Taking the "Bit" Out of Bitcoin
There’s been a trend happening in the Bitcoin industry, and it’s becoming more prevalent as the industry grows: the offering of fiat conversion or payment processing through certain cryptocurrency exchanges and wallet providers. Startups in the digital currency realm start by offering crypto-solutions with their new applications, then later offer fiat transactions as well.
Also read: The Programmable Economy, The Internet of Things, and Bitcoin Are Transforming the Future
“I think what hardcore believers in bitcoin are ultimately disappointed by is the realization that our primary goal as a company is not, and has never been to advance the cause of Bitcoin.”
— Byrne Reese, Head of Product for Uphold
It seems these companies want to get a hold of not just the cryptocurrency markets, but also all of the digital media of exchange in the world as well. BitReserve seems to be chasing that goal, rebranding its image and business to the new name “Uphold.” On October 14, the startup enabled its registered users to operate with Euros and Dollars. In 33 European countries, the service will allow accounts to be funded with fiat and next month they will begin integration with the U.S. Dollar and Chinese Yuan.
BitReserve launched in June of 2014 from the mind of CNET-founder Halsey Minor. The service allows low-cost transactions within its cloud-based financial network. Users deposit Bitcoin into reserve-currencies and commodities creating “cloud money.”
The news caused quite a stir in the community and media; some were not so happy about BitReserve supposedly waving adieu to their favorite cryptocurrency. In an article written by Techcrunch describing the company to be “saying goodbye to Bitcoin” in some people’s opinion, Byrne Reese, Head of Product for Uphold commented on the article itself saying,
“My name is Byrne Reese, and I am Head of Product for Uphold. I am not sure I agree with the assertion that we are “saying goodbye to bitcoin,” especially given that we have not lost or sacrificed any of our bitcoin capabilities with this latest advancement of our platform. I find the underlying logic behind this narrative, in fact, to be flawed. The idea that when a company like Uphold, Circle, or ChangeTip provides their customers with an interface to the banking world, that we are somehow turning our backs on bitcoin is honestly kind of absurd. Nothing could be further from the truth. When you think about it, we are actually opening bitcoin up to new markets, by making bitcoin easier to obtain, send and exchange with others.
“I think what hardcore believers in bitcoin are ultimately disappointed by is the realization that our primary goal as a company is not, and has never been to advance the cause of Bitcoin. We are not driven by technical ideologies. Our goal has always been rooted in the morality of making money, in whatever form it may take, more egalitarian. We then choose the best technologies, currencies, and services that we feel will help us to achieve that objective for our customers and us.”
The business headquarters is located in South Carolina but also has offices in California, Braga, Shanghai, and London. Recently, a former Nike executive, Anthony Watson, joined the team as the CEO of BitReserve. Being a technologically savvy person and having a financial background with Citi, Wells Fargo and Barclays, the Bitcoin startup was a natural choice for Watson. Founder and chairperson Halsey Minor wants BitReserve — now known as Uphold — to become a known application for the “Internet of money.” Minor said to Forbes,
“When I launched Bitreserve the idea was that, using the cloud and cloud money, you could eliminate all expenses related to anything monetary — the movement and conversion of money in all forms: foreign exchange, bounced checks, remittance fees,— If you’re making money by moving money — credit cards, remittances, bounced check fees — all of those fees, we will take out in the next five years.”
Circle Financial, another Bitcoin startup, also put the digital currency on the backburner recently, introducing its newly branded application, “Circle Pay.” Circle Pay allows people to easily convert to USD within its desktop and mobile platforms. The company has also received its confirmed BitLicense, being the first Bitcoin service to do so. Most likely, the startup has been working with the regulatory process so it can begin providing the ability to offer dollars. Circle Financial is also researching objectives to include Euros in its platform, and the team is actively looking for an office in the U.K. When re-opening the Circle application, users are asked if they would like to convert to USD and can do so at any time within the software. Founders Jeremy Allaire and Sean Neville state in their blog,
“You can enjoy the benefits of Bitcoin without ever holding or buying bitcoin yourself, and without being exposed to bitcoin price volatility. Even if you prefer to hold US dollars in your Circle account, you gain security, speed, and open interoperability with bitcoin wallets and services around the globe.”
Services offering USD conversion and fiat-token backing are not new elements to the cryptocurrency world. Tether wants to provide a backed 1-to-1 offering on its platform, as well converting digital currency with USD, Euro, and the Yen as an anchor. Tether gives users the ability to transact with a protocol built on top of the Bitcoin blockchain to add more stability to the crypto-environment. Exchanges and services such as Cryptsy and Shapeshift.io have integrated Tether into their asset programs and applications. The program’s co-founder and CTO Craig Sellars leads development for Tether and also works with other crypto-solutions such as Factom, and Synereo.
The implementation of fiat currencies added to Bitcoin services seems to be an acquisition for a bunch of companies. Most likely, they want the power of all digital currencies on board their platforms so they can reap the benefits. Some that feel being a provider that can add a variety of choices gives customers a more superior advantage to trade with financially. These businesses not only want to show people the exciting economic strength of cryptocurrency, but also want to enable the same vehicle with fiat conversion and transactions. Time will tell if these types of applications will continue to remain beneficial, as some innovators are trying to exit fiat currency altogether.
What do you think about services taking the “Bit” out of Bitcoin? Let us know in the comments below!
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