightforward and in giving access to public markets to people that have traditionally been left out.
We believe that cryptocurrency technology such as bitcoin can serve as a new platform to solve these problems of access and trust. Abra’s unique user experience makes the service easy to use and completely accessible to any consumer.
In the end, we just want to build such a great product that we will appeal to a spectrum of investors, from the revolutionaries to the entry-level experimenters.
What kinds of assets will be available on Abra?
With this new feature release, Abra users will be able to get exposure to cryptocurrencies including our crypto index, traditional currencies, traditional stocks, commodities, indexes, and ETFs.
Most importantly, Abra’s unique technology platform based on crypto-collateralized contracts allows us to scale to include all kinds of investment products, opening access to financial markets around the world in a way that has never been done before.
Who can use the stock and ETF investing feature?
The stock and ETF features described are provided by Plutus Technologies Philippines Corporation (Abra International). Users are not allowed to access or use the services of Abra International if they are located, incorporated or otherwise established in, or a citizen or resident of: The United States of America, Cuba, Iran, North Korea, South Sudan, Sudan, Syria and Ukraine. Persons or businesses in these countries or in any jurisdiction where it would be illegal according to applicable law (by reason of nationality, domicile, citizenship, residence or otherwise) are forbidden to access or use the services of Abra International.
Get your free $25 in Bitcoin now with the all new Abra App!
No fees, really?
Yes, to launch our new functionality of buying, selling, and holding exposure to traditional assets like stocks and ETFs, we are offering zero trading fees on these assets for the rest of 2019.
Will I still be able to use Abra to buy bitcoin?
Yes, all day, every day. Abra offers the largest selection of cryptocurrency investment options on the market today. Abra will continue to expand our crypto investing capabilities with more innovative and interesting products, like the BIT10 crypto index, alongside traditional investments like stocks, commodities, ETFs, and indexes.
What is a non-custodial wallet?
Abra’s investment app functions as a non-custodial wallet. What does that mean?
Prior to the creation of the Bitcoin network, financial transactions required a centralized and “trusted” third-party, such as a bank, a payment provider, or a credit card company. We say “trusted” in quotes as you all know how much trust these institutions exude these days.
In the simplest of terms, a non-custodial wallet allows anyone to become their own bank, so you don’t have to trust anyone to manage your money or your assets.
Think of a non-custodial wallet as a digital safe deposit box where you are in control of your own money and assets. This means that Abra cannot borrow or touch your assets unless you direct us to. Abra never holds user funds
When you first set up an Abra wallet you will be given a recovery phrase, which is your key to the safe deposit box, so don’t lose it. The beauty of a non-custodial wallet is that as long as you have access to your recovery phrase, you are in control of your assets, which are stored on the Bitcoin blockchain.
This sets us apart from all traditional investment services, and many other crypto services (like exchanges) that hold and can access user assets like a traditional bank. This also means that Abra is not susceptible to hacking to steal your assets, the way exchanges are because we don’t have your assets, you do.
What are crypto-collateralized contracts?
While we think it’s great that you’ve taken such a big interest in our technology and investment platform please note that you don’t need to understand any of this to use Abra. But we’re still very happy to explain how our technology works.
Crypto-collateralized contracts allow an investor to easily gain investment exposure to any asset, such as a stock, bond, another cryptocurrency, etc., by simply using bitcoin as the underlying technology for the investment. In other words, if you want to invest $1000 in Apple shares you will place $1000 worth of bitcoin into a contract. As the price of Apple goes up or down versus the dollar, bitcoin will be added to or subtracted from your contract. When you terminate the contract, i.e. sell the Apple investment, the value of the Apple shares will be reflected in bitcoin in your wallet which can easily, or transparently, be converted back to dollars or any other asset for that matter.
But you said that Abra can’t touch my funds?
That’s true. When you enter into the investment contract, you’re effectively creating a smart contract which automatically determines based on the price of the Apple shares whether the investor has made money or lost money. The underlying bitcoin collateral then adjusts itself accordingly to be equal to the value of the Apple shares.
If the value of the underlying bitcoin collateral adjusts itself who is taking the risk on these contracts when the price of Apple goes up? Simply put, Abra is taking that risk. However, Abra hedges away our risk on these contracts in the open market the moment the consumer creates the investment. Abra has already successfully processed hundreds of millions of dollars worth of these investment contracts and has never lost money on them.
Crypto-collateralized contracts leverage the programmable aspects of bitcoin to create a new universe of secure and decentralized finance. The programmable nature of crypto-collateralized contracts means that we can peg the value of anything with a reliable price feed to the value of bitcoin. This technology will enable all kinds of interesting financial services and products in the future.
So this is a security token, right?
No, Abra is not creating security tokens. We have created a system of crypto-collateralized contracts that peg price feeds of other assets to bitcoin. In other words, the underlying financial instrument is always bitcoin.
If the value of the pegged asset goes up or down, then the Abra user’s bitcoin balance will go up or down accordingly.
There is no secondary market for any of Abra’s investment contracts and they can only be bought and sold on the Abra platform.
Why should I trust Abra with my money?
You aren’t trusting Abra with your money. With Abra, you are holding your own assets in the form of crypto collateralized contracts. Abra is a non-custodial wallet, which means we don’t hold your funds, they exist on individual user phones and are accounted for on the Bitcoin blockchain.
While we are offering new features in the form of exposure to traditional stocks, commodities, and ETFs (and more investment opportunities are on the way), we have been using the underlying crypto-collateralized contract model for years to secure transactions around the world.
When you make an initial deposit from your bank account into Abra, Abra works with regulated exchanges around the world to convert your fiat into crypto, i.e. Bitcoin, and then moves the crypto immediately to your wallet which then gets inserted into your investment contract.
To date, we are able to account for every single decimal point of value ever traded through Abra.
Where is Abra based?
Abra is based in Mountain View, California. The company was founded in 2014 and has been growing ever since.
We have been featured in popular publications like Forbes, CNN, CNBC, Techcrunch, Coindesk, amongst others. Last year, The Wall Street Journal named Abra one of the top technology companies to watch.
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