You may not be aware of it, but ‘blockchain phones’ have been a reality for the past two years now. You probably haven’t been offered one in a phone store, and the service almost certainly hasn’t been offered to you last time you spoke to your provider about an upgrade or contract renewal, but for those who are ‘in the know’ about crypto and blockchain, it’s been possible to get a phone that’s been suited to your interests for a quite a while. Taking that on board, we have only one question – is it worth it, and is there any point?
First of all, to understand what a blockchain phone is, you’d first have to understand a little about cryptocurrency and how it works – and most of us don’t. We’ve all heard of Bitcoin, and we know that Bitcoin is a cryptocurrency, but the only thing most of us understand about it is that it’s incredibly volatile and makes for a high-risk investment unless you were lucky enough to acquire some years ago when the unit price was less than one thousand dollars. Crypto and blockchain knowledge is still largely reserved for those with a high level of technical literacy, and that excludes most people from the conversation.
While we might not understand the function or composition of cryptocurrencies, we’re seeing them in use in more and more places. You can now use crypto to pay for your weekly shop with some major online retailers. We’ve seen an increasing number of online slots websites begin to accept bets placed with crypto. We’ve also seen wry observations made about how using crypto to play online slots might make you a better financial return than trying to invest with it – so should we be buying blockchain phones with a view to mining some crypto of our own, or would we be better playing online slots UK after all?
To answer that question, we’ve been looking at some expert opinions – and the news doesn’t appear to be good. The world’s first-ever blockchain smartphone was the HTC Exodus 1, which appeared toward the end of 2018. According to the Taiwanese company, it was built exclusively for people who understand crypto and want to make use of crypto wallets, and in a neat piece of promotional advertising, it could only be bought by cryptocurrency. That makes it one of the least-owned major brand smartphone handsets of all time, and something of an irony considering the fact that, at launch time, crypto users didn’t particularly care for it.
If you’re not crypto or blockchain literate, you might be wondering what the point of the device is. So were we, so we did some more digging. The trait that sets the Exodus apart from any other HTC-built phone is something called the ‘secure enclave.’ That’s a piece of hardware that’s locked away from every piece of kit in the phone, can’t be accessed by the main processor, and is ring-fenced even from the operating software.
This is where personal information is stored in the phone – theoretically making it impossible for hackers to compromise that information – and it’s also where wallet keys for the cryptocurrency stash of users are stored. In basic terms, it means that the users always have access to the money while it’s on their phone, but also that their money is always safe. In the crypto world, this is considered to be a convenience. Why, then, was it unpopular?
HTC had failed to take into account a very important attribute about the average crypto fanatic – they don’t like large corporations. They use crypto because they hate banks, and so they were never likely to trust a huge mobile phone company with access to their treasured crypto codes no matter how many assurances they were given about protection and security.
The people they wanted to serve didn’t want to be served by them, and so it’s amazing that the concept survived for a single day beyond its launch. It’s still around today, though, and the most recent version of the phone and its software has the added feature of quietly mining for more cryptocurrency while it’s charging.
That’s nothing to get excited by, though – the currency being mined is Monero rather than Bitcoin, and the average daily yield is less than half of one cent. The retail price of the phone is currently around $250. It would take almost two centuries for the phone to repay its own purchase price.
The relative failure of the HTC Exodus phone ought to have been a warning sign to the industry that there isn’t a market for devices of this kind – and yet we’ve seen more appear in the years since, including one made by Samsung.
The Samsung Note 10 Klaytn phone was released in October 2019, albeit only in crypto-obsessed South Korea. Sirin Labs, a far smaller company, has created a device called the Finney, which claims to have military-grade security and a ‘cold storage wallet’ for crypto.
Huobi, a large-scale crypto-exchange platform, recently launched a phone of its own called the Acute Angle Node 6 – but that’s only available in China. Even that’s a strange move – China effectively banned all cryptocurrency other than its state-approved own-brand in September 2017.
If all of the information contained in this article sounds puzzling to you, you’re not alone. Even though awareness of what crypto is and what it does is increasing, it’s not anywhere near the point of mainstream acceptance yet.
Just as it wouldn’t make commercial sense to open a store on the high street where the only payment option is Bitcoin, it makes no commercial sense to create a phone marketed squarely at cryptocurrency users. There isn’t a large enough market, and a significant portion of the small market that could potentially exist are against the concept anyway.
The creation of blockchains phones looks – to us, at least – to be a fad and not a particularly popular one. This might be an idea we come back to ten years from now if crypto still exists at that point, but unless you’re a major crypto trader, they’re probably not an idea you want to consider at the moment.