Sirin Labs, the blockchain startup funded by nearly $158 million in initial coin offering (ICO) proceeds, has released its much-anticipated “blockchain smartphone,” the FINNEY.
The firm unveiled the device on Thursday at a release party in Barcelona, which featured presentations from several Sirin executives along with an appearance by football legend and Sirin brand ambassador Lionel Messi. CCN attended the event and was able to spend some hands-on time with the FINNEY during a demonstration with Sirin Labs Senior Product Manager Yaron Kaplan.
The FINNEY was manufactured by iPhone-maker Foxconn International Holdings (FIH), and it features flagship specs, including a Qualcomm Snapdragon 845 processor, 6GB Ram, a 6-inch display, two cameras (12MPx and 8MPx), and 128GB storage. On the software side, it runs an “ultra-secure and Google-certified ‘fork’ of Android” called Sirin OS that first appeared on Sirin’s first smartphone, the uber-secure (and uber-expensive) SOLARIN. The firm says that, in addition to its own line of devices, it plans to seek out OEM partners to implement Sirin OS on other products.
Sirin said that it chose to modify Android rather than use the out-of-the-box OS to “overcome the innate security challenges associated with the usage and storage of cryptocurrency on mobile devices.” Sirin co-founder and Chairman Kenes Rakishev explained that the operating system’s intrusion prevention system uses machine learning to monitor device parameters such as network, malware, and device security definitions, including when the phone is offline.
Isolated Cold Storage Wallet
Rather than store private keys in a secure enclave (components that haven’t always lived up to their name), the cold storage wallet, which features full separate hardware from the remainder of the device, is located on a sliding “Safe Screen” at the top of the phone. Here, private keys remain isolated from the phone’s internet-enabled native wallet until the user slides the Safe Screen out and initiates a transaction.
Transactions can only be signed from the Safe Screen, which ensures that user funds remain secure even if the device itself becomes compromised by malware. For example, if a user attempted to send funds and a malicious application replaced the correct receiving address with one controlled by the hacker, this change would be apparent on the Safe Screen — much like conventional hardware wallets.
“In an increasingly insecure digital world, where hackers in all corners of the globe are out to steal whatever they can, consumers need a product that gives them confidence their data is safe,” said Rakishev in the formal announcement. “With no solution available until now, many crypto users took a step back to a more primitive time and were using pen and paper to record their private key code. This and other ‘cold storage’ solutions are impenetrable to hacks but are also totally impractical for modern living. FINNEY is unique and is the only phone with an embedded cold storage wallet. There is nothing else like it on the market.”
Similar to other hardware wallets such as those produced by Trezor and Ledger, users can create and store multiple crypto wallets on a single device. By separating their funds into more than one wallet, investors can protect their holdings from the proverbial $5 wrench attack. If a mugger or other attacker attempts to force them to unlock their crypto wallet, they can enter the password to a low-value wallet while the other funds remain safe.
Password-protected cold storage or not, I’m still not sure that I would feel comfortable carrying around large amounts of crypto in my pocket. But considering that many investors do that already with wallets that are much less secure, the FINNEY is indeed a better option.
Native Crypto Exchange
In addition to a cold storage wallet, the FINNEY features an in-app token conversion service (TCS) that allows users to seamlessly exchange any of the crypto tokens supported by the device without entrusting them to a third-party wallet. Sirin itself will act as the liquidity provider — meaning that users will be exchanging funds with the company itself, not a third-party crypto exchange — and conversion rates will be pulled from CoinMarketCap. A Sirin representative told CCN that users will have to submit to local KYC/AML regulations before they can trade using the TCS, though it’s not clear exactly how this process will be handled.
One could see this service proving popular among casual investors, attracting a similar audience to Changelly and ShapeShift. However, convincing a crypto-curious friend or relative to purchase a $999 device to ease their entry into the market seems like a tough sell. Given that the FINNEY is most likely to appeal to crypto “power users,” many device owners might be familiar enough with cryptocurrency exchanges that they would prefer to use those platforms over the on-device conversion service. That’s particularly true since — at least at launch — the service only supports three cryptocurrencies: bitcoin, ethereum, and Sirin Labs Tokens.
Moreover, a growing number of crypto hardware wallets already offer users the ability to use Changelly, ShapeShift, or another token conversion service from within the device’s wallet portal. While these third-party apps charge service fees, they support a much wider range of assets than the Sirin TCS does — at least at launch.
In short, the FINNEY crypto conversion service is a useful feature, but it’s not clear how much of a selling point it will be to the device’s target market.
On-Device DApp Store
The FINNEY also features a native decentralized application (dApp) store and browser, called dCENTER, which seeks to make dApp usage more mobile-friendly and reduce the friction associated with onboarding. At present, the dApp browser is only compatible with Ethereum, though a representative said that Sirin plans to add support for other blockchains in future OS updates.
Considering that, for all their hype, almost no one is using dApps, the FINNEY dApp store could encourage more users to try out these blockchain-native applications.
