Signal Adds a Payments Feature—With a Privacy-Focused CryptocurrencyThe encrypted messaging app is integrating support for MobileCoin in a bid to keep up with the features offered by its more mainstream rivals.
MobileCoin will bring payments to Signal, but also added complexity and potential regulation. Illustration: Elena Lacey
To try to tame that volatility problem, Marlinspike and Goldbard say they imagine adding a feature in the future that will automatically exchange users‘ payments in dollars or another more stable currency for MobileCoin only when they make a payment, and then exchange it back on the recipient’s side—though it’s not yet clear if those trades could be made without leaving a trail that might identify the user. „There’s a world where maybe when you receive money, it can optionally just automatically settle into a pegged thing,“ Marlinspike says. „And then when you send money it converts back out.“The mechanics of how MobileCoin works to ensure its transactions‘ privacy and anonymity are—even for the world of cryptocurrency—practically a Rube Goldberg machine in their complexity. Like Monero, MobileCoin uses a protocol called CryptoNote and a technique it integrates known as Ring Confidential Transactions to mix up users‘ transactions, which makes tracing them vastly far more difficult and also hides the amount of transactions. But like Zcash, it also uses a technique called zero-knowledge proofs—specifically a form of those mathematical proofs known as Bulletproofs—that can guarantee a transaction has occurred without revealing its value.On top of all those techniques, MobileCoin takes advantage of the SGX feature of Intel processors, which is designed to allow a server to run code that even the server’s operator can’t alter.
MobileCoin uses that feature to ensure that servers in its network are deleting all lingering information about the transactions they carry out after the fact and leave only a kind of cryptographic receipt that proves the transaction occurred. Goldbard compares the entire process of a MobileCoin transaction to depositing a check at a bank, but one in which the check’s amount is obscured and it’s mixed up in a bag with nine other checks before it’s handed to a robotic bank teller. After handing back a deposit slip that proves the check was received, the robot shreds all 10 checks. „As long as SGX is working as promised, you can prove every robot cashier is working the same way and shredding every check,“ Goldbard says. And even if Intel’s SGX fails—security researchers have found numerous vulnerabilities in the feature over the last several years—Goldbard says that MobileCoin’s other privacy features still reduce any ability to identify users‘ transactions to low-probability guesses.If MobileCoin’s privacy promises hold true, Marlinspike says he hopes the cryptocurrency can help Signal reverse a troubling trend toward financial surveillance. If successful, Signal’s use of MobileCoin will also face the same hurdles and critiques that surround all privacy-preserving cryptocurrencies. Any technology that offers a way to anonymously spend money raises the specter of black market uses—from drug sales to money laundering to the evasion of international sanctions—along with the accompanying crush of financial regulations. And that means integrating MobileCoin could expose Signal to new regulatory risks that don’t apply to mere encrypted communications.
„I think it’s phenomenal from a civil liberties perspective,“ says Marta Belcher, a privacy-focused cryptocurrency lawyer who serves at special counsel at the Electronic Frontier Foundation. But Belcher points to a coming wave of regulation to control exactly the sort of anonymous cryptocurrency transactions Signal hopes to enable, including a new „enforcement framework“ the Justice Department published last fall and new regulations from FinCEN that could force more players in the cryptocurrency industry to collect identification details of users. „Anyone who’s dealing with cryptocurrency transactions, especially private cryptocurrency transactions, should be really concerned about all of these proposals and the government pushing financial surveillance to cryptocurrency,“ Belcher says.Matt Green, a cryptographer at Johns Hopkins University, puts it in starker terms.
„I’m terrified for Signal,“ says Green, who helped develop an early version of Zcash and now sits on the Zcash Foundation board as an unpaid member. „Signal as an encrypted messaging product is really valuable. Speaking solely as a person who is really into encrypted messaging, it terrifies me that they’re going to take this really clean story of an encrypted messenger and mix it up with the nightmare of laws and regulations and vulnerability that is cryptocurrency.“But Marlinspike and Goldbard counter that Signal’s new features won’t give it any control of MobileCoin or turn it into a MobileCoin exchange, which might lead to more regulatory scrutiny. Instead, it will merely add support for spending and receiving it. „The regulatory landscape is complicated, but there are ways to do privacy-protecting payments safely,“ says Goldbard. „To be frank, there’s a moral imperative to do so, because Signal has to offer payments in order to remain competitive with the world’s top messaging apps.“As for the possibility of enabling dangerous criminals and money launderers, Marlinspike offers an answer that mirrors one he’s long given for encrypted communications. Just as criminals used encryption for decades before Signal, they’ve used anonymous cryptocurrencies for years before Signal added MobileCoin payments as a feature.
For those criminals, the threat of law enforcement made using even clunky, tough-to-use tools necessary. By making those secure communications and payments easier, Marlinspike argues, Signal didn’t enable those criminals, but instead simply made their tools available to more casual, non-criminal users.“With Signal, we didn’t invent cryptography. We’re just making it accessible to people who didn’t want to cut and paste a lot of gobbledegook every time they sent a message,“ Marlinspike says. „I see a lot of parallels with this. We’re not inventing private payments…Privacy preserving cryptocurrencies have existed for years and will continue to exist. What we’re doing is just, again, a part of trying to make that accessible to ordinary people.“