Pundi X’s (NPXS) new XPhone attracted a lot of buzz at CES 2019 in Las Vegas this week. The idea of a smartphone that can run on blockchain technology sounds like a dream to hardcore crypto fans. But if you’re thinking they’re creating a mesh cell network – we’ll explain – you’re dreaming.
I’ve seen mesh cell networks conceptualized and pitched at a variety of tech and wireless conferences over the years. Think of a two-way radio, in which the connection between devices doesn’t require a pass-through connection with a third-party cell tower, or any other internet connection for that matter.
TOR and other P2P technologies have long been implemented in mobile phones by innovative tech startups to bypass mobile carriers. Like TOR and torrents, the idea is that the network speeds up and increases efficiency when more nodes are added: i.e. the more users on a distributed mesh network, the more it speeds up. Think of it as reverse Ethereum (ETH).
But that’s not what this phone is.
The Pundi X XPhone does act as a node for the Pundi X blockchain, but you’ll still need a SIM card from a wireless carrier that supports unlocked phones. It’s creating an Ethereum-like platform where developers can distribute dApps to consumers; hardly a revolutionary statement.
I want to be clear up front that there’s a lot I like with Pundi X; their upcoming mainnet release will be stellar. But you shouldn’t judge the company on the success of their XPhone. It’s more of a proof-of-concept than a decentralized iPhone.
Let me explain
Inside Function X
The XPhone uses an operating system known as Function X. Switching from “traditional mode” to “blockchain mode” is done by swiping left and right on the home screen. You’ll see what mode you’re in underneath the time at the top of the screen. From there, you can use the blockchain to make voice calls to other XPhone users.
When the call is placed, it’s verified on the Pundi X network, which sits, for the time being, on the Ethereum blockchain. Both your identity and the person at the other end are verified through Ethereum’s consensus mechanism.
The XPhone isn’t built in-house like Samsung does with the Galaxy, and Apple does with the iPhone. Instead, Pundi X has just branded one of many generic Android phones, which they’re then distributing under their own name.
That’s not to say the proprietary software they developed for the phone isn’t an impressive piece of technology. It does use Pundi X’s Function X protocol to tunnel all blockchain-based communications through the Pundi X network using their proprietary FXTP protocol.
The team consistently explained that using this blockchain-based phone bypasses the phone carrier’s central switching system, but most of us do that anyway with our smartphones. Roughly 90% of our phone usage is through apps, which bypass this switches in the same way.
WhatsApp, Skype, Discord, etc. all use the same voice call technology that Pundi X uses. The only time these switching services come into play is when you use the phone app.
So Does the XPhone Matter?
XPhone isn’t going to be the next iPhone, Galaxy, or Pixel – it’s not trying to be. The $35m Pundi X raised in its ICO isn’t enough to compete with the big guys on any level.
Developing an Android phone is expensive and time-consuming. The only reason Pundi X is doing it is because the retail XPOS payment processor device they created is Android based. They already had a device using their network for consensus acting as a node and made another in smartphone form.
The company is only planning to sell 5000 Pundi X-branded phones, just to prove the concept. After that, they plan to license the technology to other major phone manufacturers. Any phone can theoretically become an XPhone, and I can only wonder if they’ll ever release the APK to allow the public to install the OS on other phones.
It’s not a bad play.
Is there hope for a blockchain phone?
Pundi X went to CES to prove blockchain could work on a phone. Whether or not they succeed is a matter of opinion. The price of NPXS token soared during CES with all the buzz, and the team behind the project has a lot of support in the crypto community.
If you’re a blockchain enthusiast and love the idea of owning a mobile node on the Pundi X network, this phone is for you. If you’re a Columbian drug lord looking for a private means of communication, you’ll like it too.
Just know that the hands-on time I got with the XPhone and XPOS at CES Unveiled was with a (barely) polished prototype. It wasn’t in real-world usage where my time with other startup Android phones like the Essential Phone is enough to know it’ll likely crash on you too much to be used as a primary phone.
But, that said, it’s a step in the right direction.
The author is invested in digital assets, but none mentioned in this article.
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