Mobile bitcoin wallet and secure messaging app Gliph has received $200,000 in funding towards its first seed round, in a deal which will see it relocate from its native Oregon to California.

The company raised the money from San Mateo-based Boost VC. It follows $50,000 in funding from the Oregon-based Portland Seed Fund, and an initial $15,000 from Boost VC earlier this year, bringing its total funding to date to $265,000.

Gliph founder and CEO Rob Banagale explained that the app, which lets users send and receive bitcoin while also handling secure messages, was originally conceived as a means of shielding identities online.

“The reason I focused on this space is because I wasn't really comfortable with what I saw Facebook and Google+ doing with regards to digital IDs," he said. In particular, he has found Google's policy of forcing people to use real names off-putting.

Gliph has three main components. The first is cloaked e-mail addresses, which allow people to hide their real e-mail addresses behind a pseudonym address, which can be disposed of at will.

The second is secure messaging, which uses encryption to hide message content.

And finally, it interfaces with people's bitcoin wallets, enabling them to send money to other Gliph users easily without using bitcoin addresses.

However, he noticed that people were using it heavily for Craigslist transactions.

“What we really wanted to enable was peer-to-peer transactions, because if people were already using our services to connect with people, communicate with them, and then close a deal, the most valuable portion of that is when you exchange the service or product for payment," he said.

In Banagale's ideal scenario, a person selling an item on Craigslist or some other service would use a cloaked e-mail address to list it and communicate with a potential buyer, without having to reveal their true identity, e-mail address, or phone number. Messaging could switch to the encrypted system within the app at any point.

A payment could be made for the good or service, via bitcoin, without ever leaving Gliph, and when the transaction was complete, and the good or service exchanged, the cloaked e-mail address could be disposed of, effectively disconnecting the seller from the transaction.

The company, which demonstrated the product initially at SXSW in March 2012, added support for bitcoin at the Bitcoin Conference in May this year.

In addition to Android, Gliph is available for the iPhone, and has managed to get several releases past the stringent approval processes imposed by Apple's App Store. Several bitcoin wallets have failed, falling foul of what seemed like an anti-bitcoin policy at Apple in the past.

However, Gliph has a unique feature, explains Banagale: “We deliver an experience that no one else has come remotely close to, which is this in-line, no-wallet or intra-wallet function that enables you to send between wallets seamlessly," he said.

Instead of creating a bitcoin wallet directly on a mobile device, the software connects directly to online wallets hosted by services such as Coinbase, Blockchain.info, or BIPS. If a user doesn't have a wallet with one of these services, the act will create a Coinbase one for them, without hosting it on the mobile device.

The software does not support direct payments to bitcoin addresses using the app, but instead only permits payments to be made to other Gliph users, indirectly, by sending between wallets. Banagale believes that the concept of scanning QR codes into a bitcoin wallet to make a payment will become obsolete.

“We don't see QR codes as a sustainable and real way for the mass audience to use bitcoin," he said. “We think that will be a refuge for the early users, but if you want your aunt to start using bitcoin, she can never see a wallet address, and she won't understand or want to scan a QR code."

Gliph uses AES 256 encryption to scramble messages between its users. However, Banagale admitted that the encryption keys are still stored on central servers, potentially opening it up to hackers, or government intervention.

Lavabit, a secure messaging service that was used by NSA whistleblower Edward Snowden, also stored its keys centrally, and was forced to shut down after government intervention.

One of the barriers to storing encryption keys directly on a mobile device is that the company would be forced to use Apple’s own encryption libraries, pointed out Banagale, which potentially raises more issues than it solves.

Banagale did point out that the service includes a lockdown privacy protection facility, in which the user can elect to forego a password reset service. This means that the company will never be able to decrypt a user’s communications, even if they forget their password and ask for a new one.

Gliph will use this latest $200,000 of funding to improve the product’s ease of use and grow the user base, Banagale concluded.

Featured image: gli.ph