CNET founder Halsey Minor is climbing onto another new-tech wave with Bitreserve, a bitcoin-wallet service unveiled in May that will become publicly available later this month.
Bitreserve, a bitcoin-wallet service that was unveiled in May, will become publicly available later this month.
That’s how Bitreserve works: when one transfers bitcoins to Bitreserve, the company sells them and buys fiat currency. Users are able to hold bitcoins as dollars, euros, pounds, yen and yuan. Regardless of the price of bitcoin, users will possess that value until they spend it – as bitcoins.
The company spouts low-transaction costs and the efficiency of bitcoin, promises to bound users’ bitcoin deposits at fixed exchange rates, to consume and manage the risk of bitcoin losing value against fiat currencies by maintaining and publicly displaying an asset reserve covering 100% of its clients’ deposits.
Bitreserve’s goal is to conquer the extreme price volatility, that has been the digital currency’s primary preventive for mainstream users, and provide them with a service for reliable, easy and cheap money transfers.
“We want bitcoin to go from being this weirdo currency to being ‘my currency’,” said the founder and CEO of Bitreserve Halsey Minor.
If you want to understand the strengths of Bitreserve in a right way, you are welcome to watch its presentation by Halsey Minor (see the video above).
A core market for the service is people who have to permanently send money. That’s reasonable because for instance, according to the World Bank, remittances from the U.S. to Mexico alone ran to an estimated $22 billion last year.
By keeping transaction fees as low as 0.45%, Bitreserve attempts to take a part of that market away from dominant providers such as Western Union that use the more costly banking system to transfer money.
The company’s financial data showing reserves is public. API documentation is available on the website as well as copies of the Reservechain/Reserveledger transparency data.
In order to make the system work, Bitreserve must prove their reserves, thus preventing failure, guaranteeing exchange rates and preventing bank runs. Besides, users must trust that the company stands behind the fixed exchange rates, key to which is their conception of its reserve management.
Bitreserve aims to overcome them by publishing and constantly updating the breakdown of the reserve’s assets in a real time. The portfolio is supposed to contain short-term bonds and other highly liquid, low-risk securities, all denominated in the various underlying currencies.
The policy of full reserve admission is helped by the transparent features of bitcoin’s universal ledger, that displays every underlying transaction publicly.
With these real-time admissions and backed by quarterly audits, the company vows that customers will reach a sufficiently high level of confidence in the currency values quoted on the site.
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