Blockchain puts a Bitcoin bank in every pocket
Welcome to GET PUT POST, a newsletter all about APIs. Each edition features an interview with a startup about their API and ideas for developers to build on their platform. Join 1,400+ developers, founders, and API enthusiasts and subscribe now.
This edition, I caught up with Nicolas Cary, co-founder, and Kevin Houk, developer at Blockchain. Bitcoin has been on a tear this past year. For the call, Nicolas was walking through London after 3 trans-Atlantic flights in the previous 2 weeks. We discussed the company’s focus on APIs and developer trust. Enjoy!
What is Blockchain?
Blockchain is the world’s largest Bitcoin software platform. We focus on 3 things.
As a brand for consumers, we’re known for our Wallet. A wallet is the way for someone to send, receive, and secure bitcoin. We have about 8 million wallets, making us the market leader based on publicly available data. We continue to add about 100,000 new wallets a week, which is really exciting.
The special thing about our wallets is that we pioneered something called client-side banking architecture. We have a non-custodial relationship with our users. This is really different than other services in the Bitcoin space and definitely different than any service provider that deals with finance.
When you download a Blockchain Wallet and install it on your device, you become your own bank. In fact, that’s our slogan. We deliver a payload of software that the end-user can decrypt locally using their device or their browser using a special password. This allows for global, frictionless, and nearly free value transfer.
Beyond wallets, we also run blockchain.info, which is the world’s most popular Bitcoin website. This was our first product. It’s called a block explorer, an interface that lets anyone in the world look at the Bitcoin block chain and study the transaction history. It’s a long feed of all the things that have ever happened to the block chain.
The block explorer serves hundreds of millions of pageviews a month. Lots of news agencies (e.g. Bloomberg, Reuters, and Fox News) use it to pull data about the state of the Bitcoin network. We provide a bunch of statistics and charts that let you look at things like currency velocity, markets, news, and much more.
The core of the company, which shouldn’t be a huge surprise to you, is our developer platform and APIs. They are the most widely adopted and reliable APIs in the industry. That’s seen in our transaction volume and growth numbers. We’ve issued over 25,000 keys to developers and enterprises around the world that are building incredible things on top of the Bitcoin network.
In the beginning, what was the key to get developers to trust you?
Trust was a big deal, especially in the early days of Bitcoin. The currency grew out of a very technical community that didn’t do a really good job of self-promotion. Blockchain’s been around since 2011. The very first product we released was that block explorer based on a recommendation from a community forum.
Back in the day, there were maybe just a few hundred people that cared about Bitcoin and they needed a way to look at the block chain in an easy and simple format. Previously, people would download Bitcoin-Qt, which is a heavy piece of software that keeps track of the entire Bitcoin block chain to stay in sync with the network. We built a reliable web-based format for that. The community recommended we call it blockchain.info and that’s the genesis of our namesake.
We made everything open source from the start because we wanted to be transparent and get improvements from the security community. We felt the best way to build bridges with everyone was to be 100% open with them. This was at a time in the Bitcoin community where there were mostly nameless organizations and projects that weren’t commercialized at all.
Our ambition always was to build a platform that would be open for everyone. Our company’s mission is to build an an open, accessible and fair financial future, one piece of software at a time.
By 2011 and 2012, we were the reliable platform that people could turn to for their own Bitcoin applications. They didn’t have to host and build this entire infrastructure. Programmers could start to build things on top of Bitcoin using their expertise in user design and cross border payments and gaming services and other topics that are not our focus. We wanted to build the recipes and let them cook.
Where is the company today?
We were bootstrapped until our Series A in 2014. There are now over 8 million wallet users in over 140 countries.
What have you launched recently?
We updated our Wallet API earlier this year with a module that’s installed via NPM on the company’s or developer’s server. Essentially, it allows you to interact with your Blockchain Wallet without using an interface in the web browser. This is useful for marketplaces and gaming platforms to deposit bitcoin and send it within their ecosystem.
Tell me more about the client-side banking architecture.
A lot of companies in Bitcoin control access and custody of their users’ data. They have accounts with a username and password and backends that give them optics to this data. As a result, they actually have access to the private keys that grant the ability to send and receive transactions to addresses on the Bitcoin protocol.
Remember that the true purpose of Bitcoin is stated in its original paper. That was to create a peer-to-peer cash system for the internet. In order for that vision to become true, you can’t create intermediaries on top of bitcoin without centralizing risk. This is really important to understand.
Every single time you put more and more valuable data in a central repository, you increase the likelihood that the repository will be breached. We see more and more compromises of data when there’s a honeypot of important things. Not just in Bitcoin services, but across the web.
Bitcoin is particularly risky because there’s irreversibility designed natively into the transaction protocol. It’s intended to be a bearer instrument. When I sign bitcoin over, there’s no way to get it back without the recipient voluntarily returning it.
Frankly, there are going to be different delivery models for financial services using digital money. We truly believe that being able to be your own bank is the most important value proposition of Bitcoin. We continue to honor that original vision of the protocol and the technology. We call it client-side banking architecture as a simple description because of the way we’ve deployed our technology and have a non-custodial relationship with our users. They are literally their own banks.
What are some interesting apps developers are building on top of Blockchain?
The Payments API is really popular for those who want to accept bitcoin directly into a user’s wallet. This is really prevalent on a lot of donation sites. Since bitcoin has such small transaction fees, even donating 20 cents is possible. This also works for mining companies that need to assign a specific address to all of their customers.
We go to 6 or 7 hackathons a year like Money 20/20 and one call app we saw was Sashi, an iPhone savings app for kids. It lets a child get a specific allowance a day, like 10,000 Satoshi. If you have 10 cents, it’s not really exciting, but if you have 10,000 Satoshi it feels more substantial. They have the ability to put a little bit into savings, a little bit into spending, or donate a portion of it. The app’s a really nice way to ease kids into financial responsibility without actually using your credit card.
Pagey also came out of a hackathon. It lets you pay as you go for e-books using bitcoin. Every page you read sends a very small amount of Satoshi to the author’s account. This takes advantage of the microtransactions that bitcoin supports and saves you from committing to a whole book.
That’s actually a pretty wild idea and it works for more than books. You can apply that to music or movies. Imagine having analytics tied to how users are actually spending time on a site. You could charge based on exactly what they’re doing.
There was another app that helped lock the value of the Bitcoin wallet to dollars. Basically, in 24 hours, these guys built an app that would allow an end-user to eliminate the volatility in the price of bitcoin. I saw a father taking pictures of his son demo-ing the app onstage. I’m like, “Holy smokes, like your kid needs to go to Silicon Valley and go raise millions of dollars right now.” He’s like, “No, my kid needs to finish and graduate high school.” He was 16 years old. When I think about the power of APIs, I look at the ability for a 16 year old kid to programmatically remove the fluctuation in the price of bitcoin for millions of consumers in 24 hours.
If you look at that speed of development, we’re going to be able to do really astonishing things as a community over the coming years. These examples illustrate the creativity this type of payment platform opens up and the new opportunities to do things that were impossible over legacy payment networks.
What else would you like people to build on Blockchain?
There are lots of possibilities since we can now teleport money around the world. I’d like to see some apps that help you get paid for actions you already take. For example, a salesperson could give a small reward for reading an outbound email, or your utility company could pay you for reducing energy usage, or maybe incentivizing recycling.
If you’re interested in working on Bitcoin APIs, Blockchain’s hiring. Want the latest API interviews in your inbox? Sign up here.
