Moxie Marlinspike, the creator of Signal and CEO of the nonprofit that runs it, describes the new payments feature as an attempt to extend Signal's privacy protections to payments with the same seamless experience that Signal has offered for encrypted conversations. "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 communication platforms," Marlinspike told WIRED in an interview. "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."
The deal wasn’t a surprise, following reports this spring that Coinbase had outbid Fidelity Digital Assets, which started offering custody to clients in March.The better custody arrangements are another draw, he suggests, making it more appealing for institutional investors who could potentially store hundreds of millions of dollars worth of digital assets.
Unlike payment features integrated into other messaging apps like WhatsApp or iMessage, which typically link a user's bank account, Signal wants to provide a way to send money that no one other than the sender and recipient can observe or track. Financial institutions routinely sell their users' private transaction data to marketing firms and advertisers or hand it over to law enforcement. Bitcoin wouldn't do the trick, either. As with many cryptocurrencies, its protections against fraud and counterfeiting are based on a public, distributed accounting ledger—a blockchain—that can in many cases reveal who sent money to whom .
So Signal looked to privacy-preserving cryptocurrency, or "privacy coins," that both circumvent banks and are specially designed to protect users' identities and the details of their payments on a blockchain. While more established privacy-focused cryptocurrencies like Zcash and Monero have been more widely used and arguably better tested, Marlinspike says Signal chose to integrate MobileCoin because it has the most seamless user experience on mobile devices, requiring little storage space on the phone and needing only seconds for transactions to be confirmed. Zcash or Monero payments, by contrast, take minutes to complete transactions. "You're using a cryptocurrency with state-of-the-art encryption, but from your perspective, it feels like Venmo," says MobileCoin's founder Josh Goldbard.
Signal's choice of MobileCoin is no surprise for anyone watching the cryptocurrency's development since it launched in late 2017. Marlinspike has served as a paid technical adviser for the project since its inception, and he's worked with Goldbard to design MobileCoin's mechanics with a possible future integration into apps like Signal in mind. (Marlinspike notes, however, that neither he nor Signal own any MobileCoins.)MobileCoin only began trading as an actual currency with real value in December of last year—until then, it was running as a valueless "testnet"—and its 250 million coins, at around $69 each, are currently worth almost $17 billion dollars in total. For now it's listed for sale on just one cryptocurrency exchange, FTX, which doesn't allow trades by US users, though Goldbard says there's no reason that US exchanges couldn't also list the coin for trade. Signal chose to roll out its MobileCoin integration in the UK in part because the cryptocurrency can't yet be bought by users in the US, Marlinspike says, but also because it represents a smaller, English-speaking user base to test out the new payments feature, which he hopes will make diagnosing issues easier.
Payments present a tough dilemma for Signal: To keep pace with the features on other messaging apps, it needs to let users send money. But to do so without compromising its sterling privacy assurances poses a unique challenge. Despite Marlinspike's and MobileCoin's intentions, using any cryptocurrency today remains much more complex than Signal's other features. Even if users can send MobileCoin back and forth, they'll still likely need to cash them out into traditional currency to spend them, given that MobileCoin isn't widely accepted for real-world goods and services. And aside from that need for exchanges and the lack of availability in the US, MobileCoin also remains even more volatile than older cryptocurrencies, with constant price swings that will significantly change the balances in a user's Signal wallet over the course of days or even hours—hardly the sort of issue that Venmo users have to deal with. (Since March 27, MobileCoin's value has shot up nearly 600 percent, possibly due to rumors of the impending Signal integration or possibly the result of a "short-squeeze.")