When encrypted The Signal communications application, launched almost seven years ago, has brought the promise of the most powerful encryption available to a simple interface for calls and text messages. Now, Signal incorporates what it describes as a way to bring the same ease of use and security to a third fundamentally distinct feature: payments.
Signal intends today to announce that it is launching the possibility for some of its users to send money to each other in its fast-growing encrypted communications network. To do this, it has built-in support for MobileCoin cryptocurrency, 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 only be available to users in the UK and only on iOS and Android, not on the desktop. However, the new feature is an experiment in bringing privacy-focused cryptocurrencies to millions of users, one that Signal hopes will eventually expand worldwide.
Moxie Marlinspike, the creator of Signal and CEO of the nonprofit organization that runs it, describes the new payment feature as an attempt to extend Signal’s privacy protection to payments with the same seamless experience that Signal has provided for encrypted conversations. “There is a palpable difference in the way you 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 get into a world where not only can you feel that when you talk to your therapist about Signal, but also when you pay your therapist for the session over Signal.”
Unlike payment features built into other messaging apps like WhatsApp or iMessage, which usually link a user’s bank account, Signal wants to provide a way to send money that no one but the sender and recipient can notice, or follow. Financial institutions typically sell their users’ private transaction data to marketing firms and advertisers or pass it on to law enforcement agencies. Bitcoin wouldn’t do the trick either. As with many cryptocurrencies, its protection against fraud and counterfeiting is based on a public, distributed accounting register – a blockchain – which, in many cases, can reveal who sent money to whom.
So Signal looked at cryptocurrencies that maintain confidentiality or “privacy currencies” that circumvent both banks and are specifically designed to protect the identity of users and payment details on a blockchain. While more established, privacy-focused cryptocurrencies, such as Zcash and Monero, have been used more widely and probably better tested, Marlinspike says Signal chose to integrate MobileCoin because it has the best user experience on mobile devices, requiring little storage space on your phone and only taking seconds for transactions to be confirmed. Instead, Zcash or Monero payments take minutes to complete transactions. “You use state-of-the-art encrypted cryptocurrency, but from your perspective, it feels like Venmo,” says MobileCoin founder Josh Goldbard.
MobileCoin’s choice of Signal is no surprise to anyone following 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 worked with Goldbard to design MobileCoin mechanics with a possible future integration into applications such as Signal in mind. (However, Marlinspike notes that neither he nor Signal own MobileCoins.)
MobileCoin started trading as a real currency with real value only in December last year – until then it operated as a worthless “testnet” – and its 250 million coins, around $ 69 each, are now worth almost $ 17 billion in total. It is currently 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 US exchanges could also not list the currency. Signal has chosen to launch its MobileCoin integration in the UK, as the cryptocurrency cannot yet be purchased by US users, says Marlinspike, but also because it is a smaller, English-speaking user base to test new payments. . feature, which he hopes will facilitate the diagnosis of the problems.
Payments present a tough dilemma for Signal: To keep up with the features of other messaging apps, you need to allow users to send money. But doing so without compromising its sterling privacy guarantees is a unique challenge. Despite the intentions of Marlinspike and MobileCoin, the use of any cryptocurrency today remains much more complex than the other features of Signal. Even if users can send MobileCoin back and forth, they will probably have to cash them in the traditional currency to spend, as 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 US, MobileCoin remains even more volatile than older cryptocurrencies, with constant price fluctuations that will significantly change the balances in the user’s Signal wallet over the course of days or even hours – hardly the kind of problem Venmo users have to deal with. (As of March 27, the value of MobileCoin has risen by almost 600 percent, possibly due to rumors of imminent signal integration or possibly the result of “short pressure”).