The dCENTER further includes a “learn and earn” program through which dApps and other crypto startups can pay FINNEY owners to watch video advertisements, as well as airdrop tokens to their crypto wallets.
Sirin Labs founder and co-CEO Moshe Hogeg touted this feature for its ability to help recoup users for the initial cost of the device. After joking that he had wanted to sell the FINNEY for $1.00, he said that, at launch, the device comes pre-installed with more than $300 worth of advertising and airdrop incentives and that he hopes that future incentives will make the phone to pay for itself.
Of course, attempting to cash out those airdropped funds could cause some headaches come tax time, and, unfortunately, that is one aspect of the crypto experience that the FINNEY is not able to simplify.
Peer-to-Peer Resource Sharing
Perhaps the most intriguing feature of the FINNEY is peer-to-peer resource sharing, which leverages the Sirin OS software development kit (SDK) and Ethereum smart contracts to enable users to trustlessly lease their device resources to others.
At the launch event, Amit Krelman, VP of Research and Development at Sirin, performed a live demo of resource-sharing on the Ethereum testnet. In the demo (~27:00 in the video above), one user agreed to charge the other’s phone for a set amount of ETH. Upon initiation the transaction, the smart contract created a payment channel between the two devices and locked that amount of the buyer’s ETH in the contract.
As the first device charged the second, a real-time ticker kept track of how much the buyer owed, similar to a gas pump. Then, once the device was done charging, the smart contract transferred the locked ETH to the lessor’s wallet.
Granted, this specific example of P2P resource sharing isn’t exactly a killer app. It would require two individuals to have FINNEYs and a charging cord but no access to electricity, only a jerk would charge money to charge another person’s phone, and only a paranoid jerk would require them to lock that payment in a smart contract.
However, it was just a demo, after all, and this feature has numerous possible applications, including mobile data sharing. This, as a colleague pointed out, could prove popular enough to give service providers that offer unlimited data packages fits.
The FINNEY has flagship specs, and it has been priced accordingly. Sirin Labs’ previous smartphone offering, SOLARIN, debuted in 2016 with an eye-popping $16,000 price tag. The FINNEY, however, retails for $999, which is comparable to higher-end mainstream models such as the iPhone XS and the Samsung Galaxy Note9.
Early supporters were able to preorder the FINNEY at a discount using SRN, which the firm distributed during an initial coin offering (ICO) that raised nearly $158 million. Now, customers can also purchase the device at its full retail price using conventional payment methods, and the firm announced at the release event that the FINNEY would further be available on Amazon Launchpad — an exclusive program through which the tech giant helps startups launch products — from January.
What about the HTC Exodus?
Sirin Labs isn’t the only company to market a smartphone to crypto users. HTC, as CCN reported, became the first mainstream producer to do so when it launched the Exodus, which is scheduled to begin shipping in early December. HTC is only accepting bitcoin and ethereum for the Exodus, and, even more notably, the price is fixed at 0.15 BTC or 4.78 ETH and not pegged to USD. Consequently, the device was priced comparably to the FINNEY when preorders opened in early October but can now be purchased for around $650 worth of BTC or $560 worth of ETH.
Both companies claim that their device is the “first blockchain smartphone.” Sirin, on its part, said that for all HTC’s talk, the FINNEY — not the Exodus — will be the first blockchain smartphone on the market. As Rakishev stated during his presentation (though not directly referring to HTC): “We are the first, and we are the best.”
SRN Worth Less at Launch than at ICO
In releasing the FINNEY, Sirin Labs also became one of a small number of ICO operators to translate its funding into a working product, though the SRN token continues to trade well below its ICO price and even further below its value when it was first listed on cryptocurrency exchanges. In fact, the SRN price fell 18 percent against the US dollar over the past 24 hours, which countered the general market trend and made the token far and away the worst-performing top 100-cryptocurrency for the day.
That a crypto token would continue to trade so low even after its issuer followed through on its stated roadmap is perhaps one of the surest depictions of the degree to which ICO mania had taken hold of the retail market in late 2017 and early 2018 but has cooled down following a bear market that has persisted for nearly a year.
At $999, it’s hard to find a single feature that makes the Sirin Labs FINNEY a must-buy product for crypto users. (At least in this author’s opinion, but, then again, I would make the same claim about flagship Samsung and Apple devices, and I am happy enough using a nearly four-year-old phone that must be charged multiple times per day — not exactly the FINNEY’s target customer.) Even so, the device is more than the sum of its parts, as the combination of its features does present users with a simplified crypto experience that retains a commitment to decentralization.
Over the long run, it’s easy to imagine that developers could use the Sirin OS SDK to create one or more apps that leverage the full potential of blockchain-secured P2P resource sharing. In the near-term, if crypto users are going to spend $999 on a mobile device anyway, why not the FINNEY?
Featured Image by Josiah Wilmoth/CCN