“Let's imagine a future scenario where mobile phones, tablets, and other connected devices don't need those pesky SIM cards,” the narrator begins in this video.

Naturally, Bitcoin plays a major role in this thought experiment. The title boldly proclaims, “Bitcoin Poised To Make SIM Cards Obsolete.” We know that Bitcoin has a range of uses, but is this one of them?

The video outlines an interesting scenario. Subscriber identity module (SIM) cards are used to securely store the IMSI (international mobile subscriber identity), which identifies the mobile device. It also stores security authentication information that is used to authenticate subscribers. Since the purpose all boils down to identification, the video asks, “Why can't software do the same thing?” And then it proposes replacing the little plastic devices with Bitcoin. This could slash operating and manufacturing costs, such as the costs to manufacture and deliver to carriers.

“In our future scenario, all cell phone networks actively monitor the Bitcoin blockchain,” the narrator continues. Cell phones broadcast the IMSI signal that links the phone to an account. This account could be replaced a Bitcoin public key.

The video envisions a more private communication system, hinting at protection against NSA snooping. “The carrier, or anyone listening to the broadcast, will never know your private key,” because the private key is never broadcast to them. Rather, it is stored safely on your cell phone—in your control alone. 

The video says that Bitcoin also allows for “frictionless microbilling,” where carriers could charge data usage per KB or “voice billing per second,” allowing carriers to offer more flexible payment plans.

Some argue that people can get carried away in describing Bitcoin as a solution to every problem. Is this one of those cases? Very real hurdles stand in the way of such a system. Carrier companies would have to update their entire infrastructure in order to jettison SIM cards, which don't cost that much.

In Sunday's Reddit thread, debate raged about the flaws and merits of this thought experiment.

User “/u/Rubby2333” notes, “This completely misses the reason for having a SIM card in the first place, which is to allow subscribers to carry their account across different phones and (sometimes) networks. This is especially useful for those who travel frequently, but equally applies to those who change handsets on a regular basis.”

Replacing SIM cards with sleek Bitcoin code might be an appealing idea, but does this scenario hold up to a cost-benefit analysis?

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