This podcast discussion revolves around the recent market discussion sparked by the "Xiaomi × public blockchain wallet pre-installation," delving into the true value, common misconceptions, and long-term positioning of blockchain phones. Nothing Research Partner 0xTodd, drawing on his long-term experience in the crypto industry and practical experience with multiple blockchain phones, systematically analyzes the cognitive misalignment between traditional phone manufacturers and the crypto industry, pointing out that current blockchain phones are more of a "transitional product due to a time lag." Their core issues are not in computing power or mining, but in security models, user behavior assumptions, and product philosophy. The discussion compares blockchain phones with the recently rapidly launched AI phones (using the "Doubao phone" as an example), pointing out that AI, after gaining higher system privileges at the hardware level, has already demonstrated clear product value and an irreversible trend. In contrast, if blockchain phones cannot resolve the fundamental contradiction between security and discreet use, their long-term form is more likely to be replaced by system-level wallets and functions from mainstream manufacturers.
This content represents the guest's personal views and does not represent the views of WuShuo. Audio transcription was done by GPT and may contain errors.
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Looking at the cognitive differences between traditional mobile phone manufacturers and the crypto industry from the Xiaomi × Sei cooperation controversy
Wu Shuo Maodi: A few days ago, a cooperation between Xiaomi and Sei caused a stir, followed by a clarification. What are your thoughts on this news event between the Sei public chain and Xiaomi? Do you think it's a genuine cooperation, or more of a narrative-driven collaboration? And what do you think is the reason behind the immediate clarification after the announcement?
0xTodd: I've actually been following this issue. In my opinion, traditional mobile phone manufacturers and the crypto industry follow two completely different logics when handling matters, but both sides believe they are acting according to their respective industry practices.
Originally, each side's own publicity and interpretation wouldn't have been a problem, but within the crypto community, it was amplified into a rather heated event. This essentially stems from a discrepancy between two cognitive systems. For traditional mobile phone manufacturers, pre-installing software on phones is a very routine, business-oriented matter. Some are paid partnerships, others are part of ecosystem development. For people who frequently change phones, a new phone already comes with a large number of pre-installed apps. Therefore, from their perspective, pre-installing an app isn't a strategic or nuclear-level move. In this particular case, my understanding is that Sei may have simply provided a pre-installed entry point similar to a wallet, and Xiaomi simply considered it one of many pre-installed apps, without assigning it any particularly high strategic significance. However, within the crypto industry, the focus is on how to truly scale up the user base through partnerships with traditional major brands. The reality is that the overall daily active users (DAU) of the blockchain industry are very low. Many Layer 2 public chains have only a few hundred DAU addresses, and DeFi and NFT projects often only have tens to a couple hundred DAU addresses. Against this backdrop, the sudden emergence of a Xiaomi entry point that could potentially reach a billion users is naturally interpreted as a highly impactful event. Therefore, the amplification of this news is essentially a result of differences in perception between the two sides. Similar things have happened before. For example, early Samsung phones pre-installed the Enjin wallet, but it was later found that this pre-installation did not bring much real usage. Users might not use it, and even if they did, they might not have assets or know how to deposit funds, ultimately treating it as just another pre-installed software. Furthermore, another important background factor is that Hong Kong is promoting legal and regulatory frameworks related to stablecoins and digital currency payments, which has further fueled market speculation, even leading to conjectures about whether Xiaomi has any plans in the stablecoin or digital currency operation field. In this situation, Xiaomi needs to clarify that this is not the kind of cooperation everyone imagines. Essentially, it's still just a routine software pre-installation process, and may not even require high-level decision-making. From a technical perspective, even if a wallet is pre-installed on a phone, it doesn't mean stablecoin payments can be made directly. In reality, the most mature and feasible solution is still the U-card, completed through the Visa or Mastercard payment network. It's important to clearly distinguish here: payment capability comes from the card organization system, not the wallet itself; the wallet primarily serves the function of asset storage and management. After buying ten Solana phones: the airdrop could recoup the cost, but the product didn't convince me. Wu Shuo Maodi: I saw your tweet a while ago mentioning that you bought ten Solana phones. Why did you buy so many? And from your actual, real-world user experience, what was the overall feeling? What aspects do you find useful, and what aspects are somewhat lacking? I imagine you have quite a few things to complain about. 