Two new smartphones could help make blockchain technology more mainstream this fall. The HTC Exodus and Sirin Labs Finney, both slated for release in the coming months, are promising everything you already love in your smartphone plus cryptocurrency-friendly features like cold storage for your coins and seamless token exchange.
Sirin Labs Finney Phone
Swiss company Sirin Labs used an initial coin offering for its token, SRN, to raise money for the Finney phone. It is named after the late developer and cypherpunk Hal Finney, recipient of the first bitcoin transaction.
The phone will cost $999, but consumers can only purchase it using the equivalent amount of SRN, which was issued in an initial coin offering and is now available through several exchanges. The token is valued at $0.074245 and has a market cap of $17 million at the time of writing. Anyone who preorders the phone by depositing 50 SRN will get a 10 percent discount; 25,000 phones have been preordered.
Besides its use for purchasing the phone itself, the SRN token will also be useful for purchasing decentralized apps (dapps) from the Finney’s community-run app store, for sharing excess phone power with other Finney users, and for earning SRN by using the phone to host a WiFi hotspot.
The phone’s open-source operating system, Sirin OS, is based on the most recent Android operating system (Android 8.1 Oreo). The phone will have a Qualcomm Snapdragon 845 processor, a six-inch screen with an 18:9 display, 6 GB of RAM, a 12-megapixel rear camera, an 8-megapixel selfie camera, and 128 GB of built-in storage with the capability to add up to 2 TB more via SD memory card.
Each Finney phone will serve as a node in an independent, lightweight blockchain that doesn’t require mining and will facilitate fast, fee-less payments between network members. This blockchain will use IOTA’s Tangle technology. Sirin Labs says on its website that the phones are designed to prioritize security and compatibility with the crypto-economy.
Smartphone Cold Storage
The Finney will serve as a cold wallet for digital currencies through a physical switch that will instantly make the phone “wirelessly inaccessible,” ComputerWorld explains. A phone (or other device) needs to be completely offline—inaccessible via cellular, WiFi, Bluetooth, and NFC—to keep sensitive data such as private cryptocurrency keys secure. The phone’s crypto wallet will be compatible with the most common cryptocurrencies, not just with SRN tokens.
It will also use three-factor authentication for security. Users can protect their phones by requiring iris and fingerprint scans for access. The Finney also has a behavioral-based Intrusion Protection System. The phone even has an ideological purpose: to provide “true security, while maintaining excellent user experience,” instead of trading away security in favor of user experience like existing phones do, “at a huge cost in fraud and cybercrime.”
One of the phone’s unique features is its dual-screen design. While the phone looks like any other smartphone, it also has a two-inch rectangular second screen that pops up from behind the main screen. This safe screen’s dedicated purpose is to make cryptocurrency transactions. It runs on dedicated firmware, separated from the main phone with a firewall to prevent hacking.
The Finney phone will be designed to make crypto transactions more consumer-friendly by making automatic token conversions through its Token Conversion Service. This service will facilitate online purchases in that consumers won’t have to take the extra step of visiting an exchange to get the crypto they need, and they’ll be able to seamlessly exchange the phone’s native SRN tokens for more widely used currencies such as bitcoin. While it’s already possible to do this with an app on a regular smartphone, having this functionality built into a new phone could encourage cryptocurrency use among people who don’t know how to set up an existing phone to use cryptocurrency. And with this phone being specifically designed for people who use cryptocurrency, it should also provide greater security.
The question is how effective the phone will be in attracting new cryptocurrency users given that people will need to figure out how to acquire the SRN tokens needed to purchase it. Those able to visit a new Sirin store in the United States, Tokyo, or London, at least, can get help with this task from store employees. They can also join in-store activities to learn more about cryptocurrency and meet like-minded people in the community.
HTC is withholding many of its phone’s details for now, but here’s what we know. The HTC Exodus will offer interoperability among different blockchains with initial support for bitcoin, lightning networks, ethereum, and dfinity and possibly later support for other distributed ledgers. Each phone will act as a blockchain node, which its creators hope will double or even triple the number of nodes on the bitcoin and ethereum networks, though it is questionable whether enough people will buy the phone to make that possibility a reality. Its price is expected to be around $1,000, in line with the Finney and the iPhone X. Standalone cold-storage devices such as the Ledger Nano S and Trezor are about one-tenth of the price of these phones.
Users’ identity and data will be stored on the phone itself instead of in the cloud to provide greater security and privacy, in theory. The Exodus will also include a cold-storage wallet to keep users’ cryptocurrencies safe. And HTC will be the exclusive mobile distributor of the popular cartoon cat-breeding dapp, CryptoKitties. The Exodus may also come with developer tools for dapps.
A big question with both phones is, what happens if you lose or irreversibly damage your phone? With your cryptocurrency in the phone’s cold storage, will those assets be lost forever? And is the same true if you lose your private key and your seed phrase, the string of random words that lets you recover your private key? HTC says its phone will have a wallet recovery feature, though it hasn’t released information on how it will work. Sirin Labs says there will be no way to recover private keys and their associated cryptocurrencies for Finney users who lose their phones and seed phrases.
The first two blockchain smartphones will be niche products, to be sure, and first-generation devices aren’t always a major success. But just as the Diamond Rio and Creative Nomad Jukebox MP3 players helped pave the way for the iPod, the Exodus and Finney, even if imperfect and not widely adopted, could pave the way for future blockchain smartphones. Still, the HTC Exodus and Sirin Labs Finney represent interesting steps forward in crypto, and it will be exciting to see whether consumers embrace them.
Eric C. Jansen is the founder, president and chief investment officer of AspenCross Wealth Management (AWM), a Registered Investment Advisor. AWM provides bitcoin and cryptocurrency educational services to its retail clients and manages several thematic investment portfolios focused on blockchain innovation & disruptive technologies.