Written by: Wu Says Blockchain

This podcast discussion revolves around the recent market discussions triggered by the "Xiaomi × Public Chain Wallet Pre-installation," delving into the real value of blockchain phones, common misconceptions, and long-term positioning. 0xTodd, a partner at Nothing Research, combines his long-term experience in the crypto industry and practical usage of various blockchain phones to systematically analyze the cognitive dissonance between traditional phone manufacturers and the crypto industry. He points out that current blockchain phones are more of a "transitional product under a time lag," with core issues not lying in computing power or mining, but in security models, user behavior assumptions, and product philosophy. The conversation compares blockchain phones with the recently rapidly emerging AI Phone (taking "Doubao Phone" as an example), highlighting that AI has already demonstrated clear product value and an irreversible trend after gaining higher system permissions at the hardware level. In contrast, if blockchain phones cannot resolve the fundamental contradiction of security and discreet usage, their long-term form is more likely to be replaced by system-level wallets and functions from mainstream manufacturers.

The content reflects the personal views of the guest and does not represent Wu Says' views. The audio transcription was completed by GPT and may contain errors. Please listen to the complete podcast on platforms like Xiaoyuzhou, YT, etc.

Examining the Cognitive Differences Between Traditional Phone Manufacturers and the Crypto Industry Through the Xiaomi × Sei Cooperation Controversy

Wu Says Cat Brother: A few days ago, there was a surge of interest in the collaboration between Xiaomi and Sei, followed by clarification messages. What do you think about this news event between the Sei public chain and Xiaomi? Do you see it as a genuine collaboration or more of a narrative-driven partnership? And what do you think might be the reasons behind the immediate clarification after the announcement?

0xTodd: I have been following this matter as well. In my view, traditional phone manufacturers and the crypto industry operate under two completely different logics when handling matters, yet both sides believe they are acting according to their respective industry norms. Normally, separate announcements and statements wouldn't be an issue, but in the crypto circle, it has been amplified into a rather lively event, which essentially stems from the deviation between the two cognitive systems.

For traditional phone manufacturers, pre-installed software on phones is a very routine, business-oriented matter. Some are paid collaborations, while others are part of ecological layouts. For those who frequently change phones, a new phone typically comes with a large number of pre-installed applications. Therefore, from their perspective, pre-installing an application is not a strategic or nuclear-level action. Regarding this incident, my understanding is that Sei may have only provided a pre-installation similar to a wallet entry, and Xiaomi treated it as just one of many pre-installed applications without assigning it any particularly high strategic significance.

However, from the crypto industry's perspective, the focus is on how to truly expand the user base through collaboration with traditional big brands. The reality is that the overall daily active users in blockchain are very low; many Layer 2 public chains have only a few hundred daily active addresses, and DeFi and NFT projects often have only dozens to a couple of hundred daily active users. In this context, the sudden appearance of a Xiaomi entry that could potentially cover a billion users is naturally interpreted as a highly impactful event.

Thus, the amplification of this news is fundamentally a result of the cognitive differences between the two sides. Similar incidents have occurred before. For example, early on, Samsung phones pre-installed the Enjin wallet, but later found that such pre-installation did not lead to much real usage. Users may not use it, and even if they do, they may not have assets or know how to deposit funds, ultimately treating it as just another ordinary pre-installed software.

Additionally, an important background is that Hong Kong is advancing legal and regulatory frameworks related to stablecoins and digital currency payments, which has further sparked market speculation, even questioning whether Xiaomi has any plans in the stablecoin or digital currency operation space. In this situation, Xiaomi needed to clarify that this is not the kind of collaboration that people might imagine. Essentially, this is still just a procedural software pre-installation behavior, and it may not even require high-level decision-making.

From a technical perspective, even if a wallet is pre-installed on the phone, it does not mean that stablecoin payments can be directly realized. In reality, the most mature and feasible solution remains the U Card, completed through the payment networks of Visa or Mastercard. It is important to clarify: 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: Airdrops Can Break Even, But the Product Hasn't Convincingly Sold Me

Wu Says Cat Brother: Recently, I saw you tweet that you bought ten Solana phones. Why did you buy so many? And based on your actual, real usage experience, how do you feel overall? What aspects do you find relatively useful, and which ones do you think are rather lackluster? I feel like you must have quite a few things to complain about.

0xTodd: At that time, Solana was ambitiously pushing its hardware plan, and as a holder of SOL, I bought ten Solana phones out of a supportive mindset. First, the good news on the outcome is that this batch of phones has basically broken even through subsequent airdrops.

