Bitcoin itself was an innovation in the payments ecosystem — even if some doubt whether it is, in fact, a good one. But despite the negative rhetoric, there’s still plenty of companies trying to show the value behind bitcoin and demonstrate how the digital currency can help drive innovations in moving money.
Take Bitreserve, for example — the member-based company is using its cloud-based solutions to move money through the same technology seen in the blockchain, but doing so in a regulated and transparent manner. Bitreserve holds money in a stable manner so it can be sent and received instantaneously and free anywhere in the world. Its elevator pitch is that the consumer can “move between currencies whenever and as many times as you like with no delays.” This includes, of course, moving bitcoins.
“A lot of what Bitreserve is providing in terms of the technology — in terms of the cloud solutions — is really gearing towards providing these emerging communities access to online financial services,” Bitreserve VP of Global Payments Eric Benz said in a recent presentation where he talked about the benefits of the company in innovating the payments space. Bitreserve wants to take the burden out of sending and receiving money, making it as easy as sending an email.
So how does he believe bitcoins and the blockchain allow companies to innovate? By tapping into cloud-based technologies and the blockchain to find a faster and cheaper way to store, send and receive money. Bitcoins and the blockchain technology that drive the digital currency give companies a way to test out new ways to move money, he said, without the same regulations seen in the traditional banking business.
“The biggest legacy mindset we have as a consumer or business is finance,” he said. “So being able to change that — being able to apply cloud-based technologies, as well as blockchain technologies now — you really do have a winning solution that doesn’t happen to be sitting on Visa’s, MasterCard’s, or American Express’s rails. And that’s really important because that’s when you really have a chance to innovate.”
For the bitcoin community, this could mean holding those bitcoin (in a secure account), but that can easily be converted into dollars, or Euro or Yen, or whatever currency desired. “Enjoy the benefits of bitcoin with the familiarity and stability of the money you know and trust,” the company says, which means consumers can hold bitcoin in the same manner they would any other currency. That bitcoin can then be sent as bitcoin or it can be converted into bitmoney. Unlike the uncertainty of some bitcoin companies that have been accused of losing their consumers’ bitcoins, Bitreserve prides itself on the full reserve money-backed (or bitcoin-backed) policy that the currency is always safe.
On its website, anyone can see at anytime how much money is being held by Bitreserve. So how are its members holding their money? As shown by the figures on changemoney.org on March 26, there was 2,892.44 in bitcoin and $361,192.16 in USD. Total money in Bitreserve wallets currently totals roughly $1.3 million. The interactive map on the site also allows users to see where in the world the account holders are coming from.
Halsey Minor, the CEO of Bitreserve, was one of the panelists at Innovation Project 2015 last week who spoke about the financial ecosystem and how its being disrupted — for the better. In an interview following the panel, Minor spoke about how Bitreserve has had to step in to help consumers and companies in a way that U.S. banks haven’t been able to do, either because the infrastructure is too old or because it is subject to too many regulatory pressures from the government. Because of their old-school cost structure, banks have a cost of doing business that often prevents them from embracing new technologies. That’s where Bitreserve comes in.
“All we’re really doing is taking the banking system and collapsing it into one player,” he said, later explaining that Bitreserve holds money in a transparent manner so anyone can see how the company is managing the money it holds. Bitreserve’s cloud-based system allows the company to move money in a cost-effective manner, and like the technology of the blockchain, it moves that money quickly and on-demand.
“Money becomes so much cheaper because we’re just moving it from accounts. We’re not moving from physical bank to bank to physical bank,” Minor explained. “The only reason it’s a little confusing is because bitcoin kind of confuses people…Bitcoin is just digital money. …We just move it instantaneously. We’re Facebook for cash.”
While bitcoin gets tossed aside often as being the outside the law, or an unregulated currency plagued with illegal activity attached to it, Bitreserve is trying to give the digital currency a better name by showing how it can be managed in a fair and regulated manner. Bitreserve’s methods are aligned with regulators, Minor said, and because its practices are fully transparent, there isn’t room for the money to be used to act outside the law.
