Payments Startup Balanced Innovates In Wrong Direction

This article is just, plain, silly. The author criticizes Balanced because they don't support Bitcoin? Yea, so, here's the deal -- startups need to make money, not chase down ideological, academic experiments like Bitcoin.

As a customer, I can attest that Balanced provides a really, really valuable service to anyone building a marketplace. If you need to support money in via credit cards and money out via ACH, no other solution like it exists. It's fantastic.

Bitcoin is an investment, not a currency. Buying bitcoin is not much different than buying gold. It serves exactly none of the properties of a currency: It's not a good medium of exchange, store of value, or the other derivatives thereof.

Moreover, it's a rogue currency, not supported by any government. In fact, it is decentralized by design. This is great in theory -- decentralization can be great in company structures, software design, etc. But not currencies. It doesn't work. There is no such thing as a modern currency that's not backed by a central bank. Bitcoin is a libertarian's wet dream -- a currency not backed by the Fed that enjoys widespread usage. But it will never be more than that, a dream, because the economics of bitcoin as a stable currency simply don't work, certainly not in a modern economy.

Some of the problems bitcoin is trying to solve are important, and worthy for sure. For example, cryptography in the context of digital payments and identity. So let's take the parts that need solving, but solve them in a practical way.

Innovation in digital payments is coming, but any company operating in this space, as a matter of strategy, must support the existing payments infrastructure. Square is a great example of this: Get everyone swiping credit cards and creating square accounts, then, start paying digitally with your Square "tab".

I commented on the Forbes article, but I figured I'd repost my comment here:

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Hey Jon,

Thanks for the comments.

We do our best to listen to our customers. The primary reason that we haven't built Bitcoin support is that we haven't seen requests for Bitcoin as a payout method.

We use GitHub to track feature requests, so I created a GitHub issue (https://github.com/balanced/balanced-api/issues/204) for Bitcoin. I'd love to get feedback.

I also submitted the GitHub issue to HN (http://news.ycombinator.com/item?id=4833049) to drive more attention and increase feedback.

Matin Co-founder/CEO, Balanced