Apple is developing its own digital currency

Mobile & Apps

A few months ago Apple announced CryptoKit for iOS 13. The tool is intended to enable software developers to quickly and easily generate hash values ​​for digital signatures as well as public and private keys, which can then be saved and managed in Apple's "Secure Enclave". These keys could also be used for cryptocurrency purposes and used by iPhone users as a means of payment via an app.

Despite the announcement of CryptoKit for iOS13, an official statement by the iPhone company on the subject of cryptocurrency has been a long time coming. Jennifer Bailey, Vice President of the Apple Pay division, said in an interview with CNN Business: "We are observing the field of cryptocurrencies and think it is very interesting. We are convinced that this area has considerable potential. "

When is Apple's crypto wallet coming?

If Apple actually relies on cryptocurrencies in the future, the group would follow its smartphone competitors HTC and Samsung. Both have announced that they will develop native crypto wallets for their devices: HTC announced the Exodus 1 smartphone last year, which is supposed to store either Bitcoin or Ether. Samsung wants to implement the same feature for its flagship Galaxy 10, which will be released in 2020.

  1. Ethereum
    Another cryptocurrency based on the blockchain principle. Provides a platform for programmable smart contracts. The "ethers" are seen by fans as the legitimate successors of the Bitcoins (see also the picture above).
  2. Cryptlet
    Service developed by Microsoft for the Azure cloud, with the help of which users can enter external data into a blockchain without destroying its security and integrity. As individualized middleware, cryptlets can also be developed by Azure users themselves - in any programming language - and are intended to bridge the gap from the blockchain to new business services in the cloud.
  3. Cryptocurrency
    Digital money, without coins and bills. With the help of cryptography, a distributed, secure and decentralized payment system is built. Does not need banks, but computing power and technical aids such as the blockchain.
  4. Blockchain
    A blockchain is a decentralized database that keeps a constantly growing list of transaction data records. The database is expanded linearly in chronological order, comparable to a chain, to which new elements are constantly being added at the lower end (hence the term "blockchain"). When a block is complete, the next is created. Each block contains a checksum of the previous block.

    The technical model of the blockchain was developed in the context of the cryptocurrency Bitcoin - as a web-based, decentralized, public accounting system for all Bitcoin transactions that have ever been made.
  5. Bitcoin Core
    The open source software validates the entire blockchain and was approved at the beginning of 2009 by a certain " Satoshi Nakamoto " published under the name" Bitcoin ". Bitcoin Core was initially programmed in C ++ primarily for Windows systems. Porting to GNU / Linux followed a little later. Because the developers fell out, there are now some derivatives of Bitcoin software, including Bitcoin XT, Bitcoin Unlimited or Bitcoin Classic.
  6. BigchainDB
    The "scalable blockchain database" can manage up to a million write operations per second, store petabytes of data and still have a latency of less than a second - all of this managed in a decentralized manner and with the highest data integrity. The technical basis is blockchain technology.
  7. Distributed ledger
    Financial term for "distributed account management". Bitcoin is a completely new technical approach to distribute information about certain mappings. There is no longer a classic account that is managed centrally at a bank, but "account management" is based on a network of communicating systems.
  8. Smart contract
    A computer protocol that can map or check contracts or provide technical support for the negotiation of a contract. Could replace the written contract in the future.
  9. R3CEV
    The startup R3 CEV is building the blockchain-based "Global Fabric for Finance". The world's largest blockchain is to be developed with around 50 financial partners - a first test run with eleven major banks, including Barclays, Credit Suisse, HSBC, UBS and UniCredit, has already been successfully completed. R3CEV has entered into a strategic partnership with Microsoft to develop blockchain infrastructure and technology in the Azure cloud.
  10. Ripple
    An open source protocol for a payment network - currently still in development. P2P payment method and foreign exchange market in one, based on the crypto currency "XRP". However, Ripple users are not limited to this one currency, but can use any currency - for example euros, dollars or yen.

Jack Gold, chief analyst at J. Gold Associates, does not expect Apple to rely on cryptocurrencies anytime soon. Rather, he assumes that the group will first ensure the smooth functioning of Apple Pay and gain market share. To rely on a payment technology that may still be “cashed in” by regulators in the USA or Europe is likely to be too risky a move, as the expert explains: “I assume that Apple will match the cryptocurrency ambitions of the other players would like to analyze and then first evaluate what the chances of success are for the technology and what problems arise in practice. "

Apple is known to be pretty good at solving technological problems and presenting the results to end consumers, Gold continues. As a rule, however, the group does not favor a pioneering role, but prefers to enter already established market segments.

Cryptocurrencies - still in trend

A recent study by Juniper Research concludes that the number of users of digital wallets for all types of cryptocurrencies will increase to four billion by 2024 (2019: 2.3 billion users). This in turn should give the total volume of crypto wallet transactions a boost: It should grow by 80 percent to around nine trillion dollars per year. According to the Juniper analysts, this growth will be due in particular to the increasing transaction value, which in turn will be driven by "stored credentials" in crypto wallets.

Some of the best-known companies in the financial services and social media sector are now using cryptocurrencies as a means of payment for services or products:

JP Morgan Chase, for example, was the first major bank to recently announce its intention to introduce its own cryptocurrency based on the US dollar. This move could finally establish the blockchain as a vehicle for cryptocurrencies.

The social media giant Facebook also officially announced in June 2019 - after months of speculation - that it would launch its own crypto currency called Libra, including a wallet. Quite a few experts see this as a declaration of war on the banking sector: If the financial institutions continue to grasp blockchain technology with pincers and don't finally start evaluating the new possibilities, they could be devoured by the tech giants.

According to Clifford Rossi, an economics professor at the University of Maryland, Facebook's attack is adding additional pressure to the industry. At a time when the already troubled financial institutions are struggling not to lose touch with the more agile, technologically firm fintechs.

Cryptocurrency offensive with a focus on security?

Apple's mobile payment platform Apple Pay has existed since 2014 and now processes almost a billion transactions a month. With the introduction of the Apple Card, the group has also put out feelers in the direction of the fintech market.

For Gartner chief analyst Annette Zimmermann, a cryptocurrency feature comes at exactly the right time: "This way, Apple can keep users in its own ecosystem and market the aspect of data protection as a USP. It wouldn't be the first time Apple has tried to break away from the Stand out from the competition with features that focus on protecting user privacy. "

This article is based on an article from our US sister publication Computerworld.