An upstart cryptocurrency company, Block.io, is aiming to make it easier for developers to build cryptocurrency wallets with a simple API, and it's looking to disrupt the nascent cryptocurrency market in the process.
One of the most compelling features of cryptocurrencies is that they enable the instant movement of money outside of the traditional financial system — a traditional financial system that almost always extracts fees, sometimes hefty ones.
In theory, bitcoin and cryptocurrencies like it have the potential to significantly reduce or eliminate these fees, but today, the cryptocurrency ecosystem is filled with providers charging for their services. Block.io hopes to change that.
According to the company, "There's no need for non-network transaction fees anymore. We're not moving horses and buggies around towns trying to secure money; that's the Blockchain's job, and it does it well. Why charge transaction fees at all? You should be able to keep what you earn, and pay only the minuscule Network fee to miners that help secure the Bitcoin network."
Using the Block.io REST API, developers can create up to 5,000 zero-fee wallets that support three of the most widely used cryptocurrencies: bitcoin, Dogecoin and Litecoin. According to the company, the Block.io API makes it possible for developers "to go from nothing to a usable wallet/payment service in their own apps within 15 minutes." Currently, there are libraries for Ruby, PHP, Node.js and Python, and Java and C libraries are coming soon.
Given the sensitivity around wallet security, Block.io employs a number of techniques to help protect wallets created with its API. For instance, all wallets are encrypted, and the company says that it would take more than 4 million days to crack one user's secret PIN. In addition, Block.io does not physically store users' private keys.
A Different Business Model
Obviously, for the Block.io service to be sustainable, it must generate revenue. Instead of service fees, the company offers two paid plans. Both allow for the creation of unlimited wallets, a higher level of service, early access to new features, support and a certain number of hours of consultation each month. Block.io's Master plan also provides for the development of custom API endpoints.
Will Block.io's model work? Time will tell, but if bitcoin and other cryptocurrencies are to thrive, expect to see other providers experiment with models that deliver on the promise of close to no-cost digital transactions.