I'm Jeremy Allaire, Circle CEO, Ask Me Anything!

[jerallaire]

Hi Jeremy, and thanks for your time. What were the biggest challenges of pioneering a technology into the mainstream (perceptions, dealing with regulators, banks etc), and how does Circle prepare for Bitcoin's moment of mass adoption without know when that moment will be?

Also, I've heard you mention in talks that you were a Political Economy major and that's what I am studying! How has your college education translated to your career in business and technology?

Howdy, this project / business has been really different than my earlier products and businesses in many ways. Most importantly, this is the first product I've worked on where I've need to get government licenses to operate. But, when we started the company, we assumed it was going to take at least 5-10 years before we reached anything close to mainstream adoption, which is pretty similar to the time it has taken for things like the web, e-commerce, online video, etc. to reach that scale. It's possible that mainstream adoption of our products can happen much faster, given how fast smartphone app distribution can happen globally, as long as we have the commercial relationships in place globally to fulfill that.

one of the things, frankly, that attracted me to the digital currency space was the fact that there was so much heavy lifting that needed to be done to educate policy makers and government, and the traditional financial sector, but that the result and/or outcomes could be really profound and deeply beneficial for the world. Not just from our products, but from the development of an open, global network for secure value exchange.

RE: my education, yes, I studied international political economy, and it was that focus that actually motivated me and inspired me in 1990/1991 to get heavily involved with the internet, which from my perspective, even then, was clear that this distributed and decentralized network, had the potential to really change the world and how it worked. We've been marching through the last 20 years breaking down barriers globally, reducing the relevance of nation-states, and I think that crypto ledgers and associated technology can be the foundation for fundamental changes in our political economy, in how organizations are structured and operated, of course in how the monetary and financial systems of money work, but ultimately can materially impact how public forms of governance happens. that's a very exciting area to be involved in, IMHO.

The fusion of my technical interests maybe was a bit of an accident. My dad got my brother and I an Apple IIc in 1982, and we hacked and learned a lot, and I guess was inspired by the values of the PC revolution, and then that technical leaning drew me into the internet revolution in the early 1990s, also inspired by a lot of the same classical liberal ideals that drove the PC revolution.

Jeremy

[jerallaire]

Hi Jeremy,

What you do think of sidechains and Lightning network? Do you think they can be used as a mean to scale bitcoin?

Do you think bitcoin XT is a viable proposition to achieve larger blocks?

I don't want to claim to be an expert on any of these matters, there are much smarter and much more technical people than me to weigh and debate a range of proposals.

But, in general, I think experimentation and iteration on ideas outside of bitcoin / pegged with bitcoin is a good way to learn, and ultimately maybe scale certain use cases or applications. However, I would like to see bitcoin's network itself continue to scale, and for the bitcoin core 'runtime' to become more flexible and extensible, and to see the project continue to evolve and not just remain a base layer trustworthy accounting system.

Of course, XT is not necessary to archive large blocks. But either we have clear support for an alternative with a consensus in bitcoin core, or we have a hard fork that could build consensus among mining participants. My impression in talking with major players in the mining space is that they are pragmatic and not dogmatic, and so if the dogmatists dig in, they'll back the pragmatists.

[buddhamangler]

Hi Jeremy,

Assuming Core does not move on the block size issue at all, what happens then? Will industry get together and go around them on the issue? Do you believe it is important enough that such a move would be warranted?

[jerallaire]

Hi Jeremy,

Assuming Core does not move on the block size issue at all, what happens then? Will industry get together and go around them on the issue?

Strikes me that Bitcoin XT is just that....as noted in another thread, I think the mining players are pragmatists not ideologues, and if there is stale-mate with Core, then they'll readily back XT.

[Justin]

Why did you guys stop acccepting European debit cards?

It was a really bad experience for most users. A lot of customers had cards rejected. Those that got them accepted had extra forex and cross border fees. And too many people got caught by risk triggers that put them into manual KYC, which is a horrible experience.

