Does the world really need a blockchain phone?
Sirin Labs is betting it does. The startup, which recently raised $157 million in an initial coin offering (ICO), is building an Android smartphone from scratch with special features for cryptocurrency enthusiasts: an app store for distributed apps (dapps), cold storage for private keys and easy conversion between tokens.
The Switzerland-based company says the product will fill a need in a fast-growing market: a secure device that can simplify the use of cryptocurrency across multiple applications. But as an old tech adage goes, “hardware is hard,” and in blockchain it may be even harder, since devices must be engineered to protect not only information but unrecoverable money.
In a nod to the device’s target audience, Sirin has dubbed the phone “Finney,” after computer scientist and bitcoin pioneer Hal Finney.
Estimating this audience’s growth over the years, Sirin Labs CEO Moshe Hogeg told CoinDesk:
“You have more than 10 million people that are all in crypto in one way or another. I think the community will at least double in size by the end of this year.”
The phone is expected to retail just shy of $1,000, putting it in the high-end range with the likes of Apple’s iPhone. And it can only be purchased using Sirin’s crypto token (based on the ERC-20 standard). The firm sold 40 percent of the 573 million total tokens it created during the recent ICO.
As an Android device, the phone will include all the usual applications, including the full Google Play store. As Hogeg explained, “We’re talking about user experience. If you don’t have Facebook then forget about it.”
But what makes Finney different is that sirin tokens will also be stored on the device to facilitate payments for a wide variety of dapps.
Crypto app store
The decentralized app store on the Finney phone will provide users with access to a whole host of dapps – the products of a host of blockchain-based projects that have issued tokens via ICOs.
These could include blockchain-based alternatives to popular tech companies such as Uber, which Hogeg said would be better for users by connecting providers directly to customers, reflecting the industry ethos.
As such, the Finney would provide a one-stop shop for crypto enthusiasts to browse through dapps and spend their crypto on products and services. And through a partnership with Bancor, the decentralized liquidity market that raised $150 million last June in an ICO, Sirin’s software will convert users’ sirin tokens to whatever cryptocurrency is needed for a particular transaction.
A user shouldn’t care about technology. He shouldn’t care about how things work. He should care about the value of them,” said Hogeg. Hence, “the experience should be simple.” That’s a great view on how to help with the inclusion of new users to cryptocurrencies without having to worry about the legitimacy, and avoid scam apps like the so called Bitcoin Revolution, that was making quite an impact on early adopters in Germany and in the UK.
Simplicity will be a prerequisite for these token-based platforms to gain traction, he said.
“If we want those technologies to become mainstream, we have to fix this issue of multiple tokens,” Hogeg said. “Our software is going to allow the user to seamlessly convert between different tokens within our phones.”
Sirin faces some competition in the decentralized app store arena. Coinbase CEO Brian Armstong is also working on a browser for dapps called Toshi.
In a recent Medium post, Armstrong similarly talked about the need for one platform for consumers to manage dapps. Yet, while Coinbase’s solution wouldn’t need specialized hardware, Hogeg said he believes that by the time these decentralized marketplaces are ready, early adopters will want a distinct device to safely store the cryptocurrency they’ll use.
And while it’s proven to be difficult to get developers to switch from the two marketplaces currently dominating mobile (the Apple store and the Google Play store) to a new development platform, Hogeg said he has a way to convince them.
“We raised enough money to incentivize a community of developers,” he said.
But while Hogeg has a plan for incentivizing developers, the harder part might be luring consumers to purchase the pricey device.
But he says that for crypto users, the phone’s security features will be hard to resist. Not only does the Finney phone use behavioral monitoring to detect possible exploitation, it also allows for multiple types of biometric identification and comes with cybersecurity protection from the operating system through the application layer, according to Sirin.
All of these features, Hogeg admitted, can be found in one form or another on other devices, but there’s one feature on the phone that stands out: cold storage.
The Finney phone allows users to disconnect their cryptocurrency’s private keys from the rest of the device and from the internet, Sirin says. This provides added protection since hackers would have to physically go to the phone’s storage vault where the private keys are held to get access.
Hogeg told CoinDesk:
“I think it will differentiate us. I think it’s unique, and it will grow.”
But Peter Todd, a prominent cryptography consultant and bitcoin developer, was skeptical about the effectiveness of cold storage in this context, telling CoinDesk, “Why does that protect you? You need to connect to the internal electronics to accomplish anything anyway, at which point the attack can happen.”
Still, a spokesperson for Sirin contended cold storage still reduces risk, which is why people use crypto-wallets like Trezor and Ledger. He explained, “We do all the signature ‘foreplay’ in advance of the actual signature” – that is, making the connection as brief as possible. “This is a well known cyber security methodology of decreasing the attack surface and time exposure,” he wrote.
