News Column

Apple Ditches Last Bitcoin App

February 7, 2014

Jacob Harper, Equities.com

bitcoin
Bitcoin virtual currency (Equities.com)

On Feb. 6, Apple Inc. (AAPL) dropped the Blockchain, the last remaining bitcoin wallet app in their App Store. The tech giant provided no public explanation, merely removing Blockchain and alerting them via email that they did so for "unresolved issues."

Blockchain, understandably, is upset. And they came out guns blazing, alleging a far-flung conspiracy that is "anti-competitive and capricious in nature," ultimately engineered to ensure the success of a supposed, forthcoming Apple money-transfer app.

The company's anger and frustration is understandable - while Blockchain is still available on Google, Inc. (GOOG) Android phones, removal from the App Store is certainly a blow. Blockchain had been downloaded from the App Store 120,000 times in two years, and the move certainly affects their bottom line considerably.

Blockchain asserts that Apple dropped them not just because Blockchain is a competitor, but that Apple views bitcoin itself as a threat, saying the cryptocurrency itself has "become competitive to Apple's own payment system." Blockchain CEO Nicholas Cary further equated the decision to drop his company's app with aiding economic oppression, writing that "Bitcoin's use for international payments from family members sending money home to support entire communities in the developing world and for charity fundraising and fund distribution will be severely affected by this decision (to quit selling the Blockchain app). As of Wednesday, bitcoin is no longer available to those using iOS devices, once again leaving them to the mercy of oppressive currency controls and governments in some of the worst regimes in the world."

This hyperbolic framing of Apple's decision is supported by reporting on the matter that equates dropping an app with banning it, implying Apple possesses a dark ulterior motive and is engaging on censorship and economic repression of the highest level, never mind that emerging market mobile money transfer apps like Xoom (XOOM) remain widely available.

Blockchain isn't the first bitcoin transfer app to be removed by Apple, they have just been the most vocal - Apple previously dropped the short-lived Gliph and Coinbase, and those companies accepted the decision a lot more quietly. Through all the bitcoin app drops, the reason has always been the same: Apple does not want to break the law. Gliph, in their blog explaining their drop, cited Section 22.1 in Apple's Review Guidelines:

Apps must comply with all legal requirements in any location where they are made available to users. It is the developer's obligation to understand and conform to all local laws.

Bitcoin, regardless of its benefits, still exists in a legal gray area as far as regulators are concerned. And in countries like China, where Apple has made an aggressive play for some time now, bitcoin has a rather dim future.

It's just not worth it for Apple, at this point, to facilitate bitcoin transactions. If bitcoin gains regulatory approval - not tacit approval, but an actual A-OK from the US - bitcoin apps like Blockchain will once again become available.

Apple isn't threatened by bitcoin as a concept. Though the diehards aren't selling anytime soon, Apple could theoretically use the profits they made in the last quarter alone to buy the entire global bitcoin market. Apple's decision is less a conspiracy against Blockchain or bitcoin in general, and more a very basic cost-benefit decision. And if Apple was found by regulators to be facilitating, say, money laundering or tax evasion, that could be quite costly indeed.

Dropping Blockchain was not the result of a shadow conspiracy designed to crush a competitor, borne of a fear of the power of bitcoin to destroy them. Apple has nothing really to lose by working with bitcoin facilitators if and when the currency gains true mainstream usage and domestic regulatory approval. But until then, they certainly do. Nothing really more dramatic than that.

From a bottom line perspective, 120,000 downloads over two years barely registers on Apple's radar. But the potential to alienate an entire government does. While they might (and probably will) work with bitcoin transfer companies in the future, and this point, it's just not a risk the company is willing to take. And that there is the real "unresolved issue" Apple cited. Not Blockchain's, but the entire legal status of bitcoin in the US.

Original headline: Why Apple Ditched Blockchain: Bitcoin's Not Worth the Trouble


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Source: Equities.com


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