From Andy Greenberg at Wired:
Signal today plans to announce that it’s rolling out the ability for some of its users to send money to one another within its fast-growing encrypted communications network. To do so, it has integrated support for the cryptocurrency MobileCoin, a form of digital cash designed to work efficiently on mobile devices while protecting users' privacy and even their anonymity. For now, the payment feature will be available only to users in the UK, and only on iOS and Android, not the desktop. But the new feature nonetheless represents an experiment in bringing privacy-focused cryptocurrency to millions of users, one that Signal hopes to eventually expand around the world.
I’ve read a lot of unhappy comment threads about this. There doesn’t seem to be a lot of overlap between people who are using Signal because it’s a secure/encrypted messaging app (you know… the main reason) and people who want cryptocurrency in their messaging app.
The creator of Signal, Moxie Marlinspike, was a technical advisor to the MobileCoin project. I’ve been seeing people speculating that this decision was mostly about him and Signal pumping another cryptocurrency and making a lot of money.
The Wired article (which, on the other hand, seems way too trusting of Moxie/MobileCoin/Signal), is describing the MobileCoin choice as being about choosing a currency that works better with mobile devices, is more private (when it comes to people being able to trace your purchases by looking at the blockchain), and works better as an actual currency1 than Bitcoin.
This whole thing reminds me of what Keybase did with Stellar Lumen in 2019. They added the Lumen cryptocurrency as a way for users to send money to each other. Keybase also sent free Lumens2 to each user every month, which ended with them cancelling the whole thing after realizing that spammers are pretty attracted to free money.
The interesting part of the Signal thing is that MobileCoin is actually based on the Stellar network, so… that whole failed experiment should probably be on their minds as they attempt to roll this out.
But I don’t think this is gonna work out well. I get the feeling that Moxie actually thinks this is an important thing to do for the product and actually helped design MobileCoin to work well with Signal and be private and easy to use and all that. But I also think that as a side effect he’ll make a lot of money and he knows that and is perfectly fine with it3.
But more than that, I think users won’t like it, it’ll attract a lot of bad attention, and the product will be worse because of it. Which is exactly what happened to Keybase when they did the exact same thing.
Bitcoin is actually pretty bad as a currency. Transaction processing is very slow, which adds to the perception that people should invest in it instead of spending it. I also mentioned some of the energy use problems in an earlier article about NFTs. MobileCoin tries to address both of these problems directly. (I’m happy it’s not proof-of-work based at least.) ↩︎
Disclaimer: I’ve had a Keybase account for a while so I received all the Lumen drops they did. I transferred them all to a wallet I’ve been using and keep an eye on them every once in a while. ↩︎
The Wired article mentions that neither Moxie or Signal own any MobileCoins. But if the network is as private as they’re saying it is, we wouldn’t know if it was true or not anyway. ↩︎