Recently we wrote about all the problems that still plague how we make payments in 2014.
Bitcoin was supposed to address many of them — the costliness of sending money (especially small amounts), the lack of security, cumbersome receipts — but the Bitcoin ecosystem that’s developed to this point has itself been largely disappointing and self-defeating, with much of it has been focused exclusively on profit seeking.
Circle hopes to be at the vanguard of bringing Bitcoin out of this speculative era and into a more useful one. We wrote about them a couple months ago, when they said they wanted to be the Skype of Bitcoin.
Today, at the Bitcoin2014 Conference in Amsterdam, they officially launched their service on an invitation-only basis.
The idea is that you can be your own Bitcoin bank — but it won’t even feel like you’re even using Bitcoin at all.
“The product is…really oriented around a set of ‘metaphors’ we think will be more accessible to the average user,” CEO Jeremy Allaire told us recently. “You’re making deposits and withdrawals, you’re sending and spending, your balances are in dollars, you’re sending money in dollars. That will make more sense for the average person who would say, Why would I want Bitcoin, what can I do with that that I can’t already do?”
The service is free, and comes with insurance, although Allaire says users will have a “risk score” attached to their identities that will determine how much of the digital asset users will be able to instantly access. And you’ll still have to submit information about your fiat debit account, although that is also the case with Coinbase, the largest Bitcoin wallet service.
That of course creates another huge breach with one of Bitcoin’s ostensible initial purposes: complete anonymity. Allaire observes most mainstream customers don’t possess the libertarian streak of Bitcoin’s earliest adopters.
“It has all these features that will make sense to people and will resonate with people,” he said, “but it’s not about overthrowing world governments or undermining the banking system or things like that. It’s about how do you do something that’s faster, cheaper, easier, et cetera.”
Circle is backed by an interesting mix of Valley and Bitcoin funds, including ones run by Jim Breyer, an early Facebook investor, and SecondMarket’s Barry Silbert. Circle now has a large enough capital base to both not have to charge consumers to use the base-line service and to be able to to pay for all the risk, security and compliance that goes into creating this kind of service.
Allaire says the primary up-front benefit will be sending free and instant global money transfers, and does not expect overnight adoption. To truly take off, he said, Bitcoin must go from a few hundred thousands actual users of Bitcoin worldwide, which he admitted was “startingly” few given the amount of media attention the digital currency has received, to hundreds of millions. But it has to start somewhere, and Allaire believes Circle can lead the way.
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