Circle may have just changed the game for Bitcoin wallets…
TwentyFiveFarthingedNumbskull’s article starts with “may” and, as you’ll soon see, ends with “most definitely will because the US matters.” As we’ve previously explored, the US ain’t nothin’ but a hound dog with broken hind legs.
Happy Friday, Idiots!
“I’m not an Idiot! You’re an Idiot!” etc.
It’s official. Circle actually has a product, and it looks incredible.
Circle doesn’t officially or actually “have a product” because… no one is using it. They’re still in the very hipster “Request Invite” phase. They have a video and a CEO, which puts them on par with your average Kickstarter.
This morning, Circle unveiled the first version of its consumer wallet: a completely free, insured,iii fiat-denominated walletiv that targets the general consumer who may be interested in dabbling with “digital money”.
There is no “general consumer interested in dabbling with ‘digital money'” anymore than there’s a general consumer interested in dabbling with particle physics. They don’t get it and they probably never will, so let’s leave Bitcoin to the adults, neh?
Although I have not yet had a chance to play around with the wallet myself (I’m told an invitation is coming shortly), co-founders Jeremy Allaire and Sean Neville published a lengthy blog post about the product and presented a live demo this morning.
The wallet looks like it could be game-changing.v And despite being teased earlier for having a “penchant for overstating things”, I’m sticking by that description. Circle is promising a better, faster, cheaper wallet, and they might just deliver.
Circle might just deliver! And so might Montrex! And MaidSafe! Maybe if we get excited enough, the BTC price will go up and we’ll get rich!
The Circle team had been tight-lipped to date about their product plans, but were adamant that their product’s differentiation would center around the front-end and behind-the-scenes “details”.
Up until today, it wasn’t clear that Circle would be doing anything other than collecting Wall Street and Silicon Valley driftwood. And now we find out that it’s a measly webwallet? Colour me disappointed. I was kinda holding out for Scrypt-based perpetual mining bonds…
Now, we’ve gotten our first glimpse of those details. An intuitive interface and simple account creation process. A wallet that emphasizes the user’s local currency (purchasing power) rather than bitcoin balance and downplays the “trade” that one makes when buying/acquiring or selling/spending bitcoins.
Downplaying the “trade” of bitcoins makes as much sense as downplaying where the dollar bill goes in the vending machine. What, so we can just look at the bag of chips behind the glass without being able to buy or eat the fucking things?
A cold-storage model that leverages military-grade hardware and multi-signature architecture that makes customer funds all but impossible to steal.
Oooo “architecture.” I’ve seen a few Frank Lloyd Wrights in my day, I wonder if it’s like that…
A fully-reserved hosted wallet that is insured by third-party underwriters rather than a captive product. And dynamic risk-scoring for users based on how many forms of identity are linked to the system (debit / credit cards, bank accounts, etc.)
Word salad, my favourite! A bit light on the balsamic, however. And I don’t know about you but I want to tie my identity to my bitcoin wallet like I want to tie a noose around my neck.
Crucially, Circle’s wallet may also be much faster than competitive offerings. Bitcoin purchases can be made in real-time without requiring multi-day or week waiting times, and used immediately for transactions.
Week waiting times for Bitcoin transactions? Dude needs to pony up and add a little miner’s fee love. Also, Circle users are going to have a hell of a time making all these Speedy Gonzalez transactions when they’re stuck looking through the vending machine glass.
In addition, withdrawals to linked credit or debit cards happen immediately.
Credit cards + Bitcoin. Sounds like a recipe for success!
Since the service is geared towards a much broader audience outside of the bitcoin bubble, Circle seems to view this emphasis on speed as a crucial competency. And it’s not just with respect to buys and sales. Allaire promised that the company would bring a human element to bitcoin by making large investments in prompt, convenient customer service out of the gates, an area where others in the industry have struggled due to rapid growth and adoption. Circle, however, seems content to roll out their service gradually and grow within its means.
We can only imagine that Circle’s “human element” is going to weigh them down. Hard. Even attempting customer service for people who don’t understand Bitcoin is going to result in questions like “Why does my arm shake and turn bright red when im eating dirt?” Growth for such a quagmired company is going to be anchored to the bottom of the ocean.
And there should be no shortage of demand for the company’s services. All new invitees will receive $10 of bitcoin upon sign-up, and the service is completely free.
I don’t know about you, but when I’m offered sign-up bonuses, I usually smell a trap. Fitness club memberships, anyone?
No transaction fees on buys and sales.vi No ACH fees on bank account or debit card transfers. No fees for insurance. In fact, the only fee that Circle will likely charge is on interchange fees for credit card purchases, which will simply pass through to the card companies themselves.