“Their accounts are essentially bitcoin addresses. So we used the concept of the blockchain, not the blockchain itself, to create anonymity. The blockchain allows money to move and be recorded but anonymously, because it’s all bitcoin addresses. So even our dollar and euro cards have bitcoin addresses associated with them.”
What Bitreserve is doing, perhaps, is helping lift bitcoin’s reputation by leveraging the technology behind it to better move money around the globe. And that might just be the real innovation that those in the payments and commerce space keep talking about: how to move money faster, cheaper and in a secure manner. That’s where the conversations appear to be headed and bitcoin and the blockchain might just help lead the innovation.
Bitcoin Tracker | Week 67
As Bitreserve works to build a global money market, what else is going on in the world of bitcoin? It’s getting more help from Wall Street with support from Nasdaq, it’s helping fund wells in Kenya and it’s adding its presence to a global payments network. But then, of course, there’s always the negative bitcoin press, like the court case it’s tangled in or the fact that some people aren’t able to connect the bitcoin symbol to being a currency. There’s always plenty to talk about with bitcoin.
Bitcoin is trading down from last week’s price of $260.94 and is at $248.11 according to the PYMNTS.com Bitcoin Price index.
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On the Plus Side …
Bitcoin is getting more praise from the mainstream. Leaders from The Street started coming over to the bitcoin side (like former Wall Street Bankers), and the momentum appears to have trickled down to the chain. It was announced this week (March 25) that Nasdaq’s X-stream trading technology system has found a new use: Powering a forthcoming New York-based digital currency marketplace aimed at Wall Street traders.
- March 23: A bitcoin-funded well in Kenya opened with help from the BitGive Foundation which is helping bring clean water options to the region.
- March 24: Bitcoin seems to be doing well on the job market as there are dozens of new postings for bitcoin-related positions across the country.
- March 24: Taxes may get easier for merchants who use bitcoin. BitPay has teamed with Libra Tax to assist merchants with this service.
- March 24: Regulation appears to be on the horizon for bitcoin as the community continues to grow and more bitcoin organization back regulation.
- March 25: A bitcoin shop called Blockchain Technology Consumer Solutions is hoping to bring new life to the bitcoin mining business.
- March 25: Bitnet is teaming up with Cardinal Commerce to join the remote payments industry to integrate bitcoin acceptance for merchants.
- March 25: BitPay announced it was working with Optimal Payments’ Neteller service to add bitcoin as an option on its global payments network.
- March 26: Bitcoin may pick up in China as a Hong Kong official said there may not be need for the government to regulate the digital currency.
- March 26: Another win for bitcoin and the digital wallet mark. E-Wallet provider Neteller said it will start accepting bitcoins.
- March 26: Indian bitcoin app Zebpay may make it possible to use bitcoin for everything like paying for restaurant bills or selling real estate.
On the Dark Side …
Bitcoin can’t seem to keep its name out of court. On March 23, the Bitcoin Savings & Trust operator Trendon Shavers plead not guilty to charges stemming from security issues and wire fraud for issues relating to the bitcoin-ran business. He faced 40 years in prison if convicted for allegedly paying investors with proceeds from other investors.
- March 23: Will bitcoin’s value be hurt by the Fed’s deflationary actions? The strength of the U.S. dollar could overshadow bitcoin, one source says.
- March 24: A Swedish Bitcoin exchange will have its day in court as the tax authorities are asking for the organization to disclose its customers’ transaction history.
- March 24: A New Jersey School District network was breached and being “held hostage for bitcoins” from an unknown hacker.
- March 24: The future of bitcoin in Russia isn’t looking good, but bitcoin enthusiasts continue to fight. Still, the ban is set to hit in August.
- March 25: Bitcoin hit another new low during the recent low for bitcoin trading. Trading hit a low, then a spike — showing some bitcoin volatility trends.
- March 25: Bitcoin may still be confusing people. A survey of Americans shows that some still don’t recognize the bitcoin logo to be associated with a currency.
- March 25: Bitcoin got another competitor as a U.K.-based firm launched an anonymous digital currency to compete against bitcoin.
- March 26: Another bitcoin exchange startup has been allegedly hacked, and the bitcoin wallets emptied, but it may be a programming issue and not a full on cyberattack, the company says.