MobileCoin Secures $11.35 Million in Venture Funding

MobileCoin, a digital currency benefiting from the technical expertise of Moxie Marlinspike – the creator of the Signal messaging application – has successfully completed two rounds of venture funding, totaling $11.35 million. These investments were led by Future Ventures and General Catalyst.

Potential Integration with Signal

Sources indicate this funding may signify progress toward a possible integration of MobileCoin within the Signal platform, although it is not currently supported there. Attempts to reach Marlinspike for comment were unsuccessful.

However, an individual familiar with Marlinspike’s current endeavors suggests his primary focus remains on his own projects. Joshua Goldbard, founder of MobileCoin, identified as the “janitor” of the project on LinkedIn, declined to address inquiries when contacted via Signal.

Investors directed questions regarding MobileCoin’s competitive positioning to the company itself.

Addressing Cryptocurrency Challenges

In 2017, Wired magazine initially profiled MobileCoin, highlighting its objective to resolve prevalent issues within the cryptocurrency space. These included complexities hindering widespread adoption, scalability limitations, and slow transaction speeds.

For instance, Dapper Labs, the firm behind CryptoKitties and NBA Top Shot, opted to create its own blockchain and “Flow” token last year. This decision stemmed from scalability concerns experienced with Ethereum and a desire for a more user-friendly platform.

Wired noted that despite the proliferation of cryptocurrencies – now exceeding 4,000 – Marlinspike’s successful track record with Signal made MobileCoin a noteworthy project.

Focus on Privacy and Speed

MobileCoin aims to facilitate privacy-focused payments through “near instantaneous transactions” directly on mobile devices. However, storing cryptocurrency on a phone introduces risks, such as potential loss due to an unlocked device, compromised radio signals, or vulnerabilities within the operating system itself.

The platform claims to offer a secure wallet recovery feature in case of phone loss, though the specifics of this process – without relying on third-party key management – remain unclear.

Potential Reach Through Signal Integration

If MobileCoin were to become the primary transaction method within Signal, its potential user base could be substantial. While Signal’s exact user numbers are undisclosed, estimates suggest approximately 40 million individuals currently utilize the encrypted messaging app.

Signal experienced a significant surge in downloads earlier this year, coinciding with the end of the previous presidential administration, with 17.8 million downloads recorded during the week of January 5th, a substantial increase from its typical 50,000 daily downloads.

Regulatory Hurdles and Past Experiences

Despite the potential benefits, achieving widespread adoption and value for MobileCoin may prove challenging. The history of cryptocurrencies and messaging apps is marked by regulatory scrutiny.

Kik Messenger, a messaging app founded in 2009, launched its own digital currency, Kin, but faced a prolonged legal battle with the Securities & Exchange Commission, nearly leading to the company’s collapse.

Telegram, with an estimated 400 million users as of last April, abandoned its plans for a decentralized cryptocurrency after a lengthy dispute with the SEC. Both Kik and Telegram’s issues originated from early token sales through initial coin offerings (ICOs).

Facebook’s Approach

Even Facebook, despite initially pursuing more ambitious cryptocurrency plans, has scaled back its efforts and is now focused on launching a single digital coin backed by the U.S. dollar, with a launch anticipated in the near future.

MobileCoin’s decision to seek venture capital funding differs from Kik’s approach of utilizing an ICO, a funding method that was relatively new and unregulated at the time.

Ultimately, the success of MobileCoin will depend on navigating the complex regulatory landscape and demonstrating a clear value proposition to users.