Does Apple hate bitcoin? A look behind Gliph's (temporary) removal from the App Store

By Michael Carney , written on December 9, 2013

From The News Desk

Apple rules its iOS kingdom with an iron fist. The company rejects apps from its App Store, often without explanation and occasionally seemingly in conflict with its own stated rules or prior behavior toward comparable apps. Surefire ways to draw Apple’s wrath are to feature adult content, take unauthorized control of a user’s device, or otherwise break the law – be it the laws of a given country, or those which Apple has unilaterally created for its App Store.

Bitcoin is none of these things. And yet, Apple has emerged as anti-bitcoin, removing numerous bitcoin-related apps from its App Store – but not all. The company typically cites the app’s failure to “comply with all legal requirements in any location where they are made available to users,” per App Store Review Guidelines section 22.1, without providing any further clarity or guidance. The latest victim of such an App Store removal notice is Gliph.

Gliph is a private and secure communication and payments app designed for environments like Craigslist and cross-border ecommerce. The company describes itself as “the first fully-native iOS app approved by Apple for the App Store to send and receive Bitcoin” and “the only application that integrates with three major Bitcoin Wallet providers, Coinbase, BIPS and”

The company recently submitted an App update (Version 1.85) to Apple for approval, the 25th such update it has submitted since launching in February 2012 and the eight since incorporating bitcoin functionality in May 2013. Version 1.85 added the ability to scan QR codes pointing to a counterparty’s bitcoin wallet, allowing the user to send payments without having to key in a lengthy wallet address. This was the only change to the app’s functionality, according to Rob Banagale, Gliph’s co-­founder and CEO. Other non-functional changes included an updated visual design in accordance with the new iOS 7 design language and the inclusion of additional merchant integrations.

Not only was the latest update rejected – based on the above-described failure to comply with legal requirements – but Apple also insisted that Gliph remove existing functionality from the current version of its app (Version 1.80) which was already in the app store. The company was given until December 3 to submit an appeal of this decision. Despite this fact, Gliph version 1.80 was removed from the App Store on December 2 without warning. At proverbial gunpoint, the company relented and amended version 1.80 to remove the ability to send Bitcoin from within the app. This functionality is still available in the company’s Android and mobile Web product, which itself is accessible through any iPhone Web browser.

Banagale published a lengthy blog post this morning delving into “The State of Bitcoin Mobile Applications in the App Store and Google Play.” In it he also published the full text of his appeal letter to Apple’s App Review Board and details of his communication with the company during this appeals process. It’s a rare and potentially instructive look inside the way Apple rules its fiefdom.

As Banagale notes in both his blog post and appeal letter, Apple’s policy toward bitcoin-related apps seems inconsistent and potentially ill-informed. He writes:

Despite this breaking of a previously established agreement about our app, our bigger concern was that the Apple representative seemed to lack a basic understanding about the difference between trading and transferring Bitcoin. These are significantly different things, especially with regard to potential future regulation.

The company has previously removed several apps that offer some form of wallet functionality – the ability to send, receive, and store bitcoin – including Bitcoin Express, Bitpak, and Coinbase. At the same time, it allows others such as Blockchain and Coinjar to remain. At best, this is an indication that Apple is unaware of its own policies toward bitcoin or is sloppy in their enforcement. More cynically, it’s an indication that Apple doesn’t understand bitcoin and thus can’t distinguish between functions of similar apps.

Banagale writes:

You may be aware of one or more apps in the App Store that still offer useful Bitcoin functionality. Why are those still available? While we have our own guesses, we believe it is in the best interest of the Bitcoin community to avoid naming the remaining useful bitcoin apps and speculating publicly on why these apps remain in the store. Though, given Apple’s prior behavior, it is most likely a matter of time before they are removed.

Gliph is not a bitcoin wallet, nor is it an exchange or trading platform. At its most basic level, the app offers secure text messaging and the ability to integrate with third-party bitcoin wallet platforms which it then calls upon via API to complete transactions. The app does send bitcoin via these third-parties, but does not receive bitcoin, exchange bitcoin for government currency (like USD), or trade bitcoin for other bitcoin (something that could facilitate money laundering).

The CEO offers three reasons why Gliph does not violate section 22.1 of Apple’s App Store Review Guidelines. While his lengthy discussion are worth reading in full, the high points are:

  • The existing Gliph iOS app is not in violation of any local laws because it neither sends nor receives Bitcoin. [PandoDaily note: It does facilitate sending bitcoin indirectly, through a third-party API call]

  • The existing Gliph iOS app does not “trade” Bitcoin.

  • The newly submitted Gliph iOS app does not add functionality that violates local laws.

Apple declined to specify in which jurisdiction Gliph violates legal requirements, but the app is available for download “worldwide,” or in every jurisdiction which Apple offers its App Store.

