8 ms·

Circle Emerges From Stealth To Bring Bitcoin To The Masses

66 points by gwintrob 12y ago

nickstinemates 12y ago
> “At Circle we are very focused on creaing a product that allows us to move from early adopter to early majority,” Always surprised when typos get through, especially for founder/CEO quotes.
- andruby 12y ago
  What does that sentence even mean? It's such an empty statement.
  - paulbaumgart 12y ago
    http://en.wikipedia.org/wiki/Diffusion_of_innovations http://en.wikipedia.org/wiki/Diffusion_of_innovations
jerguismi 12y ago
Circle has been in "stealth mode" for like a year, and still hasn't published anything else than press releases. It is annoying how much press you can get without actually delivering anything concrete.
JoshTriplett 12y ago
Reading the entire article, their business model is not at all obvious. They claim to not charge fees; they can't make money on their customers' money; where do they see a business opportunity here? Conversion fees would be the obvious, if the lack of fees just referred to transmit/receive, but that doesn't seem true based on the article.
- jerguismi 12y ago
  And even then, what is the differentiation from other wallet services? Usually bitcoin wallets are free, and the money is done on trading (trading btc to fiat and back and charging %).
- nwh 12y ago
  Keep in mind that if they're paying the network fees for the user they also lose ~0.0001BTC or more per transaction it's users make. They've got to make that up from somewhere.
  - icebraining 12y ago
    The fee was reduced to 0.00001 BTC (1/10th) recently: https://github.com/bitcoin/bitcoin/pull/3305 https://github.com/bitcoin/bitcoin/pull/3305 EDIT: It seems I misunderstood the change. M4v3R is right.
    - M4v3R 12y ago
      That change only reduces RELAY fee, which means that nodes will now by default relay transactions with such fees to other nodes. The default minimal miner fee, which is what miners require to include transactions in blocks is unchanged.
      - icebraining 12y ago
        Yeah, it seems I misunderstood the change.
- pbreit 12y ago
  If they get a lot of usage they will have no problem whatsoever making money.
- beaner 12y ago
  I just watched their demo video at the bottom of their blog post [1]. When making a purchase, they already show line items for Circle Fee and Bank Fee, they're just set to $0. My guess is that this is a promotion for growth, and at some point when they need to kick in a business model, these lines will stop showing $0. Edit: Also, even if they are showing $0, they could be doing something sneaky like showing the price of bitcoin as higher than they are actually buying it for. If they are doing this, then you are actually paying a fee, it's just hidden. [1] https://www.circle.com/2014/05/16/circle-update https://www.circle.com/2014/05/16/circle-update
  - jc123 12y ago
    They should avoid such gimmicks and I hope they remove them. It will be exciting if they can really focus on acquiring users and worry about revenues later and become consumer tech successes like Facebook, YouTube...
- battani 12y ago
  The are operating as "custodians of customers' digital currency assets" (their words). That means they are a bitcoin/fiat bank. Commercial banks make money on 1) currency conversion and 2) loans. Circle could offer these services in the future. Not tremendously excited about the announcement today. The mainstream consumer still has no compelling reason to purchase or use bitcoin over fiat.
- 0xycom 12y ago
  IF bitcoin takes of and IF they get a lot of usage, they can make money like banks (e.g. using the funds stored to do high volume trading) or by selling the buying patterns.
- deleted 12y ago
  [deleted]
gwintrob 12y ago
http://circle.com http://circle.com - That must have been an expensive domain!
- hkmurakami 12y ago