So we decided to put it of until we could provide European customers with the same experience we can offer in the US, and hopefully we'll have that in place real soon now...

Jeremy

The odd thing about that is even for me living in the U.S. my card got flagged using circle. The weird thing about that is I've been using circle since the invite only period and got a call about two weeks ago saying they had to send me a new card because my card was now at risk and one of the transactions they stated may have caused this was circle.

[jerallaire]

It was a really bad experience for most users. A lot of customers had cards rejected. Those that got them accepted had extra forex and cross border fees. And too many people got caught by risk triggers that put them into manual KYC, which is a horrible experience.

So we decided to put it of until we could provide European customers with the same experience we can offer in the US, and hopefully we'll have that in place real soon now...

Jeremy

The odd thing about that is even for me living in the U.S. my card got flagged using circle. The weird thing about that is I've been using circle since the invite only period and got a call about two weeks ago saying they had to send me a new card because my card was now at risk and one of the transactions they stated may have caused this was circle.

Sounds like your bank's anti-fraud department has been hit by cyber criminals who have compromised their customer's identities and banking/card credentials and tried to steal the money through bitcoin via a service like Circle. We've seen fraud rings that have clearly gotten data from some large banking data breaches, and those banks often tighten up their rules for specific merchants (e.g. Circle is the card merchant in this case). It sucks badly, and we have a program to work with the anti-Fraud groups at banks to make sure they understand and don't block customers from interacting with Circle.

[Justin]

Hey Jeremy,

Thank you for creating Circle.

What do you predict will happen in the Bitcoin space within the next 5 years? -- Answered already.

What is the next big move for Circle? Where are you taking it from here?

Thanks

Lee

We're really heavily focused on changing consumer expectations for and experiences of their 'spending account' or 'current account', moving from closed and proprietary, with crappy UX and built-in hidden fees, to an app based model where storing, using and sharing money is instant, global, secure, free and fun, and riffing on UX for how consumers have learned to share content and messages, not bank-like interfaces. We're focused on bringing more fiat currencies onto our platform as well. Mostly, right now, we're really focused on personal payments, including group or social payments; you'll see our apps changing every 2-3 weeks. We're also focused on making customer onboarding as seamless as possible, without compromising and risk and security.

Basically almost like a universal international venmo? I believe they don't exactly make much money. How do you compete with something like venmo if they could just integrate bitcoin themselves if it ever gained traction. Either way I like the idea of hiding bitcoin away and circle becoming a social tool for people to use. It'd be much easier to get people to use it as I've gotten people to use Venmo if bitcoin isn't plastered all over it. This is coming from a bitcoin fanboy.

[buddhamangler]

Jeremy,

Many of the interesting aspects of bitcoin come out when the "loop is closed". Do you think it is important for companies such as Circle to go after enterprise clients and help with this?

[jerallaire]

We're really heavily focused on changing consumer expectations for and experiences of their 'spending account' or 'current account', moving from closed and proprietary, with crappy UX and built-in hidden fees, to an app based model where storing, using and sharing money is instant, global, secure, free and fun, and riffing on UX for how consumers have learned to share content and messages, not bank-like interfaces. We're focused on bringing more fiat currencies onto our platform as well. Mostly, right now, we're really focused on personal payments, including group or social payments; you'll see our apps changing every 2-3 weeks. We're also focused on making customer onboarding as seamless as possible, without compromising and risk and security.

Basically almost like a universal international venmo? I believe they don't exactly make much money. How do you compete with something like venmo if they could just integrate bitcoin themselves if it ever gained traction.

Right now, there are really no globally adopted mobile apps for free personal payments and spending, but we believe that there will be WeChat and WhatsApp scale apps/services built around sharing value. Amazingly, in China, this is extremely broad consumer behavior, but in the US and Europe, really really limited. Services like Venmo, so far, have been constrained to a pretty small user base, and haven't broken out like other social and messaging apps have. So we think the space is still very wide open.

