• Thursday, March 28, 2024
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BusinessDay

Era of cryptocurrency smartphones looks good on adoption, but…

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As the world awaits the release of Samsung’s Galaxy S10 series that would come with a secure storage system for cryptocurrency private keys, the digital currency market has been bristling with excitement. The Galaxy S10 will list four cryptocurrencies namely bitcoin, Ethereum, Enjin Coin, and Cosmo Coin.

The price of Enjin Coin (ENJ), a crypto asset native to a gaming-suited blockchain network called Enjin and one of the cryptocurrencies to go live on Galaxy S10 rose more than 200 per cent from 0.00000958 to 0.00002943 within 24 hours of the Samsung announcement last week.  News of the imminent release has also seen Ethereum (ETH) make a solid price recovery rising from $124 to $139 as at time of writing this article. Volume of bitcoin (BTC) transactions in Nigeria has also appreciated from N1.155 billion to N1.213 billion, according to data from LocalBitcoins.

Although Samsung is the biggest player in the smartphone market, the Galaxy S10 is not the only smartphone willing to host cryptocurrency wallet.

HTC have launched the Exodus 1, dubbed the ‘blockchain phone’ since 2018. Unlike the Galaxy S10 which has a cold storage solution that allows user store private keys offline, the Exodus uses a Social Key Recovery system. Users of Exodus can select a small group of contacts and give them parts of their keys. If a user loses his or her key, they can recover them piece by piece from their contacts.

There is also Sirin Labs which used proceeds from a successful initial coin offering (ICO) to build Finney, the first blockchain smartphone and Electroneum which has begun selling its $80 Android phone that can mine cryptocurrency. The Electroneum M1 smartphone comes with built-in smartphone technology which enables users to earn cryptocurrency as they keep using their smartphone.

Beyond the immediate impact on prices of cryptocurrencies, is the story of adoption.

“(It) makes adoption easier since you already have infrastructure, it’s like say, someone preloading WhatsApp on a phone,” says Yele Badamosi, director at Binance Labs and founder of Microtraction a VC firm focused on blockchain startups.

A new mode of purchasing HTC Exodus 1 is supported by Binance following a partnership agreement that allows customers to do so using Binance Coin.

Like Galaxy S10, the Exodus 1 comes with preloaded Blockfolio app which helps users track price fluctuations of various coins (a blockchain version of the Stocks app), and Cryptokitties that allows users trade and breed digital cats on the Ethereum blockchain. The Zion wallet on the Exodus allows users to store and transact with Bitcoin, Ethereum, and a few dozen tokens and collectibles built on the Ethereum blockchain.

The Zion is built in such a way that first timers can easily set up their cryptocurrency account.

Although the market has seen significant price drops in recent times, adoption has remained positively unchanged. The market as a whole lost 85 per cent of its value in 2018 however the number of new users managed to stay up. According to a Cambridge study, the number of users participating in the cryptocurrency ecosystem grew from 18 million in 2017 to 35 million users in 2018, a 94 per cent increase.

The study also showed that the number of accounts at cryptocurrency exchanges almost doubled in 2018. In 2017, there were around 80 million user accounts while this year there are about 150 million accounts. The number of users verifying their identity is on the rise too. A reported 20 million users verified their accounts in 2017 and that number has now doubled to 40 million verified user accounts.

A recent survey carried out by Luno Nigeria on adoption rates in the country has also confirmed that more people are embracing cryptocurrencies.

“However, there is still a mile to go for utility,” Bademosi told BusinessDay.

It is one thing to put a cryptocurrency wallet on a smartphone; it is another thing to get shops, businesses and individuals to put the cryptocurrencies into daily use. So far, bitcoin is the only cryptocurrency that has enjoyed wider domestic and commercial acceptance. May be the next smartphone solution could focus more on utility.