How Does Signal Make Money? Signal App Business Model


How Does Signal Make Money

The Signal messaging app was released in November of 2015 and has been growing in popularity ever since. Much like other popular messaging apps such as Telegram and Whatsapp, Signal is an application used to send text messages, videos, pictures, and more with your friends and family.

Since Signal is a FREE app and it won’t cost you anything to use, it is natural for you to wonder how does it earn money to sustain itself then? What is the source of income for this popular messaging app? But don’t worry! This article will answer all of these questions in detail.

So, how does signal make money? Signal is a free messaging platform that focuses on security and privacy. Since it is free, it does not generate any revenue from its users. Signal App was developed by Signal Technology Foundation, registered as a non-profit that makes money only from donations and grants.

Signal is different from other messaging apps because Signal doesn’t collect data, and it’s not interested in targeted advertising.

Brian Acton, a former WhatsApp co-founder who resigned over disagreements on monetizing, joined Moxie Marlinspike and together developed Signal intending to provide security of the users’ data.

In addition, he contributed a zero-interest loan of $50 million to the foundation to help facilitate smooth development and operations. The foundation is tax exempted in the federal government of the US, and in the app, you will find how to donate cash or cryptocurrency.

After WhatsApp changed its privacy policy and announced that it would share data with its parent company Facebook, this sparked fears among many users worrying about their data privacy. As a result, most sought to find another platform, and the best option was the Signal app.

Operating Model of Signal App

Signal is known to be the first messaging app to have end-to-end encryption for texts and calls. Conversations in the app are private, and even Signal itself cannot track them.

This privacy-centric software uses encryption to make sure the information sent through it even if tapped in the server, the actual message can’t be seen.

How is this type of security reached? First of all, let’s learn how the app operates. The following are some of the basic features of Signal:

  • The messaging app employs the use of end-to-end encryption. When calling or texting, both sides develop unique keys and the data sent is changed randomly going through the server, and upon reaching the end, the unique key is required to make the transmitted data readable.
  • The platform limits the use of metadata. Metadata refers to user data in terms of message, timestamp, address, the device used, and so on, which is the part used to infringe privacy. With Signal, this is not the case since its servers only keep the last connection.
  • With Signal, you can delete messages, and with the automatic timeout option, the message is wiped out entirely after the defined period.
  • Signal software source codes are available to the public, leaving it nothing to hide, and now it is easier to know how it operates.

 

Encryption

Signal is known for offering end-to-end encryption starting from the conversation to the user profile. This feature is a correspondence framework wherein just the clients who are imparting can peruse the messages.

Thus, it essentially forestalls expected busybodies, such as ISPS, hackers, broadcast communications suppliers, and surprisingly, the correspondence specialist co-op – from getting to the cryptographic keys expected to interpret the discussion.

Both ends of encryption hold information back from being perused or furtively adjusted by anybody other than the genuine receiver or sender.

The sender can scramble the messages, yet the outsider cannot decode them and store them encoded. The receiver can unscramble and encode the information sent.

 

Features that Make Signal More Secure than Other Apps

Other than open-source software, Signal protocols and codebase is made public, and any developer can contribute to its development. Others that make it unique include;

  • Local backups – Files received via the Signal platform, such as media, are stored in the device’s local storage, thus restricting access by third parties seeking to access the data. Unlike where the company can leak the cloud backup.
  • Disappearing message – This feature means users can set the time for their messages, sensitive information to appear for a certain period. The time set will allow the other user to view the information before it is deleted permanently from the platform.
  • Registration lock – When it comes to registration in the Signal app, one must set unlock pin to enable the user data in the app not to land in other people’s hands. This set of security also ensures that no account or other devices can be added without verifying using the registration pin.
  • View-once only media – This feature as it stands means a person sending sensitive media files can restrict the other one from permanently having the file. It may be sensitive videos or images, which means when sending, the users can set the number of times the other user can view the file. After viewing, the media now turns to be unavailable on the device.
  • Encrypted video and voice call – With encryption, information sent over the app to the server isn’t accessible to third parties.
  • Invites to Group chat – Unlike WhatsApp, where one can be added to a WhatsApp group without consent, here with Signal, it’s different. Once one wants to add you to a group, an invite is sent requesting you to join or decline.
  • Incognito Keyboard – Like browsers where one can use incognito mode to avoid storing the cookies and history used to personalize ads depending on what you search. In the Signal app, instead of using the keyboard that does track the pattern on what you type most, you can use an in-app keyboard with no ability to understand the user pattern to frequent use of words.

 

History of Signal App

The development of signal runs back to 2010 when Moxie Marlinspike, a security researcher, and Stuart Anderson, a roboticist, developed an encrypted voice calling and messaging app RedPhone and TextSecure under Whisper Systems.

Both worked to improve security through encryption, and Twitter in 2011 acquired RedPhone and TextSecure, which made it a free and open source.

Moxie later left Twitter and founded Open Whisper Systems to continue supporting the open-source TextSecure. After working on it, he developed the base protocols for instant messaging and encryption; in 2014, Signal was born after TextSecure and RedPhone merged. But, unfortunately, the app was only available on iOS devices.