  $26MM in venture funding will get you far. Iirc, color.com was purchased for $200,000. This was probably in that ballpark.
adamnemecek 12y ago
Is the name a jab at Square?
- davidw 12y ago
  There seem to be a lot of these things. Circle, Square, Stripe. I'm expecting to see a Triangle enter the fray soon.
  - adamnemecek 12y ago
    Dibs on icosidodecahedron.
  - jyu 12y ago
    Pyramid is a more likely candidate.
bprater 12y ago
Jeremy Allair and his brother invented the Coldfusion programming language, later bought by Adobe. Bright dudes!
aspidistra 12y ago
Every time I read an headline about "bringing bitcoin to the masses" I'm reminded of the saying that you can lead a horse to water, but you can't make it drink. > "We don’t think consumers should be charged for using their own money." Where I live (UK), I can't think of anything bitcoin services like Circle offer that is definitively better than my existing bank setup. I'm not charged for using my own money. I don't pay a monthly fee for my bank account. I don't pay anything to send money to other people in the UK, which covers 98% of all the people I send money to. If I do send money to people in the UK, it's usually virtually instant, because of Faster Payments. I can withdraw money from nearly all ATMs in the UK free of charge -- the only exception are rare independent ones in places like nightclubs and out-of-the-way convenience stores, and I honestly can't ever remember using one. I can check my bank balance on my phone -- by app or by SMS. In lots of outlets I can pay for small value transactions, anything up to £20, just by waving my bank card. I understand the banking system in the USA is ... different. (Some would say behind the times.) But in the UK at least, promoting a bitcoin-based service based around the concept of better retail banking is a hard sell.
- bambax 12y ago
  I'm French and I have the same experience as you: bank services are virtually free for individuals (although not for companies) and I don't see what Bitcoin conversion would add to the value proposition; it would add risk and uncertainty, but nothing in the way of convenience or cost.
- georgemcbay 12y ago
  "(Some would say behind the times.)" Joke's on you, we are ahead of the times! It used to be pretty much just like you described here in the US and then they realized they could fee the shit out of us, "optimize" our deposits and withdrawal timings to maximize the likelihood of overdraft (which they would also then apply a series of meta-fees on), drop our earned interest to essentially 0% and most people would be too lazy to do anything about it.
  - pjc50 12y ago
    The UK has a bank regulator agency which isn't totally ineffective. Their main success was ending the sale of "payment protection insurance", which was overpriced and worthless in almost all cases. There's still a level of BS fees, worse for business bank accounts, but the general consumer experience is fairly good at the moment.
thinkcomp 12y ago
Circle's demo video at https://www.circle.com/2014/05/16/circle-update/ https://www.circle.com/2014/05/16/circle-update/ is perhaps the only I've seen best watched with a calculator. $10.00 + $0.01 that comes out of nowhere + $200.00 - $23.65 = Uhhh... $187.27? Plus or minus 91 cents? What? Yes the Bitcoin exchange rate fluctuates a lot, but their ledger does not seem to reflect that. That's problem number 1. Problem number 2 is Bitcoin itself. Problem number 3 is that the comments are about "insurance" are completely disingenuous. What insurance? Circle is not FDIC or NCUA insured and the company has an obligation to make that clear. Allaire and his investors should know better.
- joosters 12y ago
