HTC Exodus 1: The Off-Grid Blockchain Jesse Ventura of Smartphones

Mention the word blockchain and most people immediately think of cryptocurrencies like Bitcoin. But while they share a common history, they’re totally distinct ideas. It’s reminiscent of going back to the early days of the Internet in the early 90s and explaining the difference between the Internet itself (blockchain) and email (Bitcoin). But like the early Internet, blockchain is maturing into a powerful, multi-purpose platform with capabilities well beyond Bitcoin or even cryptocurrency itself. Enter the HTC Exodus 1, the first effort from a major phone manufacturer to create a blockchain and crypto-friendly handset. It’s a niche phone to be sure. So niche in fact, that you can presently only buy Exodus 1 using cryptocurrency. The measure is sure to keep out the no-coiners, but it’s a step in a direction that has the potential to bring cryptocurrencies out from the shadows and into many people’s day-to-day consumer reality.

What is Blockchain?

The blockchain concept was developed by an unknown person or team in Japan under the pseudonym Satoshi Nakamoto, the creator(s) of Bitcoin. This is why bitcoin and the blockchain concept have been inextricably linked. But cryptocurrency is just one use for blockchain. As an application platform, proponents suggest that blockchain carries the promise of solving inefficiencies in many industries, well beyond finance.

Blockchain’s core capability as a secure yet decentralized ledger is already well-known for disrupting finance and currency exchanges. Its ability to allow data to be distributed over the Internet, but not directly copied, has tremendous potential in digital media  and the entertainment industry as an alternative to traditional Digital Rights Management (DRM). Sony is already researching distributed ledger technology for its own vast empire of intellectual property. Meanwhile, blockchain is being used organically by artists, giving them the power to completely cut out recording industry gatekeepers like Sony.

At least one artist, a DJ known as Gramatik, is breaking ground as the first crypto-artist by using blockchain to distribute music to fans. It lets him maintain control over his own Internet distribution while cutting out the record label middlemen that have been central to the recording industry since its inception. Blockchain shows promise to any market that relies on digital content distribution. But that is still just the beginning of the possibilities.

So far, blockchain’s impact on the industries proponents claim it may someday revolutionize has been minimal, but it continues to be tested in diverse business settings that include telecommunications, energy, retail, real estate, aviation, supply-chain management and even health care.

Ultimately, one of the key decentralizing benefits of blockchain is that it gives individuals control over their money, digital data, art and identities, rather than leaving it in the centralized control of banks, governments, retailers, software companies or social media services. In short, blockchain optimists claim that it promises to usher in a new era of liberty, privacy and self-determination by decentralizing almost everything!

HTC Exodus 1

So, how does a smartphone incorporate this idea?

As the name suggests, Exodus 1 is designed to help you and your data escape the centralizing power of Google, Apple and national currencies. HTC says it’s the first blockchain phone because it contains a built-in cryptocurrency hardware wallet that’s truly walled off from the rest of the phone’s functions. The addition of an extra-secure environment is packed into an Android phone with the kind of specifications you’ve come to expect from today’s flagship smartphones. The wallet interface is designed to provide users with easy access to the keys to various cryptocurrencies in a device they use every day.

It’s still far too early to tell, but we could be at the start of a trend that sees major consumer electronics brands incorporating even more blockchain, cryptocurrency features and apps into their devices. Integrating a secure cryptocurrency hardware wallet into a flagship smartphone is a small step, but one that could constitute the beginnings of a leap in mainstream adoption. It may even open the door to a future where using Bitcoin and Ethereum becomes as easy as Apple Pay or Google Pay transactions.

As an Android phone, Exodus 1 boasts the kind of specs that puts it on par with any flagship phone of its generation. It features a 6-inch quad HD+ display, a Snapdragon 845 CPU, 6GB of RAM, dual cameras (front and back), an IP68 waterproof rating, and is powered by a 3,500 mAh battery.

The heart of Exodus 1’s unique security feature is what HTC calls its Secure Enclave. It’s runs on a separate processor from the phone’s main CPU that runs Android. The walled off environment is designed to hold the keys to your crypto and other important data that the security conscious among us may want to keep off the cloud.

The security perimeter around the OS and CPU puts Exodus 1 a significant step beyond conventional software wallets for Android. Portable and easy-to-use mobile or desktop apps are popular among the casually crypto-coined. But software solutions require a lot of trust, because user’s must either store their keys in software on their phone or entrust them to a third-party. Either way, they’re particularly vulnerable to hacks in ways HTC’s Secure Enclave is not, even though it should be noted, nothing is ever totally hack-proof.

The alternative to achieve the same level of cryptocurrency security, used by more hardcore crypto-investors is the hardware wallet. These are the little devices that look like USB thumb-drives that store a user’s crypto keys. They’re designed for anyone who is serious about securing their crypto currency, and popular brands of these small devices include Ledger and Trezor. The Secure Enclave inside Exodus 1 is intended to provide the peace of mind of having a hardware wallet inside your phone.

But the Secure Enclave secures more than just your crypto-keys. HTC hopes that security-minded consumers will see the measures around cryptocurrency as just part of the Exodus 1’s security value offering. The company wants Exodus 1 to be seen as a complete digital-footprint security package using its Secure Enclave to store a variety of sensitive information, including the kind of personal biometric data you use for Touch or Face ID. Storing the data you use to login to your phone and online accounts on a separate, walled-off processor may seem like over-the-top security to some but – just because you’re paranoid doesn’t mean they’re not watching you. Exodus 1 is so privacy oriented, you can consider it the Jesse Ventura of cell phones, if former pro-wrestler and governor turned conspiracy theorist would ever own a cell phone, this might be it.

Blockchain and Smartphone - Opposite Worlds

One major problem with keeping your cryptocurrency keys on a phone, as every smartphone user knows, you’re just one fateful drop away from being in the market for a new one. So, it’s conceivable that, if you ever damaged or lost your phone, you’d lose your data (including cryptocurrency keys) along with it. And that’s a thought that keeps many Bitcoin holders up at night.  

To address this concern, instead of calling your phone provider to restore your account, as you would with a more mainstream device, the Exodus 1 uses a system called Social Key Recovery. This effectively divides your blockchain key into 5 sections that can be shared with people you trust. Recovering 3 of those sections allows you to restore your data. You’d just make sure you really, genuinely trust those three people. Most serious cryptocurrency aficionados practice a secure form of redundancy and one common practice is referred to as cold storage. This is where keys are hidden away on paper, usually a QR-code stored on paper. Sometimes the measure is called the paper wallet and it protects your coins from loss due to sharing your keys with third parties.

Time will tell how far cryptocurrencies will integrate into smartphones. Smartphones are tied to a culture of social media that emphasizes sharing, transparency, and having your accounts hacked almost routinely. The culture of blockchain cryptocurrency is the opposite as it resorts to decidedly low-tech, off-grid methods to achieve security. But new applications in blockchain technology may fill that need for heightened security on overly-social devices. HTC Exodus 1 may not be the complete answer, but it’s a step in the right direction.  

If you’re interested in giving the Exodus 1 a try, it’s available in early access editions right now, thought HTC says quantities are limited.