I think eventually nearly all walled garden payment services (PayPal, Venmo, Google, WU, etc.) will adopt open network protocols, much like closed online services eventually adopted HTTP and SMTP, or closed broadcast companies adopted Video over IP, etc. But I think that is unlikely to happen anytime soon, so we will race ahead supporting the global open ecosystem building around bitcoin's blockchain. As you note, yes, we want to see the world's most adopted currencies be directly usable on Circle.

Also, without sharing details, our vision is not limited to just personal payments, and likewise we don't feel like we are anywhere near close to done in seeing innovation in the use cases and UX of personal payments.

Jeremy

[jerallaire]

Jeremy,

Many of the interesting aspects of bitcoin come out when the "loop is closed". Do you think it is important for companies such as Circle to go after enterprise clients and help with this?

We're really exclusively focused on providing apps and services for consumers. Unlike prior payment ecosystems / platforms / networks, which required a closed loop or two sided platform by the platform operator, the digital currency ecosystem is built on open standards and open networks (e.g. the bitcoin blockchain), and so we can focus on consumers will other companies focus on b2b payment processing. There are many companies doing this, and we want those companies to grow and succeed.

While merchants conceptually love the benefits (fast settlement, secure / anti-fraud, global, nearly free), they've been frustrated because it's so complex and cumbersome on the consumer side of things. We hope we're addressing that with our most recent versions of Circle Pay (app store name) where consumers can just hold, send and spend USD, but the transaction is settled over the bitcoin network; the customer just needs to know how to click a payment URL or scan a QR code. There's still more work to do to make it a seamless experience -- e.g. exchange rate normalization, pricing denominated in fiat not BTC -- for the average person to feel comfortable using bitcoin for payments.

[marct]

Who do you admire in the business/tech world, and why?

[edugarbizu]

Hi Jeremy!
Can you explain how Circle technology works?
I mean, is it blockchain based? is it server based? (do you need to trust the servers in that case?)
Can the company change the customer´s funds? or is is a trustless system?
Hope you can shed some light on that.
Thanks

[jerallaire]

Who do you admire in the business/tech world, and why?

Lots of people. Early in my career, I was inspired by the creators of the PC industry -- Mitch Kapor, Bill Gates, Steve Jobs, etc., etc.

I admire Esther Dyson, who's an incredible and curious mind. I admire Elon Musk for taking such big risks and trying to solve really enormous problems and challenges. I admire Zuck for his relentless focus on product.

I admire Sheryl Sandberg a great deal, she has demonstrated such moral strength, combined with exceptional business leadership.

Recently, i really admire Slack founder Stuart Butterfield, who is clearly doing an amazing job iterating on the future of business collaboration.

Outside of tech/business, I have always deeply admired Noam Chomsky, who speaks truth to power more effectively than anyone on the planet, IMHO.

[jerallaire]

Hi Jeremy!
Can you explain how Circle technology works?
I mean, is it blockchain based? is it server based? (do you need to trust the servers in that case?)
Can the company change the customer´s funds? or is is a trustless system?
Hope you can shed some light on that.
Thanks

Pretty classic transaction-based message-oriented architecture, running in JVMs, with SQL DBs for persistence, multiple layers and levels of encryption and network security, including HSMs for master keys, running in a VPC in AWS.

Circle controls all of the private keys in our system. We keep a small amount online to meet transaction flows and reserve needs, and we keep the majority offline in several geographically distributed secure cold storage locations, with a multi-sig architecture governing bringing funds back online to Circle addresses. For online spends and receives, Circle runs bitcoin nodes and directly listens to mempool and responds to receives, and handles spends on behalf of customers. When spending/sending USD, we auto convert to BTC at the time of the transaction, again, invisible to the customer.