0xTodd: At one point, Solana was ambitiously pushing forward with its hardware plans, and as a Solana holder, I bought ten Solana phones out of support. First, some good news regarding the outcome: these phones have basically recouped their cost through subsequent airdrops. However, regarding the product itself, I must be honest, its pricing was on the high side. I remember it was $500 each, roughly equivalent to 3500 RMB. In the Chinese market, that price could buy many flagship models from mainstream brands. But if you carefully compare the Solana phone's hardware configuration, including the chip, memory, and screen, it's actually closer to the level of phones priced between 2000 and 2200 RMB in China. This certainly illustrates, on the one hand, that the domestic mobile phone market is indeed very competitive, with extremely high hardware cost-effectiveness; but on the other hand, it also shows that the Solana phone itself has a price premium. I believe they themselves are aware of this, so they didn't try to compete on cost-effectiveness, but instead chose to emphasize the differentiated selling point of "blockchain phone". One of their key selling points is the so-called security chip, which generates a more secure mnemonic phrase. However, I personally have concerns about this. I have more trust in security solutions that have been validated over a long period and have mature models. There have been similar cases in history: a once-famous crypto wallet suffered a large-scale theft after two or three years of operation, and it was later discovered that the source of the problem was a backdoor left in the code by an early employee who had participated in the development, which was only exploited years after the employee left the company. Because of these past experiences, the more you emphasize "this is a completely new security chip," the more cautious I become. On one hand, it's a very new technology; on the other hand, I can't confirm whether the engineers involved in its development left any security vulnerabilities that I couldn't detect, or even that they themselves might not have been aware of at the time. Therefore, from a practical standpoint, I personally wouldn't dare store a large amount of assets on such a phone for an extended period. From another perspective, I think these types of blockchain phones actually have security issues in the real world. Recently, we've seen many cases where people traveling to relatively dangerous countries or regions have their phones stolen or forcibly unlocked, resulting in the direct transfer of their encrypted assets. If your phone has a large Solana logo on the back, it becomes a very obvious target in someone's eyes—"who else would they rob?" After being stolen, it's very convenient to liquidate or sell the digital assets. So, in my opinion, this design is a bit too flashy. Because of this, I feel that the so-called "security chip" selling point isn't that significant in real-world scenarios, at least not at this stage; I'm not inclined to use it heavily myself. After all, it hasn't undergone sufficient long-term validation. Another point that I find less than ideal is their emphasis on the phone's support for many DApps. I actually looked at them, and they were mostly applications within the Solana ecosystem, such as Jupiter, and some perpetual contract apps. But in practice, this advantage is actually quite limited. Apps like Jupiter are already available on Google Play; I can easily download them directly from the official app store, and the code and developers undergo some verification, making the source more reassuring. Conversely, if downloaded from a so-called DApp store, I would worry about the reliability of the source, whether it's the official version, and whether the updates are timely. To some extent, we are already in a "dark forest" environment, and we are even less willing to install applications from unknown sources. Overall, my personal experience is indeed not very satisfactory. These functions have not formed a truly irreplaceable necessity, which is my overall evaluation of the Solana phone. Wu Shuo Maodi: I have a few questions. The first is that you just mentioned it will give you airdrops. How exactly does this airdrop work? Is it because when you receive this phone, it already has a Solana wallet pre-installed, and each phone corresponds to a wallet address, and the project team directly airdrops to this wallet address? Is that correct? The second question concerns the security chip you just mentioned. While listening to you talk about it, I was reminded of a previous encryption project that used palmprint verification, which was later exposed by the community as having a flawed privacy protection mechanism. Of course, we won't judge the veracity of this claim here, but the community found that although the project advertised itself as very secure, it was actually outsourced to a domestic contract manufacturer. So, my question is, is the security chip mentioned in the Solana phone backed by a dedicated team, or is it essentially just a marketing gimmick? 