Apple Cozies Up With Bitcoin -- What You Need to Know

Apple (NASDAQ: AAPL  ) is notorious for its tumultuous relationship with bitcoin developers. And given the cult-like nature of the bitcoin community, its coldness toward the virtual currency affects Apple's relationship with bitcoin enthusiasts, too. Lately, however, Apple has made moves in what appears to be an attempt to, perhaps, make amends with bitcoin. While the importance of friendlier gestures from Apple toward bitcoin and its loyalists may seem unimportant to those unfamiliar with the digital currency, a closer look reveals that Apple's newfound openness to the evolving technology may provide some benefits.

The Apple-bitcoin history
For years, Apple prohibited and removed bitcoin apps from its App Store, giving users no reliable iOS app to transfer or track their bitcoin.

Apple's reasoning, according to the statement it gave a number of developers, was that the activity allowed in the app was "not legal in all the locations in which the app is available, which is not in compliance with the App Store Review Guidelines." 

But in June, at Apple's 2014 Worldwide Developers Conference, Apple relaxed its policy toward bitcoin apps when it gave virtual currencies a specific mention: 

Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions

Then, on Monday, popular bitcoin app Blockchain returned to the App Store, finally giving bitcoin users a way to transfer the virtual currency on iOS again.

Blockchain app for iPhone. Image source: Apple App Store.

At bitcoin news site CoinDesk, Blockchain CEO Nicolas Cary explained the thought behind returning to iOS.

The moment Apple signalled [sic] a shift in their policy toward digital currency apps, we pulled the iOS project off the shelf and got to work. We wanted to use this as an opportunity to improve the wallet, but we were still apprehensive about dedicating huge amounts of engineering time because it wasn't clear what types of apps would get through the submission and approval process.

So far, the return of bitcoin to iOS has worked out well for Cary: "Working with Apple has been quick and easy, and we really appreciate their thoughtful guidance -- it's a partnership we really value."

Most importantly, Cary says that "this confirms that Apple is welcoming back the development community to invest, build, and create bitcoin apps again."

The implications for Apple
With Apple allegedly working on a new technology for payments, some people -- investors in particular -- have wondered whether bitcoin could be at odds with the potential new service from Apple. But Zachary Collier, who is known in the bitcoin communities as a knowledgable subject-matter expert (you can find him actively contributing to the bitcoin topic on Reddit under the name zamicol), told The Motley Fool that Apple doesn't have a reason to fear bitcoin as a competitor in the payments space -- at least not anytime soon:

Even if Apple does release their own payment solution, I don't think bitcoin itself will directly stand at odds with future payment technology as it functions differently from current payment methods. Maybe future businesses that support bitcoin services, like Coinbase, which acts like a bitcoin bank, might compete directly with other forms of mobile payment but for now bitcoin remains a niche means of completing payments with a very specific demographic. If that time ever comes Apple still has the ability to impose restriction[s] on apps that duplicate services Apple provides instead of an outright ban on cryptocurrencies like bitcoin. Apple might have asked itself, "Could bitcoin begin to cut into businesses that act like credit cards?" The answer is, "Not in the foreseeable future, and not directly."

iOS App Store on iPhone. Image source: Apple.

But there is another story on the implications of Apple's bitcoin policies beyond the potential overlap in the payments space, Collier says. And this one could be even more important -- especially in the near term. Given the popularity of bitcoin with developers, Collier argues that it would be wise for Apple to act favorably toward bitcoin policies.

Developers, I would argue, are one of the most important demographics for any computer company, and for Apple they create all the apps in the Apple ecosystem that keeps it vibrant and alive. By not embracing bitcoin like developers are, Apple risks disenfranchising some. As a developer myself, I view Apple's acceptance of bitcoin applications into the app store as a gesture of goodwill that will reflect positively for bitcoin aware developers.

Indeed, Apple's App Store is the heart and soul of iOS, and a major boasting point for Apple CEO Tim Cook at product launches. If developers love bitcoin, maybe Apple should, too.

At this point, there seems no harm in allowing bitcoin apps in the App Store. In fact, there only appears to be upside to a mended relationship. On that note, from one tiny Apple shareholder, I'd like to pay my regards: Welcome back to iOS, bitcoin.


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