The new system is based on a little-known cryptocurrency called MobileCoin, characterized by its rapid transaction speeds and ease of use on mobile platforms. The digital currency shares a number of traits with popular privacy coins Monero and Zcash, which specialize in totally anonymous and untraceable transactions.
During the initial trial, payments functionality will be available to UK users only, and exclusively on mobile devices. According to Signal, this is partly due to the fact MobileCoin is not currently listed on any US-based crypto exchanges, but the company hopes it will be able to bring payments to a wider audience soon.
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In a bid to capitalize on this momentum, Signal has been hard at work building out the range of available features. Recent additions include multi-device calling, end-to-end encrypted video conferencing and, now, cryptocurrency payments.
What sets Signal’s new payments system apart is that users will not be required to link a bank account in order to send or receive money. The blockchain underpinning MobileCoin cryptocurrency is also architected in such a way as to protect the identity of the sender and recipient, as well as obscure the value of transactions.
“There’s a palpable difference in the feeling of what it’s like to communicate over Signal, knowing you’re not being watched or listened to, versus other communications platforms,” said Moxie Marlinspike, Signal CEO.
“I would like to get to a world where not only can you feel that when you talk to your therapist over Signal, but also when you pay your therapist for the session over Signal.”
However, Signal will need to resolve a number of outstanding questions before its new payments system can be adopted en masse.
The most obvious is the limited availability of the MobileCoin cryptocurrency, which is currently listed on only one exchange, FTX. And unlike some older cryptocurrencies, MobileCoin is not widely supported by retailers, meaning users will have to switch back out to fiat currency in order to purchase goods and services.
Even more difficult to resolve is the issue of volatility, which afflicts almost all major cryptocurrencies. Within the last ten days, for example, the value of a single unit of MobileCoin has swung from circa $7 to more than $60. This level of instability exposes users to significant theoretical losses, in the event the price skyrockets in the immediate aftermath of a purchase.
Marlinspike acknowledges these challenges, however, and remains bullish about his company’s ability to find viable workarounds. Front of mind, he says, is the opportunity to push back on financial surveillance practices and give people a simple and totally private way to send and receive money.
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