Because free shit is always the best shit? Blockchain.info at least makes a few bucks on advertising.
Circle is betting the company on winning the consumer land-grab with this “everything-for-free” model, and Allaire admitted that they were in no rush to monetize the business in the near-term. Instead, he and his team have a firm belief that future revenue opportunities will present themselves once they have earned customer trust (and deposits).
Maybe you don’t have to worry about revenue in the Internet TV business, Jeremy Allaire’s most recent industry experience, but in most other types of business requiring large staffs and high overhead, revenue kinda matters.
From a competitive standpoint, Circle appears to have ceded the payment processing market to BitPay and Coinbase. But it is a calculated move. Allaire told me he believes it will be much easier for Circle to work with these companies as well as other payment processors who add bitcoin capabilities such as Square, Stripe and (perhaps) PayPal. Instead of investing in a two-sided platform, the team can now throw 100% of its resources at solving the (arguably) more important problem of developing killer applications for bitcoin consumers.
The idea that Bitcoin cares about killer consumer applications has been but to rest. Let’s move it along.
I’ve written previously about Circle’s impressive team and board, but its strong strategic relationships with banking partners and underwriters is just as important to the company’s long-term viability. They seem to have figured out how to make it all work despite the ambiguous regulatory environment.
To repeat: Circle hasn’t made anything work and thus have no long-term viability. Even their short-term viability is in question at this point. Circle is a wallet inspector of the worst kind.
If it seems like I’m fawning over the product it’s because I am. With one enormous caveat that I’ll repeat: I’ve seen the live demo, but I haven’t yet gained access to a personal account.
I’m not trying to suggest this is a fully-baked product, though. Circle still needs to figure out a way to deal with sizable challenges associated with bitcoin tax reporting.
Seriously, what sizeable challenges does Circle have regarding bitcoin tax reporting? The IRS already said it’s property. Unless Allaire is taking the IRS to court to challenge the ruling, this is the end of the story.
They have a way to go before they can ever even consider introducing a product like a fully hedged bitcoin, which might hold steady value like a dollar, but transmit across the Bitcoin payment rails.
A fully-hedged, stable-value dollar with low-transactions costs sounds a lot like Dogecoin. We already have that. Next!
Finally, this 1.0 product and its corresponding banking relationships are confined, for now, to the U.S. with Euro-denominated wallets a near-term priority.
Allaire noted during his product demo that we’ve become accustomed to the many free utilities that the internet made possible like email, publishing and telecommunications. He expects Circle’s free core product will be the monetary manifestation of that trend of “digital money” products that use and possibly even transcend bitcoin.
Products that transcend Bitcoin? Bitcoin 2.0 perhaps? Or right, we already put that to rest too.
Neville had previously said that he hoped to tame the vast gap that existed between “expectations and reality” when it comes to Circle. It didn’t seem possible, but after today my expectations have moved even higher.
If Neville wants to tame the ‘tards, maybe TBI won’t be getting a free invite to use Circle after all.
If the product ultimately sucks, I’ll be as critical then as I am complimentary now. In the meantime, if I’m going to levy any criticism it would be on their product demo video, which I thought was underwhelming and didn’t do the product/team justice. (I think Allaire says “really” about 85 times.)
So there, I’m not a total shrill.
TwoBitties isn’t a shrill! A naïve shill, on the other hand… And I never realized how much balls it takes to criticize a product demo video for a product that you inexplicable like without ever having used any of the products developed by any of the members of the entire team. That’s some shirtless Tom Sellick fighting a lazershark shit. Maybe we should give the man a little more respect? Nah, I didn’t think so either.
So who sucks more, Circle or TwoBitIdiot?
The jury’s still out, but it’s a deadly race to the bottom.
___ ___ ___
- Yes, the least terrible of the webwallets decided to launch their own awards for, among other such irrelevance, “Best ATM Design” at this year’s Bitcoin Foundation Conference in Amsterdam. These awards are fitting given the Foundation’s own irrelevance.↩
- Remember the Gox Dox? That was TwoBitTwit’s sharpie work.↩
- Free insurance is about as likely a proposition as Bitcoin losing to Berkshire.↩
- “Fiat-denominated” makes as much sense as cheese-denominated. Maybe not even that much. The point being: Bitcoin matters. Other shit, not so much. Also, this “fiat-denominated” thing is already an option on Blockchain.info and has been for quite some time. And, y’know, bc.info already has over a million wallets.↩
- Wallets, particularly webwallets, don’t change the game anymore than new socks change the NBA.↩
- Please make him stop saying “buys and sales!”↩