BitPay, the global bitcoin payment processor provider, just got a little more consumer friendly.
The bit of big news that came from the company this week (June 3) is that BitPay is taking its consumer-facing bitcoin wallet out of beta and opening it up to the general public. But what does that mean for the bitcoin community?
PYMNTS caught up with BitPay at IRCE this week in Chicago, where BitPay’s Marketing Manager Emily Vaughn shared why the company’s announcement is a big step for both the bitcoin community and the company itself.
“It’s a pretty big move for us because we’ve been strictly B2B for the past few years and now we are sort of experimenting with being able to enhance our services by adding a consumer layer. It was actually something that we built for all of the developers and employees that work at BitPay that “live” bitcoin and use bitcoin in their daily lives,” Vaughn said. “We found we needed a more secure wallet and a wallet that was truly functional for daily activities. So we brought that out of beta and it’s available on iOS, Android and Windows — it’s the only bitcoin wallet on Windows. We’re pretty excited to see where it can go. That’s a big announcement for us.”
BitPay’s core product is payment processing, which means security is always top of mind. And when it came to its latest service to rollout into the bitcoin market, the company said it didn’t take any shortcuts in ensuring the same security features were offered across its platform of services.
Just one year ago, BitPay built its bitcoin wallet that BitPay says was secure enough for its own company’s funds. And after ensuring it was ready to rollout to the consumer audience, it released what it’s calling the first version of Copay.
Copay’s features include the ability to hold bitcoin, and hold bitcoin across multiple wallets while offering shared and personal wallets across all devices. From a developer’s perspective, it’s also all open source. The open source aspect, Vaughn said, is something the company was very excited to announce.
Copay works exactly how it sounds. The bitcoin wallet enables users to copay from the wallet, but both users must authenticate a purchase. That ensures both parties agree to the purchase, which can be useful for couples who want a joint account, or even for friends or business partners who want the same convenience. And it comes with that multi-signature touch.
“The multi-signature adds a social layer. …We think multi-signature security is really where the whole industry is going. I would think that not too long from now that will be a pretty standard issue for a bitcoin wallet feature,” Vaughn said. “But we’re really excited that Copay works the way that it does because it’s a true bitcoin wallet,” Vaughn emphasized. “So it’s not like a consumer has to create an account with us where we have their keys. We don’t have their keys. They have their keys. But, it‘s enabling the bitcoin holder to set whatever layer of security the user requires.”
This means enabling wallets that can require one signature, or a wallet that requires five. As explained above, different wallets can require different signatures. For Copay, the extra layer of security is what makes it most appealing to the general bitcoin public. BitPay’s goal with Copay was to provide the trust for its users that their bitcoin could be secure, making it so users don’t look to store their bitcoins on a third-party service that is more likely to be hacked.
“That’s a cool function of Copay. And from a security standpoint we think that’s very necessary. Copay requires co-signature. We wouldn’t have required anything else,” Vaughn said. “It’s a bitcoin wallet built for bitcoin developers by bitcoin developers.”
[pullquote] “Once bitcoin becomes the backend technology for financial activities in your daily life, then it will really be like the Internet. I don’t know how the Internet works, but I use it every day. That’s where bitcoin really needs to be for bitcoin to get millions of users all over the world.” [/pullquote]
Bitcoin is like the Internet, Vaughn says, parroting the metaphor that many bitcoin advocates have used in the past to describe its innovation. When it first came out it was clunky, not so user friendly and no one really understood how to use it — or what its true power was. But then the Internet evolved into something consumers use today without so much of a thought of how or why (unless it’s not working). Bitcoin, she noted, has evolved in many of the same ways, but still has some catching up to do on the tech side.
“Bitcoin is a really, really new technology. You’ve heard about comparisons that compare bitcoin to the early Internet,” Vaughn said. “Where bitcoin is right now is like where the Internet was in the early ’90s. Which is not too far off base. Bitcoin is still clunky — we’re using QR codes, we have alphanumeric randomized addresses and that’s not the user friendliness that consumers have come to enjoy.”
The backing of big financial players like NASDAQ and the NYSE endorsing the bitcoin blockchain (in a small way) has really helped propel bitcoin’s image onto the table for deeper discussions. In New York, an official bitcoin business license is being reviewed, and across the nation, as PYMNTS detailed in last week’s Bitcoin Tracker, states across the U.S. are reviewing how bitcoin can be regulated.
“It’s really great to see massive, traditional financial institutions buying into bitcoin. …We think that’s fantastic for the industry because to us that indicates a level of interest in bitcoin as an infrastructure. Using bitcoin to replace clunky, outdated, slow financial infrastructure. That’s what’s going to cause bitcoin to take off,” Vaughn said.
Which goes back to the Internet comparison, Vaughn emphasizes. Consumers don’t always understand the nuances of the Internet, but most who have access embrace it most hours of the day and don’t really care how it works – so long as it does.
“Once bitcoin becomes the backend technology for financial activities in your daily life, then it will really be like the Internet. I don’t know how the Internet works, but I use it every day. That’s where bitcoin really needs to be for bitcoin to get millions of users all over the world. People don’t need to understand the technology in order to use it, but to get those big endorsements I think will push bitcoin where it needs to go in order for it to stabilize a little bit,” Vaughn said.
The big R word. The word everyone in the bitcoin community is talking about.
“As a payment processor — we are open to working with regulators. We are fully compliant. …We have to work with banks for account settlements to our merchants or to provide transfers for the payroll processing we are exploring. Even so far as starting a wallet,” Vaughn said. “We want to make sure from a regulatory standpoint we are all in the green.”
She also shared her personal belief that lawmakers and politicians need to be aware of the impact that regulation has on innovation — especially when it comes to financial tech.
“If you regulate something to the point where we can no longer improve the technology then it’s sort of forcing people to use it in a way that isn’t effective and isn’t efficient and isn’t really serving any purpose. And bitcoin really does have the ability to fix a lot of broken aspects of our financial system. It’s not going to get to where it needs to if there is too much red tape,” Vaughn said. “But, at the same time, I do think regulatory oversight is going to help bitcoin become accepted by more traditional institutions. Banks are looking at bitcoin as a way to improve their internal process. If there is no safety for them, but if in their mind bitcoin is just a criminal instrument, then we’re not doing ourselves any favors.”
BitPay, she noted, works with regulators to ensure the company is expressing the views of the bitcoin community, particularly those looking to innovate the space. And that’s not something BitPay plans to shy away from, she said.
To view PYMNTS’ previous Bitcoin Trackers, click here.
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