Jack Dorsey, founder and CEO of fintech company Block (formerly Square), which just announced third-quarter revenue of more than $5 billion, strikes again. He has in fact just announced December 7 the launch of Bitkey, a Bitcoin wallet available for pre-order in over 95 countries. In a context where the self-preservation of cryptos has become a major subject, Bitkey includes a mobile application, a hardware device and a set of recovery tools. Explanations.
The crypto custody dilemma
The former Twitter boss’s company claims: using a self-custodial wallet is more secure. However, we will have to watch for the public’s reaction. The example of Ledger and the launch of its cloud-based private key recovery solution which has raised numerous criticisms in the crypto community calls for caution.
However, the Self-custodial wallets impose the responsibility on users to memorize, or securely store, passwords or long seed phrases to unlock their accounts. The Block team that worked on the development of the Bitkey wallet said they solved this problem by using a two-of-three authentication mechanism.
A two-of-three authentication mechanism
Bitkey combines a mobile application and a hardware device. The application allows users to conduct Bitcoin transactions directly from their mobile phone, while the hardware device stores assets securely offline. These two elements constitute two of the three keys needed to secure a user’s bitcoins, with the third stored on Bitkey’s servers. This third key plays a crucial role in verifying transactions made only with the phone (in the absence of the hardware device) and also allows the wallet to be recovered in the event of loss of the device used.
THE pre-orders expected to ship in early 2024, according to company announcements. Bitkey began beta testing over the summer. Block announced in June that the wallet would connect to its Cash App payment platform and the Coinbase exchange to facilitate the purchase and sale of BTC within the application.
move your bitcoin off the exchanges: https://t.co/x1oLkjhs0H
— jack (@jack) December 7, 2023
A Response to Growing Concern Around Crypto Custody
Self-custody of cryptoassets has become an increasingly important area of concern for users following the collapse of many centralized platforms like FTX, Voyager or Celsius. The end of 2022 saw the emergence of the “not your keys, not your coins” movement at the forefront as rarely before.
In a context of still present distrust towards the crypto ecosystem, we can still bet that solutions like the one proposed by Bitkey will increasingly establish themselves in the landscape.
Sources: Coindesk, Businessinsider, Techcrunch
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