One of the primary goals behind any new invention should be to make it as accessible and user-friendly as possible. Although cryptocurrencies attempt to simplify monetary transactions, the current reality is that bitcoin can only process up to 7 transactions per second compared to Visa that can process thousands of transactions in a second. Moxie Marlinspike, founder of Open Whisper Systems, has decided to use the Stellar blockchain to power a new cryptocurrency called MobileCoin.
MobileCoin’s architecture is based on the Stellar Consensus Protocol (SCP), which claims to implement a faster, more reliable, and more efficient payment network. Ted Livingston, founder of Kik Messenger, has decided to switch from Ethereum to Stellar. Livingston has gone as far as calling Ethereum the “dial-up era of blockchain”.
So, what does MobileCoin plan to offer? Well, if a technology solution truly qualifies as being accessible, then it should be as intuitive and user-friendly as possible. If a technology, and in this case cryptocurrency (MobileCoin), is intuitive, then it must be simple as well. In addition, the solution must safeguard the privacy of its users and offer reliable and secure methods of transactions. MobileCoin plans to offer all of these features and more.
Although these claims seem promising on the surface, it is too early to jump to any conclusion. What real-life, practical evidence do we have that MobileCoin will deliver on its promises? We can read through the MobileCoin whitepaper, carefully analyze the document on the Stellar Consensus Protocol, and the Stellar blockchain, but even then the best we’d be able to come up with is an educated guess, or rough hypothesis, on just how MobileCoin will work in real life.
What we do know is that the best proven orchestrator of financial transactions are banks. Whether we like it or not, banks are still more trusted than cryptocurrency by the majority of people on this planet. However, banks are not as accessible to people, especially in Africa, where only 1 out of 3 people have access to banks. MobileCoin seems to have the right idea, to simplify and increase the accessibility of financial transactions, but how it will do so (the actual implementation) remains to be seen.
To his credit, Moxie Marlinspike, the founder of MobileCoin has managed to launch a fairly successful private messenger app called Signal. It has received over 171,000 reviews with an average rating of 4.6. However, it’s worth noting that this is simply a messaging application and not a complex payment system that MobileCoin will be. So, the moderate success of the Signal app does not mean that MobileCoin will be successful. Nevertheless, it is a step, or at least a thought, in the right direction because it aims to “fix” the most common problems associated with cryptocurrencies.
When you think of ease of use and simplicity, then you also think that you might have to compromise on security. However, this will not be the case with MobileCoin. Even though the security of digital transactions is made possible by implementing sophisticated cryptographic algorithms, the end-users need not be aware of these intricacies. Just how MobileCoin will offer simplicity in addition to robust security remains unclear. This is why the best we can do is closely watch or monitor the upcoming MobileCoin developments.
Cryptocurrencies like bitcoin depend on centralized exchanges like BitFinex, Kraken, and Bittrex to offer accessibility to its users. Crypto users get to interact with a realistic user-interface that they can comprehend to a fairly reasonable extent. One can argue that this is against the spirit or principle of decentralization that cryptocurrencies were founded upon. Some work has been done to develop decentralized exchanges such as EasyDex.
One of the driving forces behind MobileCoin and EasyDex is to stop hackers from maliciously infiltrating the system, which is easier to do if the system is centralized. We have all heard of the Mt. Gox bitcoin exchange that was hacked several years ago. Hackers managed to steal approximately $450 million worth of bitcoins. While we are all aware of the foul play that occurs in the crypto-sphere and many coins are launched claiming they will resolve these issues, how can we be sure that MobileCoin will truly resolve these issues? We cannot. That’s why this wouldn’t be the time to invest, or even think of doing so, in MobileCoin.
Clearly, there are serious architectural issues that cryptocurrencies like bitcoin and ether face. The gravity of these issues are severe. Marlinspike explains that these issues can be resolved by allowing powerful servers, simply referred to as nodes, to take over all the complex processes involved in verifying and securely processing transactions. The nodes will only have access to as much information that is absolutely necessary for them to complete their tasks.
For example, the nodes will not have direct access to the ledger. Since the ledger contains sensitive transaction details, it can no longer be exploited. SGX technology is used to prevent access to what’s referred to as the enclave. Essentially, private data such as a users’ private keys cannot be accessed by the nodes because they’re stored in the impenetrable enclave. The concept behind all this is that you only get access to the information you absolutely need in order to get your job done. This ensures privacy and security.
The official MobileCoin website claims that its ledger will be opaque. Whether this is exactly a good thing or not remains unclear. MobileCoin plans to seamlessly integrate and function with popular and user-friendly chat applications like Whatsapp and will be launched sometime in the middle of or late 2018. It’s evident that everything is still in the experimental phases and there is not much more one should do other than keep any eye out for future developments.