So, we are clearly not a "trustless system", anymore than Twitter is a trustless system for broadcasting messages online.

For the specific product(s) we are providing -- simple, easy, free payments apps -- this is the best available architecture today.

[crypter]

Hi Jeremy,
Thank you for supporting the community with a great business enterprise,
I have 2 questions:
1. With every advocate of Bitcoin talking about the un-banked, yet we see that most Bitcoin Business , Circle included, marginalize the unbanked, either the Treasury laws or risk of fraud etc. there are reasons for that , I understand. But I want your take as a business on the future of less fortunate countries. how do you envision these countries will benefit from Bitcoin while:
a. They cannot transition between fiat and Bitcoin (even Bitcoin ATM companies do not ship or provide service there)
b. They cannot hold on to Bitcoin and watch as it drop or gain 20% overnight.
Is the only solution for those countries local exchanges? but then how can those exchanges at the end of the day turn Bitcoin into fiat (sending Bitcoin is easy, the challenge is to turn it into fiat in cash based economy) , and when non of the large exchanges accept dealing with them? Do they have to create their own eco-system that use and consume Bitcoin?
Bit-Peza in Kenya is successful because, Kenya is accepted as more open and developed economy than most other smaller countries.
I'm talking about countries with no presence what so ever for Visa, Master Card or Paypal.

2. How do see the business of crypto currencies backed with USD or gold going forward (TetherUSD comes to mind) , they actually have a registration form! and check for KYC and AML , and have to have $1 for each Tether coin , is this sustainable, does it have a market? when it's not so much different than Paypal for example.

Thanks again

Asim

[jammers]

Hi Jeremy,

Jamie from BitcoinsInIreland.com here. I'm based in Dublin, and I know that you had a small office in The Digital Hub, but I've also heard that the person who was there doesn't work for Circle any more.

What's happening with the Dublin office these days?

Thakns!

Jamie

[jerallaire]

Hi Jeremy,

Jamie from BitcoinsInIreland.com here. I'm based in Dublin, and I know that you had a small office in The Digital Hub, but I've also heard that the person who was there doesn't work for Circle any more.

What's happening with the Dublin office these days?

Thakns!

Jamie

We continue to grow our Dublin Operations. We recently hired a new head of the dublin office (Joao Reginatto -- https://www.linkedin.com/in/joaoreginatto), and are adding more business operations staff there, and also expanding and moving the office to the docklands.

[jerallaire]

1. With every advocate of Bitcoin talking about the un-banked, yet we see that most Bitcoin Business , Circle included, marginalize the unbanked, either the Treasury laws or risk of fraud etc. there are reasons for that , I understand. But I want your take as a business on the future of less fortunate countries. how do you envision these countries will benefit from Bitcoin while:
a. They cannot transition between fiat and Bitcoin (even Bitcoin ATM companies do not ship or provide service there)
b. They cannot hold on to Bitcoin and watch as it drop or gain 20% overnight.
Is the only solution for those countries local exchanges? but then how can those exchanges at the end of the day turn Bitcoin into fiat (sending Bitcoin is easy, the challenge is to turn it into fiat in cash based economy) , and when non of the large exchanges accept dealing with them? Do they have to create their own eco-system that use and consume Bitcoin?
Bit-Peza in Kenya is successful because, Kenya is accepted as more open and developed economy than most other smaller countries.
I'm talking about countries with no presence what so ever for Visa, Master Card or Paypal.

We certainly want to continue to expand the ways that people can use Circle as an on/off ramp between fiat and digital, including more options such as pre-paid, ATMs, etc. We've prioritized first on people who have debit cards linked to a current account, or credit cards. Obviously we want to expand options as we grow. I think there need to be money service businesses in countries around the world that provide fiat-digital gateways, that conform to local AML rules, but that work with new payment methods such as mobile money. If bitcoin and the bitcoin blockchain continue to grow as a commercially viable open payment and settlement network, I would not be surprised if over time, the mobile carriers, local banks and payments companies all adopt integration directly with with bitcoin network.

