Tuesday, June 10, 2014
While virtual currencies are not yet regulated in the United States either federally or at the state level (although virtual currencies have been addressed from federal law enforcement and taxation perspectives), Apple's move to include virtual currency apps seems like an admission of bitcoin's viability as an alternative currency when bitcoin payment facilitators operate in accordance with regulations.
The new operating rule states, "Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions." Reportedly, Apple did previously allow bitcoin-related apps in its app marketplace, but those apps were not enabled to send and receive bitcoin payments, as wallets do.
Apple's banning of the popular bitcoin-based Blockchain app in February 2014 and the earlier removals of similar apps, such as Coinbase in November 2013 and BitPak in May 2012, angered bitcoin enthusiasts. Apple apparently did not provide adequate explanations for why it pulled the bitcoin apps from its app store.
Apple has been called an app dictatorship for its moves. Blockchain, which was the last bitcoin wallet in the iTunes Store at the time of its removal, charged Apple with engaging in anti-competitive practices and violating anti-trust laws. But the U.S. Department of Justice did not find suitable merit in the case and dismissed it. Following that dismissal, members of the bitcoin community expressed their outrage by publicly destroying iPhones.
In the absence of Apple making an explicit statement to explain its reasoning, tech bloggers dissected Apple's decision. Either Apple was imposing the bitcoin app ban because the tech giant was building its own person-to-person payments network, which would include virtual currency transactions, and it didn't want competition from bitcoin players on the iOS platform; or Apple was taking a conservative, wait-and-see approach to the murky regulatory framework that has contributed to the volatility of the bitcoin marketplace.
The latter reasoning now seems to be the correct one, mixed with perhaps an attempt to woo back frustrated bitcoin users. "It appears to simply be a PR move to try and win back the hearts of the ever-growing bitcoin user (traditionally higher-tech) demographic," said Thomas Waters, Certified Payment Professional and Director of Sales at Bank Associates Merchant Services. "This is great news for bitcoin as it adds more authenticity to the technology, as well as puts it back into mainstream media in a positive light."
Waters remarked on the resiliency of bitcoin. Despite its wildly fluctuating market valuation, restrictions placed on it by foreign governments, security breaches caused by badly designed digital wallet schemes and the implosion of bitcoin exchanges, the virtual currency continues to grow in popularity.
A new term has been attributed to bitcoin: "anti-fragile." Waters defined the term as an object that not only survives but thrives as a result of shocks and stresses to it, and any other disorder surrounding it. "Apple's rejection of the associated apps did nothing more than enrage the user base, slightly limit accessibility and make Apple look bad," he said. "Ultimately, the press and the community reaction was more successful at keeping more people talking about the technology than it was at hindering its availability."
Waters added it is still the "early adopter" phase of the bitcoin marketplace, although it is swiftly moving into the "early majority" phase, during which the user base continues to grow as regulations are drafted and implemented and the mainstream media increases coverage of it. "It appears that bitcoin is thriving on its current volatility, and it is becoming increasingly difficult to conceive its demise," he said.
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