Circle adds GBP! (Review)
Thursday 14 April 2016
Lacking a good GBP option for bitcoin because the banks are so unkind here, I was excited to hear that Circle had made progress in that direction...
Over the past two or three years, a dozen or more British bitcoin exchanges and brokers have been euthanased by the UK’s banks, which have withdrawn facilities without consultation or warning. The most recent to have the plug pulled was CryptoPay, which I used to cash out BTC to my bank account - a great option, since I otherwise have to use Bitstamp and pay additional fees for a SEPA transfer, as well as waiting an extra 2-3 days.
So it’s great that Circle have announced a partnership with Barclays to start working with UK banks again. Circle is Goldman Sachs backed, and I hope that the banks’ trigger-happy approach to toying with bitcoin businesses like a cat with a mouse will be tempered by the Goldman’s clout. (And yes, that mixed metaphor does work if you imagine a cat pointing a gun at a mouse.)
Encouraged by the mobile screenshots of GBP payments on the Circle homepage, I sign up and give it a whirl.
Circle makes a point of un-bitcoining bitcoin
The email is one of those slightly-too-informal ones that tells me I’m ‘part of the Circle’ now, that they’re fun because they have GIFs and emojis, and that if I have suggestions then ‘We're all ears. (Not literally because that would be weird.)’ Maybe I’m suspicious, but it puts me in mind of one of those mercurial teachers at school who tried to be all relaxed and pally, until it got away from them, at which point they flipped and revealed themselves as a disciplinarian control freak. (Come to think of it, a lot of my interest in crypto probably derives from the authority issues I picked up at school. But I digress.)
First up, the usual round of email, password, verification, and a little extra KYC and security with mobile 2FA. Then you need to add debit/credit cards in order to deposit or withdraw funds. Credit cards have a charge, debit cards don’t. I’m not sure why they do it this way and not with normal bank details, but I’ll play along.
I dutifully add my VISA debit card, and it records the details (and no doubt drops GCHQ a quick line, too, though they presumably already knew I use bitcoin).
Now it gets a little weird. Circle have gone out of their way to keep the bitcoin out of bitcoin - to create a service suitable for mass adoption, such that people don’t have to understand anything about crypto to use it. But that means they’ve actually hidden away stuff that would be quite useful to me. I have to hunt to find my bitcoin address to send funds to.
Not only that, but the bitcoin address changes every time you ask for it. This is a great feature, in some ways. ‘To protect your privacy, we provide a new bitcoin address for each transfer. This prevents someone from tracking all the payments you receive by looking at the blockchain.’ Alright, thanks Circle! But on the other hand, it means I have to give a new address every time ask a regular client for funds. I can’t just say, ‘Same as always’. (I’m following up with Circle whether I can, in fact, reuse addresses - presumably they won’t prevent payments coming through to old addresses, but it’s kind of important to know for sure.)
I generate a new address and send 0.01 BTC to it. It soon turns up as a pending deposit. Let’s just calculate what hidden fees they’re charging in the spread: I send 0.01 BTC, which is $4.24, and it says I’m receiving £2.98. Current exchange rate is 1.4264 USD/GBP, so $4.24 should be £2.9725. I will take that, Circle, and I have renewed respect for you. Often there’s a ‘secret’ fee of up to 5% with these kinds of services. If this works out for me, I’ll benefit to the tune of a good few quid a month as a result, since that spread has so far been an additional tax on my BTC earnings.
It takes a while as Circle seems to want 4 confirmations and the network is slow today, but hey, what can you do. Other than, you know, increase block size already. Eventually it confirms - there’s an email to tell me so - and the money is there for me to withdraw to my card, which I do. Processing takes 1-4 business days (why, in this day and age?), but there are no charges. I’m not sure how Circle make their money. Perhaps it’s just ‘Because crypto!’ and their VC backers haven’t caught on yet. Or perhaps charges will be imposed once they have a large enough user base. We will see.
Anyway, the money arrives in my account 36 hours later. And that’s a wrap for Circle: I really like what’s going on here, low charges and (generally) pretty good UX, which counts for a lot. I am sorely tempted to make them my de facto option for remittances.
Oh, a little more on that address re-use issue. I dig a little more and here’s something I find on their Support pages. There’s some extensive warnings about the bad sorts of things that go on in internetland, especially on the darkweb, and how trying to buy knives and drugs with your Circle account would not be a good idea. Additionally, a warning on gambling sites:
‘First off, most gambling sites don’t work with Circle. The popular ones that we’ve noticed use a system that send funds back to the originating address. This misses the benefit of bitcoin addresses being one-time use tokens. Secondly, we aren't allowed to process gambling winnings. So even if you win, you still lose.’
This starts to make it look a little more as if their onetime address policy is motivated by a little more than maintaining my privacy and is actually a convenience to avoid certain regulatory headaches. But then Nina B gets back to my support request, telling me:
'You can generate a unique Bitcoin address anytime you want. It will stay connected to your Circle account no matter how many addresses you create, so you can re-use receiving addresses!'
So that's good.
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