Bitphone recently announced to its users via email that service was being closed down, and Bitcoinist caught up with Gavin about the circumstances surrounding the startup’s untimely demise.
Interview with Bitphone Founder, Gavin Stevens
Starting a new business is very difficult, and starting one inside of a new technological niche market is even more daunting.
Gavin Stevens, the founder of Solid Cloud, created a new concept known as Bitphone in the spring of 2015 that created a new way for Bitcoin users to communicate online, creating an encrypted version of Skype, in effect. You could do everything from a web conference to a tele-seminar, and pay for it all with your Bitcoin, or altcoins for a couple of cents per minute.
Bitcoinist: Please go over the concept behind Bitphone and what market it was trying to fill, for those who may be new to the Bitcoin community?
Gavin Stevens (GS): Bitphone was developed to be an ultra-convenient payphone. It was easy to use, no installation, no registration required, just deposit bitcoin or altcoin and place calls. It combined the use of WebRTC (RealTime communications) technology with Bitcoin. There aren’t any services like this that use Credit Cards because of fraud. Bitcoin was the perfect payment mechanism for a service like this. We also let user’s rent phone numbers around the world and place and receive calls.
Bitcoinist: Do you consider Bitphone to have been a success? Why or why not?
GS: You bet it was a success! 127,535 people visited the payphone. 7,549 users deposited money, and users placed 42,195 calls to 101 different countries! Our site was also very secure. We were never hacked and never lost any Bitcoin. Many hackers tried, of course, we even got threatened several times by hacker groups promising ransom DDOS attacks.
Once we had a working product, we continually enhanced the features over time, we almost pulled off the beta tag! Right before we shut it down, we had just implemented Call history, an Affiliate program with Instant payouts, Inbound Call forwarding, pay per minute/ call forwarding and conferencing. It’s unfortunate we had to shut the site down.
Our carrier told us to continue service we needed to not allow anonymous callers and to collect our customers’ identification before allowing them to place calls.
Bitcoinist: What finally brought down Bitphone?
GS: Unfortunately, a small number of users abused the service. Recently a nefarious actor placed a few hundred bomb-hoax calls and started an international investigation to find the source. We broke no laws, but global governments were able to put enough political pressure on our carrier to suspend our service. Our carrier told us to continue service we needed to not allow anonymous callers and to collect our customers’ identification before allowing them to place calls. For our customers’ sake, we refused!
The Telecom system is highly regulated and monitored by global governments. In order to call phone numbers, you have to get onto this network eventually. After the calls, our carrier took a lot of heat and pressure to try and identify the source of the calls. Bitphone doesn’t collect our user’s private, personal information and doesn’t believe it’s necessary for our service.
Bitcoinist: Will we ever see a version of Bitphone again, maybe with a new carrier? What changes would you make to a Bitphone 2.0?
GS: Once the site is completely closed in a few months, once our users have had a chance to withdraw their funds, if there is interest, we might release the source code to allow others to setup their own Bitphone like service either public or private.
I’m sure anyone that tries to provide a similar service to the public will face the same problems that we did with any carrier. A private instance would be great for users that don’t abuse the system, they can setup the carrier network directly. We hope releasing the code will let the public fight the battle in a more distributed way. Solid Cloud could help in a professional services style agreement to help customers setup the software if needed.
It’s definitely an example of politics stifling the development of technology!
I find it interesting that WebRTC was developed years ago and support built into Google Chrome for quite some time. However, development has stalled. By now every web browser should already have the ability to dial a phone number built into it! We don’t even need a phone number anymore! SIP addresses, just like email addresses have been around for a while. It’s definitely an example of politics stifling the development of technology! Bitphone was created to fill that gap, and we didn’t realize the difficulties we would encounter politically would eventually shut us down. We got too big, and people took notice!
Bitcoinist: What advice do you have for entrepreneurs in the Bitcoin space looking to build a business? What wisdom can you share to up and coming Bitcoin businessmen?
GS: If you ever plan to be successful in a market and to grow, you should take the time to understand the market and product you are trying to deliver. Bitcoin makes payments easier, but it’s not the end-all, be-all, it’s just a payment mechanism.
Had we set up Bitphone using credit cards we would have had tons of fraud and abuse. Bitcoin removed the fraud aspect, but the service was still abused. We didn’t understand the political problems we were likely to experience ahead of time. I had spoken with one of the founders of our carrier service and had their blessing to setup the service, unfortunately, the political pressure became too much. Even if you don’t break any laws, every industry has politics you should understand.
Had we set up Bitphone using credit cards we would have had tons of fraud and abuse. Bitcoin removed the fraud aspect, but the service was still abused.
Bitcoinist: Your business, Solid Cloud, does other things besides Bitphone. Can you go over what Solid Cloud is and what is next for your company?
GS: There are a lot of software development companies all over the world. Solid Cloud is different because we don’t just develop software, we design, develop, host, service and support custom software products for our customers. We’ve grown a lot over the past few years! We work with you to understand your business’s process workflow and determine how you can gain efficiencies by moving some technology resources to the cloud.
We build custom solutions if needed to help you get the most from your companies processes and data. Many businesses use a Hybrid approach, keeping critical data on-premises, but using the cloud as a backup or business continuity failover. We help businesses with all of this. Many customers think of us as their “Virtual Cloud CTO” – How can we help you in the cloud? Let’s talk at SolidCloud.io.
Bitcoinist: I appreciate how good Bitphone was, having used it many times myself. Good luck in your next Bitcoin project, Gavin.
GS: Sorry, we couldn’t solve the world’s communication problems.
Would you be interested in a Bitphone 2.0? Let us know in the comments below!
Images courtesy of LinkedIn, shutterstock