Really cool and useful apps are achievable through mash-ups. Examples include mapping integrated with Web pages to provide location information for businesses or Amber Alerts combined with SMS to quickly get child abduction notifications to large numbers of people.
Shortly after Google released the first version of WebRTC, discussion began on the Internet about mashing up WebRTC and bitcoin, the open-source peer-to-peer payment network, to create pay-for-use telephony. Part of this was for gearheads who simply liked using their PCs for calling and wanted an alternative to Skype. However, developers also have voiced some other legitimate (and non-legitimate) reasons for mashing up bitcoin and WebRTC.
The key idea behind the bitcoin phone is enabling payments for gateway services and connection charges from WebRTC to the PSTN using the bitcoin digital currency as opposed to using any of the currencies backed by any particular country's central bank. So, why would someone want to use bitcoin as opposed to just using regular currency?
Free From Fees
Well, part of the reason is the payment process. Using a cloud-based service like Skype typically involves payment via credit card. This comes with two downsides. The first is the required exchange of personally identifiable information with the service provider. The second is the associated fee, which often includes two components: a per-transaction charge ($0.19/transaction, for example) and a percentage of the transaction fee (2.3%, for example). To recharge a Skype account, you need to pay a minimum of $10; in turn, Microsoft would pay $0.41 in credit charges ($0.19 for the transaction plus $0.23 for the percentage).
In some emerging countries and elsewhere, many people neither have credit cards nor are able to prepay significant amounts for a service. Even if a service provider charges on a per-minute basis with no prepayment, credit-card payment isn't an option -- a five-minute call may only cost 10 cents, but the credit card fees would be much higher than that total.
This is where bitcoin comes in. Providers can process bitcoins in micro amounts with minimal to no transaction fees. For example, bitcoin-WebRTC mash-up XCoinCall shows rates in micro-bitcoins, with a call to the U.S. being 103 micro-bitcoins. (By the way, a bitcoin equaled $240.80 as of early September, bringing the total charge for the call to only $0.024/minute. Remember, no other transaction fees would apply.)
This brings to mind the old payphones we used to see on street corners, hotels, and airports. One bitcoin-WebRTC company, Bitphone, even advertises itself as a sort of digital payphone. You tell the service how much time you want, and the service lets you call a single number for up to the time you specified. You don't get a refund for unused time, which is exactly how the payphones used to operate. When we inserted a quarter, we could dial a single number and speak for 10 seconds or five minutes, but when we hung up or the time ran out, that was that -- no refunds.
Another driver for mashing up bitcoin and WebRTC is anonymity. Both bitcoin and WebRTC are secure and encrypted, so determining who pays the money or who places the call is difficult. You can find white hat and dark hat reasons for wanting to use this kind of a service. Perhaps we just get tired of people tracking us. Authorities can track and lawfully intercept traditional landline or mobile phone calls, or even those made from Skype; the point is that somewhere a call record exists. With bitcoin and WebRTC, callers can make and pay for calls anonymously. Clearly this is a boon to terrorists and crooks, but the encrypted calling WebRTC offers may be a way to keep our own governments from tracking the activity of law-abiding citizens. I won't debate the pros and cons of this issue here; the point is that anonymous payment and calling exist.
A Bitcoin Trio
At least three companies exist that provide bitcoin-funded pay-for-use telephony service based on WebRTC: XCoinCall and Bitphone, as I mentioned above, and BitcoinDial. All three specify in their terms of service that the persons using the service agree that they are complying with communications laws and that they are not using the service for illegal activities.
XCoinCall requires that the user create an account, while the other two services offer account creation but do not require it. Bitphone also offers a dial-back option to the user's phone should the caller wish to use a mobile phone or a landline. But, calls remain anonymous.
BitcoinDial is actually a mash-up between Coinkite (an enabler of a bitcoin payments using an API) with Twilio's cloud communications platform.
Bitcoin-WebRTC mash-up calls won't likely become commonplace in developed countries. For one thing, people are still generally uncomfortable with converting "real currency" backed by the country government to bitcoins (in full disclosure, the author does not own bitcoins, either). However, we might see some edgy use cases where such a service may be highly desirable, and of course, clandestine uses will exist. Nevertheless, these bitcoin-WebRTC mashed-up services are an interesting example of two emerging technologies merged to create more value than either offers on its own.