Bitcoin is being evaluated and discussed at length by a number of leading world governments, but none to date have banned its use. The United States has required that exchanges operating within its borders register as Money Transmission Businesses – a designation which would not apply to Gliph since it does not handle any bitcoin or fiat currency. The closest thing to an outright ban came this past week, in China, where banking regulators announced that bitcoin and other virtual currencies are legal to use between citizens, but are not to be used by banks, payment companies, or merchants. Notably this occurred after Gliph’s app was rejected by Apple.

Banagale requests that Apple develop clear App Store guidelines dealing with bitcoin. His three recommendations, which may be viewed as self-serving, are:

1. Allow apps that facilitate or directly move Bitcoin from one wallet address to another.

2. Do not allow apps that “trade” or exchange fiat currency for Bitcoin.

3. Allow apps that read Bitcoin addresses by scanning QR codes.

In his letter, Banagale is surprisingly cordial and complimentary toward Apple. Perhaps this is just wise diplomacy. He notes that not only are he and his team avid iOS users themselves, but that one of his iOS developers, James Lawton, previously worked on Apple’s own retail store and concierge app. Since its beginnings, the company has developed for iOS first, with its Android app typically lagging behind its iOS version in terms of features. In other words, we’re the good guys.

Unfortunately, if history is any guide, Gliph is unlikely to get much of a response from Apple or see much softening in its stance against bitcoin. The company is notoriously stubborn and opaque in its dealings with App Store approval matters. And while the bitcoin phenomenon is certainly growing rapidly, it is anything but mainstream. Apple’s target is mainstream. Until the legality surrounding bitcoin is crystal clear, and the demand for access to bitcoin tools is widespread, Apple presumably sees little incentive and plenty of risk in supporting related apps.

“If there’s anyone that can take this fight up with Apple more effectively, it’s Apple’s customers,” Banagale says. “Customers should contact Apple directly.”

Banagale’s blog post addresses the question, Why is it important for there to be useful Bitcoin apps? He writes:

Bitcoin skeptics don’t see the proof-of-work from mining as a good reason for there to significant value in the currency. Instead, the focus is on whether Bitcoin has value because it is a generally accepted form of payment for goods and services.

Since Bitcoin is electronic, and many things need to be paid for on-the-go, the smartphone is the natural device for use of Bitcoin. This makes use of Bitcoin on a smartphone an important contributor to sustained value of Bitcoin as a currency.

In other words, this is a chicken and egg situation. For bitcoin to become more widely adopted, there needs to be easy to use tools making the virtual currency more accessible to mainstream users on the platforms they already use – platforms like iOS.

Unlike Apple, Google has yet to request remove a Bitcoin app from Google Play, or request that a developer remove bitcoin functionality from an existing app. As a result, the Android ecosystem is crawling with bitcoin apps – something that was briefly the case on both iOS and Android. The company has not explicitly endorsed or approved bitcoin, but appears to be taking a wait and see attitude toward the evolving regulatory situation. Whereas Apple was proactive and conservative, maybe even pessimistic, Google appears willing to remain passive and, dare I say it, optimistic.

Bitcoin is a global phenomenon and Android is the mobile platform with the largest global market share. To that end, it would not be the end of the bitcoin ecosystem if Android became the exclusive home of bitcoin on mobile. But, Apple has repeatedly demonstrated its ability to validate and bring mainstream previously marginalized technologies such as touch screens, voice commands, and biometric sensors, among others.

The fear is that without Apple’s buy in, bitcoin will remain a quirky technology for government conspiracy theorists, crypto-nerds, and those lurking in the internet’s shadows. Recent events have demonstrated that bitcoin is already moving beyond this crowd, but Apple's rejection of the platform could conceivably stall this progress.

Gliph is currently fundraising and had two investments pending  at the time it received its rejection notice from Apple. Fortunately for the company, these investors followed through on their commitment to back the company despite the uncertainty of the current situation. The latest funds bring the three person company to just $400,000 in backing to date – it had raised $250,000 previously, in part through its participation in the accelerator and is targeting an additional $500,000 as part of this ongoing round. Current backers include, Boost VC, Bitcoin Opportunity Fund, Rogue Venture Partners, Pantera Capital, Portland Seed Fund, Tim Draper, Zander Adell, and Tom Sperry.

It’s still early days for Gliph, which has just 25,000 total users across both iOS and Android. Given the uncertainty around its future on the iOS platform, the company will begin dedicating the majority of its resources toward Android. IOS users will still have access to the company’s now stripped-down native app and its full-featured mobile Web product.

Banagale views himself as an early founder in the bitcoin industry and thus holds a sense responsibility toward the rest of the community to spread awareness and increase bitcoin adoption.

“I feel like it’s important to give this detailed look at the state of bitcoin on mobile and promote what’s best for the industry,” he says in a telephone interview. “It’s an honor to be involved at this early. It’s almost like evangelizing on behalf the Internet itself. Bitcoin is so much bigger than Gliph. It’s bigger than Apple.”

[Image via PatentLawCenter]