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
Ampleforth [AMPL] To Conduct First IEO on BitFinex and Ethfinex’s Blockchain Project Launch Platform, Tokinex, in June
Ampleforth expected ticker symbol AMPL, announced today it will be the first initial exchange offering to be conducted on Bitfinex&Ethfinex’s token project launch platform, Tokinex.
Ampleforth’s whitepaper, co-authored by Manuel Ricon Cruz, a researcher at the Hoover Institute, introduces the Ampleforth protocol. Further context for understanding the implications of AMPL as a new type of synthetic commodity and economic theory is provided in the accompanying Red Book.
The appeal of digital assets like Bitcoin is that they are uncorrelated with traditional asset groups. But, among large-cap digital assets, there is a high degree of non-diversifiable risk and the price volatility of most cryptocurrencies mimic that of Bitcoin.
Evan Kuo, CEO, and founder of Ampleforth said,
“We see Amples as having a near-term utility that naturally dovetails into a much bigger vision, and I can’t wait to see it unfold. The Bitfinex and Ethfinex user communities are among the best in the industry, and we are excited to work alongside the Tokinex team for Amples’ exchange debut.”
Ampleforth’s protocol receives exchange-rate information from trusted oracles and propagates that to holders of Amples by proportionally increasing or decreasing the number of tokens each individual holds according to the magnitude of the exchange rate fluctuations over the previous 24 hrs.
For traders, these changes in the exchange rate and quantity translate into changes in Ample’s market capitalization. Ultimately, unique trader behavior in response to the protocol’s incentives is expected to produce an asset price with lower correlation to Bitcoin than other digital assets.
Jean-Louis van der Velde, CEO at Bitfinex, stated
“The Ampleforth project is fascinating to us with its refreshing vision to become a unique digital asset and serve as a potential future reserve currency. We believe it can provide a unique volatility profile, uncorrelated to other digital and traditional assets. This uncharted territory makes Ampleforth, and the team behind it, the perfect first project to list on Tokinex and we are excited to provide an opportunity for the community to be a part of it.”
Paul Veradittakit of Pantera Capital said,
Ampleforth is interesting because there’s not another asset like it, so it will likely not be correlated with other large-cap cryptocurrencies. With more traders and enthusiasts entering the ecosystem since the last rise, there needs to be an option like AMPLs, which could reduce the risk for the entire space, and potentially attract more institutional interest.”
Ampleforth is a digital asset protocol for smart commodity-money funded by Brian Armstrong, True Ventures, Pantera Capital, and Slow Ventures. For more information, please visit our website.
Launched in May 2019, Tokinex is the IEO platform of Bitfinex and Ethfinex that brings fair opportunity to participate in curated token projects. It gives qualified participants the chance to contribute to pre-vetted token sales directly from their personal wallet through common crypto assets, and with no personal data or funds held by the exchange.
Tokinex uniquely does not require tokens to pay an upfront fee for listing and following a successful capital raise are subsequently listed on the two exchanges as permitted by applicable law.
For further information please contact.
State Street’s Blockchain Lead Departs to Build Data Privacy Startup
Moiz Kohari, State Street’s global chief technology architect, has traded his position at the custodian bank for a move into the startup world, he told CoinDesk.
Kohari helped kickstart the bank’s wide-ranging technology transformation program structured on a bedrock of distributed ledger technology (DLT) from the point he joined State Street in September 2016. Prior to that, he spent five years as head of technology innovation for London Stock Exchange Group.
While Kohari and the co-founders of his new project are officially in stealth mode, he said that at a high level, the incipient startup will focus on the data privacy space and how enterprises interact with users in this area.
Kohari told CoinDesk:
“We are looking at how best to create a software-as-a-service (SaaS) platform that allows enterprises to really provide compliance to [data privacy] regulations and at the same give control of that data directly to the users. It will use both DLT and traditional types of data stores such as [Amazon Web Services’] S3. We think this is an underserved area and a great opportunity.”
Data as an asset
Kohari explained that the work he did in the open source community building a DLT backbone for State Street’s custody business informs the new privacy project. The difference is that the latter treats data itself as the asset class.