Further, even Hogeg acknowledges that security doesn’t sell hardware. So Sirin is also setting up the devices to be able to cooperate and share resources, for instance, in a way that allows strangers can pay each other in microtransactions for borrowing computing power or bandwidth.
Yet that raises another issue.
In Sirin’s whitepaper, these services lean heavily on the “Tangle,” a technology pioneered by the distributed ledger startup IOTA.
Pitched as a solution tailor-made for the internet of things, IOTA requires devices to make a few proof-of-work computations in order to participate in the chain, rather than pay a fee to miners as with bitcoin.
“This is how we allow it to be fee-less,” Hogeg said.
Yet, IOTA and its technology have been a flashpoint of controversy since over-the-counter trading of its cryptocurrency began in 2016. For instance, MIT Media Lab actually disputed the claims in an MIT Technology Review article describing the security of IOTA.
Further, the lab’s Digital Currency Initiative found a serious security flaw in Iota in September. The IOTA Foundation acknowledged the researchers’ work, while arguing that it did not represent a realistic attack and said it has always planned to submit its final cryptographic design, once ready, to academic review in order to insure its solidity.
Val A. Red, a security researcher with experience in IoT systems, told CoinDesk that any blockchain-based application raises issues.
“If I were looking at this outside of cryptocurrencies and from the perspective of a secure mobile or BYOD [bring-your-own-device] network administrator, I would also have reasonable concerns looking at a proposal involving interoperability with IOTA or any digital ledger technology in production.”
Hogeg didn’t dispute that there are doubts about the protocol at present, but said, “Maybe we’re going to change to a different fee-less network, and there are a bunch who are talking about it. Probably it’s going to be IOTA.”
Although he continued, “We are not going to announce 100 percent it is IOTA until we are 100 percent satisfied.”
Hogeg confirmed that IOTA is not an investor in Sirin.
But even with the Finney project’s blockchain architecture still up in the air, Hogeg is confident the phone will be released by the end of this year.
And, he said, prototypes of the device should be available soon at retail stores the company plans to open in cities around the world, where people will be able to pre-order phones and talk to staff about its structure.
That may sound expensive, but remember that Sirin raised $157 million in its token sale, triple what it initially estimated it would need to develop the phone.
Also in the works is a Finney PC, based on the Android OS.
If this all sounds overambitious, it’s worth noting that Hogeg has been effective at generating chatter around his projects. In 2014, he created the joke app Yo, a messaging app that initially only allowed users to send the single word “yo” back and forth.
Around the same time, he snagged backing from Leonardo DiCaprio, Lance Armstrong and Serena Williams for his short-form video service, Mobli.
At Sirin, he has already had some success in manufacturing mobile devices, building a privacy-oriented Android phone called Solarin, which came with a $13,800 retail price tag.
Still, his projects have also not matured without some stumbling blocks. In 2016, even though it had some real traction, Mobli was shut down, and in early 2017, Sirin laid off 30 percent of its staff after sales of the Solarin phone failed to support the business model (they are still sold, though).
But according to Hogeg, the way in which the software for Finney was built, allowing other Android manufacturers to use it in their devices as well, hedges the company’s bet on building a piece of hardware from the ground up.
Addressing the uncertainty of the business, but also his optimism going forward, Hogeg concluded:
“Could be that we will become a very big phone manufacturer. Could be. Could be, also, that phone manufacturers will use our software … and we give them everything we do for free, as long as they use our token as the engine for everything.”
Smartphone interior image via Shutterstock.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency
HSBC, SGX to Investigate if DLT Offers Efficiency Boost for Bond Markets
Can digitalizing bonds with distributed ledger technology (DLT) bring benefits to market participants?
That’s a question being asked by HSBC Singapore in a new trial being developed in partnership with Singapore Exchange (SGX) and investment firm Temasek.
The effort will examine the potential of DLT to streamline the issuance and servicing of fixed income securities, debt instruments that pay fixed interest to investors, with a specific focus on the Asian bond markets.
In an announcement on Wednesday, HSBC sets out that, while the Asian bond markets have been seeing speedy growth, issuance and servicing of the instruments lack efficiency without a single platform for sharing data between different entities and tracking bonds across their lifecycle.
The trial aims to address that shortfall by tokenizing bonds using smart contracts on a permissioned ledger with the intention of streamlining these processes and easing friction in the markets. Ultimately, DLT could cut costs for issuers, investors, bond arrangers and custodians, the bank said.
HSBC is already deep in the blockchain and DLT space, having launched numerous projects involving the tech and often speaking out in advocacy. Last year the bank warned that “digital islands” could inhibit global blockchain-based trade. An exec also called on the U.S. Commodity Futures Trading Commission (CFTC) to make more “positive noise” about DLT to encourage reluctant businesses into using the tech.
