CNET Founder Readies Bitreserve Launch in Bid to Quell Bitcoin Volatility

Halsey Minor made a name for himself during the dot-com boom with CNET. Now he’s climbing onto another new-technology wave with Bitreserve, a bitcoin-wallet serviceunveiled in May that will become publicly available later this month.
Bitreserve has a few features differentiating it from other digital-currency wallet services. It taps the efficiency and low-transaction costs of bitcoin, but also promises to lock in users’ bitcoin deposits at fixed exchange rates. The service does not allow actual exchanges of bitcoin against fiat currencies but rather promises to absorb and manage the risk of bitcoin losing value against them by maintaining and publicly displaying an asset reserve covering 100% of its clients’ dollar- and other currency-denominated deposits. The goal is to overcome the extreme price volatility that has been the digital currency’s primary deterrent for mainstream users and thus provide them with a service for cheap, reliable money transfers.
‘We want bitcoin to go from being this weirdo currency to being ‘my currency,’ ‘ says Mr. Minor.
A key target market for the service is that of remittances, by which immigrants in the U. S. send money back to their home countries. Remittances from the U. S. to Mexico alone ran to an estimated $22 billion last year, according to the World Bank. By locking in rates in dollars and/or Mexican pesos and by keeping transaction fees as low as 0.45%, Bitreserve aims to take a portion of that market away from dominant providers such as Western Union , which use the more costly banking system to send money.

This post was published at Wall Street Journal on Oct 22, 2014.