In 2015, he started developing the encryption for messaging for Android devices through TextSecure, and later in the year, Signal for Android was born through the merge of RedPhone and TextSecure.

The development continued until 2018, when Brian Acton, WhatsApp’s co-founder, resigned due to disagreements over security in the app. He joined Moxie and donated $50 million on zero-interest to the Signal Technology Foundation.

In 2020, the app gained ground after the rise of Black Lives Matter, which sought justice for the killing of George Floyd. The app got popular since the conversation was secure and couldn’t be tracked.

And also, WhatsApp’s controversial policy announced the merger with its parent company Facebook and unified sharing of data. Facebook is known to exploit users’ data to send ads, and this made many people who value privacy feel threatened.

Ultimately they sought to migrate to a more secure messaging app, and Signal was a perfect choice.

 

How to Register on Signal App?

The Signal app is available for download on App Store, Play Store, and Windows Store. To register with the cross-platform is simple as shown below;

  • After downloading the app, open and proceed to create an account.
  • You are required to have a working phone number.
  • Upon registering, a verification SMS will be sent, and enter the code to proceed. If the code isn’t sent via SMS, tap “Call” to listen to the code.
  • Follow the instruction given in the app.
  • Set the lock pin and verify.
  • Enjoy sending SMS, MMS, videos, images, and other media.

 

How Signal App works

Like WhatsApp, Signal allows one to send text, images, gifs, and videos. You do this, and you only need to have data or a connection to the internet. Also, it can work as the default SMS app to send texts and MMS to non-users.

 

Signal vs. Other Messaging Apps

When mentioning Signal, you can’t mention other instant messaging apps like WhatsApp, Facebook Messenger, and Telegram.

Therefore, it is necessary to understand how they compare to each other, as illustrated in the table below.

Signal WhatsApp Telegram Facebook Messenger
Note to self is allowed You can’t send messages to yourself Saved messages are available You can’t send messages to yourself
End-to-end encryption End-to-end encryption No End-to-end encryption No End-to-end encryption
Doesn’t share data Share data with Facebook Collect limited users’ data Collect and use data to personalize ads
Support group members up to 1000 Support group members up to 200 Support group members up to 100,000 Support group members up to 250
Limited features Good range of features Wide range of features Few features
Secure Less secure A bit secure Less secure
Free and open source Free and owned by Facebook Free Free but contain ads
Group calls up to 8 participants Group calls up to 8 participants Group calls up to 30 participants Group calls up to 50 participants
Transfer files up to 100MB Transfer files up to 16MB Transfer files up to 2GB Transfer files up to 25MB
Has disappearing messages Has disappearing messages Has secret chats Doesn’t support disappearing messages

 

Signal Payments

Signal app has integrated to accommodate sending and receiving of digital money through MobileCoin. As a result, transactions can be done efficiently while also keeping it secure and allows users to be anonymous in the transaction.

At the time of writing, the feature is available for Android and iOS users in the UK. However, the new feature constitutes an attempt to give privacy-oriented cryptocurrency to its users, which it hopes at long last to avail to millions of users around the world.

 

Signal Revenue

Signal Technology Foundation, which operates Signal, is a non-profit and tax-exempt organization registered in the United States. This organization depends on grants and donations to fund its operations. However, Signal doesn’t display the names of the donors, citing it is for security reasons.

Donations are allowed in digital cash, and through The Giving Block, you can donate cryptocurrency (Bitcoin or Ethereum).

 

Signal Donations

The most significant donation to Signal known to date was made by Brian Acton, who gave $50 million as an interest-free loan.

In addition, during the initial days back in 2013 and 2016, Open Whispers Foundation received donations from Knight Foundation, Shuttle Foundation, and almost $3 million from the US fund (Open Technology Fund). Others include the Freedom of Press Foundation and Tesla CEO Elon Musk.

Elon Musk has contributed a lot to the growth of Signal. In January 2021, he tweeted “Use Signal,” and there was a surge of new downloads as well as users in both Android and iOS.

 

Future of Signal 

As the focus remains on security, the biggest question now comes that “what if it becomes a breeding ground for wrongdoers?”. Signal team raised the alarm over fears that the app can favor terrorists or malicious people.

However, the train looks to have left the station, privacy is what is needed now, and the Signal app can be the answer.

When it comes to how Signal will generate revenue, the future may be uncertain. But it can continue to expressly ask users to donate or create add-ons that the users can pay to unlock. Thus, privacy lovers will be willing to spend on purchasing the extra features or also donate.

It is estimated that as of 2021, Signal has around 20 million active users. Currently, the management is primarily focused on expanding its user base, but there is a big question “How sustainable is it to depend on donations?”.

The app looks promising, but its business model in the long run at the question. Apart from being secure, the app has limited features compared to most popular messaging apps such as WhatsApp and Telegram.

The team has assured users that it will continue prioritizing privacy and security since it is a non-profit project. In these modern times, security concerns regarding user data collected by software owners have been in question, and Signal is the best option for a secure messaging platform.

 

Conclusion: How Does Signal Make Money?

Hopefully, this post has helped you learn more about the business model of Signal and how it makes money. Now you should have a better understanding of its revenue source(s). If you have any questions or feedback, please feel free to drop us an email.

Thanks for reading this article. Have a nice day 🙂