Apple has been silently promoting their iBeacon technology and recently debuted it in their own stores

Bitcoin Versus iBeacon, Apple’s Up And Coming Payment System Infrastructure

Apple has been silently promoting their iBeacon technology and recently debuted it in their own stores

Apple has been silently promoting their iBeacon technology and recently debuted it in their own stores

This past Friday: December 6th, 2013 Apple launched iBeacon within its 254 U.S. stores.  iBeacon takes advantage of Low Energy (LE) Bluetooth, which Apple has silently put into all of its products since the iPhone 4s and iPad 3rd gen.  Essentially, any device that can run iOS7 can be directly used as a LE Bluetooth device and function as a transmitter and receiver: be an iBeacon.  TechCrunch’s article on the iBeacon calls Apple’s marketing of the iBeacon an “Open Secret,” and Wired goes on to call iBeacon a force that might “Disrupt Interaction Design.”

As of right now, there are anywhere from 170-190 million Apple devices that can be used as an iBeacon.  Experts estimate that after this coming holiday season, the total number of iOS 7 capable, and thus iBeacon capable, Apple devices will reach upwards of 250 million.  There are even extraneous companies, such as Estimote, developing standalone LE Bluetooth devices for use as an iBeacon that can run for an entire year on a small watch battery.

These small devices could tie digital data to physical locations, but can they be used for payments?

These small devices could tie digital data to physical locations, but can they be used for payments?

The next step in this innovation is the tying of virtual data to physical locations and items.  iBeacon’s technology can pinpoint an LE Bluetooth device, and hence its owner/operator to within a few feet of their actual location.  With this technology, in 254 Apple stores around the world, users that have installed the App from the iOS App Store and accepted all the terms, can receive automatic updates and information on the products they are nearest in the Apple Store.  iBeacon would allow a user to walk into the Apple Store, walk up to the newest iPad, receive billing information on their own iBeacon enabled device and make the purchase through Apple’s own e-wallet services all without speaking to those over-enthusiastic Apple employees.  The use case for an Apple Store may not seem readily apparent to readers; however, imagine if you could go to a humongous grocery store with your pre-made shopping list and have an App that tells you exactly where everything is.  Hell, the App could even use proprietary GPS pathing algorithms to map you the “quickest” route to pick up all the goodies on your list… Oh yeah, you don’t have to wait in line for a cashier or cut out coupons either, those are included.

Just how innovative is this though?  LE Bluetooth as the most energy-efficient means of remote Near-Field Communication (NFC) does have promises; however, in-store location technology has been around for awhile.  An App called Shopkick sends users discounts to be used at Macy’s and J.C. Penney whenever they enter a store location.  In fact, everything that I described in the previous paragraph can happen without Apple.  In fact, iBeacon is only used in Apple Stores right now because those that peruse Apple Stores are likely to already have an Apple product, and an affinity for giving up privacy rights for ease of use.

Qualcomm, like Estimote, is also launching an NFC device that works with LE Bluetooth and competes directly with the iBeacon, with one notable difference: functionality on Android devices.  The picture being painted should be getting clearer, this NFC technology being developed by Apple and the rest of the world isn’t yet a payment system; however, it is the infrastructure for a payment system.  This infrastructure being disseminated by Apple, and the underlying LE Bluetooth technology being pursued by many more companies, might have long-lasting effects on basic consumer interaction design for the average consumer’s retail experience; however, a revolutionary payments system it is not.

 

On to Bitcoin, which is actually a revolutionary payments system!

Bitcoin already has an established infrastructure for its payment system.  This infrastructure has been in place longer than Bitcoin’s existence and in fact, every internet-enabled Apple device since the 1990s (not just the iPhone 4s or 3rd gen iPad) can access and be a part of this infrastructure.  Of course, I am talking about the Internet.  As of 2013, Cisco believes that there are over 8.7 billion internet enabled devices in the world, which means there are over 8.7 billion potential “Bitcoin beacons”.  Obviously, only a portion of the 8.7 billion internet enabled devices are capable of running a full Bitcoin node; however, the vast majority of them are undoubtedly able to operate a light-weight client.  Also, since Bitcoin can be sent by SMS, the true amount of “Bitcoin-enabled” devices is actually in the tens of billions.  250 million iBeacon, and maybe iPayments, enabled devices by 2014 doesn’t even seem significant anymore does it.

I know that any infrastructure that Apple sets up in their attempt to move on the P2P payments network can be used for Bitcoin as well.  On that note, it should be readily apparent why Apple has taken out key Bitcoin functionality from most Bitcoin apps in their iOS App Store.  Gliph and Coinbase are the two most recent casualties of Apple’s anti-Bitcoin Terms of Service.  Despite Apple’s best efforts to keep Bitcoin-enabled Apps out of its App Store, Bitcoiners will always be able to access Gliph and Coinbase’s services through an Apple sanctioned web browser such as Safari.

I look forward to seeing what LE Bluetooth does for my personal shopping experience, but seeing as how Apple technology has consistently been too under-performing and over-priced i will likely never have an iBeacon enabled device.  Actually, I don’t think I would want to give up that much privacy for any perks they could conceivably offer me.  However, the inconceivable “perks” are exactly what developments in technology will lead to.  I believe that iBeacon, and other LE Bluetooth devices, will start tying digital data to physical locations/stores in cost-efficient ways: I just needed to point out that there is nothing in the sphere of payments that Apple, Qualcomm, Estimote, or even Google can do that Bitcoin can’t do better.