Yesterday I finally got access to my Circle.com Bitcoin account, after I signed up for it 3 months ago during the announcement at the Bitcoin Conference in Amsterdam. My first impression: Circle is the most user-friendly and safest Bitcoin wallet (wallet = similar to a bank account) that’s currently on the market, but it’s not perfect yet. Because Circle is so easy to use and no real Bitcoin knowledge is needed it could help lead to more widespread Bitcoin adoption.

Setting up your account 

If you have ever used online banking you’ll be able to use Circle.com as well, the site is very basic without any bells and whistles, and leads you through the process of setting up an account in 2 minutes. You don’t need to understand much about Bitcoin and your coins are supposed to be safe because they are all insured.

After setting up your account (just an email username and a password), you are asked to give Circle your mobile number so they can send you a text message to verify it. From that moment on Circle will keep on sending you text messages with a verification code each time you want to log in or you want to transfer money. This is called 2-factor authentication and many other sites use it (I use it for many other applications to make them more secure, incl. for example Gmail), and it’s a good thing that Circle forces everybody to use it.

Account balance in BTC and USD

Once you are in your account you will see your account balance. I was happy to see that Circle sent me $10 worth of Bitcoin already, which is great for people who are new to cryptocurrencies and don’t own any BTC yet. The interesting thing is that the value of your BTC is prominently displayed in USD. This may confuse some customers at first because your account balance is fixed in BTC, but changes constantly in USD when the rate changes (overnight my USD balance went up to $10.35 because the BTC price went up).

Buying BTC

Buying BTC is a big problem for most people that I have introduced to Bitcoin over the past year, but Circle changes that. You don’t need to set up an account at an exchange anymore, but you just link your credit card or bank account to the website and transfer money to your Circle account. I connected one of my credit cards and that was literally done in 30 seconds. I could immediately transfer money from my card to the account.

Changing BTC from your circle account to USD is just as easy, you can just send it from your account to your credit card or bank account. Of course credit cards may charge fees for that, but bank transfers should be free. One downside is that only US bank accounts can be used for now, so international customers can only use credit cards to easily get money out.

Sending BTC

Sending money is even more easy, either you send money to another Bitcoin address like in every other wallet or you can send money to the receiver’s email if he or she also has a Circle account. That’s a major thing in my opinion, because most people at first are afraid to type in (or copy) a long string of characters when they send money to someone. But typing in an email address is something everybody does all the time, so using it transfer money is a much lower hurdle.

Issues with Circle

I am very impressed with the simplicity and functionality of the site. However, there are a couple of downsides that I need to mention here. First of all, for Bitcoin power users like me it’s not acceptable that I do not have my private key. This is similar to Mt. Gox where Mark Karpeles or a hacker was able to run away with most of the funds because the site held the private keys. Of course Circle solved this by insuring the funds, but I would still be reluctant to put larger sums on the site. But I believe that for most people not having to worry about a private key or storing Bitcoins offline is actually a good thing, because this is the same experience as putting money in a bank account, where you have to trust the bank to keep your money safe.

Circle creates a new Bitcoin address for you each time you want to receive money and this is confusing to consumers. People are used to having just one bank account that never changes. I emailed their support last night to ask what happens with used addresses and it turns out that they will always stay yours. So your ‘bank account number’ does not change, but you end up with many ‘bank account numbers’ that consolidate in your account balance. Probably a good solution, but because it’s initially confusing they should make it clear on the site how this works. By the way, their support responded very fast and gave a clear answer, this is very important for such service that depends on trust.

Another problem I have is hat Circle does not have a mobile app yet. They tell you to use their mobile site, but this is not very secure when you also receive your 2-factor authentication codes there. But worse is that if you want to pay with Bitcoin in a coffeeshop you can’t just scan a QR code and then press pay on your screen, but you’ll need to manually type in the full address. That makes using Circle virtually worthless to me when paying with Bitcoin in daily life. I assume this is something they’ll work on, because without it nobody will pay small amounts with Circle (or maybe that’s their aim right now?).

Conclusion: this comes close to BTC’s killer app

Generally I think Circle developed a fantastic product for new users. At Bitcoin conferences I have said a few times that I am waiting for the Bitcoin killer app to appear and I think this app comes very close. Circle is so simple to use that it could lead to mainstream Bitcoin adoption. If you’re interested in Bitcoin you should sign up for a Circle account and experience yourself how easy to use it is. Too bad I am not an investor in this company: they raised $26 million already and are probably values at $100-200 million right now, which is a bit out of my league.