However, regarding the product itself, I must be honest; its pricing is on the high side. I remember it was $500 per unit, which is roughly equivalent to 3,500 RMB. In the domestic market, this price can already buy several flagship models from mainstream brands. But if you closely compare the hardware specifications of the Solana phone, including the chip, memory, and screen, it is actually closer to the level of phones priced around 2,000 to 2,200 RMB in China.

This, of course, indicates that the domestic phone market is indeed very competitive, with high hardware cost-performance ratios; but on the other hand, it also shows that the Solana phone itself has a price premium. I believe they are aware of this, which is why they did not attempt to compete on cost-performance but chose to emphasize the differentiated selling point of "blockchain phone."

One of the key selling points they emphasize is the so-called security chip, which generates mnemonic phrases that are more secure. However, I personally have concerns about this. I trust those security solutions that have been long-validated and have mature models. Historically, there have been similar cases: a once well-known crypto wallet experienced a massive theft after operating for two to three years, later discovering that the source of the problem was a backdoor left in the code by an employee who participated in the early development, which was exploited years after their departure.

Because of such past experiences, the more you emphasize "this is a brand new security chip," the more cautious I become. On one hand, this is a very new technology; on the other hand, I cannot confirm whether the engineers involved in the development left any security vulnerabilities that I cannot detect, or even that they themselves may not have been aware of at the time.

So from a practical usage perspective, I personally do not dare to store a large amount of assets long-term on such a phone.

From another angle, I think these types of blockchain phones actually have security issues in reality. Recently, we have seen many cases where people travel to relatively dangerous countries or regions, and their phones are stolen or forcibly unlocked, resulting in their crypto assets being directly transferred away. If your phone has a large Solana logo on the back, it becomes a very clear target in others' eyes, "If not you, then who?" After being stolen, cashing out digital assets and selling them is also very convenient.

Therefore, in my view, this kind of design is somewhat too ostentatious. Because of this, I feel that the so-called "security chip" selling point does not hold much significance in real-world scenarios; at least at this stage, I do not dare to use it heavily. After all, it has not undergone sufficient long-term validation.

Another point that I find less than ideal is that they emphasized the phone's support for many DApps. Upon checking, I found that they are basically applications within the Solana ecosystem, such as Jupiter, and some perpetual contract apps. However, in practice, this advantage is quite limited. Applications like Jupiter are already available on Google Play, and I can directly download them from the official app store, where the code and developers undergo certain reviews, making the source more reassuring.

In contrast, if I download from the so-called DApp store, I would worry about the reliability of the source, whether it is the official version, and whether updates are timely. To some extent, we are already in a "dark forest" environment, making us even more hesitant to install applications from unknown sources.

Overall, my personal experience has indeed been less than satisfactory; these functions have not formed a truly irreplaceable necessity, which is my overall evaluation of the Solana phone.

Wu Says Cat Brother: I have a few questions. The first is that you mentioned you received airdrops; what is the specific method of these airdrops? Is it because when you received the phone, it already had a Solana wallet pre-installed, and essentially one phone corresponds to one wallet address, so the project team directly airdrops to that wallet address, is that correct?

The second question is about the security chip you mentioned earlier. When I was listening to you talk about this, I suddenly recalled a previous crypto project that was doing palm print verification, which was later exposed by the community as having a privacy protection mechanism that was actually non-existent. Of course, we won't judge the truth of this matter here, but at that time the community discovered that although the project claimed to be very secure, it was actually outsourced to a domestic factory.

So I want to ask, is there a dedicated team responsible for the security chip mentioned in the Solana phone, or is it essentially more of a marketing gimmick?

0xTodd: That's a great question. First, regarding the first point, what is the biggest difference between blockchain phones and mainstream Apple and Android devices? I think a very practical difference is that about 90% of blockchain phones emphasize one thing: using this phone gives you the opportunity to receive token rewards. For example, with the Solana phone, it is airdropped by a third-party project; earlier products even directly advertised that buying the phone could "mine."

So essentially, many people buy blockchain phones not purely for the phone itself, but for the "tokens." On the surface, they are buying hardware, but in reality, they are buying an opportunity linked to tokens and airdrops.

