Elon Musk Announces XChat With Bitcoin-Style Encryption Amid Expert Skepticism

Elon Musk has launched XChat, a messaging app claiming to use Bitcoin-style encryption. However, tech experts are sceptical of its security claims, clarifying that Bitcoin uses signatures, not encryption. Bitcoin’s value remains around $105K after a slight decline last week, while XChat offers features like end-to-end encryption and disappearing messages, which still raise doubts among industry professionals.

Elon Musk, the CEO of X, recently announced the introduction of a new messaging application dubbed XChat. However, this announcement has not left a positive mark on tech experts or the bitcoin community. The app, which boasts features like end-to-end encryption, disappearing messages, and the ability to send files without needing a phone number, is receiving scrutiny concerning its actual security capabilities.

XChat claims it’s built on a programming language called Rust with purported Bitcoin-style encryption, but many in the crypto world are not impressed or convinced. Experts caution that the phrase “Bitcoin-style” might be misleading. According to Ian Miers, an Assistant Professor of Computer Science at the University of Maryland, the statement that XChat operates on Bitcoin-like encryption is problematic. “Bitcoin primarily uses signatures, not encryption. This is like saying we decided to run our rocket on water, since NASA uses Hydrogen and Oxygen,” Miers commented on X.

To clarify, encryption is a technique for scrambling data, ensuring that only those with the correct keys can read it. However, on the Bitcoin blockchain, transactions aren’t encrypted in the traditional sense but rather signed. Miers elaborates that all data shared among Bitcoin nodes is openly accessible, enabling interactions between total strangers on the network. He added, “Needless to say ‘Bitcoin style’ and ‘Rust’ aren’t descriptions of an encryption scheme. They don’t strongly indicate security for a messaging app either. Unless the encrypted DMs are limited to the app itself, they likely aren’t solely built with Rust.”

Reflecting on market movements, Bitcoin, the dominant cryptocurrency by market capitalisation, traded flat at approximately $105,000, remaining steady despite a noticeable decrease of 3% from the previous week, according to data from CoinDesk.

The additional functionalities touted in XChat include not just end-to-end encryption but also self-destructing messages and the capacity to send diverse file types, covering audio and video formats. However, skepticism looms amid concerns about the security claims made by Musk and his team.

Omkar Godbole, a seasoned financial journalist and Co-Managing Editor of CoinDesk’s Markets team based in Mumbai, provided insights into the situation. With academic credentials in Finance and experience as a fundamental analyst, Godbole has a nuanced understanding of market dynamics, having previously worked at FXStreet and various brokerage houses. He also holds minor investments in cryptocurrencies like bitcoin and ether.