BitcoinWallet Aims to Make Digital Currency More Social, Transparent
Longtime friends and business partners Alex Charfen and Price Givens have formally launched BitcoinWallet.com, which they plan to market as a social, consumer-friendly and transparent digital currency wallet.
"It's the first [Bitcoin] site where commerce and community connect," says Alex Charfen, co-founder of BitcoinWallet. "Other sites that have done this, they're successful for a reason. Put a human connection to commerce and suddenly it becomes more intriguing."
Bitcoinwallet.com has several pages dedicated to technical data about the wallet's financials, including its number of users, account openings, transactions per week, and how many bitcoins the service is holding in both hot (online) and cold (offline) storage.
"If there isn't transparency, you cause yourself a lot of real issues," Charfen says, contending a lack of transparency contributed to the collapse of Mt. Gox, formerly one of the world's largest Bitcoin exchanges. "Some people say it's crazy for us to put all this stuff out there."
The algorithm for the wallet service's hot/cold bitcoin storage ratio uses withdrawal patterns as a base and then considers the balances of the largest depositors.
The data is "something that no Bitcoin service has ever done, which is our proof of solvency. We show our cold storage addresses as proof of funds and our total liabilities," says Givens. "More to the point, we've revolutionized the role of independent auditors and provided each user a personalized and private proof of solvency. Each of our users can verify how much money we should have and that their balance is included in that number."
BitcoinWallet will also focus heavily on customer service, says Charfen. For example, the site will show how many customer service requests have been made and which ones have been resolved.
The service can also simplify transactions by replacing the 15-digit alpha-numeric public key consumers use to send Bitcoin funds. BitcoinWallet will tie the key to a name, so users can send and receive funds with their name instead of entering the case-sensitive digits of a public key.
The wallet service lets people upload photos and give a brief bio, similar to a social media profile, and stores addresses for other alternative currencies.
Charfen gives Amazon.com as an example of a company that built a community into its commerce platform, citing the marketplace's review community which gives frequent feedback about products and sellers.
BitcoinWallet does not currently have a review and rating system, but Charfen says this is a feature that could be added in the future if merchants start using the platform.
More than 1,000 accounts have been created since the founders purchased the domain name for $250,000 in February, Givens says.
Transactions spiked at the end of March, with nearly 2,200 of the 2,500 overall transactions happening in a two-week span, Charfen says.
Transactions between BitcoinWallet users are instantaneous and free since they take place off the blockchain, the public ledger of Bitcoin transactions. When a transaction goes through the blockchain, it takes about 10 minutes to get verified. In the first week of April, users made nearly $200,000 worth of bitcoin transactions without paying a fee, says Givens.
The company is working on launching an escrow and crowdfunding feature soon.
Charfen and Givens have launched several projects together in the two decades they've known each other. In 1993, while the pair was attending California State University, they launched their first company, which managed consumer funds.
BitcoinWallet is their first foray into Bitcoin. "The world is shrinking," says Charfen, referencing how globalization is allowing people on opposite sides of the world to interact as seamlessly as if they were in the same city. "But there's still significant challenges with the transfer of money."
BitcoinWallet has U.S. bank accounts with specialty commercial bank Texas Capital Bank and with JPMorgan Chase in its private client division.
Other businesses are also focusing on making Bitcoin easier to use, including OneName, which links a Bitcoin address to a username in a directory similar to the White Pages, and Robocoin, which allows users of its Bitcoin ATM to send funds to a user's mobile phone number.