Thursday, November 30, 2023

Signal adds payment functionality – with privacy-focused cryptocurrency

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When the encrypted Communication application signal launched almost seven years ago, it brought the promise of the strongest encryption available to an extremely simple interface for calls and texts. Now Signal is integrating what it describes as a way to bring the same ease of use and security to a fundamentally separate third functionality: payments.

Signal today plans to announce that it is rolling out the ability for some of its users to send money to each other within its rapidly growing encrypted communications network. To do this, he has Built-in support for MobileCoin cryptocurrency, a form of digital currency designed to work efficiently on mobile devices while protecting user privacy and even anonymity. For now, the payment feature will only be available to users in the UK, and only on iOS and Android, not on the desktop. But the new feature nonetheless represents an experiment to bring privacy-focused cryptocurrency to millions of users, a cryptocurrency Signal hopes to eventually expand worldwide.

Moxie Marlinspike, the creator of Signal and CEO of the nonprofit that runs it, describes the new payments feature as an attempt to extend Signal’s privacy protections to payments with the same seamless experience Signal offered. for encrypted conversations. “There is a palpable difference in how it feels to communicate through Signal, knowing that you are not being watched or listened to, compared to other communication platforms,” Marlinspike told WIRED in an interview. “I would like to come into a world where you not only can feel this when you talk to your therapist through Signal, but also when you pay your therapist for the session through Signal.”

Unlike the payment features built into other messaging apps like WhatsApp or iMessage, which typically tie a user’s bank account, Signal wants to provide a way to send money to no one other than the sender. and the recipient cannot observe or follow. Financial institutions regularly sell their users’ private transaction data to marketing companies and advertisers or hand it over to law enforcement. Bitcoin wouldn’t do the trick either. As with many cryptocurrencies, its protections against fraud and counterfeiting rely on a public and distributed ledger – a blockchain – which can in many cases revealing who sent money to whom.

Signal therefore turned to privacy-preserving cryptocurrency, or “privacy coins,” which both bypass banks and are specially designed to protect user identities and the details of their payments on a blockchain. While more established privacy-focused cryptocurrencies like Zcash and Motto have been more widely used and arguably better tested, Marlinspike says Signal chose to integrate MobileCoin because it offers the most seamless user experience on mobile devices, requiring little storage space on the phone and requiring only seconds for transactions to be confirmed. Zcash or Monero payments, on the other hand, take a few minutes to complete transactions. “You are using a cryptocurrency with cutting edge encryption, but from your perspective it looks like Venmo,” says MobileCoin founder Josh Goldbard.

Signal’s choice of MobileCoin comes as no surprise to anyone observing the development of the cryptocurrency since its launch in late 2017. Marlinspike has served as a paid technical advisor for the project since its inception, and he has worked with Goldbard to design the mechanics of MobileCoin with possible future integration into apps like Signal in mind. (Marlinspike notes, however, that neither he nor Signal owns MobileCoins.)

MobileCoin didn’t start trading as a real currency with real value until December of last year – until then, it operated as a worthless “testnet” – and its 250 million coins, at around $ 69 each, is currently worth nearly $ 17 billion in total. . For now, it is listed for sale on a single cryptocurrency exchange, FTX, which does not allow transactions by US users, although Goldbard says there is no reason why the exchanges also cannot list the coin for trade. Signal chose to roll out its MobileCoin integration in the UK partly because the cryptocurrency cannot yet be purchased by users in the US, says Marlinspike, but also because it represents an English-speaking user base. smaller to test new payments. , which he hopes will make it easier to diagnose problems.

Payments present a difficult dilemma for Signal: To keep pace with the functionality of other messaging apps, it needs to allow users to send money. But doing so without compromising its excellent privacy guarantees poses a unique challenge. Despite Marlinspike and MobileCoin’s intentions, using any cryptocurrency today remains much more complex than Signal’s other features. Even though users can send MobileCoin back and forth, they will likely need to cash them in traditional currency to spend, given that MobileCoin is not widely accepted for real world goods and services. And aside from this need for exchanges and the lack of availability in the United States, MobileCoin also remains even more volatile than older cryptocurrencies, with constant price fluctuations that will dramatically alter a user’s Signal wallet balances. over the days, even hours. hardly the kind of problem that Venmo users face. (Since March 27, MobileCoin’s value has climbed nearly 600%, possibly due to rumors of the imminent Signal integration or perhaps the result. of a “short-squeeze”.)


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