My thoughts on Signal, the Monero derivative MobileCoin, and why it’s not the end of the world

Disclaimer: I don't use MobileCoin, I have never owned a MobileCoin, I will never purchase any amount of it, and if it is given to me for free, I will get rid of it immediately. I have no financial involvement with it, and hold no long or short positions of MobileCoin (MOB) or its derivatives. I do have a financial stake in XMR, and as per the rules of this subreddit, I won't state how small it is. Some would say I lost my private keys in a tragic boating accident in 2017.

Disclaimer 2: Sources exist for all the claims made in this document, but I haven't compiled the links in this post. If you would like to add a source, comment and I will add it.

As I'm sure everyone who follows privacy technology and crypto is aware of by now, Signal (led by "Moxie Marlinspike") is an organization that created the private, end-to-end-encrypted messaging service also called Signal. They also developed the Signal protocol, which covers the end-to-end encryption as well as sophisticated metadata protection, and this protocol has been adopted by other messaging services as well. Until now, Signal has been funded by donations, including significant funding from the U.S. government and WhatsApp. If the U.S. government's involvement scares you, remember that they also engage in secret and illegal activity, and the development of a secure messaging app benefits them as well. Although the possibility of a backdoor can never be ruled out, the code is open-source and watched by many security experts.

A few days ago, Signal announced on Twitter that the UK version of their app would be beta-testing integration with MobileCoin. MobileCoin, at its core, is a modified version of Monero with the exact same privacy stack rewritten in Rust. The key difference is that instead of PoW, they use the consensus protocol employed by the XLM (Stellar) cryptocurrency, which is itself a modified version of the protocol used by DNS servers. There has been a lot of discussion about MobileCoin and the MobileCoin Corporation's shady actions. I will list the notable ones here:

  • Millions of MOB tokens were sold at 80 cents in a private ICO to investors prior to the announcement of the partnership with Signal; the price currently sits around 60 USD. It is reported that the investors were informed of the partnership with Signal prior to the general public (insider trading, in a non-legal sense).

  • MOB is 100% premined. Although this may be considered shady to some, this is more or less a design decision – since there is no PoW, coins have to be distributed in an alternative manner. The CEO of MobileCoin, Josh, said in Hackernews comments that he did not want to go the route XLM did (distributing tokens for free) because of legal and tax implications, and because this didn't cause significant adoption in the case of XLM. Many would argue that this is just an excuse for a cash grab.

  • Moxie was a paid advisor for the MobileCoin Corporation. There's not much to say about this one, it can be considered a conflict of interest but ultimately, since the coin was likely developed with Signal in mind, it makes sense to have Moxie's input.

  • Neither Moxie nor the Signal Foundation hold any MOB tokens, nor has the Signal Foundation been paid for integrating MOB (yet.) However, the MobileCoin CEO (Josh) claimed that they will be donating millions of dollars to the Signal Foundation ASAP.

  • Many critics have said Signal doesn't need an integrated payment system at all, and that if anything, it should be a separate app. There's no factual rebuttal here.

  • MobileCoin's team has been extremely unprofessional, between their mission statement that "regulating economic activity is legitimate", and the developer calling Monero's codebase garbage on twitter. There is no factual rebuttal to this.

  • Many critics involved with the Monero community have said that if Signal were to implement any crypto, it should be Monero or even Zcash or Bitcoin. Moxie claims that speed is an issue, which is why he chose MOB to test first. Monero fans say that 0-conf transactions are secure for 99% of uses. This is true. However, a larger issue is the sync time. In my experience (as the OP of this post), I use a mobile wallet (Cake wallet) approximately once a week, and it takes about an hour to sync. It's certainly possible to argue that a casual Signal user would consider this unworkable, not to mention the data capacity required to use such a thing. In that area, the XLM protocol certainly has advantages. Many areas of the world have very slow internet or data caps, and it may be impractical to use Monero mobile wallets there for the time being.

  • Many community users have advocated switching to Threema or Session. I think this is a mistake. At this point, Signal has a lot of name recognition and adoption, and the privacy is still just as good as it always was, despite the integration of what may end up being viewed by history as a "scam coin".

TL; DR: Yes, it's a cash grab. But it's not as bad as it may have seemed at first glance.

Let me know if I've missed anything.

submitted by /u/Iegalizecrack
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