  It's even worse! His purchase was for $23.44 at Overstock, yet when he viewed it at Circle, the price was now $23.55 - shown as 0.05264624 BTC on both sites. As soon as he clicked the USD/BTC button, the price stays at $23.55 but the BTC is now 0.05265041. After he confirms the transaction, the price has now jumped to $23.65. So the numbers really don't add up. And as you point out, there's a big balance difference. Start with $210.01, spend $23.65 and your balance should be $186.36. Yet he has $187.27. What?
- oska 12y ago
  While Jeremy is talking in terms of dollars in the presentation, the software is actually keeping balances in terms of bitcoins. You can see on the screen below the two green add/withdraw funds buttons a bitcoin price ticker, e.g. 1 BTC = $446.87 at the start of the video. As he is talking and doing transactions this exchange rate is being updated, maybe as often as every 30 seconds. And you can see even when he's not doing anything his dollar balance is fluctuating to reflect the changes (it goes from $10.00 to $10.05 to $10.01 at the start of the video without him doing anything). But the number of bitcoins remains constant. So that's a fault of the video I think, that he doesn't explain this clearly and talks too much in terms of dollars rather than bitcoins. They'll need to present this more clearly for their actual user video.
  - joosters 12y ago
    So why does the BTC amount for the socks that he is buying change, then? 0.05264624 suddenly becomes 0.05265041 despite 'zero fees'.
ZenPro 12y ago
Essentially, for the benefits of anonymous transactions I need to - [1]Change Fiat Money into Fiat CryptoCurrency >> incurring a fee and absorbing risk [2]Use a Third Party Application to Purchase Something >> incurring a fee [3]Change Fiat CryptoCurrency back to Fiat Money >> incurring a fee and absorbing risk > > [4]Hope that Steps 1 and 2 become so popular I no longer need 3. [5]Wait on employers and clients paying me in volatile crpytocurrencies
sidko 12y ago
> "I'm not charged for using my own money" You are, you just don't know it because it isn't apparent. In fact, they want to make it appear that you're making money for spending money! Ultimately, it doesn't matter who bears the additional cost of using credit/debit cards, it results in higher prices for everyone and since credit card agencies prohibit differential pricing, it punishes people who pay cash. Bitcoin still has a long long way to go and won't replace the existing system anytime soon, but definitely watch out for retailers who already provide a steep discount for using Bitcoin. That will be a good first step.
- mcintyre1994 12y ago
  Can you expand on this a bit? I put money in the bank, no fees are ever charged. I spend money on the card for that account, no fees. I have a credit card, pay it off in full every month, no fees. I have direct debits to pay my bills, no fees. I don't see anywhere I'm charged anything by my bank. I think I'd have to pay 50p if I wanted paper bills actually. If your argument is everything is priced higher because I'm not using bitcoin, the banks aren't getting that money so I'm not sure I understand - will everyone have to lower prices when everyone accepts bitcoin? I mean that sounds great but I'm not sure why a capitalist market would indefinitely reward you for using another currency - when there's nothing to gain marketing wise we'll see I guess.
al2o3cr 12y ago
Hmmm, a service that charges nothing for things that almost certainly cost money (BTC-USD conversion, "insurance"), marketed at "non-technical" users, lots of promises about "nobody will steal your BTC, not like all the other places"... Remember the old line that if you don't know who the sucker is at the poker table, it's YOU?
jzwinck 12y ago
In a business where information security is so important, it's discomforting to see mishandled HTML escaping on their own News page: > Bloomberg TV – Circle CEO Jeremy Allaire Interview on Bloomberg’s “In the Loop”