While all this seems extremely bullish on the technology, Tony Cripps, HSBC Singapore CEO, argued that DLT’s potential to reduce inefficiencies in the fixed income market still has to be determined. “Only by collaborating with market participants will we fully understand its actual viability,” he said.
“Having HSBC and Temasek on board will enable us to evaluate holistically whether smart contracts and DLT can solve some of the long-standing challenges in the fixed income issuance ecosystem,” said Lee Beng Hong, head of fixed income, currencies and commodities at SGX.
The Big Block blockchain
The importance of having a big block in a vehicle motor means the vehicle will have much more power overall. There is much more space [more volume] for fluids to be contained within. If you can pump more fluids such as oil, gasoline, air, etc., you can produce a larger combustion which, in turn, cranks larger components.
With more power, the vehicle can do more work and do that work much more easily than that of a vehicle with a smaller engine block. ILCoin is the big block motor of cryptocurrency. At the end of November of this year 2019, the ILCoin Development Team will be rolling out its newest model: the big block RIFT Protocol.
This new, big block protocol will be primed and ready to take on much, much more work than its current 25 MB block. The maximum capacity of the block will be 5 GB; making it the largest functional block size to successfully operate on a live network. Up until now, Bitcoin SV [BSV] has the record for the largest mined block on the live network set at 128 MB.
RIFT Protocol is able to achieve these large block sizes due to the way it handles data synchronization. A 5 GB block will not have to synchronize all at once. The block’s information will be broken down into smaller Mini-Blocks which upload asynchronously.
Each Mini-Block is referenced not only to the primary block being mined but to the previous and next Mini-Block in the series using a highly unique hash. This referencing system allows for a completely secure sync as no block may be added or missing from the series less the block, nay, the chain become completely rejected.
What does this bigger block mean for cryptocurrency?
Put simply, room for expansion. The new block size will give enough room within each block to store much more than transaction data. Just one year later after the release of the RIFT Protocol, the ILCoin Development Team will be releasing their Decentralized Cloud Blockchain [currently in development].
The implications of which mean yet another blockchain first for the ILCoin Development Team; complete on-chain data storage. There are many types of cloud storage available today, but none of the storages may boast such a longevity and overall immunity to data decay as would an on-chain data storage network completely contained within mined blocks. The RIFT Protocol is priming the way for this new Decentralized Cloud Blockchain as well as other future developments.
Smart contracts are also in development by the ILCoin Development Team. ILCoin uses SHA-256 Proof-of-Work technology which will also make ILCoin the first SHA-256 blockchain to successfully utilize any type of smart contract.
Also, on the docket for evolution within the ILCoin blockchain is the Command Chain Protocol [C2P] itself. C2P, for readers new to this technology, is a security protocol integrated directly into the Proof-of-Work algorithm; effectively changing the algorithm from simply POW to POW/C2P.
C2P already makes ILCoin immune to 51% attacks [another cryptocurrency first] by automatically refuting unwanted miners even though the source code is open source. In its future update, when it becomes C3P, it will allow other miners to connect to the network.
However, it will limit miner participation hashrate to allow all miners who want to join the network a fair chance at mining while at the same time preventing any mining pool dominance; essentially it will even the playing field.
Big block engines have a downside. They consume much more fuel to operate. With the ILCoin’s RIFT Protocol, the energy consumption to produce the block will be minimal thanks to their closed mining policy as well as the RIFT’s programming. The 5 GB block is only the beginning.
As necessity dictates, the block size can be upgraded to a theoretically unlimited size. Therefore, as storage for the Decentralized Cloud Blockchain becomes more demanding, we could possibly see another record-breaking block size in the future to drive the powerhouse that is ILCoin.
Alibaba’s Ant Financial Starts Pre-Launch Testing of Business Blockchain
Ant Financial, the fintech arm of Chinese tech giant Alibaba Group, has launched the testing stage for its blockchain network aimed to support small and medium-sized businesses.
Speaking at the World Blockchain Summit at Wuzhen, China, Jieli Li, senior director of technology and business innovation at Ant Financial, said the tech underlying its Ant Blockchain Open Alliance is set to go live three months after the testing period, according to a report from Sina Finance.
“While the blockchain is open to developers and institutions from all over the world, we will be cautious in terms of selecting nodes on the platform,” Li stressed in an interview with 8btc.com.
The company will include educational and certification agencies as nodes to increase credibility of the network, and choose partners depending their industries rather than which regions they are based in, the exec explained. However, who those firms might be is not yet being disclosed.
“We can not disclose the names of our partners who participate in the consortium blockchain at this time,” Li said.
Ant Blockchain Open Alliance is aimed to cut costs and expand the reach of services in different industries, such as finance and healthcare, to a larger user base.
The company unveiled the project in September and has been adding partners to the consortium since. It’s working on other blockchain projects too, including a food tracking app and a system for monitoring agri-products in partnership with Bayer.