- >What to Make of Signal’s Foray into Crypto with MobileCoin
What to Make of Signal’s Foray into Crypto with MobileCoin
Encrypted messaging app, Signal has recently integrated MobileCoin onto the platform in the UK. What does this mean for the app and what is MobileCoin’s claim to fame? Finally, why not choose Bitcoin or Ethereum as the currency to integrate into Signal?
Michael Brown | Apr 23, 2021
What is Signal and What is MobileCoin?
Signal is an end-to-end encrypted messaging application that allows users to have secure conversations either one on one or with a group of up to eight people. It also features a highly simplified interface, bringing encryption to anybody. Signal recently announced that they were adding MobileCoin to the platform, allowing users (currently only available in the UK) to send money to one another.
MobileCoin is a cryptocurrency designed to be used on mobile devices. The founder of Signal, Moxie Marlinspike, also serves as an advisor for the MobileCoin team. MobileCoin has some pretty simple goals in mind that focus on the quality of life of making payments and use of the coin. These features include easier wallet recovery in the event of loss, payment in under 10 seconds, and scalability. In addition to these features, MobileCoin claims to be a security coin with an opaque ledger.
Marlinspike has been working on the currency since 2017, reports Wired. The goal in mind with the currency is to overcome some of Bitcoin’s heavyweight problems such as scalability. Marlinspike began work on it two years after Bitcoin devs published a draft of the lightning network, which was proposed as a solution for the scalability problem. Wouldn’t it have been easier to integrate Bitcoin into Signal instead of developing a new currency?
The Lightning Network and Stellar Consensus
Bitcoin developers, Joseph Poon and Thaddeus Dryja published a draft proposing the lightning network for Bitcoin in 2015. Meanwhile MobileCoin is based off the Stellar Consensus Protocol. Stellar was released in 2014 with the goal of creating a blockchain network that could achieve consensus quickly but also with a safety net in the event of misbehavior.
The lightning network for Bitcoin runs on what’s called a “layer 2” payment protocol. It is too complex to summarize here, but the short version is that it makes micropayments after analyzing the fastest chain of nodes for each micropayment to traverse through. The best part is that it does this with virtually no cost to the sender. This network also does not have to delegate custody of funds from node to node like a game of telephone. It tracks each micropayment as it moves through the nodes and they belong to respective parties the entire way. In addition these payments do not appear on the blockchain. Finally, the lightning network can process transactions between the ranges of less than a minute to milliseconds, according to the 2nd edition of Mastering Bitcoin by Andreas Antonopolis.
The Stellar network that MobileCoin runs on operates with the intended goal to trade digital representations of all forms of money and reduce fees. Stellar’s user experience also seeks to create something simple which lines up pretty well with Signal’s user experience.
Signal and Stellar do seem to have a lot of the same design philosophy in mind. In addition, Stellar has no ownership and is an entirely open source network, similar to Bitcoin. In the past, Stellar has also been described as a “little Federal Reserve”. Allowing users to “mint” their own tokens, based off of a currency of their choice. So if MobileCoin ever decided perhaps they wanted to have their currency based on something else, that option may be on the table.
Why Choose Stellar over Bitcoin?
So given that the lightning network is suitable for micropayments in Bitcoin, why would one choose to mint their own token instead of siding with digital gold? Well, it can be quite a profitable business. Especially in the crypto market we have now where speculation is running a bit wild.
While I don’t doubt that Marlinspike is committed to privacy he is also from the world of silicon valley tech, which is quite a competitive and profit driven place. However, while Marlinspike does run a business, it’s easy to see why he settled on Stellar instead of the lightning network. For exchangeability I suspect. Not only are there a whole bunch of global currencies, there are even more altcoins alongside Bitcoin. So on Signal’s mobile app which is designed from the ground up to be secure and lightweight, you would probably want to select a digital token that is exchangeable with other tokens and currencies.
Imagine you’re a child in a classroom and you’ve got a note that you want to pass along to a friend but there’s a teacher watching you and you’d really rather not have them see it. Wouldn’t you want that note to be as small or concealable as possible? That’s the thinking behind choosing Stellar with Signal. Make the redeemable note for money as small as possible so you can squeeze it through your super secure, super fast network. Signal has the tunnels, they’ve got to fit the monetary package through those tunnels. I don’t think Stellar was a bad choice for this.
Currently, MobileCoin transfers are only available for the UK version of the Signal app, but this does open up interesting opportunities and questions about the future of both Signal and how Bitcoin will compete with new altcoins as blockchain tech advances. Perhaps Bitcoin could one day be as easily exchanged.