Who Needs A Smartphone Designed For The Blockchain?
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Huawei Technologies, a telecommunication equipment manufacturing giant, is giving strong signals that it will be building a smartphone that runs blockchain-based applications. The Shenzhen-based company is in conversation with Sirin Labs and considering licensing the SIRIN Operating System (OS) for their mobile devices. The SIRIN OS will run blockchain applications alongside Alphabet Inc.’s Android System.
While it’s unclear how the Huawei blockchain-ready smartphone will differentiate itself from current smartphones (which already run blockchain apps and hold cryptocurrency wallets), it’s a new move for the Shenzhen-based company. And although a blockchain smartphone may sound innovative, it’s uncertain whether the public will respond well to the idea.
According to Bloomberg, representatives from both companies have confirmed that Huawei and Sirin Labs have met. They are currently in preliminary talks. Sirin Labs has, however, confirmed Bloomberg’s story through a tweet on the company’s official Twitter account.
Is there true demand for a blockchain-ready smartphone?
As reported by Statista, blockchain technology is expected to reach a market valuation of $2.3 billion by 2021. If Huawei proceeds with the blockchain-ready smartphone, it will be one of the first smartphones connected to the blockchain, and it could potentially, be a catalyst to the widespread adoption of the technology.
On the Sirin Labs website, they argue that blockchain-ready smartphones solve significant problems with existing smartphones. Popular smartphones compromise on user security for improved user experience, which results in fraud and cybercrime.
As mentioned on their website, Sirin Labs strong believes that “the digital economy of the future cannot tolerate this trade-off: device architecture demands a paradigm shift the enables true security, while maintaining excellent user experience.”
Sirin Labs’ concerns for cybercrime and fraud are well-founded: they cost the global economy more than $445 billion every year. However, there is a relatively small number of early adopters that may be interested in exploring blockchain technology on their smartphones.
The majority of people do not take proactive steps to protect their online information and digital identities, and Sirin Labs, therefore, needs to educate the public on the security benefits gained from blockchain smartphones if they wish to “cross the chasm” and sell to the mainstream public. Otherwise, a blockchain-ready smartphone may be too avant-garde for users in 2018.
Of course, the phone could find plenty of niche uses – anyone seriously concerned with security, from spies to corporate executives (or cheating spouses) might consider a mobile device with bulletproof security to be a necessity for work… or play.
Finney: Sirin Labs’ blockchain-based smartphone
Sirin Labs is also working to develop their blockchain-ready smartphone. The Switzerland-based company raised $157 million in an initial coin offering to build a secure device that can simplify the use of cryptocurrencies across multiple applications. Sirin Labs plans to sell the Finney for $999 and currently has over 25,000 pre-orders, according to Nimrod May, a Sirin Labs spokeswoman.
The Finney smartphone “will form an independent blockchain network, a distributed ledger that is scalable and lightweight, powered by the IOTA’s Tangle Technology.” The Switzerland-based company also plans to release a desktop computer for $799 with the same features.
Despite Sirin Labs’ focus on security, Peter Todd, a cryptography consultant and Bitcoin developer, expressed great skepticism concerning the effectiveness of Finney’s cold storage. He asked CoinDesk, “Why does that protect you? You need to connect to the internal electronics to accomplish anything anyways, at which point the attack can happen.”
Huawei’s expertise in telecoms gear, smartphones, cloud computing, and cybersecurity may uncover a real demand in the future that we have not yet considered – but for now, questions linger regarding the need for (and adoption of) mobile devices that are designed specifically with blockchain applications in mind.
As for Sirin Labs, CEO Moshe Hogeg appears confident that Finney has “unique [features] and…will grow.”
If blockchain-based smartphones do become the next big thing, Huawei and Sirin Labs may well reap the benefits of first mover advantage in the hyper-competitive smartphone market.