Apple yanks last remaining bitcoin wallet

Above, a gentleman who was unhappy with Apple's decision to remove the Blockchain bitcoin wallet from the iTunes App Store shot holes through his iPhone with a rifle.

• Boing Boing presents a guest op-ed from the the Chief Security Officer of Blockchain, a Bitcoin wallet app recently removed from Apple's App Store.

On Wednesday February 5th, Apple yanked Blockchain, the last remaining bitcoin wallet from the App Store without notice, firmly establishing iOS as the bitcoin-hostile mobile operating system. In a terse email to the app’s developers, Apple cited an “unresolved issue”, without any further explanation. While Blockchain’s developers scrambled to get clarification, it appears the unresolved issue is that the application is a bitcoin wallet, something that cannot be “resolved.” Blockchain was the last of the bitcoin wallets, the others yanked months ago by Apple’s innovation gatekeepers.

Meanwhile, across the mobile market divide, Google’s Android OS is quite bitcoin friendly. More than a hundred bitcoin related apps, including a dozen different wallets, compete for attention in a crowded market. Clearly, Apple’s “unresolved issue” is not related to bitcoin’s legality, which has been firmly established in the US and almost all other jurisdictions. Presumably, Google’s lawyers arrived at the same conclusion as US law enforcement agencies and the Financial Crime Enforcement Network (FinCEN) in the United States, that the use of bitcoin is perfectly legal.

So if legality is not the problem, what is?

Apple’s walled garden has always been touted as a means to ensure a safe and high quality, consistent experience for its users. The blockchain app had built a solid user base with more than 120,000 downloads and high ratings over two years. Apple had offered no warning or expressed any concern over the safety or quality of the application. Rather, it seems to have simply missed the application in its review process and just belatedly decided to drop the hammer once it was noticed.

The reaction by bitcoin’s iPhone users was both furious and at times quite funny. One reddit user offered Nexus 5 Android phones to anyone who would demonstrate their ire by destroying their iPhone in protest, in the most spectacular way. Many raced to compete, creating hilarious entries with titles such as “blunt object” and “second story window” to document their chosen means of iPhone destruction. The top prize however must go to the reddit user “dieselgeek,” a firearms reviewer who reports under the name R3 or “Ryan’s Range Report” who drove out to the middle of a snow covered firing range to put three bullets into his iPhone at 300 yards with a high-powered sniper rifle. [See video, above.]

All this demonstrates the unenviable position that Apple has as gatekeeper of the App Store’s walled garden. Touting security and user experience as their mission, the reviewers find themselves acting as arbitrators of technology innovation in a world that moves far too fast for them to remain consistent, or credible. Their ambiguous criteria for judging application qualifications can never be flexible enough to anticipate technologies as radical and disruptive as decentralized currencies. Furthermore, by applying a blanket ban on a technology that directly competes with their in-app purchases payment system, from which Apple derives a fat 30% fee and with a rumoured retail payment application for iOS in development, Apple opens itself to accusations of anti-competitive behavior. While it is likely that Apple lacks the internal strategic sophistication to see bitcoin as a threat, the ambiguity and capriciousness of the rules made many in the bitcoin community suspect the worst.

By banning bitcoin wallets, Apple has cut off millions of users from one of the most exciting and empowering technologies since the Internet itself, as crypto-currencies implement what is often called “The Internet of Money”. What started as a trickle of apps with bitcoin wallets in 2013 will likely turn into a deluge as hundreds of companies compete and innovate on bitcoin, as well as hundreds of other crypto-currencies in this exploding new tech industry. Worse, Apple is thwarted by the open nature of the Internet, as most bitcoin wallet designers are quickly pivoting to HTML5 as the platform to deliver bitcoin wallets right in the browser. The last hurdle to such implementations, which was the ability to use the phone’s camera to capture QR code encoded bitcoin addresses was recently overcome and a deluge of HTML5 bitcoin wallets is in development. Apple will now face even more pressure as these wallets slip further outside their control making a mockery of the restrictive App Store rules and leaving them with few options other than imposing orwellian controls inside Safari, the mobile web browser.

Bitcoin is still a niche fad among geeks, but the underlying technology that made it possible is creating a revolution in de-centralized finance that is unleashing a tsunami of pent-up innovation. Bitcoin’s open network architecture allows innovation at the edge of the network, innovation without permission and a proliferation of bitcoin applications that implement novel financial services. Even if bitcoin itself were to be eclipsed by subsequent generations of crypto-currency innovation, the core technology is more likely to have a major impact on financial empowerment for billions of people around the world. Standing alone, in the guard shack at the entrance to its walled garden of applications, the world rushing by too fast for comfort, Apple may find that the role of the gatekeeper of innovation is a very lonely one indeed.

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