Is Circle actually an elaborate scam? How do they make their money?
there are many ways to make money and claim there are no fees
take 3 exchanges
itbit $390
bitstamp $387
btc-e 384
lets say someone wants to sell bitcoins. they will be shown btc-e's price and buy 1BTC off that customer for 384.
lets say someone wants to buy bitcoins. they will be shown itbit's price and sell 1BTC to that other customer for 390.
thus the prices are in range of expectations. they have not mentioned adding on any fee ontop of exchange prices. and they keet $6 for that transaction between 2 customers.
this is why i laugh at people moaning about fee's... bitcoin is naturally volatile with prices moving all the time, a fee is meaning less when you realise the movement movements behind the scenes are profitable.
the other method, which i prefer. is where they are not even trading with exchanges but have private fiat and private bitcoin investors and circile just match makes profitable trades and takes a cut from the private investor, not the retail customer.
there is a whole list of ways to arbitrade trades for hidden profit.