Tonight a buddy of mine (who works at Google) and I released an open source application.
It’s an Android app for Bitcoin that allows you to have a digital “wallet” on your phone. Here are a few screenshots:
Simply put, the app allows you to send and receive bitcoins from your Android phone.
If you’ve never heard of bitcoin then you aren’t alone. It is a very new technology. After reading about bitcoin I still wasn’t sure what might become of it, but I wanted to learn more and figured the best way would be to dive in and build something with it!
If I had to sum up bitcoin in one sentence I’d say it is a “distributed peer-to-peer currency”. But what does this mean and why is it important?
I think it’s most important features are that it…
allows you to send money without transactions fees
allows you to send money instantly, anywhere in the world
and (it appears) it can do this securely
If you contrast this with how most payments work today, most merchants pay 2-3% as a transaction fee to Visa or Mastercard (and this fee is partially passed on to you as a consumer). In addition, whenever you want to move money between accounts it can take up to 3 business days. With bitcoin, there are no transaction fees and money can be moved instantly, anywhere in the world. This is a potentially very disruptive technology, even if it looks like a toy today.
Bitcoin accomplishes this using cryptography across a large number of servers on the internet, and doesn’t rely on one trusted third party (a bank) to control the money.
It’s also important to realize that bitcoin is not a new product or service, it is a new platform. Much like email or the internet itself, it has no centralized servers and many products and companies can be built on top of it (our app is just one). It’s also an open source project itself so anyone can see how it works and it isn’t owned by anyone. In fact, thousands of computer scientists around the world have looked at it at this point. This gives it a lot of potential to survive and adapt over the years.
Whether it ever becomes mainstream or not is still very much an open question (I have mixed thoughts on this). However, at present there is already about $100M in real money tied up in the bitcoin economy, so it has certainly shown some early promise. There are already a few stores starting to pop up who accept bitcoin.
I think a day will come very soon where we no longer need to carry a physical wallet, and our smart-phones will take over that job. I also think it would be great for the economy to not pay a tax of 2-3% on each transaction to Visa or Mastercard (both for businesses and consumers).
For a glimpse of how this might work, checkout this little demo video we put together. It shows us instantly transferring money between two phones using just the internet and a distributed network of computers around the world.
The QR codes you see used there could be on a point of sale device in a store, a mobile device like a phone, or a sticker on the wall.
It’s important to realize that those two phones could have been anywhere in the world. If you’d like to send money to another country today, Western Union takes a hefty fee and will take days. Even Paypal charges 2-3% and will take 3 business days to move money in and out of an account. Bitcoin is instant, and has zero transaction fees. You can do it from any computer, including a smart phone like the one shown here.
Anyway, I’ll see if I can post more about this in the future. But let me know what you think in the comments below. And if you have an Android Device, you can download it from the Android Market here. It is 100% free and open source.
Finally, if you are a developer, here is a link to the github project page.