The battle to create a seamless Bitcoin acquisition and hosted BTC savings accounts has been going on for quite some time with Coinbase pretty much leading the pack. But with the success of their product demo at Bitcoin 2014 in Amsterdam this last May, Circle may be joining the race to challenge Coinbase as they have been sending out invitations for people to take a long look at their product.
One reviewer found that it was extremely easy for him to set up a new account, set up his 2FP preferences, both buy BTC with a credit card or transfer BTC in from an outside wallet, instantly transfer Bitcoin to another Circle client and withdraw BTC to his bank account. He was also able to get all of this done from his smartphone.
The earlier criticisms about Circle were not as much about its functionality as they were about that fact that the launch did not reveal as much about the product as people had anticipated. But founders Jeremy Allaire and Sean Neville wanted to be extra careful and not release a full product, even in beta, that was not as close to perfect as possible. They seemed to have done a pretty good job though as the above mentioned reviewer was only able to find one minor and very fixable bug after two hours of heavy use.
- Jeremy Allaire
The company keeps Circle financially secure by running what amounts to as a shadow exchange in the back end, although the company does not use that descriptive term and this exchange fully controls the user’s private keys, a possible indication that they intend to compete directly with Coinbase.
This might prove to be a Herculean task however as Coinbase sets a standard so high that even PayPal struggles to replicate. Their UI/UX is comparable but Coinbase has a much better looking and easier to navigate trading account.
Circle, on the other hand, has a more user friendly bank account that is more oriented toward the general consumer with simple features like prioritizing balances in a specific currency, giving users the ability to hide their account balances upon sign-in are notable, design upgrades, and tracking the number of confirmations a “pending transaction” has made through the block chain. This is actually a big security feature because you do not have to pull out your wallet displaying a huge balance. Simply convert BTC to a small amount of dollars and use that as the visible balance.
Circle has some extra advantages that might make users feel much more comfortable. The company’s assets are protected against theft and loss through their insurance with Marsh, and this coverage is free for the user. Coinbase does not allow credit cards for payments, but merely keeps them for backup. With Circle you can use your credit card to purchase Bitcoin. Circle’s daily buy and sell limits on instant transactions are much higher as well, US$2,500/US$10,000 as opposed to Coinbase’s of US$1,000/US$0 for deposits and withdrawals, respectively. Finally, Circle offers a US$10 sign-up bonus for new users and has really upped the ante by waiving all fees on deposits and withdrawals, excluding the bank’s small ACH transfer fee.
Circle has certainly demonstrated that it is not another hyped up vaporware and is poised to become a formidable competitor to Coinbase. Customers will certainly benefit from increased competition in the market as each company tries to out-innovate each other while offering perks, discounts and additional features.
But the companies differ in that while Circle is innovative their approach seems to primarily target consumers while Coinbase tries to service consumers, merchants and third party app developers all at once, giving them a much broader customer base to work with.
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