Signal Is Integrating a Cryptocurrency, and Bitcoiners Are Not Amused
On Tuesday, privacy-focused messenger Signal published a blog post introducing a number of beta features, among them "Signal Payments," which it described as “a new feature that enables you to send and receive privacy focused payments.” To facilitate these payments, Signal uses payment network MobileCoin, which — as the name suggests — comes with its own coin (MOB). The new payment beta will initially be available to users in the UK.
Unsurprisingly, the move had many Signal users confused. Where only weeks ago, a powerful push triggered by an Elon Musk Tweet had brought hundreds of thousands of users to the app, the sentiment has since changed dramatically. Among the most vocal critics: bitcoiners, who had a lot to say.
In a Tweet, podcast host and author Gigi referenced a Reddit post that included an analysis of the initial MobileCoin Whitepaper. According to the post, 85% of MOB's supply of 250 million tokens had been premined and are owned by a single entity, with the remaining 15% offered in a private presale at $0.80 each. At press time, MOB trades at around $63 on FTX.
The Reddit post pointed out another possible conflict of interest in the involvement of Signal founder Moxie Marlinspike as former CTO MobileCoin.
"Bold move, especially if you are following all this up with 'the bitcoin / lightning UX just isn't there yet'," Gigi commented on the post.
On the topic of privacy, Ricardo Spagni, former lead maintainer of privacy coin Monero, dug up a statement from the MobileCoin foundation, which read, "at MobileCoin, we believe governments have a legitimate interest in regulating the economic lives of their citizens.”
Although it is unclear how MobileCoin's integration will affect the messenger from a regulatory standpoint, the implications have users alarmed, especially after Signal had gained popularity recently as a more privacy-conscious alternative to WhatsApp. A Twitter user who goes by the name Tim expressed their concerns as follows:
I feel betrayed by @signalapp. I fought hard to bring my contacts over from other messaging platforms. People graciously put up with my elevator pitch, and finally started to see the need after things got ugly last year. All of that, so you can bundle in a garbage ICO?
Much of the recent criticism is further directed at MobileCoin's claim of being a decentralized cryptocurrency, which Peter Todd heavily criticized in a Twitter thread. The cryptographer named, among other things, MobileCoin's use of the Stellar and Ripple protocol, its dependence on Amazon S3 for the distribution of blockchain data, and its reliance on Intel SGX, which prevents other developers from working on it and thus conflicts with the basic idea of an open and free protocol.
Furthermore, voices were raised among the community to implement Bitcoin and make use of the Lightning Network instead, to which Moxie said his “impression is that it has a little ways to go still” when it comes to development and user experience. He did not specify why Signal gave priority to MobileCoin.
Zap founder Jack Mallers went as far as to say that “using [Lightning] is not only the correct approach but likely the only one,” when discussing whether Lightning would be ready for beta testing on the Signal app. As a second layer solution to Bitcoin, fast payments make up one of Lightning's core use cases, which is why many bitcoiners are disappointed to see their (once) favorite messenger go down another path.
While many see the implementation of MobileCoin into Signal as problematic and anticipate regulatory problems and a dent in Signal's image as a privacy-focused and censorship-resistant messenger, some seem to find the idea quite appealing; Coinbase CEO Brian Armstrong commented on the announcement that he was "excited for this."