The second point is the North Korean hacker issue you mentioned earlier, which I think is very critical. North Korean hackers now have very strong social engineering capabilities; they can infiltrate companies through "fake interviews." For example, they might impersonate a Korean person, 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 factory—and I generally consider blockchain phone manufacturers to be small factories—if a "Samsung-background" engineer suddenly appears, it is easy to be deceived and recruit them into the core team. The result could be that the person is actually a hacker who quietly leaves a backdoor in the system, and after a while, comes back to "collect the net." In small factories where the screening mechanism is not mature, I think this risk is not low.

Of course, this issue is not unique to blockchain phones; small factories face it as well. But the difference is that ordinary generic phones generally do not hold much money; whereas if you are using a blockchain phone and have stored a large amount, or even all, of your crypto assets in it, then from a risk perspective, it is very hard for me to feel truly at ease.

What Can Blockchain Phones Rely on for Long-Term Existence Besides Airdrops?

Wu Says Cat Brother: Yes, you also mentioned that many people buy blockchain phones mainly for airdrops and incentives. What do you think is a key capability that must be supplemented for blockchain phones to become a truly long-lasting and sustainable product, aside from these airdrop-style incentives?

Additionally, what do you think the most reasonable and core use case for a true blockchain phone should be?

0xTodd: I have indeed thought seriously about this question. If blockchain phones are to truly exist, I believe the key lies not in hardware, but in software, creating features that are genuinely tailored for crypto users and are essential.

I think the most important point is the ability to hide all crypto-related applications with one click. This can be fully realized on the software level, but it is crucial for crypto users. Recently, I saw a case where someone was traveling in Bogotá, Colombia, and their phone was stolen. Later, it was unclear how the thief unlocked it, but they directly transferred all the crypto assets inside, reportedly resulting in a loss of $200,000.

This incident deeply resonated with me. If you compare it to traditional finance, such as brokerage apps, even if a phone is lost, it is very difficult for someone to transfer money; usually, it can only be transferred to an account under the same name, with strict risk control. But crypto assets are different; they are peer-to-peer, and once unlocked, there are almost no restrictions, often resulting in a complete emptying of the account. Because of this, many people do travel to relatively complex regions, and you can't realistically delete Binance, exchanges, and wallets every time. If there were a way to hide all crypto-related content with one click before traveling, I think that would be a very strong necessity.

Additionally, I previously saw Teacher Kay mention an interesting design: using the same phone, entering different lock screen passwords would lead to different home screens. One home screen would have crypto applications, while the other would be a completely "clean" ordinary desktop. This design essentially helps users isolate risk scenarios from daily scenarios.

Since crypto assets are highly self-custodial, once you choose self-custody, it is equivalent to carrying a vault with you every day. Under this premise, it is very necessary to implement more protective measures for "hiding" and isolation.

Another equally important point is the identification of malicious software and fake wallets. In the past, many people fell victim to fake MetaMask or fake Trust Wallet apps because they used modified Android systems or downloaded APKs from random sources online. If the phone could alert you at the system level that this is a fake application, or even isolate it, I think that would be a crucial protection for many users.

Cryptocurrency has always emphasized self-custody, but the reality is that most ordinary users do not possess mature self-custody capabilities. In this case, as a product at the phone and system level, it should help users address these security shortcomings.

Following this product idea, there are actually many genuinely useful security features that can be developed. For example, a one-click clipboard clearing function. I have seen too many cases of private key leaks due to clipboard reading. Professional custodial institutions are extremely cautious with private keys, but in reality, many people directly copy mnemonic phrases, paste them into notepads, or even send them via WeChat, which is almost incomprehensible from a security perspective. If it were a blockchain phone, it could automatically clear the clipboard after copying and pasting, at least reducing some risks.

Another very common but equally dangerous behavior is taking photos of mnemonic phrases with the phone. To be honest, I think at least half of people have done this. Initially, they think it's just for testing the wallet for convenience, but many test wallets end up becoming their main wallets. At this point, the photos of mnemonic phrases in the album become a huge security risk, especially if the album is synced to the cloud, which is essentially like being exposed.

So if we really want to create a blockchain phone, we could provide a "disconnected album" at the system level. When it detects that you are taking a photo of a mnemonic phrase, it would only store it locally and not sync to the cloud, at least blocking the most dangerous step. Furthermore, many crypto websites use WalletConnect to redirect wallets; these processes could also be made clearer and safer at the system level. Since you are already doing pre-installation and push notifications, you could also push more security reminders to users, rather than just emphasizing features and gimmicks.