0xTodd: That's a very good question. Let's start with the first point: what is the biggest difference between blockchain phones and mainstream Apple and Android phones? I think a very real difference is that about 90% of blockchain phones emphasize one thing: using this phone gives you the opportunity to receive token rewards. For example, the Solana phone received airdrops from third-party projects; earlier products even directly advertised that buying the phone would allow you to "mine." So, essentially, many people buy blockchain phones not just for the phone itself, but for the "coins." On the surface, they're buying hardware, but in reality, they're buying an opportunity linked to tokens and airdrops. The second point is the North Korean hacking issue you just mentioned, which I think is crucial. North Korean hackers now have very strong social engineering capabilities; they can infiltrate companies through "fake interviews." For example, they might impersonate a South Korean, claiming to have previously worked at Samsung as a senior engineer in a certain department—such resumes are not difficult for them to forge. If you look at it from the perspective of a small manufacturer—and I basically consider all blockchain phone manufacturers to be small manufacturers—it's easy to be misled and recruit an engineer with a "Samsung background" into the core team. It turns out that the engineer might actually be a hacker, secretly leaving backdoors in the system, only to come back later to "catch them all." In small manufacturers with immature screening mechanisms, I think this risk is not low. Of course, this problem isn't unique to blockchain phones; small manufacturers face it all. But the difference is that ordinary, no-name phones generally don't carry much cash; but if you're using a blockchain phone and have a large amount, or even all, of your encrypted assets in it, from a risk perspective, I find it hard to truly feel at ease. Without airdrops, what can blockchain phones rely on for long-term survival? Wu Shuo Maodi: Yes, you just mentioned that many people buy blockchain phones mainly for the airdrops and incentives. So, in your opinion, if blockchain phones are to become a truly long-term, sustainable product, what key capability, besides these airdrop-style incentives, must be added? Also, what do you think is the most reasonable and core use case for a truly meaningful blockchain phone? 0xTodd: I have indeed thought about this question seriously. If blockchain phones are to truly succeed, I think the key is not in the hardware, but in the software, creating truly tailored and essential functions for crypto users. I think the most important point is the ability to hide all crypto-related applications with one click. This is entirely achievable at the software level, but it's crucial for crypto users. I recently saw a case where someone was traveling in Bogotá, Colombia, and their phone was stolen. The thief, using some unknown method, unlocked it and transferred all the cryptocurrency assets inside, reportedly resulting in a loss of $200,000. This incident really struck me. Compared to traditional finance, such as brokerage apps, even if your phone is lost, it's extremely difficult for someone to transfer money. Usually, the money can only be transferred to an account under the same name, as risk controls are very strict. But cryptocurrency is different. It's peer-to-peer, and once unlocked, there are almost no restrictions; it's often wiped out in one go. Because of this, many people do travel to relatively complex regions, and it's impractical to delete Binance, exchanges, and wallets every time. If it were possible to hide all cryptocurrency-related content with a single click before traveling, I think that would be a very strong and essential need. Additionally, I saw Kay mention a very interesting design: on the same phone, entering different lock screen passwords leads to different desktops. One desktop has encrypted apps, while the other is a completely "clean" ordinary desktop. This design essentially helps users isolate risky scenarios from everyday scenarios. Because crypto assets are inherently highly self-custodied, choosing self-custodial means you're essentially carrying a vault with you every day. Under this premise, implementing additional "hidden" and isolated layers of protection is essential. Another equally important point is the identification of malware and fake wallets. In the past, many people, because they used modified Android systems or could only download APKs randomly from the internet, ended up installing fake MetaMasks or fake Trust Wallets, and were directly scammed. If a phone can alert you at the system level that it's a fake app, or even isolate it, I think that would be crucial protection for many users. Cryptocurrencies have always emphasized self-custody, but the reality is that most ordinary users don't have mature self-custody capabilities. In this situation, a phone and system-level product should inherently address these security shortcomings. Following this product line, many truly useful security features can be implemented. For example, one-click clipboard clearing. I've seen too many cases of private key leaks because the clipboard was read. Professional custodians are extremely cautious about their private keys, but in reality, many people directly copy mnemonic phrases, paste them into notepad, or even send them via WeChat, which is almost incomprehensible from a security perspective. A blockchain phone could automatically clear the clipboard after copying and pasting, at least reducing some of the risk. Another very common, but equally dangerous, behavior is taking photos of your mnemonic phrase with your phone. Frankly, I think at least half the people have done it. Initially, it seems like just testing a wallet for convenience, but many test wallets eventually become the main wallet. At this point, the mnemonic phrase photos in the album become a huge security risk, especially if the album is synced to the cloud, essentially leaving it unprotected. Therefore, if you really want to make a blockchain phone, you could provide an "offline photo album" at the system level. When it recognizes that you've taken a photo of your mnemonic phrase, it only stores it locally and doesn't sync to the cloud, at least blocking the most dangerous step. For example, many encrypted websites redirect to wallets via WalletConnect; these processes could also be made clearer and more secure at the system level. Since you're already doing pre-installation and push notifications, you could also push more security