First Blockchain ‘Cryptocurrency’ Smartphone
Taiwanese electronics company Huawei Technologies Ltd. (HTC), and Swiss-based Sirin Labs are both introducing blockchain smartphones.
HTC’s Exodus blockchain smartphone, which it is believed will be priced at around $1,000, and is reported to have “tens of thousands” of reservations globally. The smartphone, from the world’s third largest phone manufacturer, will be released this year, will come with a built-in (offline) wallet for storing cryptocurrencies, and will act as a computer node in a blockchain network.
What Is Blockchain?
Blockchain is an incorruptible peer-to-peer network (a kind of ledger) that allows multiple parties to transfer value in a secure and transparent way. Blockchain’s Co-Founder Nic Carey describes Blockchain as being like “a big spreadsheet in the cloud that anyone can use, but no one can erase or modify”. Blockchain is the technology at the heart of cryptocurrencies like bitcoin, is open-source, and free.
Why A Blockchain Phone?
Giving a phone a blockchain element means that it has access to blockchain applications such as a crypto wallet, secure exchange access, encrypted communications and a P2P resource sharing ecosystems for payment and apps. It can also be used for cryptocurrency mining.
The built-in wallet for the HTC phone for example, will enable it to store bitcoin, Ethereum and other digital tokens.
Sirin Labs – The Finney Phone
The other blockchain smartphone, which is likely to be launched after HTC’s, is the ‘Finney’, named after the late bitcoin pioneer Hal Finney.
This smartphone, which also has a $1,000 price tag, has been described as an “ultra-secure blockchain smartphone”, and has been specifically designed to get around what Sirin Labs believe to be 2 main obstacles to mass market acceptance – security and user experience.
Sirin Labs even launched an initial coin offering / ICO (crowd funding from early backers of tokens for a new cryptocurrency) to fund the Finney. This resulted in over $157 million being raised.
The Big Advantage – The OS
Sirin claims that its big advantage with the Finney is not so much the phone, but more the Operating System (OS) that it claims, thanks to partnerships it is making, will soon be included in phones by other top OEM phone developers.
In terms of how secure the phones are, the main question will be how both companies will keep sensitive cryptocurrency data secure. For example, unless a phone is in flight mode, there’s always a connection of some kind, and that offers a lot more attack surfaces than something like a USB stick that’s only occasionally connected.
Niche Product For Rich Enthusiasts?
Some critics have said that a blockchain smartphone is too much of a niche product that may just appeal to enthusiasts and speculators rather than a mass market, and that most people may struggle to understand what blockchain is and how / why they should use cryptocurrencies.
What Does This Mean For Your Business?
For HTC, many see this as being a way for the company to find a way back into the smartphone market, where it’s been struggling in recent times, but this time with a differentiated product that is a market first, ahead of competitors.
For Sirin Labs, it could also be a way to get into a new section of the market ahead of the competition, but many are sceptical as to whether the Finney will get the mass market acceptance that Sirin Labs hopes.
Most business people in the UK, for example, may be unlikely to see why they would need a blockchain phone with a crypto-currency wallet as part of their daily working life. If they’re going to spend £1,000+, they may be more likely to opt for new models of more familiar phones with more standard features e.g. iPhone or Samsung Galaxy.