66 points by gwintrob 12y ago

> “At Circle we are very focused on creaing a product that allows us to move from early adopter to early majority,” Always surprised when typos get through, especially for founder/CEO quotes.

andruby 12y ago
What does that sentence even mean? It's such an empty statement.
- paulbaumgart 12y ago
  http://en.wikipedia.org/wiki/Diffusion_of_innovations http://en.wikipedia.org/wiki/Diffusion_of_innovations

jerguismi 12y ago

Circle has been in "stealth mode" for like a year, and still hasn't published anything else than press releases. It is annoying how much press you can get without actually delivering anything concrete.

JoshTriplett 12y ago

Reading the entire article, their business model is not at all obvious. They claim to not charge fees; they can't make money on their customers' money; where do they see a business opportunity here? Conversion fees would be the obvious, if the lack of fees just referred to transmit/receive, but that doesn't seem true based on the article.

jerguismi 12y ago
And even then, what is the differentiation from other wallet services? Usually bitcoin wallets are free, and the money is done on trading (trading btc to fiat and back and charging %).
nwh 12y ago
Keep in mind that if they're paying the network fees for the user they also lose ~0.0001BTC or more per transaction it's users make. They've got to make that up from somewhere.
- icebraining 12y ago
  The fee was reduced to 0.00001 BTC (1/10th) recently: https://github.com/bitcoin/bitcoin/pull/3305 https://github.com/bitcoin/bitcoin/pull/3305 EDIT: It seems I misunderstood the change. M4v3R is right.
  - M4v3R 12y ago
    That change only reduces RELAY fee, which means that nodes will now by default relay transactions with such fees to other nodes. The default minimal miner fee, which is what miners require to include transactions in blocks is unchanged.
    - icebraining 12y ago
      Yeah, it seems I misunderstood the change.
pbreit 12y ago
If they get a lot of usage they will have no problem whatsoever making money.
beaner 12y ago
I just watched their demo video at the bottom of their blog post [1]. When making a purchase, they already show line items for Circle Fee and Bank Fee, they're just set to $0. My guess is that this is a promotion for growth, and at some point when they need to kick in a business model, these lines will stop showing $0. Edit: Also, even if they are showing $0, they could be doing something sneaky like showing the price of bitcoin as higher than they are actually buying it for. If they are doing this, then you are actually paying a fee, it's just hidden. [1] https://www.circle.com/2014/05/16/circle-update https://www.circle.com/2014/05/16/circle-update
- jc123 12y ago
  They should avoid such gimmicks and I hope they remove them. It will be exciting if they can really focus on acquiring users and worry about revenues later and become consumer tech successes like Facebook, YouTube...
battani 12y ago
The are operating as "custodians of customers' digital currency assets" (their words). That means they are a bitcoin/fiat bank. Commercial banks make money on 1) currency conversion and 2) loans. Circle could offer these services in the future. Not tremendously excited about the announcement today. The mainstream consumer still has no compelling reason to purchase or use bitcoin over fiat.
0xycom 12y ago
IF bitcoin takes of and IF they get a lot of usage, they can make money like banks (e.g. using the funds stored to do high volume trading) or by selling the buying patterns.
deleted 12y ago
[deleted]

gwintrob 12y ago

http://circle.com http://circle.com - That must have been an expensive domain!

hkmurakami 12y ago
$26MM in venture funding will get you far. Iirc, color.com was purchased for $200,000. This was probably in that ballpark.

adamnemecek 12y ago

Is the name a jab at Square?

davidw 12y ago
There seem to be a lot of these things. Circle, Square, Stripe. I'm expecting to see a Triangle enter the fray soon.
- adamnemecek 12y ago
  Dibs on icosidodecahedron.
- jyu 12y ago
  Pyramid is a more likely candidate.

bprater 12y ago

Jeremy Allair and his brother invented the Coldfusion programming language, later bought by Adobe. Bright dudes!

aspidistra 12y ago

Every time I read an headline about "bringing bitcoin to the masses" I'm reminded of the saying that you can lead a horse to water, but you can't make it drink. > "We don’t think consumers should be charged for using their own money." Where I live (UK), I can't think of anything bitcoin services like Circle offer that is definitively better than my existing bank setup. I'm not charged for using my own money. I don't pay a monthly fee for my bank account. I don't pay anything to send money to other people in the UK, which covers 98% of all the people I send money to. If I do send money to people in the UK, it's usually virtually instant, because of Faster Payments. I can withdraw money from nearly all ATMs in the UK free of charge -- the only exception are rare independent ones in places like nightclubs and out-of-the-way convenience stores, and I honestly can't ever remember using one. I can check my bank balance on my phone -- by app or by SMS. In lots of outlets I can pay for small value transactions, anything up to £20, just by waving my bank card. I understand the banking system in the USA is ... different. (Some would say behind the times.) But in the UK at least, promoting a bitcoin-based service based around the concept of better retail banking is a hard sell.

bambax 12y ago
I'm French and I have the same experience as you: bank services are virtually free for individuals (although not for companies) and I don't see what Bitcoin conversion would add to the value proposition; it would add risk and uncertainty, but nothing in the way of convenience or cost.
georgemcbay 12y ago
"(Some would say behind the times.)" Joke's on you, we are ahead of the times! It used to be pretty much just like you described here in the US and then they realized they could fee the shit out of us, "optimize" our deposits and withdrawal timings to maximize the likelihood of overdraft (which they would also then apply a series of meta-fees on), drop our earned interest to essentially 0% and most people would be too lazy to do anything about it.
- pjc50 12y ago
  The UK has a bank regulator agency which isn't totally ineffective. Their main success was ending the sale of "payment protection insurance", which was overpriced and worthless in almost all cases. There's still a level of BS fees, worse for business bank accounts, but the general consumer experience is fairly good at the moment.

