By Trung Phan
Apple Inc is a $2.5 trillion company. To significantly boost that bottom line, the company has only so many opportunities it can pursue. Self-driving cars and mixed-reality glasses come to mind (as much as I love the Ted Lasso cinematic universe, it won’t move the needle).
There’s another massive opportunity that the iPhone maker has been fairly mum on: crypto. “Apple’s position on crypto is between neutral and hostile,” says Ric Burton, an early contributor to the Ethereum project. “However, iPhone could be the tool that on-boards millions of people to the ecosystem.”
How? By creating a user-friendly way to interact with the crypto economy.
“You have to remember that Apple is a company that makes products for people to access protocols,” Burton tells me, noting that the iPod helped users interact with the MP3 standard while the iPhone does the same for internet standards.
Crypto is a set of protocols, and there are many tools to interact with it. But as designer and tech advisor Holyn Kanake recently wrote for CoinDesk, “[these products] are miles away from decentralization, aggressively technical and composed of discordant user interfaces.”
The point was hammered home in January when Signal founder Moxie Marlinspike wrote a viral post titled “My First Impressions of Web3.”
He observed that crypto’s promise of a decentralized tech stack is running up against human behavior: “People don’t want to run their own servers, and never will.” (My rough translation: We default to simple and lazy.)
Burton believes that the iPhone — which more than 1 billion people carry in their pockets for everyday use — can alleviate this problem in two ways:
Safari browser extension: One of crypto’s biggest on-boarding tools so far is Metamask, a Chrome extension crypto wallet with 21 million users. Apple’s iOS 15 update in November provides more browser extension support. And with 54% of mobile traffic in America coming from Safari, there’s an opportunity for more crypto iPhone tools.
Hardware wallet: The iPhone has a hardware feature called a secure enclave. It’s a subsystem on the iPhone A1 chip that stores information (passcodes, biometric data) for sensitive applications like FaceID and Apple Pay. Crucially, iOS is unable to directly access the data.
If Apple added an encryption signature known as Elliptic Curve Digital Signature Algorithm (ECDSA), the iPhone could become a secure crypto hardware wallet to hold private keys and for digital authentication.
“A good browser extension is a near-term solution for on-boarding crypto users,” says Burton, who has turned his bullishness into action by building Balance, an open-source crypto wallet extension for (you guessed it) Safari.
The hardware wallet is a longer-term solution, but — with Apple’s ability to create consumer-friendly tools — one that could be revolutionary. In some ways, crypto is already at Apple’s whim. Coinbase Global Inc. CEO Brian Armstrong noted in a Feb. 4 blog post that the crypto exchange has to “play by [Apple’s] rules” to list in the App Store and service iPhone users.
But what does Apple actually think about crypto?
At present, iPhone users can download crypto wallet apps (eg. Coinbase, Crypto.com), but the company has deemed NFT-viewing apps not appropriate for the App Store. This position, however, seems more related to Apple’s App Store tax than a crypto issue. CEO Tim Cook told the DealBook Conference in November that he owns crypto as “part of a diversified portfolio.” While he said Apple had “no immediate plans” to integrate crypto payments, “there are things [the company is] definitely looking at.”
The White House is also looking at how to foster crypto innovation. President Joe Biden recently signed an Executive Order on crypto that includes an objective of driving “U.S. competitiveness and leadership” in digital assets technologies.
“As crypto assets make up a larger portion of people’s net worth, they’ll prioritize security and privacy,” Burton says. “Cook has pushed those features from the beginning. Compared to other Big Tech players (Google, Meta), I trust Apple to do the right thing for people if it goes the crypto route.”
Apple embracing crypto wouldn’t be the first time a major tech player changed its tune. A significant domino fell last week when payments giant Stripe Inc. rolled out a suite of crypto-infrastructure tools. It had previously launched and folded its crypto team in 2018.
The move wasn’t surprising to Burton, who briefly worked at Stripe during its early days: “Web 2 companies all come around to crypto when they see how it can actually help their customers.”