The Bitcoin payment app, Strike, has expanded its service into the UK following its successful European launch earlier this year.
The app enables users to buy, send, and receive Bitcoin, and also enables payments in local currencies using Bitcoin’s lightning network.
The lightning network enables faster and cheaper localised and cross-currency payments.
Spending Bitcoin
Bitcoin was first created in 2009 as a decentralised payment system. Initially, it found limited use, but its utility has grown exponentially since. Besides being tradeable on exchanges and the web, it’s accepted by some major companies. For example, Microsoft, Twitch, and Newegg are among some of the big names that accept the digital currency, while even PayPal now allows for the holding of Bitcoin.
BTC, and other cryptocurrencies, can also be used to tip content creators on social media and there is an already expansive and continually growing network of crypto casinos in the UK for local players to access. Crypto writer Kane Pepi cites the growing adoption of cryptocurrencies as one of the major drivers behind the increase in crypto casinos.
About Strike
Strike launched in the U.S. in 2020 and was founded by Jack Mallers. It offers similar functionality to the likes of PayPal and Cash App but uses the Bitcoin Lightning Network and enables users to transact using Bitcoin as well as fiat currencies.
The app also accepted users from El Salvador and expanded into Africa and Europe at the beginning of this year. Following this successful rollout, Strike has now been made available to the UK market and it doesn’t look like slowing any time soon.
The UK Expansion of Strike
CEO and founder Jack Mallers said that Strike is expanding into the UK, even though other cryptocurrency companies are withdrawing from the market for various reasons. As the sixth largest economy in the world, the UK represents a significant opportunity for the company.
Blockchain Technology
However, cryptocurrency is still a relatively new technology, and while it can be used to buy some products and services, it hasn’t reached complete mainstream adoption as yet. Despite this, the blockchain technology it uses does offer various benefits over traditional payment systems.
The Lightning Network
In particular, the launch of the Lightning Network in 2018, improved on the existing technology by reducing transaction times and costs. Transactions on the lightning network take milliseconds to complete and are immutable: meaning they cannot be changed or altered.
In comparison, Visa and Mastercard payments can take several days to settle. Transactions on the Lightning Network can also cost fractions of a penny, compared to card transaction fees which are typically between 1% and 3.5%.
Strike Services
As such, Strike offers considerable benefits to retailers who can access funds faster while losing less of the payment to transaction fees. With systems like Strike, neither the recipient nor the sender actually need to use Bitcoin. Users can opt to receive payments in Bitcoin or GBP, and senders have the same option of sending in local currency or Bitcoin.
The system will automatically convert the currency for you, so the buyer can send a Bitcoin payment but the recipient receives the money in GBP, and vice versa. This also works for cross-border payments. A UK user can send money from their GBP balance to a user in Germany, for example, and the recipient can receive the funds in Euros. Furthermore, Strike also enables individuals to buy Bitcoin.
Limitations To Strike
Strictly speaking, however, the account holder never really owns the Bitcoin while using this system. The company retains the keys, making funds available for sending, but those keys are never passed to the owner until the Bitcoin is sold.
There are other restrictions to using Strike too. UK regulations dictate that users must complete a knowledge test when they sign up. The Appropriateness Assessment is meant to ensure that crypto users know what they are getting into and understand the possible risks associated with Bitcoin and cryptocurrencies in general.
Users must also state what type of investor they are: restricted investor or high net worth investor. A restricted investor is one that invests less than 10% of their net assets in “high-risk investments” while a high net worth investor must have assets of more than a quarter of a million pounds or has earned over £100,000 in the past twelve months.
When signing up, users have two attempts to pass the knowledge test and cannot use their account for 24 hours after signing up while they complete a cooling-off period.
Cryptocurrency Expansion
There are only a limited number of companies and businesses that accept Bitcoin in the UK currently, but Strike could change that following the app’s rollout. Loyal Bitcoin users love businesses that accept cryptocurrency, so will typically keep returning to use their chosen currency. With Strike, the business doesn’t need to get into Bitcoin at all, but can still offer functionality to crypto holders.
UK Cryptocurrency Regulations
The UK rollout comes at an uncertain time for the crypto market in the UK. PayPal withdrew its UK Bitcoin services in 2023, and other companies including Bybit and Luno followed a similar path.
The withdrawals came as the country introduced new marketing and compliance rules. Any company that wants to advertise its cryptocurrency services must be registered with the Financial Conduct Authority, which said that they were making the move because they were concerned that overseas companies did not offer robust enough frameworks to safely operate in the country.
Strike’s knowledge quiz and its requirement for users to state what type of investor they are helping the app fall in line with the new stricter rules. Additionally, Strike isn’t the only company that still operates in or offers its services to UK users. As well as a large number of sites that provide services like crypto gambling and crypto purchases to UK clients, exchanges including Kraken, Bitstamp, and Bitpanda still enable UK enthusiasts to buy and sell cryptocurrencies on their sites.