reminders to users instead of just emphasizing features and gimmicks. As for mining, everyone is certainly concerned, but what they care about is mining that will pay off. In contrast, these security details are what the older generation of crypto users and OG users really care about. If these things can be done well, I think it might have a "happy accident" effect—core users will start to use it and gradually bring the product to market. Finally, there's the design. I've always felt that some blockchain phones that emphasize Bitcoin and Solana logos on their appearance are inherently insecure. Don't flaunt your wealth; you shouldn't let others know at a glance that you're carrying an asset that can be easily transferred and liquidated. The ideal situation is to make the appearance exactly like a regular domestic phone, looking like a Redmi, so understated that no one will give it a second glance. Conversely, printing a huge logo on the back like the Solana phone and labeling it with "security chip" is like reminding others: I have money here. Under these premises, making the phone discreet, user-friendly, and truly implementing security details is what a product manager who genuinely wants to make a good blockchain phone should focus their efforts on. This is just my personal opinion. How to avoid over-centralizing security capabilities: Trade-offs between permission design and the "off-network approach" Wu Shuo Maodi: Some of the security features you just mentioned, such as different passwords for different interfaces, detecting pirated apps, and recognizing mnemonic phrases, I'm wondering if this grants the phone too many permissions? It might be safer for novice users, but essentially, isn't it concentrating the originally dispersed security risks at the phone manufacturer or system level? Once the system itself is compromised, it could actually bring about a larger-scale risk.
0xTodd: That's a very good question, but I think it's a relatively extreme case that can be mitigated through permission design. For example, regarding pirated apps, the system only needs to "remind" rather than forcibly delete them. When suspected piracy is detected, a pop-up warning should appear, but the system shouldn't be given the power to make decisions for the user; this keeps permission boundaries clear. Regarding mnemonic phrases, I also don't advocate scanning the entire photo album. A more reasonable approach is to impose restrictions in key scenarios, such as prohibiting screenshots on pages displaying mnemonic phrases, or providing a clear risk warning when the system recognizes that a user has photographed a mnemonic phrase.
The core idea of security protection is to minimize the risks of centralization through permission splitting and function isolation, rather than concentrating all power in the system's hands. How to implement this specifically depends on the product manager's understanding and trade-offs regarding security boundaries.
But I want to emphasize that what these kinds of products should really focus on is understanding users' real security needs, not just focusing on conceptual packaging and gimmicks.
Not the end game, but a transition: The positioning of blockchain phones before major manufacturers enter the market
Wu Shuo Maodi: Overall, your thinking has been centered around "security." But mobile phones, as industrial products, face a real contradiction: if they are made in a niche market and highly customized, the cost is high; if they are mass-produced, they become conspicuous, and even assumed that "people who use this phone are crypto professionals," which brings new security risks. So, in your opinion, what is a more realistic solution? Is it to continue making independent blockchain phones, or to return to cooperating with major manufacturers and solving these problems within the mainstream mobile phone system?
0xTodd: This is a very crucial question. In my opinion, many large companies still have reservations about cryptocurrencies, which is why cooperation is progressing slowly. But most of the features we discussed earlier are software-based and don't require significant hardware modifications. Essentially, blockchain phones are more like a transitional product, filling the time gap before major companies fully embrace crypto. I don't believe it will become a long-term independent market. With stablecoin legislation in the US and compliance efforts in Hong Kong and Singapore, mainstream acceptance of crypto is only a matter of time. Once major companies truly enter the market and offer built-in wallets and system-level solutions, most users will be more willing to trust them. From a cost perspective, these security requirements themselves aren't expensive; they involve software optimization on existing systems and don't require re-entering a complex hardware supply chain. There's absolutely no need for unconventional designs. As long as they closely resemble established designs from brands like Redmi, Vivo, OPPO, and Xiaomi, remaining sufficiently understated, the average person won't be able to distinguish them. This also allows for the reuse of existing production lines, further reducing costs. Therefore, at this stage, blockchain phones are more of a stopgap measure: keeping costs low, making the design sufficiently ordinary, and ensuring good security details—this balance is achievable. Furthermore, I strongly agree with the idea of "not making it a primary phone, but only a secondary phone." Blockchain phones don't actually need high performance; their core purpose is running exchanges and wallets. I previously spoke with a studio working on Binance Alpha, and they were using secondhand OPPO phones costing 250 to 300 yuan, which could still run Binance normally. This shows that the