Apple Inc’s decision to remove a program used to send and receive bitcoins from its App Store prompted New York-based SecondMarket Inc CEO Barry Silbert to end a love affair with his iPhone.
“I’m switching,” Silbert said in an e-mail after Apple this week removed his bitcoin application of choice, Blockchain.info.
“Shopping for a new phone this weekend,” he added.
From Wall Street to Silicon Valley, technology enthusiasts who used to see the Cupertino, California-based company as a kindred spirit are voicing their frustration over its policies. Apple requires apps to be legal everywhere they are offered and some governments, including China and India, have questioned bitcoin’s legal status.
The ouster of Blockchain is causing a backlash and some people are going to extreme measures to show their displeasure. Several people posted videos online destroying their iPhones. One user shot his iPhone with a sniper rifle, another smashed it with a metal bar and another threw it down a flight of stairs.
Bitcoins exist only as software and transactions are completed via computing devices. Even though no physical currency exists, merchants from car dealers and Web stores are accepting the digital money. Mobile apps such as Coinbase, which was removed from the App Store last year, and Blockchain have become a popular way to make payments.
Blockchain had been downloaded 120,000 times before being removed. Apple has already shut out several other applications that facilitate digital-money payments from its online store.
“Apple has been acting to suppress bitcoin apps for years,” said Rob Banagale, the CEO of Gliph Inc, a bitcoin app that Apple allowed to remain in the store only after the ability to send and receive bitcoins was removed.
“Few consumers are using bitcoin actively yet, including Apple customers,” Banagale said.
Since removing the apps “affects only a tiny fraction of their customer base, it isn’t worth having bitcoin as an additional consideration for the company to worry about regulatory oversight,” he said.
Backers of bitcoin, including the venture-capital firm Andreessen Horowitz, see it as an alternative to the global-payment system currently dominated by companies including Visa Inc, Western Union Co and large banks. Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.
Early adopters of bitcoin technology, many versed in cryptography, saw it as a way to thwart government control of currencies.
Jerry Brito, director of the technology program at George Mason University’s Mercatus Center, said Apple probably banned Blockchain due to concerns that bitcoin transaction apps would run afoul of the law.
“Apple removing bitcoin apps is stupid, but I don’t think it’s doing it to thwart competition,” Brito said. “But it’s so opaque, people will speculate.”
The App Store is a big business. Apple said last month that the digital storefront was available to users in 155 countries and had sales of more than US$10 billion last year.