“Bitcoin has hardly developed fast sufficiently to assist daily fiscal hobbies. “
Loops founder and CEO Jeremy Allaire.
Circle cuts the option to buy and market cryptocurrencies. Preferably of Bitcoin as a means of transaction, the company then wants to utilize stop woods as a negotiation part. After CEO Jeremy Allaire talked about his aggravation with the gradual development of Cryptocurrency at Wall Street Journal, he reaps a online shit storm that culminates in a relatively unusual thank-you procession in front of the core.
Often the company design only doesn’t meet. It could be that this information has then occurred at Circle.
Circle is the business that was hyped for a long time because of wonderful assets without knowing what it was doing. It went life in October 2014-and was an on-line finances with the option to buy and market bitcoin. The only change to the penny basic presently existing at this point was that you could acquire bitcoin from Circle without costs with a credit card.
That was insane from the first moment. There is a reason why very few Bitcoin sellers accept credit cards. The cards are stolen, the numbers sold on the net, the transactions can be reversed. If at all, then brokers require high fees to cushion the risks that are associated with credit card payments for bitcoins.
Circle not. The plan was probably to get so many users through the unique offer to achieve a critical mass. Until then, the coal of the investors is burned and tries to keep the damage as low as possible through a AI. A post on the company blog from October shows how important fraud prevention is for circle. It is basically the heart of the company:
We use State-of-the-Art Machine Learning Algorithms that combine millions of data every hour to calculate probabilities that decide in real time whether an account is opened, a transaction or other activities are continued. These models should identify the special cases- the fraudsters, money washer and other actors with bad intentions, and separate them from the perfectly legal customers.
Circle’s risk models must be sophisticated enough to understand that a person has stolen a credit card, even if it makes everything possible to appear like a normal customer. The Circle’s compliance models must be able to recognize that a certain type of transaction or a certain behavior pattern, which looks normal on the surface, is very likely to be a financial crime.
The risk of selling Circle with the sale of bitcoins against credit card transactions is enormous-as well as the effort that is operated to reduce the risk. This is a business model that only works if Circle reaches a critical mass after the ashes of the ashes of the ashes of the ashes of the ashes. Perhaps revenues can then cover the costs, maybe circle data, combine identities and Bitcoin addresses, connect advertising. Whatever. If you have millions of users, you will be able to make money.
But this did not happen. Circle has reached many customers, but not the necessary critical mass. The still unresolved blocksize problem makes it even completely impossible that circle can ever reach enough bitcoin-while the emerging EU regulation will probably increase the operating costs of Circle even further.
In other words, Bitcoin is unsuitable for fulfilling circle business plan, but suitable for increasing the costs.
Euro and dollar instead of the blockchain!
In a blog post from 6. December announces Circle of bundle of news that is equivalent to a fundamental change of strategy.
In addition to a new messenger and higher deposit limits, Spark is particularly noticeable,” a new blockchain-based protocol to make trust”, as well as the elimination of the option to buy and sell bitcoins. According to the blog post, both fit perfectly into Circle’s business strategy, which has been clearing over the past few months.
Circle writes:
When we founded Circle, we had the vision and the belief that it will finally be possible that money will work as the internet works. A large part of it was the long -term bet on blockchain and digital currencies, which we thought that they had the potential to provide the missing protocol that is necessary for an open exchange of values.
We were never focused on persuading customers to exchanged the familiar currencies for Bitcoin, but we wanted to bring the advantages of public blockchains and digital assets to customers without asking them to understand the technical details. We have made great progress in recent years by launching our Payment app in the USA, the United Kingdom and parts of Europe so that direct payments between countries and the option have made it possible for people to send their local currency to other digital wallets via Bitcoin Blockchain. Our focus has been on this model of a’hybrid digital money’ for some time.
In other words, Circle is not about Bitcoin, the alternative currency that absorbs values and attacks the power of central banks. Circle is about technology to send values through the Internet via blockchain values. The new innovation of Circle,” Spark”, fits perfectly into this concept:
Spark, a set of protocol extensions that offer a method for digital wallets to replace values by using blockchains, also Bitcoin, as a setting layers. There are many applications for this technology, but the original focus is on combining digital wallets around the world, while ensuring that the complete requirements for KYC/AML and regulation are met and a smooth experience is guaranteed. .
So Circle no longer wants to use Bitcoin, but the blockchain to handle payments in traditional currencies worldwide. Circle does not want to offer the customer the freedom of banks, regulation and permission that Bitcoin offers, but complies with all the rules entirely.
In a way, circle does exactly what some parts of the Bitcoin community have been demanding: it does not make the Bitcoin blockchain a payment system, but into a settlement network. It uses the blockchain to handle payments, but not the Bitcoin as a means of payment.
The decision against Bitcoin trade is accompanied by the decision for Spark. Circle writes:
With the introduction of these new features, Circle is even further away from being a Bitcoin exchange, and we will continue to focus on our resources on global social payments and blockchain technologies of the next generation, instead of dedicating the direct purchase and sale of bitcoins.
If Bitcoin is not a means of payment, then there is no need for the Payment App Circle to facilitate the use of Bitcoin. Therefore, Circle cut this service- which was probably a loss anyway- without further ado.
Said situation- stuck communities
For the Wall Street Journal, the change of direction from Circle does not throw good light on the status of Bitcoin. “The train is another finger that the financial revolution that the Early Adopters wanted to ignite from Bitcoin does not go as planned as planned. “
Circle CEO Jeremy Allaire explains a little more clearly to the journal, which moved him to the step: Bitcoin had not developed quickly enough to support everyday financial activities. “According to Allaire, the blockchain-based payments in normal currencies are grown many times faster than the Bitcoin payments.
As has been stated so often, Bitcoin offers few advantages as money for everyday transfers. It is a good investment, a value -stable money and a means of making private transfers and overcoming borders. Where normal money works, there is little need for Bitcoin as a payment system. Instead of now seeing that his expectations for the use of Bitcoin were wrong ( and Bitcoin is still a success story ), Allaire is now putting the black Peter on to the Core developers:
The thing is that the situation among the core developers has actually stuck, while mainstream companies begin to use this technology. We are deeply frustrated with the lack of progress and we want things to move forward.
The Bitcoin community reacted to this statement by Allaire as after script. The Pawloffian dog greets. Jeremy Allaire was cheered on R/BTC, the place where criticism of Core always cuts open doors, and damned the Core developers. On the other hand, Jeremy Allaire was insulted. How can he dare to criticize Core?
How can someone like Circle Bitcoin accuse if you have not invested a single Bitcoin or only dollar in the Bitcoin protocol? If you don’t pay a single Bitcoin developer?
Then the forum opened up to open a thank you thread for the Core developers. The Redditor fell on its knees in the name of a free currency in order to thank Core so that the developers do not come up with the idea of taking Allaire’s criticism seriously.
Not that it is not great that the core developers do something for Bitcoin-but most of them are on the salary list of block stream or that with. It is not necessary that circle pays them, and their work is not charitable that is only rewarded by the thanks to the community.
Bitcoin, as a whole, is also not the matters of developers, but also depends on entrepreneurs. Entrepreneurs who risk their personal freedom as well as their own capital or that of investors to enable the trade in bitcoins ensure that Bitcoin is not only software, but also money.
The fact that Bitcoin no longer fits into the circle of Circle is inevitable. But it’s a shame, and it shows how Allaire correctly says that Bitcoin has reached a border in a way.