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saksham tripathi

April 24, 2021

Want your payments even more secure? Use Signal!

The private messenger app known as Signal, which was launched nearly seven years ago, promised that its services are encrypted with one of the strongest available encryption for calling and texting in the industry. Now it has decided to incorporate what it describes as a way to bring that very same simplicity and security to a 3rd, fundamentally distinct feature: payments.Signal has planned to announce that it's rolling out the power for a few 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 'Mobile Coin', a type of digital cash designed to work efficiently on mobile devices while protecting users' privacy and even their anonymity. For now, the payment feature is going to be available only to users in the UK, and only on iOS and Android device, not on desktop. Nonetheless the new feature represents an experiment in bringing privacy-focused cryptocurrency to many users, one that Signal hopes to eventually expand around the world.

Moxie Marlinspike, the creator of Signal, describes the new payment feature as an attempt to extend Signal's privacy protection to payments with an identical seamless experience offered for encrypted conversations. Unlike payment features integrated onto other messaging apps like WhatsApp, iMessage or Messenger, which usually link a user's bank account, Signal wants to provide a way to send money that nobody aside from the sender and the receiver can observe or track. Big Companies routinely sell their users private transaction data to marketing firms and advertisers. Bitcoin wouldn't do the trick, either. Like many other cryptocurrencies, it's protections against fraud and counterfeiting are based on a public, distributed accounting ledger—a blockchain—that can in many cases reveal who sent money to whom.

So Signal started looking at privacy-preserving cryptocurrency, that both, bypass banks and guard users identities and store the details of their payments on a blockchain. While more established privacy-focused cryptocurrencies like Zcash and Monero are widely used and arguably better tested, Marlinspike says Signal chose to integrate MobileCoin because it provides the seamless user experience on mobile devices, requiring little space for storing on the phone and needing only seconds for transactions to be confirmed. Zcash or Monero payments, against this, take minutes to end transactions.

Signal's decision of selecting MobileCoin is no surprise for anyone watching the cryptocurrency's development since it launched in the late 2017. Marlinspike has worked as a technical adviser for the project since it's beginning, and he has worked with MobileCoin's founder Josh Goldbard to style MobileCoin's mechanics with a possible future merger keeping apps like Signal in mind.MobileCoin is not that old, it began trading as an actual currency with real value in December of 2020, and its 250 million coins, at around $69 each, are currently almost worth $17 billion dollars in total. As of now it is just listed for sale on one cryptocurrency exchange known as FTX, which does not allow trades by the US users. "Signal chose to roll out its MobileCoin integration in the UK for now, because the cryptocurrency can't yet be bought by users in the US," Marlinspike says, and also because it represents a much smaller, English-speaking user base to check out the new payments feature, which he hopes will make diagnosing issues easier.Payments create a troublesome dilemma for Signal: to keep pace with the features on other messaging apps, it must let users send money. But to do it without compromising its sterling privacy assurances, poses a difficult challenge. Despite Marlinspike's and MobileCoin's intentions, using any cryptocurrency today remains far more complex than Signal's other features. Even if users can send MobileCoin back and forth, they'll still prefer to cash them out into traditional currency to spend them, given that MobileCoin isn't widely accepted for real-world goods and services. And apart from that, requirement for exchanges and the lack of availability in the US, MobileCoin also remains even more volatile than older cryptocurrencies, with constant price swings which will significantly change the balances during a user's Signal wallet over the course of days or maybe just hours—hardly the type of issue that Venmo users have to face.