Topic: Bitcoin startup Circle unveils no-fee digital currency banking (Read 3327 times)
It's early days. I'm expecting great things from them given their funding. Fee free is a positive start
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It's Money 2.0| It’s gold for nerds | It's Bitcoin
Have fun with a "digital currency bank" controlling your Bitcoins.
This is a bad concept for most bitcoin users, but for someone just learning about bitcoin this concept can be a good one.
Bitcoin is a hot commodity in the tech community, but its complexity is turning off many consumers.
Circle, a Bitcoin currency services startup founded in 2013, emerged from stealth mode on Friday with the launch of a suite of consumer financial services that bank on the belief it can take the cryptocurrency mainstream. The state goal of the startup's free product is addressing "the terrifying complexity and risk" many people associate with the digital currency.
Bitcoin has been the subject of wild rollercoaster value fluctuations in the past couple of years, skyrocketing from an exchange value of $2 a share in 2011 to about $1,000 last fall. Rather than facilitating speculation in the digital currency, however, Circle's Web platform is intended to allow users to create accounts for the everyday exchange of Bitcoin.
"Our goal is to make it easy for consumers to deposit and convert currency into a digital form that they can then use globally and instantly, not offer a trading exchange where they can bet on a speculative asset," Circle CEO Jeremy Allaire explained in a company blog post
As Allaire explained, customers can deposit local currency into an account that converts the funds to Bitcoin and stores it for them without incurring any fees. Funds can then be sent and received globally in their digital form. Upon withdrawal, bitcoins will be changed back into the local currency and transferred to a bank.
To increase consumers' security confidence in its platform, Circle said it has instituted several features and processes to defeat the possibility of fraud or theft. The startup says its network architecture has been pressure tested by a cybersecurity company as well as black and white hat hackers who test the system's defenses.
The company also said it is employing "military-grade" encryption keys and keep funds in offline "cold storage" vaults it says are inaccessible to cybercriminals. "We maintain several geographically distributed secure vault facilities protected by multiple layers of access control, monitoring and armed guards," Allaire wrote.
To further assuage consumer fears, the startup notes that it's a regulated money transmitter in the US and promises that deposits made to its platform are fully insured, meaning that if a security breach results in the theft of funds, its customers are protected from loss.
The company is catering to Bitcoin's growing popularity and acceptance. Cryptocurrency ATMs have begun to pop up, some casinos have said they would accept digital currency payments, and even the US Federal Election Commission has said it would allow political action committees to accept donations in the form of Bitcoin.
Despite Bitcoin's growing acceptance, Circle still faces concerns over the curency's stability and security. The prominent Tokyo-based Bitcoin exchange Mt. Gox filed for bankruptcy earlier this year after hackers stole nearly $500 million in bitcoins through a weakness in the company's system. Bitcoin bank Flexcoin also had to shut down after being hacked.
There is no official government consensus on Bitcoin's security status. One day before the FEC's decision to allow donations in the digital currency, the US Securities and Exchange Commission issued an advisory warning investors to be wary of Bitcoin and other virtual-currency related investments. Noting that the cryptocurrency is uninsured, unregulated, and volatile, the SEC said its chief concern was the risk of fraud.
Let's say a whale comes along and pushes price to $900 on Sunday. Circle, a Bitcoin currency services startup founded in 2013, emerged from stealth mode on Friday with the launch of a suite of consumer financial services that bank on the belief it can take the cryptocurrency mainstream. The state goal of the startup's free product is addressing "the terrifying complexity and risk" many people associate with the digital currency.
Bitcoin has been the subject of wild rollercoaster value fluctuations in the past couple of years, skyrocketing from an exchange value of $2 a share in 2011 to about $1,000 last fall. Rather than facilitating speculation in the digital currency, however, Circle's Web platform is intended to allow users to create accounts for the everyday exchange of Bitcoin.
"Our goal is to make it easy for consumers to deposit and convert currency into a digital form that they can then use globally and instantly, not offer a trading exchange where they can bet on a speculative asset," Circle CEO Jeremy Allaire explained in a company blog post
As Allaire explained, customers can deposit local currency into an account that converts the funds to Bitcoin and stores it for them without incurring any fees. Funds can then be sent and received globally in their digital form. Upon withdrawal, bitcoins will be changed back into the local currency and transferred to a bank.
To increase consumers' security confidence in its platform, Circle said it has instituted several features and processes to defeat the possibility of fraud or theft. The startup says its network architecture has been pressure tested by a cybersecurity company as well as black and white hat hackers who test the system's defenses.
The company also said it is employing "military-grade" encryption keys and keep funds in offline "cold storage" vaults it says are inaccessible to cybercriminals. "We maintain several geographically distributed secure vault facilities protected by multiple layers of access control, monitoring and armed guards," Allaire wrote.
To further assuage consumer fears, the startup notes that it's a regulated money transmitter in the US and promises that deposits made to its platform are fully insured, meaning that if a security breach results in the theft of funds, its customers are protected from loss.
