Earlier today, Coinapult took to the Bitcoin subreddit to unveil their new, global Bitcoin service that functions on plain ol’ SMS technology. This means that users around the world that do not have smartphones or data plans will be able to use Coinapult SMS. Bitcoin technology is extraordinarily unique because it can maintain its security even while being used over SMS, Bluetooth, NFC, or even Ham radio. Blockchain.info and Coinbase have both had send-Bitcoin-by-SMS functionality for years now; however, their service requires users to sign up an account to receive the sent money. Coinapult explained the difference:
At Blockchain you have to login/create a wallet to receive the funds sent by SMS, data service is required for functionality. At Coinapult you don’t ever need to leave the SMS environment to use funds sent to you. Spend, invoice, view transactions and even lock BTC to a range of currencies and assets with simple txt commands.
Coinapult isn’t the first SMS wallet either; however, they do have a solid advantage over existing services.
Coinapult recognizes that their service is imperfect and centralized; however, such things are necessary steps towards the greater goal of a decentralized solution. Coinapult responded to the fact that a Man In The Middle (MITM) attack is possible to capture users’ private keys:
Yes, it is possible that a dishonest telecom or telecom employee could intercept or distort the messages. For this reason, Coinapult does not advise using these accounts for large amounts or long-term storage. Our SMS wallet is a convenience for people with few/no options.
Coinapult is working on providing more languages and is also looking into more secure possibilities that SMS and SIM card technology, prevalent around the world, can offer. It turns out that SIM cards are capable of executing small java applets. An anonymous Reddit comment prompted Coinapult to state that they were going to look into this:
SIM card is capable of executing “java applets” – small (up to 64kB) programs written in modified java. 64kB is enough to store the private keys and signing algorithms. Theoretically you could receive unsigned transaction via SMS, sign it, and then send it back to someone who will broadcast it into the bitcoin network. In such case, SMS does not need to be encrypted, since it is secured by signing the same way any bitcoin tx is. Someone “could” send to you fraudulent transaction to sign, but recipient’s address displayed on the phone screen would change.
Have no doubt that new advancements will continually increase the reach of the Bitcoin network.
Where Coinapult differs from existing SMS Bitcoin providers, such as 37Coins , is their Coinapult Locks system. Coinapult allows users to “lock” the exchange rate for any portion of their stored bitcoins at any time. This type of volatility avoiding technology is on the rise in the Bitcoin ecosystem. Other services such as BitReserve or BitShares offer centralized and decentralized alternatives to this type of service as well. Having an SMS wallet and a volatility tool in one place will be a great boon to those in developing countries. Check out the Coinapult Locks video below:
Images from Coinapult and Shutterstock.
Quotes edited for readability and grammar.