Why Does Apple Continue Killing Bitcoin Apps?

[Turk]

By Caleb Garling on February 6, 2014

They keep disappearing. In 2012 it was BitPak. Last November it was Coinbase. Earlier this month it was CoinJar. And on Wednesday it was Blockchain.

Apple has been eliminating apps in its App Store that process or deal with the popular cryptocurrency bitcoin. Cupertino allows plenty of other payment apps like PayPal, Venmo and a variety of banking apps, so the exception for those dealing in bitcoin has raised questions why Apple has been zeroing in on the controversial currency. The US Justice Department has said virtual currencies aren’t illegal.

In typical style, Apple did not return a request for comment.

But there are two main theories here: the first is that Cupertino wants to eliminate nascent competition for its own payment platform. Apple executives have recently had discussions with outside companies over payments for physical goods and services on its devices, according Wall Street Journal sources. The company has filed for a patent for something resembling iMoney.

The other theory is that Apple doesn’t want to deal with a technology with such a murky legal and regulatory future. When it eliminated Coinbase Apple said it needed to “comply with all legal requirements in any location where they are made available to users,” an echo of its App Store review guidelines.

But after its banishing, Blockchain fell into the crush-the-competition camp.

“Offering no explanation and no opportunity to address any issues, without any apparent change in circumstances other than the growing popularity of the independent and competitive payment system, Apple has eradicated their payment competition on iOS,” wrote CEO Nicolas Cary after quoting Apple’s famous ode to the crazy ones and the misfits.

“We need [bitcoin users] to take a stand against Apple, make noise, complain, and show Apple that there will be consequences to their actions.”

Some obliged. A string of videos appeared on YouTube of bitcoin enthusiasts smashing their iPhones. One guy even used a high-powered rifle (see below). A Reddit user had promised them a replacement Nexus 5, which runs Google’s Android and allows bitcoin apps, if they went through with the protest. (It’s not clear if the promise was made good.)

But Cary’s cry was a noticeable departure from the previous bitcoin apps that had been nixed, which have (publicly) fallen in the second camp or opted for silence.

To put it mildly, bitcoin’s place in the future of finances is unclear. The government has said bitcoin has benefits and is not illegal, but hasn’t taken much action otherwise. But major markets like India and China have expressed greater concerns over bitcoin, and Apple’s terms and service do note that an app must be legal whereever it’s offered.

Bitcoin has hit the spotlight over the past year for the right and wrong reasons. It was the only currency accepted on Silk Road, a digital underground marketplace mostly of illegal goods like drugs and stolen goods. But at the same time large corporations like Overstock.com have started accepting bitcoin — though immediately flips it to the more stable dollar. Bitcoin’s exchange rate has been, again putting it mildly, volatile.

Messaging app Gliph allowed users to attach bitcoins to messages until Apple stepped in and told them to remove the capability. “There wasn’t any negotiation other than them saying what was going to be allowed or not allowed,” says CEO Rob Banagale. (Here’s a copy of Gliph’s appeal letter.)

Yet despite the one-way negotiation, Banagale doesn’t buy the idea that Apple is trying to squash nascent payment competition or hurt the growth of bitcoin. Apple’s lawyers have been getting plenty of work these days. The company is fighting a huge intellectual property suit against Samsung. The Justice Department has been pursing Cupertino for collusion on pricing its e-books. The government is starting to take a harder look at offshore tax havens used by big tech companies.

So with the murky regulatory future of bitcoin, he speculates the company just wants to nip a problem in the bud. When CoinJar was nixed, the company said much of the same. In the grand scheme of Apple’s app ecosystem, Blockchain’s 120,000 users and a handful of petition signers are a rounding errors.

“I think the primary reason is the company has bigger fish to fry,” Banagale says. But he is a full-throated supporter of bitcoin as part of the future of payments.

“It’s a little strange to have Apple be on what feels like the wrong side.”

San Francisco’s Coinbase, which provides the software to manage bitcoins, has recently integrated with financial management software Mint, processes payments for Overstock and has taken over $30 million in investments from Andreessen Horowitz and others. While the future value of bitcoin is highly debatable, this is no fly-by-night operation. The company declined comment.

You can find other bitcoin apps in the App Store, but the only ones I could find monitored exchange rate — they didn’t actually trade the currency, a notable difference. Google’s Play Store, the equivalent of the App Store on Android phones, has versions of Coinbase and Blockchain. Though the company has never been known for a long attention span, a recent story in Forbes indicated Google is showing signs that it will embrace the cryptocurrency.

Though speculation is hot on Apple’s opaque motives, it is clear Bitcoin is not going anywhere.

Here’s the dude destroying his iPhone with a rifle

http://blog.sfgate.com/techchron/2014/02/06/apple-bitcoin

[helendouglas]

Of course Apple will crash down bitcoin before it kills them. That is what we call competition. Or maybe Apple is making their own crypto-coin now. Applecoin or iCoin, which is better?