The company is catering to Bitcoin's growing popularity and acceptance. Cryptocurrency ATMs have begun to pop up, some casinos have said they would accept digital currency payments, and even the US Federal Election Commission has said it would allow political action committees to accept donations in the form of Bitcoin.
Despite Bitcoin's growing acceptance, Circle still faces concerns over the curency's stability and security. The prominent Tokyo-based Bitcoin exchange Mt. Gox filed for bankruptcy earlier this year after hackers stole nearly $500 million in bitcoins through a weakness in the company's system. Bitcoin bank Flexcoin also had to shut down after being hacked.
There is no official government consensus on Bitcoin's security status. One day before the FEC's decision to allow donations in the digital currency, the US Securities and Exchange Commission issued an advisory warning investors to be wary of Bitcoin and other virtual-currency related investments. Noting that the cryptocurrency is uninsured, unregulated, and volatile, the SEC said its chief concern was the risk of fraud.
Near as I can tell, Circle is going to operate much like Coinbase. I went ahead and asked for an invite as well. Just as I would not expect anything resembling privacy from Coinbase, it would be even more the case for Circle. I personally don't mind privacy violations as long as I am aware of them because A) I'm not trying to cheat on my taxes, sell stolen BTC, etc, and B) even if I were it's actually advantageous in some ways to be spied on. It is a pretty workable to throw algorithms off of one's scent (which is why it's complete hogwash that the NSA spying has much to to with catching nefarious people...or those with some functional brain cells at least.)
Anywhoo, I'll update this or some other thread to relay my experiences. If any. I'm apparently a big enough fish that Wells Fargo is fucking with me fairly strongly, and Coinbase themselves is asking about the nature of my stash in less than totally friendly terms. How much communications these various entities have, and if any, through what channels is a very interesting string to tug on. Not that I don't have other things I'd rather be doing, but one takes what life throws at them I suppose.
BTW, my aformentioned issues are outlines here: https://bitcointalksearch.org/topic/hu-wells-fargo-acct-coinbase-issue-sscams-577378 for anyone interested. I also became aware of 'operation choke point' through the Lets Talk Bitcoin podcast #110 linked in this thread. It is pretty interesting (and awesome news for alternates to federal reserve notes + mainstream economic activity) and I wonder if it has some relationship to the problems I'm experiencing.
Coinbase charges 1% to buy and the same to sell.
Bitcoin has been the subject of wild rollercoaster value fluctuations in the past couple of years, skyrocketing from an exchange value of $2 a share in 2011 to about $1,000 last fall. Rather than facilitating speculation in the digital currency, however, Circle's Web platform is intended to allow users to create accounts for the everyday exchange of Bitcoin.
"Our goal is to make it easy for consumers to deposit and convert currency into a digital form that they can then use globally and instantly, not offer a trading exchange where they can bet on a speculative asset," Circle CEO Jeremy Allaire explained in a company blog post
As Allaire explained, customers can deposit local currency into an account that converts the funds to Bitcoin and stores it for them without incurring any fees. Funds can then be sent and received globally in their digital form. Upon withdrawal, bitcoins will be changed back into the local currency and transferred to a bank.
Got the email that they received my request and stay tuned, as others did.
I'm curious about what their service will offer, and I'm all for increased visibility of bitcoin and multiple competing services. However, I'm not sure why they bring up volatility of bitcoin price since they cannot affect that. I also want to see how this differs from services like coinbase where I'm already not charged ongoing fees and can use it to buy, sell, and spend bitcoin.
I'm still trying to understand any advantage this service has over Bitstamp or Coinbase.
Does this service allow clients to keep their assets in either BTC or $$ like Bitstamp?
Does the service allow selling BTC and holding the $$ proceeds in their Circle account, like Bitstamp?
Does the service allow selling BTC and depositing the $$ proceeds directly to one's bank account, like Coinbase?
Does the service allow one to sell their BTC for $$ without fees (not sure if Coinbase charges a fee upon selling)?
Does this service allow clients to keep their assets in either BTC or $$ like Bitstamp?
Does the service allow selling BTC and holding the $$ proceeds in their Circle account, like Bitstamp?
Does the service allow selling BTC and depositing the $$ proceeds directly to one's bank account, like Coinbase?
Does the service allow one to sell their BTC for $$ without fees (not sure if Coinbase charges a fee upon selling)?
Circle's advantage is that you can sign up and instantly buy and sell without fees. No waiting like Coinbase, Circle assumes all of the risk.
Also all of your BTC are fully insured against hacking for free.
As for your questions:
-You keep your money in BTC.
-It is not an exchange, it is a wallet service / broker. Your funds are credited to your bank / credit card immediately.
-See above.
-Coinbase charges a fee, Circle does not (for now)
I'm still trying to understand any advantage this service has over Bitstamp or Coinbase.
Does this service allow clients to keep their assets in either BTC or $$ like Bitstamp?
Does the service allow selling BTC and holding the $$ proceeds in their Circle account, like Bitstamp?
Does the service allow selling BTC and depositing the $$ proceeds directly to one's bank account, like Coinbase?
