Here’s why you should be excited about ‘blockchain phones’
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Within the next few months two different companies are due to release new ‘blockchain phones’. I am personally very excited for this, and have delayed buying a new handset even though I need one so I can wait to pick up one of these new releases. But I suspect many people, even within the crypto space, don’t really understand exactly what a blockchain phone does and why its so exciting.
A hardware wallet without the hassle
When you own crypto you are faced with a choice. You can hold onto your private keys yourself and take on all the responsibility for keeping them safe from theft or loss, or you can trust someone else and lose some of the inherent benefits of crypto in the form of privacy, independence and safety from third party risk of loss.
It is often said that if you don’t own the keys you don’t own the coins, and it is generally accepted that it is better to hold your keys yourself if you can. This is because custodians holding them for you present a great target for hackers or insider thefts, and can also go out of business or behave fraudulently with your funds.
While theft from individual user wallets is not common, it can and does still happen. One of the most popular products to help users store their coins in the safest way possible is the hardware wallet – a physical device whose sole purpose is to securely store your crypto. But in addition to being something extra to buy, a hardware wallet adds time and hassle both to set it up properly in the first place and also when it comes to moving your bitcoin out of ‘cold storage’ to spend.
Blockchain phones bring an excellent compromise between added security and ease of use, offering a wallet which is safe enough for the vast majority of people while also being as easy to use as any other app.
For example, the Finney phone has as separate processor and small additional touch screen for the wallet. Both of these remain completely unconnected from the rest of your phone and from the internet until you press a small hardware button to reveal them. This gives you the full security of a hardware wallet but without the hassle of separate hardware and working out how to connect your cold storage to your spending wallet when the time comes to use your coin.
Meanwhile the HTC takes a slightly different approach. They don’t go so far with the hardware, instead using the trusted environment on the phone’s regular chip. This is not quite so hackerproof as the Finney but is still pretty secure. They then combine this with a unique recovery system for people who lose their phones – if you have friends using their app you can split your keys between friends who can then restore your wallet for you in case of loss; for many people this will certainly be a more user-friendly method than writing down 12 words and trying to keep them safe.
Mass appeal: privacy, security and owning your own data
Hardware wallet are obviously most likely to appeal to people who already use crypto. But blockchain phones, if done well and marketed right, have the potential to introduce other consumers to the potential benefits of blockchain. This could be a significant driver of cryptocurrency adoption in the future.
Mobile phone technology is infamous for the way it has eroded privacy and created armies of app developers making a living from using and abusing consumers’ data behind the scenes in ways that most are unaware of until after the fact. Blockchain has the potential to form the core of decentralized data networks which put users back in control whilst also securing against data theft.
Unfortunately, however, asking users to learn about and understand the benefits, choose the best products from all those which are available and then work out how to use a bunch of dapps and potentially multiple blockchains and how they can (or more likely cannot) interact with their device and the other apps they use is almost certainly to big of a hurdle. A handset maker is in a pretty unique position in being able to integrate this technology into the phone’s regular interface in a simple, understandable and easy to use way. In the future I can definitely see this kind of device being marketed to people who are concerned about privacy and security or just want to share in the benefits from their data being used – with blockchain simply being the background tech used to accomplish it.
You can’t even publish an app which uses crypto directly to the Apple app store, let alone publish a decentralized app.
There are loads of things that can be done with decentralized apps. But you can’t easily use them on your phone and even on a laptop or desktop computer they can be a hassle to find, a hassle to use, and if your not careful and knowledgeable you may well find yourself getting scammed along the way. A curated dapp store integrated into the phone so that people can use it just as they would a regular app store has great potential to make using dapps more fun and provide an entry into the world of dapps for people who wouldn’t otherwise bother.
There are almost certainly a ton of other benefits that I haven’t thought of, probably many that nobody has thought of yet, but one other interesting use is the resource sharing which will be included with the Finney. You can share your data or even your battery charge with other users in the area and get paid instantly with crypto, or access other people’s resources on the fly when you need them and pay a small fee using your phone’s built in wallet. Pretty cool if you ask me.
If I can afford it I will buy both phones to review here for you when they come out, but at the very least I’m going to get the Finney from Sirin Labs so stay tuned and subscribe to see that as soon as I can get my hands on one!
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