As for mining, people will certainly be concerned, but they are concerned about mining that can break even. In contrast, these security details are what truly matter to the older generation of crypto users, the OG users. If these aspects can be well executed, I believe there might be a "serendipitous" effect—core users start to be willing to use it, gradually bringing the product to life.

Finally, regarding the design. I have always felt that some blockchain phones emphasizing Bitcoin or Solana logos in their appearance are inherently unsafe. Wealth should not be flaunted; it is best not to let others know at a glance that you are carrying an asset that can be easily transferred and liquidated. The ideal state is to make the appearance identical to ordinary domestic phones, looking like a Redmi, understated to the point that no one pays much attention. Conversely, having a huge logo printed on the back like the Solana phone, along with a "security chip," actually serves as a reminder to others: I have money here.

Under these premises, making the phone understated and user-friendly, while truly addressing security details, is what I believe a product manager who genuinely wants to create a successful blockchain phone should focus on. This is just my personal opinion.

How to Avoid Over-Concentration of Security Capabilities: Trade-offs in Permission Design and "Offline Thinking"

Wu Says Cat Brother: Some of the security features you mentioned, such as entering different interfaces with different passwords, detecting pirated apps, and recognizing mnemonic phrases, make me wonder if this gives the phone itself excessively high permissions. For novice users, it may be safer, but does it essentially concentrate the originally dispersed security risks onto the phone manufacturer or system level? If the system itself is compromised, it could lead to larger-scale risks.

0xTodd: You raise a very good question, but I think this is a relatively extreme situation that can be mitigated through permission design. For example, regarding pirated apps, the system only needs to provide a "reminder" rather than forcibly delete them. When a suspected pirated app is detected, a pop-up warning about the risk can appear, but the system should not have the authority to make decisions for the user, thus keeping the boundaries of permissions clear. Regarding mnemonic phrases, I also do not advocate scanning the entire album. A more reasonable approach would be to impose restrictions in key scenarios, such as prohibiting screenshots on the page displaying mnemonic phrases, or providing clear risk warnings when it detects that the user is taking a photo of a mnemonic phrase.

The core idea of security protection is to minimize the risks brought by centralization through permission splitting and functional isolation, rather than consolidating all power into the system. How to achieve this depends on the product manager's understanding and trade-offs regarding security boundaries.

But I want to emphasize that what these products should truly focus on is understanding users' real security needs, rather than remaining at the level of conceptual packaging and gimmicks.

Not the Endgame, but a Transition: The Positioning of Blockchain Phones Before Major Manufacturers Enter the Market

Wu Says Cat Brother: Overall, your thoughts have consistently revolved around "security." However, as an industrial product, the phone encounters a real contradiction: if it is made very niche and customized, the cost will be high; if it is scaled up, it will become conspicuous, even leading to the assumption that "users of this phone are crypto practitioners," which brings new security risks. What do you think is a more realistic solution? Should we continue to make independent blockchain phones, or return to collaborating with major manufacturers to solve these issues within the mainstream phone ecosystem?

0xTodd: This is a very critical question. In my view, many major manufacturers still have concerns about cryptocurrencies, which is why collaboration is progressing slowly. However, most of the features we discussed earlier are primarily software-based and do not require heavy hardware modifications.

Essentially, blockchain phones are more like a transitional product, filling the time gap before major manufacturers fully embrace crypto. I do not believe it will become a long-term independent track. As stablecoins are legislated in the U.S. and compliance is advanced in Hong Kong and Singapore, the acceptance of crypto by the mainstream is just a matter of time. Once major manufacturers truly enter the market and integrated wallets and system-level solutions emerge, most users will be more willing to trust them.

From a cost perspective, these security needs are not expensive; they are software optimizations on existing systems and do not require retracing complex hardware supply chains. In terms of appearance, there is no need to be innovative; as long as it is close to the mature designs of Redmi, Vivo, OPPO, and Xiaomi, it can be understated enough that ordinary people cannot distinguish it, while also reusing existing production lines, thus lowering costs.

So at this stage, blockchain phones are more like a stopgap measure: lowering costs, making the appearance ordinary enough, and ensuring security details are well executed—this balance is achievable.

Additionally, I also agree with the idea of "not making a primary device, only a secondary device." Blockchain phones do not need high performance; their core purpose is to run exchanges and wallets. Previously, I spoke with a studio working on Binance Alpha, and they were using second-hand OPPO phones costing 250 to 300 RMB, which could still run Binance normally. This indicates that the requirements for configuration are really not high.

