The BitPayphones Have Arrived

This year has seen the first three examples of a new, important web service that was antecedently infeasible before, due to inefficiencies in Telecommunication billing systems.The technology needed to create these services has been around for a couple of years, but these new, highly-advanced telecommunications platforms lacked Bitcoin’s ability to make small payments in order to efficiently operate. Now, with bitcoin added, it appears that they are finally viable services.

Since Skypeemerged in late 2003, Voice over the Internet (VoiP) technology hasn’t had many improvements. The whole field of calling other people through the internet has been almost totally dominated by Skype despite the 2013 introduction of the open-source WebRTC (Web-based, Real-Time-Calling) protocol released by the World Wide Web Consortium (W3C), which has been built into Chrome, Firefox and Opera browsers already.

Unlike Skype, a WebRTC service is simply a website that everyone online can use, and you don’t need to download software in order to run it. That means anyone on any net-enabled device worldwide can use WebRTC websites and apps as a phonebooth, even if they can’t load an app like Skype requires.

“WebRTC is an open source project that aims to add real time communication capabilities to web browsers. ”
— – WebRTC

WebRTC clients allow free calls within their own network. Tempting as it is, most people can’t use this free service alone as their primary phone because they still need to be able to call regular phones or cell phones too. With both options, when users call outside of either network, additional telecommunications charges will still apply.

To be truly useful, not simply to those that credit card billing is inefficient for, but also to the majority of the world that doesn’t even have a credit card; such an app needs to have a way to make billing practical.

A “BitPayphone” is the solution. BitPayphones are online, software-based payphones that display in your web browser, and that require bitcoin for any external calls you make rather than a credit card or some other less efficient way to pay.

The problem with other software payphones that make a BitPayphone really useful is that phone calls usually don’t cost enough to warrant swiping your credit card and paying the 3% plus 30 cents fee that is a standard charge in credit networks these days.

With Bitcoin’s ability to charge small amounts, called micropayments, this issue is no longer a deal breaker and Skype may soon find that it has some competition.

Besides the micropayments, there are several benefits for calling from a software payphone, not the least of which is privacy. Whistleblower Edward Snowden showed us in 2013  that Skype has unchecked access to all of your communications through their system, collecting all of your calls and video chats, so that they can hand them over to the US Government through the PRISM program. Such activities are far less likely, if not impossible, with a WebRTC service.

"SRTP (encryption) now on by default, meaning all audio and video data will be encrypted."
— – WebRTC

A more popular reason to use a WebRTC payphone is simply that it can be accessible in situations that apps like Skype are not. Millions of cellphones in the developing world have access to the internet but cannot install applications like Skype on them. So for many of these people a software payphone is likely the only way to undercut their own phone’s monopolized rates.

Possibly the simplest of this new breed of services is CoinKite’s API test project, BitcoinDial, which won a CoinKite-sponsored hackathon earlier this year. Although it is fairly simplistic, it is was one of the first truly sound uses for CoinKite’s powerful API which does show off the API’s features very well.

The other two are much more developed efforts. At the opposite end of the scale is XcoinCall, which offers a fully encrypted service and an optional, downloadable app to make it look more like a normal phone. This service offers calls to the most destinations by far, but to use their service at all, you first have to create an account.

"We offer an affordable, easy way to call internationally. Our customers can make crystal-clear calls using smartphones, tablets or computers, to over 300 countries worldwide. "
— – XcoinCall

BitPhone appears to be the only service represented here that takes advantage of all the options WebRTC offers. Not only is no account required, but they have a way to use an alternate phone (for an additional call’s fee) that allows both ends of the call to be using standard phone lines. The calls are all encrypted by default, and their website uses RSA 2048-bit bank level encryption on the entire site, secured by a Secure Socket Layer.

There is no software or app to install, but if you sign up for an account,  they give you a better deal on the calling rates, and also let you change your call-from number (Caller ID) to anything you want for a small fee. This handy feature helps to preserve privacy but is also very useful in case you’d like to be seen as calling from another specific phone you own such as from your office. It can be obviously be misused, however BitPhone makes sure you’re aware of the law.

"The FCC outlines the rules and regulations related to changing your Caller Id.  It is important that these rules be followed."
— – BitPhone

The U.S. FCC rules on spoofing“prohibit any person or entity from transmitting misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.” It is the caller’s responsibility to use this option lawfully, but perhaps one day BitPhone will be pressured to remove the feature entirely.

BitPhone is also the only service to let you use alternative cryptocurrencies to pay for your call. Using ShapeShift’s Shifty buttonyou have the option of easily paying for your call in one of 42 Altcoins on top of the default Bitcoin payment option.

"Bitphone is seamlessly integrated with ShapeShift.io to accept Altcoin payments."
— – BitPhone

Using it to place calls from any device with a microphone and speakers is user-friendly and quite simple. First, you choose the country you are calling, then input a phone number. Once the number is determined valid, which typically takes less than a second, BitPhone will display the calling rate both in millibits and your local currency which can be chosen from the drop down menu on the right-hand side.

It then displays the current price that your call will be charged at bearing in mind there is, a 0.1 mBTC connection fee per call, and a tiny 0.0001 BTC fee on all deposits and withdrawals, likely to cover their mining fees.

Once you decide to make the call, you simply deposit your BTC into the dedicated box, which Coinbase processes excluding any blockchain confirmations before starting your call. They do warn that there may be an up to 1-minute delay on processing the payment, which is standard for Coinbase processing. Once your Bitcoin shows up, the green call button will appear, and you can begin your call.

When your call is done, you can get any and all unused money back by providing a return address; a very nice feature that no other services are attempting yet. There is, however, a 2-confirmation delay on receiving bitcoin back from these returns, so it can take around 20 minutes to receive your change.

Unlike Skype, which is riddled with privacy concerns, forces you to download software, uses no encryption, and worst of all, charges your credit card a minimum of $10 non-refundable when placing calls out of their network, all three of these WebRTC-based services are new and being actively developed. We may yet see lots of innovation to come in this space from these or other new BitPayphones.

Innovation often happens at the edges, too. There already happens to be a similar bitcoin-using service ideal for the office place called iCallthat does not use WebRTC and cannot be used through a browser.

iCall requires that you download an application to begin with and you can only use their service through the app. Besides using Bitcoin, the only different between iCall and Skype’s services is that iCall offers you your own 9-digit phone number that normal phones can call, for a fee of $2 per month.

"iCall is a Voice over IP business phone system that allows users to place phone calls over computer or mobile networks."
— – iCall

This makes it a very useful business phone but all calls to that number would be charged at a rate of at least 3 cents per minute and there would be none of the benefits associated with a WebRTC phone.

No matter how much more private and cost-efficient this new class of Skype alternatives end up being; it is still a long, uphill battle fighting such a large competitor and entrenched marketplace expectations. Just like with the adoption for Bitcoin itself, perhaps these new services should be focused on the edge cases for signs of success; developing-world users that can’t load Skype would be the first natural place to look for customers in this field, and hopefully marketing efforts are being deployed there first.