US based bitcoin Startup Abra gets funding from Ratan Tata, American Express

Ratan Tata and credit card player American Express have made an undisclosed investment in a US based Startup Abra which deals in digital Currency. Digital currency is an online medium of exchange that allows for instantaneous transactions and borderless transfer-of-ownership. Digital currency or virtual currency uses cryptography, making it difficult to counterfeit.

In September, Abra closed $12 million in Series A funding. Investors in the round included Arbor Ventures, RRE Ventures, and First Round Capital. The company is also planning to launch an app Abra Pay which will store digital cash and will enable sending or receiving money through any smart phone. The revenue model for this company is based on charging a .25 percent fee to users whenever they transact with an Abra Teller,  who are people or businesses earning money by transacting digital cash to and from any consumer via the app.

The users of Abra will not have to worry about the back-end functionalities of bitcoin and the Blockchain. Bitcoin is a payment system through which users can transact directly without needing an intermediary. Transactions are verified by network nodes and recorded in a ledger called the Blockchain. Blockchain uses its own unit of account, also known as bitcoin. Bitcoin is often called the first cryptocurrency .

The users of Abra aren’t supposed to know about bitcoin and Blockchain. Two users could send each other in dollars.Though actually bitcoin is being transferred, both will just see the transaction denominated in dollars. Abra’s app will initially be available in the US and Philippines with more countries to follow in the coming months.

Image credit : unic.ac.cy