Conversely, primary devices are more for entertainment, watching videos, playing games, and even running AI in the future, which have completely different performance requirements. Therefore, the combination of "primary device + secondary device" is very reasonable: the blockchain phone serves as a secondary device, responsible for security, asset management, verification codes, and inserting foreign SIM cards, which already makes sense. This is a form I personally find quite acceptable.

Will AI Phones Become a More Worthwhile Strategic Direction?

Wu Says Cat Brother: Thank you for sharing so many insights, as well as the interesting story about Alpha. You also mentioned the topic of AI, noting that major manufacturers are relatively slow to "embrace crypto," but their attitude towards AI seems completely different, advancing very quickly. For example, the Doubao phone recently sold out quickly, with around 20,000 units.

I heard that you have also been researching the Doubao phone recently. Do you have any interesting observations or experiences to share with everyone?

0xTodd: This is actually quite interesting. I remember the Doubao phone was around 30,000 units, and it is not a traditional major manufacturer product; it was produced by Nubia. Think about it, now a phone just released can sell out tens of thousands of units at once; to be honest, that is already quite difficult, but the Doubao phone indeed achieved it.

I personally feel regretful because I am in Singapore and couldn't grab the first batch of phones, but I have been continuously researching it during this time. It is fundamentally different from "installing a Doubao app on an ordinary phone." The key difference is that the Doubao phone gives Doubao higher permissions at the system and hardware levels. It doesn't just converse with you; it can directly operate your screen. In contrast, Doubao on an ordinary phone can only chat and answer questions, but cannot truly click, swipe, or execute operations for you.

In my view, this step actually solves the "last mile" problem. Many people have found interesting uses for the Doubao phone, such as having Doubao help complete daily check-ins for Duolingo and Baicizhan, letting it play Dou Di Zhu for them, and even having it search for videos on Douyin and directly send them to groups. It is genuinely "doing things," rather than just remaining at the conversational level.

Of course, giving AI higher permissions at the system level will certainly bring security risks. So now you will see that many banking apps prohibit Doubao from operating, and some major manufacturer applications, such as those from Tencent and Alibaba, have also closed related access. But the reality is that Doubao itself is a ByteDance product, so ByteDance's software is relatively open to it.

This creates a very interesting comparison. For example, Apple, at its 2024 launch event, began discussing Siri's full integration with AI, but many of the capabilities in the PPT at that time had not truly materialized. I also specifically bought a new iPhone that claims to support Apple AI, but in actual experience, the things it can do are still very limited, only able to handle some particularly simple operations.

But the Doubao phone is different; it can really get things done. For example, some people have asked it to order takeout, and it automatically uses discount coupons, which shows a high level of "intelligence." The reason lies in the fact that it grants AI higher permissions at the system level.

Everyone knows that phones already have accessibility features for visually impaired users that can read out screen content. Now, these AI phones essentially utilize similar capabilities, allowing AI to "read" screen information and complete operations "like a human," even without going through an API. This means that even if certain software does not cooperate or open interfaces, AI can still accomplish tasks.

So you will see an interesting phenomenon: the AI capabilities that Apple showcased at its launch event have actually been realized first by the Doubao phone. This is understandable; smaller companies can pivot quickly and make decisions rapidly. This product is inherently experimental, and many people refer to these 30,000 phones as "engineering machines." As an engineering machine, it has performed quite well. On the other hand, major manufacturers are clearly more cautious: they want to embrace AI but hesitate to take that step. Once smaller companies have run for a while and even formed a relatively mature "mid-stage solution," major manufacturers may have no choice but to follow suit.

Personally, I believe that the deep integration of phones and AI will be a long-term project, but the trend itself is irreversible. It's somewhat like when the internet first emerged; traditional media looked down on it, but ultimately, it was those internet companies that changed the world. Now, to some extent, the giants are starting to set barriers for further penetration of AI. If they were to fully open up, you could simply tell AI, "Go to Taobao and buy me a box of the cheapest water," or "Go to WeChat and chat with a certain person," which would greatly enhance efficiency. The reason many platforms are blocking this is also related to their own AI systems. In the future, you might have four or five AIs installed on a single phone, each responsible for different tasks.

But regardless, the ultimate result will definitely be the liberation of human hands. I believe this is an absolutely irreversible trend. Once this form is truly realized, those who have used it will likely feel that "it's really great." So, although this topic has somewhat deviated from blockchain phones, I am personally more excited and looking forward to these AI phones that can truly operate the phone and get things done.

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