News about blockchain-first mobile phones have been making the rounds again, so we wanted to give it a bit more structured thought. A core premise of why Crypto matters is the ability to have digital goods that are scarce. This means, that these things are unique just like physical goods, and thereby support real economic activity. Two concerns, however. The first is that today’s Internet is free, and does not have the friction of costs. A blockchain-based Internet that does have built-in tolls everywhere is akin to buying music with built-in Digital Rights Management – just a frustrating, pointless experience. The music labels were never able to get consumers to adopt DRM. And second, using a DApp is really hard. Not only do you have to know how to buy cryptocurrency, but you need to buy tokens for particular apps, figure out how to store those tokens, and how to spend them. While yes, Metamask can do much of this, such an experience is still far worse than downloading an App from the App Store with one thumbprint.
Usability could be solved by blockchain-native devices. HTC, Huawei and Sirin Labs are each working towards this goal. HTC is building a phone model called “Exodus”, which will be able to serve as a node for Bitcoin and Ethereum networks, act as a cold storage device, process crypto payments, hold personal identity, and support decentralized applications natively. Other HTC phones already support games like Crypto Kitties today, and the company has partnered with Animoca and Bitmark on future developments. There’s some speculation that these initiatives are just a publicity grab for HTC after the sale of its design team to Google, but we still think that the direction of travel matters. Landing a major handset with crypto functionality in the pockets of consumers everywhere is compelling.
As for Huawei, the world’s third largest handset maker, it is rumored that they are partnering with Sirin Labs to license Sirin’s operating system. Sirin has already been working on a blockchain-enabled smartphone called “Finney”, manufactured by Foxconn and sold for about $1,000. It also supports blockchain applications, such as a crypto wallet, secure exchange access, encrypted communications, and a P2P resource sharing ecosystem for payment and apps. The caveat for Sirin is that the phone requires a proprietary token, SRN. Which of course goes back to our initial points about DRM – the things most likely to succeed is the one that has the fewest barriers.