2. How do see the business of crypto currencies backed with USD or gold going forward (TetherUSD comes to mind) , they actually have a registration form! and check for KYC and AML , and have to have $1 for each Tether coin , is this sustainable, does it have a market? when it's not so much different than Paypal for example.

I don't know anything about TetherCoin. I'm not that interested in and don't see a lot of value in coins backed by fiat or other assets. Eventually, of course, governments will offer their 'coins' on a crypto ledger which hopefully is easily inter-operable with the global open ledger (e.g. bitcoin blockchain), as the Bank of England is now seriously studying for the Sterling Pound (GBP).

[brucefenton]

Hi Jeremy!

Where do you see Circle focusing in the future : more towards broader adoption or higher dollar values,

In other words if you could choose between having 1000 new $100 customers or 10 $10,000 customers which would you choose?

Also, can you give a broad idea of what types of partnerships Circle is looking for in the future, are there any apps you are excited about or areas you think would make a particularly great fit?

Keep up the great work!

B

[jammers]

We continue to grow our Dublin Operations. We recently hired a new head of the dublin office (Joao Reginatto -- https://www.linkedin.com/in/joaoreginatto), and are adding more business operations staff there, and also expanding and moving the office to the docklands.

That's good to hear, how have the Irish banks treated you? Any problems getting a bank account opened? They didn't with my own business, but I'm not buying or selling bitcoin the way circle is.

[jerallaire]

Hi Jeremy!

Where do you see Circle focusing in the future : more towards broader adoption or higher dollar values,

In other words if you could choose between having 1000 new $100 customers or 10 $10,000 customers which would you choose?

Also, can you give a broad idea of what types of partnerships Circle is looking for in the future, are there any apps you are excited about or areas you think would make a particularly great fit?

Keep up the great work!

B

Hi Bruce-

We're very focused on growing adoption, and growing how people use Circle for everyday personal payments, which we expert on average will be quite small.

We're doing a range of partnerships mostly around things needed for our internal operations and making sure that our products work well in different geographies.

Jeremy

[jerallaire]

We continue to grow our Dublin Operations. We recently hired a new head of the dublin office (Joao Reginatto -- https://www.linkedin.com/in/joaoreginatto), and are adding more business operations staff there, and also expanding and moving the office to the docklands.

That's good to hear, how have the Irish banks treated you? Any problems getting a bank account opened? They didn't with my own business, but I'm not buying or selling bitcoin the way circle is.

We have a range of commercial banking relationships, but those where we are handling client money (e.g. conducing eMoney activity) are separate from those that are used for day to day operations of the company. We don't disclose who are banking partners are, but we principally work with national or global brands who have a focus on fintech / financial innovation.

Thanks,
Jeremy

[jammers]

thanks for the answers. On another note, how has your experience in Ireland been for the company? Worth it? Also, will Circle be getting involved in any of the local Dublin meetups? In the past, some of these were organised with Circle's involvement, and there's starting to be a modest but growing community locally

[jerallaire]

thanks for the answers. On another note, how has your experience in Ireland been for the company? Worth it? Also, will Circle be getting involved in any of the local Dublin meetups? In the past, some of these were organised with Circle's involvement, and there's starting to be a modest but growing community locally

Experience has been great. Very easy place to do business, and a lot of local talent. We're excited to continue to expand operations there. You should reach out to Joao about getting involved with the local community, I'm sure he'd be thrilled including sponsoring some things.

Circle co-founder Sean Neville is going to be in Dublin Wed-Fri of this week for the WebSummit and time with our team there.

Jeremy

[timryan]

Hi Jeremy,

Thanks for participating. A few questions outlined below:

Do you see any new use case examples with how consumers at brick/mortar checkouts exchange digital value beyond a mobile device to some POS display, as currently this experience is performed with credit card processors?