configuration requirements are really not high. Conversely, the main phone is used more for entertainment, watching videos, playing games, and even running AI in the future, which has completely different performance requirements. Therefore, the combination of "main phone + secondary phone" is very reasonable: the blockchain phone, as a secondary phone, is responsible for security, asset management, verification codes, and accepting foreign SIM cards, which is already a viable option. This is a form that I personally agree with. Will AI phones become a more worthwhile strategic direction? Wu Shuo Maodi: Thank you for sharing so many viewpoints, as well as the interesting story about Alpha. You also mentioned the topic of AI, and mentioned that major companies are relatively slow in "embracing encryption," but their attitude towards AI seems completely different, and they are pushing forward very quickly. For example, the Doubao phone a while ago, it seems that 20,000 units were sold out very quickly. I heard you've been researching the Doubao phone lately. Do you have any interesting observations or experiences you could share? 0xTodd: This is actually quite interesting. I remember there were around 30,000 Doubao phones released, and it wasn't even a product from a traditional major manufacturer; it was from Nubia. Think about it, these days, it's already very difficult for a newly released phone to sell tens of thousands of units instantly, but the Doubao phone really did it. I'm quite regretful because I'm in Singapore and couldn't get my hands on one of the first batches, but I've been continuously researching it. It's fundamentally different from "installing the Doubao app on a regular phone." The key difference is that the Doubao phone gives Doubao higher permissions at the system and hardware levels. It doesn't just talk to you; it can directly operate your screen. In contrast, the Doubao app on a regular phone can only chat and answer questions; it can't actually tap, swipe, or perform actions for you. In my opinion, this step actually solves the "last mile" problem. Many people have already discovered interesting uses for Doubao on their phones, such as having it help with daily check-ins on Duolingo and Baicizhan, playing Dou Dizhu on your behalf, and even having it search for videos on Douyin and share them directly in groups. It's truly "doing things," not just engaging in conversation. Of course, giving AI higher permissions at the system level will inevitably bring security risks. Therefore, you'll see that many banking apps prohibit Doubao from operating, and some large companies' apps, such as Tencent and Alibaba, have also closed related access points. But the reality is that Doubao is a ByteDance product, so ByteDance software is relatively open to it. This creates a very interesting contrast. For example, Apple started talking about Siri's full integration with AI at its 2024 launch event, but many of the capabilities shown in the presentation slides haven't actually been implemented. I myself bought a new iPhone that supposedly supports Apple AI, and in actual use, it's still very limited, only able to handle some very simple operations. But the Doubao phone is different; it can actually get things done. For example, if someone asks it to order takeout, it automatically uses coupons for you, which is quite a high level of "intelligence." The reason is that it gives AI higher permissions at the system level. Everyone knows that phones already have assistive functions for visually impaired people, such as reading screen content. These AI phones essentially utilize similar capabilities, allowing AI to read screen information and perform operations "like a human," even without APIs. This means that even if certain software doesn't cooperate or open its interfaces, AI can still complete tasks. Therefore, you'll see an interesting phenomenon: the AI capabilities Apple showcased at its launch event were first implemented by the Doubao phone. This isn't hard to understand; smaller manufacturers are quick to adapt and make decisions. This was an experimental product, and many refer to these 30,000 phones as "engineering prototypes." As engineering prototypes, they were already quite impressive. Larger manufacturers, on the other hand, are clearly more cautious: they want to embrace AI but hesitate to take that step. Once smaller manufacturers have been working on it for a while, even developing a relatively mature "mid-game solution," larger manufacturers may eventually have to follow suit. Personally, I believe that the deep integration of mobile phones and AI will be a long-term project, but the trend itself is irreversible. This is somewhat similar to when the internet first emerged; traditional media dismissed it, but ultimately, it was the internet companies that truly changed the world. Now, to some extent, these giants are setting barriers to further AI penetration. If it were truly fully open, you could simply tell AI, "Go to Taobao and buy me a case of the cheapest water," or "Go to WeChat and chat with someone," resulting in a massive efficiency boost. The reason many platforms are currently blocking it is related to their own proprietary AI systems. In the future, you might have four or five AIs on one phone, each responsible for different tasks. Regardless, the ultimate result will undoubtedly be freeing up people's hands. I believe this is an absolutely irreversible trend. Once this form is truly realized, most users will likely find it incredibly appealing. So, although this topic has somewhat deviated from blockchain phones, I personally am more excited and looking forward to AI phones that can truly operate and perform tasks.
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