How Does Signal Make Money in 2022?

Companies have turned people’s privacy into commodities at a time when more than half of the world’s population uses the internet. They personalise adverts for each prospective consumer based on the information acquired. People are becoming more and more aware of the data they publish on the internet and even on private chat sites.

WhatsApp, a widely used messaging programme, is currently the subject of privacy concerns. Individual users are becoming more wary about how private their discussions on the app really are. As a result of this problem, many have switched to alternative end-to-end encrypted messaging apps. Signal is one such texting programme that is rapidly gaining popularity among users.

So then how does it make money? Let’s take a deeper look into that.

What Is Signal?

Signal is a secure messaging programme that lets users send and receive messages as well as make phone calls.

Signal’s speciality is its unwavering commitment to privacy protection. Individual specialists may check on its privacy and security since it is open-source and peer-reviewed. Text messages, calls, including group conversations, and even gif searches are all encrypted.

The programme is designed in such a way that a user’s privacy is given top priority. This may be seen in a variety of ways, one of which being its video call capability. When a person on the other end of the call answers a video call, the user must switch on their camera since it does not come on automatically as it does on other messaging apps.

How Does Signal Work?

Signal uses end-to-end encryption, which essentially means that every communication within the application is encrypted from beginning to end. On the positive side, Signal does not have access to the encryption key, so it will not be able to read your communications even if they wanted to.

What makes things even better is that Signal doesn’t store user information anywhere in their database. On initial launch of the application, the app allows you to see who is using Signal from your contact list.

The signal app uses the Whisper protocol which gives multi layered protection and thus making it difficult to brute force your way in.The following is an explanation of how end-to-end encryption works:

When a conversation between two users begins, keys are generated in sets of two

  1. Private key – stored in the device of the end user
  2. Public key – stored in the signal’s server which can also be called the host device. 

When a message is sent from user-X to user-Y, there is an action to retrieve the Public key which is used to encrypt the message, ensuring that it can only be read by the recipient who has the private key.

The host server sends the message to the user, whose device then uses the private key to decrypt it and make the message viewable for the user. 

The phone numbers in your contact list are hidden by an algorithm that encrypts the digits and which are abbreviations to offer more security and preserve anonymity. The concept of metadata saving is non-existent in Signal’s case. 

The feature of backing up messages to cloud storage or google drive is also not supported since these can be hacked. Users can export and import their messages to another device, if they are changing their device. 

There is nothing that anyone can find of importance, for e.g., even if a third party were to ask, Signal can only oblige them with the user’s sign in date and they cannot even get a checksum(timestamp) of the user sign in.

For users who place a high value on privacy, the exclusion of cloud-based backup means that the access to messages is restricted to everyone, including the user in case of loss of device. 

Signal allows you to export and import data from your old device to your new device, but this option is only available for Android phones and not for iphones. Compared to one of the most widely used applications, whatsapp, signal lays a lot more importance on user data and privacy. 

The import/export of messages is not supported by Signal in some special cases, for e.g., if you lost your phone, switched from Android to iOS or vice-versa, deleted your messages etc. Moreover, signal tries to keep the use of metadata to a bare minimal level.

Signal has a relatively small chunk of the market with a little over 40 million users as recent as January 2022. In 2016, as a result of a partnership with signal, WhatsApp began to provide full encryption for all messages, including multimedia messages.

Signal, on the other hand, values the privacy of its users and only keeps track of the last time a user connected to the server, and even that information is only accurate to the day, not to the hour, minute, or second, as it would be with a traditional server.

Signal had a feature called “disappearing messages”, which means that the messages disappear after some time.If you use this feature, your data will be deleted after a specified amount of time, which may be anywhere between a few seconds to a few days. This feature was a part of signal well before other communication applications started incorporating this into their code.

What Value Does Signal Provide To Its Customers?

Some of the features that signal gives to its customers are: –

  1. End to end encryption – Signal provides end-to-end encryption on all messages, Audio and video calls and media (videos, images) 
  2. View once media – Another option that is now famous with many other communication applications but this ensures that the media is deleted after it is viewed once.
  3. Signal PIN – If a user loses or switches their device, the signal PIN can assist them in recovering their profile, settings, contacts, and block list.
  4. Payments – You can send and receive payments using signal and this is also secure and users can also transfer cryptocurrencies using signal. By providing this feature, the company is furthering its goal of ensuring that your data remains in your possession rather than in the company’s.

How Does Signal Make Money?

Signal is a Non-profit organisation and most of its money is generated from fundings and donations from users or investors. The donations can be either through normal means or cryptocurrencies. This messenger app was created by the Signal Foundation, which was formerly known as the Open Whispers System, and is available for free. 

The foundation has concentrated its efforts on the development of its Messenger application and protocol, both of which bear the same name.

The Freedom of the Press foundation is a fiscal sponsor of the company securing a good number of investments which helped them cover their expenses while their non-profit organisation application was under approval.

It is very well known that Signal’s programme is open-source, or publicly available, independent developers are encouraged to submit patches and solutions, which saves the organisation a significant amount of time and money in development costs.

How Signal Started: Company History

In the period of 2013 to 2016, the Open Whispers System, as Signal Messenger LLC was formerly known, received grants from a list of different foundations. Among the most notable of these donors who helped in raising nearly $3 million in the mentioned period of 3 years included; the National Science Foundation, Open technology fund (which is sponsored by the USA government), The Knight Foundation, and The Shuttleworth Foundation.

After Brian Acton, the co-founder of whatsapp, left whatsapp due to disagreements over commercialisation of the application, he created The Signal Foundation and Signal Messenger LLC with Moxie Marlinspike in 2018. The non-profit organisation began with a $50 million loan from Acton.

There are 3 members in the Signal Foundation board of directors:

  • Brian Acton (acting president)
  • Moxie Marlinspike
  • Meredith Whittaker

Since Signal is a non profit organisation, there is no information about investors or Investment rounds. Moxie Marlinspike has stepped down as the Signal messenger LLC CEO as of January 2022.

Future Of Signal

The future of Signal looks bright in a time where the users are getting more and more aware of their rights, data and privacy. This was evident when whatsapp changed their privacy policy in 2021, many people switched to signal to ensure they hold the cards when it comes to privacy and data. 

Acton mentioned in an interview that Signal does not have affiliate marketers, advertisements, tracking mechanism and no collection of user metadata, hence it means that the application cannot read the messages or keep a log of what the users speak about. 

In current times this may be an option which really tilts the users to favour Signal as opposed to whatsapp.

Signal has many celebrity users, the most famous one being the current twitter and Tesla owner, Elon Musk among others. KT Tunstall, Jack Dorsey, Anand Mahindra and Edward Snowden being a few others who have openly endorsed or supported Telegram and Signal. 

As we all know what Elon Musk’s tweets can do to products that he has mentioned on the microblogging site, celebrities shifting to Signal may increase the appeal of the messaging application. 

There are also some concerns among people about such an application being used to organise terrorist attacks and riots. Since it is difficult to trace the people and what they speak in such groups remains private, Intelligence agencies may have some issues with it and may even think about banning its use in their countries. China, which has a record of not taking too kindly to foreign apps, has banned Signal in its country. 

Signal may find it very tough to operate if the donations and funding become scarce, they might need to find some innovative ways to tap into the market. There are in-app purchases that can change the way that Signal earns without making it “pay-to-use”.

Signal has a long way to go and although the road has been quite tough, Signal has stood strong on its commitment to offer privacy and data security to its users. If this is interpreted as a security risk or not, time will tell. 

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