Mycelium made an unexpected announcement on May 8 — an introduction to a new project called Mycelium Gear, which is a direct, zero-fee payment processor for merchants. Bitcoin users no longer have to worry about providing their personal information to a service provider. A Mycelium spokesperson told Cointelegraph:
“Mycelium Gear is a merchant processor service that does everything typically expected from a merchant processor, but doesn't actually touch any money. It does this by showing the merchant's personal wallet addresses on the merchant's behalf, so payments are sent directly into the merchant's own wallet.”
The news was well-received by redditors, to whom the Mycelium team made the announcement. They explained that merchants can now process their bitcoin sales directly to their Mycelium or Electrum wallets, without needing a middleman.
Gear also integrates with Trezor hardware wallets, with Ledger support coming in the future. The Gear website is no-frills and displays no pictures of technology. It shows just black-and-white text describing a product that says it delivers — “online payments done right.”
Roman Snitko started working on what he called Straight, which later became Gear, in 2014. Then friends introduced him to the team at Mycelium. It seemed Roman’s project was just what they were looking for, as they’ve been a service provider in the cryptocurrency industry since Bitcoin's inception, offering many services to the ecosystem.
Cointelegraph had a chance to chat with Gear project developer Snitko to get an inside look at its development.
“Money goes from the customer straight into the merchant's wallet, so no need to wait for the merchant processor to transfer it into the merchant's bank. ”
Cointelegraph: How did you come up with this idea, and how did Mycelium get involved?
Roman Snitko: I started developing an open-source Bitcoin payment processor called Straight in September 2014, all on my own. Then my friend introduced me to the Mycelium team and it turned out they wanted to do the exact the same thing I was working on — a payment processor — and I already had the major parts written and working. We discussed and agreed that while the open-source project is a great thing to have, not many people will be willing to go through the process of installing such a software on their own servers, and thus a hosted version is needed. And so we decided to join our forces to bring a commercial hosted version of Straight, which is now called Mycelium Gear.
CT: Why would merchants be interested in Gear?
RS: Money goes from the customer straight into the merchant's wallet, so no need to wait for the merchant processor to transfer it into the merchant's bank. Does not require any payment processor policies, since there wouldn't even be a way to enforce them. No commission fees. It's free of charge to use. Takes just a few minutes to set up. No need to sign up for accounts, get approval, link bank accounts, etc.
Even if you have never used or owned bitcoin before, it would only take you an extra minute to download and install your own Mycelium app, and you can accept payments from anywhere in the world, regardless of where you are in the world. Since Gear doesn't actually handle any money, it doesn't require personal information or KYC/AML. The core is open source, so merchants can even run Gear from their own servers, not depending on us at all.
CT: How does Gear operate without a middleman touching your money?
RS: We use BIP32 public keys currently supported by Mycelium and Electrum wallets. It allows us to generate a new Bitcoin address for each new order, but only the merchant who provided us with this public key actually has access to spend the money, because he holds the private key.
“Imagine a service that watches the blockchain, then sends you an email when money arrives at some address you are interested in. Would such a service need to comply with AML/KYC? It would be insanity to believe it had to. The blockchain is a public ledger. Anyone can watch it.”
CT: How does Mycelium Gear go about not using AML/KYC standard practices?
RS: It is best to think about Mycelium Gear not as a payment processor, but as a blockchain notifier. Imagine a service that watches the blockchain, then sends you an email when money arrives at some address you are interested in. Would such a service need to comply with AML/KYC? It would be insanity to believe it had to. The blockchain is a public ledger. Anyone can watch it. Does it mean everyone has to comply now?
CT: Can you explain how you came up with the simplified widget and API design for Gear? How easy is Gear to use for the common merchant?
RS: The API is rather standard in a sense that it is exactly what you would expect from a payment processor. Developers who integrated any payment solution, not just Bitcoin, would almost instantly know where to look. We, of course, provide a detailed documentation that allows those developers who've never touched payment processing to quickly learn how to do it.
But answering your question, I didn't just come up with the API. I tried to make it as predictable and simple as possible. The widget is a different story in that we also realized there is a large group of people who would like to sell things with Bitcoin, but who don't want to spend time integrating our API and reading docs. The widget is a simple way to start accepting Bitcoin through your website, and to integrate it you don't even need to know HTML. (In case you're running Wordpress or Joomla, we have plugins you can install.)
CT: What regions around the world can use Gear? Have you seen a significant amount of user signup?
RS: Any region. We don't have any restrictions. As for the amount of signed up users, I'm actually quite happy with the pace. It's not exploding, and this allows us to do proper monitoring, polish the service and fix the small bugs that we might have.
CT: What processing features does Gear have to offer, as opposed to the current competition, such as Coinbase or BitPay?
RS: I'd name three major ones: we don't hold the bitcoins, the product is open source (no vendor lock-in) and we don't ask a lot of privacy-intrusive questions. All of that means that YOU are in control of your money. We can't lock your money for whatever reason.
“I personally do not believe in "security through obscurity" and think that an open-source product is in most cases preferable in terms of security to a closed source one.”
CT: How secure is the Straight Server processor?
RS: I think this is a very important question, and I will try to be as honest and to the point as possible. The first thing to remember is: we don't hold the money. Whatever happens, we can't lose it, and no one can steal it from us, because we don't have the private keys — only merchants do. The second thing to remember is that the core (Straight Server) is open source and can be audited by anyone.
While this may be an additional reason to be concerned, I personally do not believe in "security through obscurity" and think that an open-source product is in most cases preferable in terms of security to a closed source one. I do have concerns, of course. I think it is only natural to be aware of the possible security breaches and always keep them in mind. This is part of the reason we say this is a beta version of the product. The plan is to monitor, listen to the customers' suggestions, and improve, improve, improve.
RS: Yes, you will. I would like to also emphasize that anyone using our widget or the API is welcome to contact us via our support email and share concerns and suggestions.