“Normally we don’t think of data as an asset class,” said Kohari citing as typical examples consumers’ personally identifiable information (PII) or the way data is managed in the adtech space. “It’s about how do you represent that information in such a way you allow consumers to take direct control of that data, instead of enterprises allowing it to happen via archaic interactions in emails and written communications.”
Many of Kohari’s team members have been working as maintainers of Hyperledger Fabric for some years now and adopted the open-source blockchain tech with his team at State Street. Kohari further confirmed that work on Fabric continues within the bank.
“That journey continues in full force and I’m very excited to see where that will land and the huge implications of how that changes the custody world so you can create reconciliation-less systems,” he said.
State Street declined to comment.
Draper Venture Network Selects Blockchain-Focused Venture Studio, GHV to Join DVN Beta
LOS ANGELES (May 22, 2019) – Goren Holm Ventures (GHV), a fintech and blockchain-focused venture studio based out of Santa Monica, California, has joined Draper Venture Network’s DVN Beta program.
Founded by legendary venture capitalist Tim Draper, DVN currently comprises of 24 VC funds that operate in 60 cities globally and collectively manage over $2B in assets under management. It is a global, self-governed organization of independent venture funds that cooperate on investment diligence, marketing intelligence, corporate relationships, and co-investments. The DVN Beta program focuses on supporting budding VCs and exposing them to the world’s best investors and investment infrastructure. It is also meant to be a testing ground for first-time funds and alternative funding models.
“We are thrilled to bring in GHV as a member fund,” said Tim Draper, Founder of Draper Associates and Draper Fisher Jurvetson. “Josef and Alon have a great reputation for networking and inclusion. We are confident that they will be a great source of deal flow and wisdom to the network. We look forward to working with their team and their portfolio companies going forward.”
By joining DVN Beta, GHV accesses a global nexus of business development
opportunities and tech hubs with a local footprint in emerging economies around the world.
“GHV has amassed an incredible, global platform,“ says Gabe Turner, DVN’s Executive Director“By providing strategic introductions and access to partner funds, corporate partners and industry leaders, we will bring visibility and scale to their portfolio.”
GHV’s portfolio companies also benefit through this partnership by gaining access to a worldwide network of capital and expertise while procuring entry into localized private events and exclusive gatherings.
“As a former DVN portfolio company CEO, I had access to DVN’s incredibly powerful, global network and private events,” said Alon Goren, Founder of GHV. “Later as a venture partner for one of their funds, I experienced just how valuable DVN can be from the other side of the table. When we decided to formalize GHV, Gabe and Tim were our first call, and we couldn’t be more thrilled that they asked us to join them.”
The partnership will deliver more exposure to early-stage blockchain and crypto startups for DVN, as well as provide GHV with a larger global entryway for investment opportunities.
“We are humbled and excited to gain access to a vast network of funds and resources that not just GHV, but also our portfolio companies will benefit from directly,” said Josef Holm, Founder of GHV. “This takes our strategy of amplifying and exposing the work of the best blockchain entrepreneurs in the world to a whole new level.”
About Goren Holm Ventures (GHV)
Goren Holm Ventures (GHV) was founded in 2018 as a limited partnership between founders Alon Goren and Josef Holm. The firm has evolved to a venture studio, accelerating six startups and incubating 3 more, while simultaneously producing the premiere blockchain and cryptocurrency events in the Los Angeles area, Security Token Summit and Crypto Invest Summit. Sponsors for GHV events have included American Airlines, tZero, and eToro, and prior keynote speakers include Steve Wozniak of Apple, Anthony Pompliano of Off the Chain Podcast, and Shruthi Rao of Amazon Web Services. More information can be found at GorenHolm.com
About Draper Venture Network (DVN)
Starting in 1990, Draper Venture Network has grown into a self-governed organization of independent venture funds on four continents who cooperate on investment diligence, marketing
intelligence, corporate relationships, and co-investments. Draper Venture Network is a robust venture collective that brings together experienced investors with innovative entrepreneurs from around the globe to share strategies, source opportunities and create value. All member funds maintain independence while raising capital and managing investment decisions. More information can be found at DraperNetwork.com.