thinkcomp 12y ago

Circle's demo video at https://www.circle.com/2014/05/16/circle-update/ https://www.circle.com/2014/05/16/circle-update/ is perhaps the only I've seen best watched with a calculator. $10.00 + $0.01 that comes out of nowhere + $200.00 - $23.65 = Uhhh... $187.27? Plus or minus 91 cents? What? Yes the Bitcoin exchange rate fluctuates a lot, but their ledger does not seem to reflect that. That's problem number 1. Problem number 2 is Bitcoin itself. Problem number 3 is that the comments are about "insurance" are completely disingenuous. What insurance? Circle is not FDIC or NCUA insured and the company has an obligation to make that clear. Allaire and his investors should know better.

joosters 12y ago
It's even worse! His purchase was for $23.44 at Overstock, yet when he viewed it at Circle, the price was now $23.55 - shown as 0.05264624 BTC on both sites. As soon as he clicked the USD/BTC button, the price stays at $23.55 but the BTC is now 0.05265041. After he confirms the transaction, the price has now jumped to $23.65. So the numbers really don't add up. And as you point out, there's a big balance difference. Start with $210.01, spend $23.65 and your balance should be $186.36. Yet he has $187.27. What?
oska 12y ago
While Jeremy is talking in terms of dollars in the presentation, the software is actually keeping balances in terms of bitcoins. You can see on the screen below the two green add/withdraw funds buttons a bitcoin price ticker, e.g. 1 BTC = $446.87 at the start of the video. As he is talking and doing transactions this exchange rate is being updated, maybe as often as every 30 seconds. And you can see even when he's not doing anything his dollar balance is fluctuating to reflect the changes (it goes from $10.00 to $10.05 to $10.01 at the start of the video without him doing anything). But the number of bitcoins remains constant. So that's a fault of the video I think, that he doesn't explain this clearly and talks too much in terms of dollars rather than bitcoins. They'll need to present this more clearly for their actual user video.
- joosters 12y ago
  So why does the BTC amount for the socks that he is buying change, then? 0.05264624 suddenly becomes 0.05265041 despite 'zero fees'.

ZenPro 12y ago

Essentially, for the benefits of anonymous transactions I need to - [1]Change Fiat Money into Fiat CryptoCurrency >> incurring a fee and absorbing risk [2]Use a Third Party Application to Purchase Something >> incurring a fee [3]Change Fiat CryptoCurrency back to Fiat Money >> incurring a fee and absorbing risk > > [4]Hope that Steps 1 and 2 become so popular I no longer need 3. [5]Wait on employers and clients paying me in volatile crpytocurrencies

sidko 12y ago

> "I'm not charged for using my own money" You are, you just don't know it because it isn't apparent. In fact, they want to make it appear that you're making money for spending money! Ultimately, it doesn't matter who bears the additional cost of using credit/debit cards, it results in higher prices for everyone and since credit card agencies prohibit differential pricing, it punishes people who pay cash. Bitcoin still has a long long way to go and won't replace the existing system anytime soon, but definitely watch out for retailers who already provide a steep discount for using Bitcoin. That will be a good first step.

mcintyre1994 12y ago
Can you expand on this a bit? I put money in the bank, no fees are ever charged. I spend money on the card for that account, no fees. I have a credit card, pay it off in full every month, no fees. I have direct debits to pay my bills, no fees. I don't see anywhere I'm charged anything by my bank. I think I'd have to pay 50p if I wanted paper bills actually. If your argument is everything is priced higher because I'm not using bitcoin, the banks aren't getting that money so I'm not sure I understand - will everyone have to lower prices when everyone accepts bitcoin? I mean that sounds great but I'm not sure why a capitalist market would indefinitely reward you for using another currency - when there's nothing to gain marketing wise we'll see I guess.

al2o3cr 12y ago

Hmmm, a service that charges nothing for things that almost certainly cost money (BTC-USD conversion, "insurance"), marketed at "non-technical" users, lots of promises about "nobody will steal your BTC, not like all the other places"... Remember the old line that if you don't know who the sucker is at the poker table, it's YOU?

jzwinck 12y ago

In a business where information security is so important, it's discomforting to see mishandled HTML escaping on their own News page: > Bloomberg TV – Circle CEO Jeremy Allaire Interview on Bloomberg’s “In the Loop”