Are there enough merchants that are adopting this new method of digital payment both local for everyday purchases and globally to provide enough incentives to customers to use digital cash for their transactions instead of the status quo?

For security and safety to more mainstream consumers, is there an insurance possibility similar to the way the FDIC insures balances up to a certain amount? Who would back that?

Thanks!

[jerallaire]

Hi Jeremy,

Thanks for participating. A few questions outlined below:

Do you see any new use case examples with how consumers at brick/mortar checkouts exchange digital value beyond a mobile device to some POS display, as currently this experience is performed with credit card processors?

Are there enough merchants that are adopting this new method of digital payment both local for everyday purchases and globally to provide enough incentives to customers to use digital cash for their transactions instead of the status quo?

For security and safety to more mainstream consumers, is there an insurance possibility similar to the way the FDIC insures balances up to a certain amount? Who would back that?

Thanks!

Lots of work todo to get the UX for mobile app payments to work seamlessly in person. But good news is that as things like BLE and NFC open up on multiple platforms, there's plenty of room to innovate. Adoption by merchants at the PoS will take a long time, and so the first focus needs to be on the payment gateway companies and payment processors who sit between merchants and card networks, who will want to provide alternative digital payment rails to card networks. Companies like BitPay, Coinbase, Bitnet and others are taking this approach -- focusing on partnerships with other payment processors and aggregators.

In theory, payments over the bitcoin network are more safe and secure than existing payment systems. Deposit insurance like FDIC is insurance in the event that a bank over-leverages and goes bankrupt. With a full reserve model, this is less of a risk, of course. For Circle customers, we provide actual FDIC insurance coverage for up to $250k for USD balances. For BTC balances, we provide insurance from theft (cyber, physical, employee/fraud) for 100% of the BTC value.

Jeremy

[Deloren]

Hi Jeremy,


Thanks for doing the AMA!

I'm wondering, how does Circle deal with the price fluctuations? Do you store bitcoin on several exchanges? Does Circle buy directly from miners? How does Circle calculate the bitcoin sale/buy price (from the consumer viewpoint)?

Coinbase has its own appstore or developer community. What about Circle? I couldn't find a developer section.

Thanks!

[cemil.t??r??n]

Hi Jeremy,

You always mention sending/receiving money between people. Looks like your main aim (now) seems to disrupt international money transfer joints like WU. Which could be quite fast if you have enough geographical reach soon.

1-- Do you plan to attach your service to apps like Whatsapp/Fb Messenger/email?
2-- Do you plan to go into store payments in the future, like a digital app version of a bank POS.

Many thanks for being here.
Cemil

[jermwerty]

Hi Jeremy! Thanks for doing this AMA! I'm a long-term bitcoin miner so my in/out BTC flows look a bit different I assume than most investors or small time buyers (constant stream of incoming small deposits, sell sometimes to cover power usage). I have been worried in the past with all the KYC/AML policies I might get "flagged" for having the constant deposits - are you guys required to know where these funds are arriving from?

Additionally I buy/sell/trade a lot on forums (EDIT- Sorry I specifically was thinking buy/sell/trade GOODS in this case, forgot in this context without that clarification that would sound really bad - I am aware of the money transmission concerns!), and I always wondered what would happen if someone I sent bitcoin to ended up on the darkweb or a mixer with those coins, would my account become suspect because of someone else's actions?

[dcb]

Hi Jeremy,

Below is what I think is a very strong use case for Circle:

Example:
I have an employee in India that I pay to create drawings for my small US engineering firm.
Circle could run payroll for my business for the international contractors that I employ and they would receive the funds in a circle account. They could keep a % in rupee, and a % in USD, and a % in bitcoin if they choose to do so.

Is this something that is more easily done without bitcoin or would this be a legitimate use case for bitcoin and a possible service circle could provide in the future?

Thanks