The first wave of "blockchain phones" is a small step toward the decentralized web. The crypto world is full of buzzwords, but if you can peel away the marketing fluff, you sometimes find innovation beneath the surface. You are often also reminded just how early it is in the history of this technology. Case in point: the "blockchain phone."
All of a sudden, several crypto-focused handsets are hitting the market, or will launch soon. The biggest player in the new game is Samsung, which confirmed this month that the Galaxy S10 will include a secure storage system for cryptocurrency private keys. It joins HTC, which for months has been touting the Exodus 1, Sirin Labs, which used proceeds from a huge ICO to build the Finney, and Electroneum, which this week began selling an $80 Android phone that can mine cryptocurrency.
So what is the point? In the wildest dreams of enthusiasts, these devices will be a gateway drug to something called the decentralized web, or "Web 3.0." In this future version of the internet, blockchains and similar technologies would support decentralized applications—"dapps" that look and feel like the mobile apps we use today but run on public, peer-to-peer networks instead of the private servers of big tech companies.
It's widely thought that a major impediment to mainstream adoption of cryptocurrency and dapps is that these technologies are too difficult to use for people who are not especially tech savvy. Better user experiences, starting with cryptographic key management, could spur adoption. That's not straightforward, given that key security is paramount: you lose your keys, you lose your assets.
This also explains why Ethereum creator Vitalik Buterin seems so excited about one particular feature of HTC's Exodus 1, called social key recovery. Essentially, users can choose a small group of contacts and give them parts of their keys. If they lose their keys, they can recover them piece by piece from their contacts. Buterin, as usual, is looking far down the road, in this case to a future where people use blockchains to maintain more control over their digital identities and personal data than is generally possible today. Social key recovery is "arguably an early step toward formalized non-state-backed identity," he tweeted.
First thing's first, though. To be compelling to users outside the bubble of enthusiasts and speculators, these phones will probably need to be able to do more than just keep your keys safe. This week, Samsung and HTC touted a few things they hope will do the trick. Samsung seemed to reveal partnerships with several blockchain projects, including beauty services dapp Cosmee, and Enjin, a blockchain-based gaming platform. HTC announced that it has partnered with browser maker Opera to make it easier for people to use crypto, whether for making micropayments on websites or for using dapps.
"We are at the dawn of a new generation of the web, one where new decentralized services will challenge the status quo," Charles Hamel, Opera's head of crypto, said in a statement about the company's tie-up with HTC.
Perhaps, but even if these phones take off, the decentralized web will still be mostly a dream. Construction of its foundational infrastructure is in the beginning stages. Perhaps an influx of new users would spawn compelling new applications, which might in turn inspire the development of new infrastructure. But the best the first round of "blockchain phones" can do is give us a glimpse at a potential future that's still a long way off.
Coinbase is facing outrage after acquiring a blockchain analytics firm whose founders previously sold spyware to authoritarian governments. Three founders of the newly acquired firm, called Neutrino, previously worked for a controversial company called Hacking Team, whose products have been used to spy on journalists and human rights activists. Coinbase has released a statement saying it is aware that Neutrino's founders worked for Hacking Team, and that it does not "condone nor will it defend the actions of Hacking Team."
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Loose Change
Fill your pockets with these newsy tidbits.
- An improperly configured "blacklist" let a bad actor steal around $7 million worth of cryptocurrency from the smart contract platform EOS. (Breaker)
- Coinhive, which created the in-browser crypto-mining application that opened the door to "cryptojacking" attacks, in which hackers hijack computers to mine digital coins, will shut down in March. (The Block)
- Online lending startup So-Fi has partnered with Coinbase to let its users buy cryptocurrency. (CNBC)
- Fidelity Investments has backed a blockchain analytics startup called Coin Metrics. (CoinDesk)
