Cryptocurrencies shot into mainstream consciousness with their volatile price swings and scandals. But their adoption and traction for mainstream use and trading is still abysmally low. South Korean smartphone giant Samsung Electronics recently took a stab at further popularizing coins by integrating private key storage capability in its latest Galaxy S10 edition.
“The Galaxy S10 is built with defense-grade Samsung Knox, as well as secure storage backed by hardware which houses your private keys for blockchain-enabled mobile services,” the company stated in a press release. Samsung Knox is the result of a collaboration between the South Korean manufacturing giant and Canadian company Blackberry. It consists of the “Knox platform for Enterprise” and Samsung Dex, an out-of-the-box Blackberry Universal Endpoint Management System. Private keys represent ownership of cryptocurrencies and are used to move them from one blockchain address to another. Samsung had earlier leaked images of its blockchain keystore.
Can Samsung’s Galaxy S10 move alter the current trajectory of crypto adoption? The answer to that question is complex but the hot takes have already started pouring in. Some claim that Samsung’s obfuscating move is a story of “failed opportunity”. Others are bullish on the move since it will be a solid foundation when the “mega-rally” for crypto hits.
Samsung Knox is a BIG deal:— Ryan Selkis (@twobitidiot) February 21, 2019
+ Largest smartphone manufacturer (70M phones a quarter)
+ Lower end than Apple (broader access)
+ Explicitly mentions crypto private key storage
It's not a demand driver, but *when* the mega-rally hits, the new crypto foundation will be solid.
Crypto Adoption Whither?
Samsung’s move is a significant one as far as the optics of popularizing cryptocurrencies is concerned. The South Korean giant is the world’s biggest manufacturer of smartphones and its Galaxy series of phones are among the best-selling (and most well-known) brands of all time. That the company is based in South Korea, one of the biggest markets for trading in cryptocurrencies, is also a bonus.
But it is just one of the missing pieces in the larger puzzle of cryptocurrency adoption. For the most part, purchasing and storing cryptocurrencies still remains a difficult and complicated task. The learning curve involved in the exercise, including ramping up knowledge of private keys, is a significant barrier to user adoption. Cryptocurrencies and blockchain discussions are cloaked in technological garble with little to show in terms of utility or interface. (Note: Samsung’s press release, which refers to “blockchain-enabled services”, is prime example of the obfuscation practiced by companies when discussing the technology.)
A case in point is North America’s biggest cryptocurrency exchange Coinbase, which has a simple interface and boasts more users than Charles Schwab. But those users are largely dormant. Trading activity still comprises a majority of transaction volumes for cryptocurrencies.
The other important question relates to the utility of private keys within the existing cryptocurrency ecosystem. Most services today, whether they are cryptocurrency exchanges such as Coinbase or cryptocurrency retirement accounts like BitcoinIRA, do not offer access to private keys for end users. This means that users cannot transfer their cryptocurrency holdings between different wallets or, in some cases, withdraw them from the account. To what extent does the introduction of a private key storage facility make sense in an ecosystem where most consumers do not have access to the keys themselves? Probably not much.
HTC’s Exodus -1, which can only be purchased using cryptocurrencies, and Sirin Labs’ Finney, the “world’s first blockchain smartphone” were released with much fanfare but have not moved the needle much. Samsung’s move is great for crypto public relations but it does not solve the underlying problems of cryptocurrency adoption.