HTC announce blockchain-powered smartphone – but why?

Speaking at Consensus 2018, HTC founder Phil Chen revealed the plan for ‘Exodus’, a smartphone that will support “underlying protocols such as Bitcoin, Lightning Networks, Ethereum, Dfinity, and more.”

The vision revolves around three key selling points: a seamless experience of decentralized apps, inherent security from embedded cold storage, and node functionality. Details were given in a post on Medium:

“The HTC Exodus is the first native blockchain phone dedicated to bringing end consumers the best decentralized application (DApp) experiences, including a built-in secure hardware enclave, and helping underlying protocols expand their base of dedicated nodes, thus expanding the total blockchain ecosystem.”

HTC does have a history of innovation and were the first manufacturer to implement Android, and the first to release 4G-enabled phones in the West. However, despite claiming that this will be the first “native blockchain phone”, they will join a host of other manufacturers aiming to implement the technology. This includes Chinese PC giant Lenovo, Huawei, and leaders in the space, Sirin Labs.

But the exact benefit of these offerings is not clear— are blockchain phones are a worthwhile proposition, or just another variant of blockchain iced tea?

Does the world need a blockchain phone?

Should crypto gain wider adoption, then we could expect transfers over Near-Field Communication (NFC) using smartphones to become more commonplace. The manufacturers claim that phones built with blockchain-specific hardware would make these transfers more secure.

The most developed example comes from Sirin Labs, which held one of the biggest ICOs in recent memory. Security is the key premise of its phone Finney, that claims it will be the only smartphone in the world secure enough to hold cryptocurrency safely.

Phones built with blockchain hardware would also be more secure for all activities rather than just transfers, say Sirin Labs, who argue that as the devices rely on the blockchain and decentralized apps rather than standard technologies, they would make web browsing, messaging, and mail all more private and secure.

Is this extra level of security necessary?

Although smartphone implementation could be the catalyst to widespread adoption for cryptocurrency, whether it is necessary for specialist hardware or not is unclear, as many security features and blockchain apps can be integrated into an average smartphone with the help of software alone.

Peter Todd, a prominent cryptography consultant and bitcoin developer, is skeptical about the advantages offered by cold storage for security. He told CoinDesk, "Why does that protect you? You need to connect to the internal electronics to accomplish anything anyway, at which point the attack can happen."

For many users, rather than invest in a new phone, it will be easier to download a secure and private browser or a messaging app to their familiar iPhone or Android device.

It is crypto aficionados that are likely to be attracted to the additional benefits that specialist hardware brings, which includes the possibility of further security from biometric identification, cybersecurity protection, and behavioral monitoring to detect possible exploitation. Features that could become increasingly necessary to guard against 5 dollar wrench attacks (this is the theory where having identified somebody with a lot of crypto, instead of deploying a super-hacker, thieves instead mug the person and hit them with a 5 dollar wrench until they hand over their private key).

For those users that might want to support the blockchain by running a node, the extra security could also help guard against hacking. The HTC Exodus’ website claims that each blockchain phone can serve as a Node, with the goal of doubling and tripling the number of Nodes of Ethereum and Bitcoin.

The other key benefit of blockchain-powered phones, according to HTC, is ownership of personal data. Speaking at Consensus 2018, Mr Chen said

“We envision a phone where you hold your own keys, you own your own identity and data, and your phone is the hub. I want to see a world where the end consumers can truly own their data—browsing history, identity, assets, wallets, emails, messaging—without the need for central authorities.”

Amid news of massive losses, floundering mobile company HTC have unveiled their latest attempt to stay above water: a blockchain-powered smartphone.