Does the service allow one to sell their BTC for $$ without fees (not sure if Coinbase charges a fee upon selling)?
Does this service allow clients to keep their assets in either BTC or $$ like Bitstamp?
Does the service allow selling BTC and holding the $$ proceeds in their Circle account, like Bitstamp?
Does the service allow selling BTC and depositing the $$ proceeds directly to one's bank account, like Coinbase?
Does the service allow one to sell their BTC for $$ without fees (not sure if Coinbase charges a fee upon selling)?
Still no invitation. I think their business model at some point will incorporate merchant services as well. Just speculation obviously but it would make sense.
Just sent a request. Just to see what it's all about.
There really isn't much information.
There really isn't much information.
Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
If you're not paying, you might not be the customer, but the product.
It seemed pretty obvious to me that they are planning to make money in the 'normal' way. That is by data mining, analytics, and advertising. This has proven a remarkably successful business model. So ya, the 'product' is the intel coming off the userbase which, for all intents and purpose, does make the user qualify as 'the product'. Akin to 'eyeballs' which is not a metric which I believe to be secret. We'll have to use some imagination (but not a lot these days) to identify Circle's actual customers.
That said, I'm having a lot of trouble with mainstream banks + Coinbase of late. I'll totally welcome another means capitalizing on my speculation. I'll look forward to a more concrete and less fluffy description of what, exactly, these guys can offer ME.
I think you're most likely wrong.
I would imagine they are zero fees in the same way as Coinbase. Sure they have no fees but they do have a hefty spread.
One would be at a disadvantage to one's competition if one neglects to monetize an information stream as rich as that coming off something like Bitcoin. I've never had any doubt that Coinbase shares whatever info they have about me at least as liberally as needed to stay on the right side of LE and our internal corporate/government intelligence bodies. Just like any other internet based player these days. There is no reason to believe that they wouldn't take advantage of other revenue streams other than the possibility that it would alienate their users if/when the scope is discovered. But a brief skim of this board indicates that very few people give a shit about that kind of stuff. Even in the ratified Bitcoin ecosystem. This is particularly pronounced among the more recent participants in this forum.
Time will tell if I'm right on this. My projections are skewed somewhat by having spent some time working in related environments. At this point it is pretty difficult to understand what Circle are even expecting to offer in terms of services. Their site is characteristically opaque about this, and most observers seem only to be able to guesstimate about it. Probably it is still a bit unclear even to them until they work through some agreements about how they'll be allowed to operate.
- edit: spelling.
Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
If you're not paying, you might not be the customer, but the product.
It seemed pretty obvious to me that they are planning to make money in the 'normal' way. That is by data mining, analytics, and advertising. This has proven a remarkably successful business model. So ya, the 'product' is the intel coming off the userbase which, for all intents and purpose, does make the user qualify as 'the product'. Akin to 'eyeballs' which is not a metric which I believe to be secret. We'll have to use some imagination (but not a lot these days) to identify Circle's actual customers.
That said, I'm having a lot of trouble with mainstream banks + Coinbase of late. I'll totally welcome another means capitalizing on my speculation. I'll look forward to a more concrete and less fluffy description of what, exactly, these guys can offer ME.
I think you're most likely wrong.
I would imagine they are zero fees in the same way as Coinbase. Sure they have no fees but they do have a hefty spread.
Have fun with a "digital currency bank" controlling your Bitcoins.
I know, I get it, but at the same time, this might be the type of "bridging the gap" sort of service that we need to get average joes involved with bitcoin. Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
If you're not paying, you might not be the customer, but the product.
It seemed pretty obvious to me that they are planning to make money in the 'normal' way. That is by data mining, analytics, and advertising. This has proven a remarkably successful business model. So ya, the 'product' is the intel coming off the userbase which, for all intents and purpose, does make the user qualify as 'the product'. Akin to 'eyeballs' which is not a metric which I believe to be secret. We'll have to use some imagination (but not a lot these days) to identify Circle's actual customers.
That said, I'm having a lot of trouble with mainstream banks + Coinbase of late. I'll totally welcome another means capitalizing on my speculation. I'll look forward to a more concrete and less fluffy description of what, exactly, these guys can offer ME.
Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
If you're not paying, you might not be the customer, but the product.
Much of the time yes, but Circle (and other providers of bitcoin liquidity) will often be able to make money from large off-exchange bitcoin-fiat transactions.
Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
If you're not paying, you might not be the customer, but the product.
Sorry but if I can get coins from them with no fees Im signing up in a heartbeat.
Bitcoin is not complex... It really isnt.
Anybody received an invite yet? Been 2 weeks with no word for me.
The latest Let's Talk Bitcoin podcast goes into quite a bit of depth about Circle. Overall it's quite balanced, but they do refer to it as a "bridge service". Something that may be useful in the interim, but also something that could be surpassed later as Bitcoin matures. Andreas says he'll likely use the service, but purely as an exchange to buy bitcoin, not to hold it like a bank, due to the inherent risk of them controlling the private keys.
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