Jack Dorsey’s Block (the company formerly known as Square) announced today that it is launching its hardware Bitcoin wallet, Bitkey, in 95 countries. However, users can only pre-order the device at the moment with shipping starting in early 2024. The company has not yet specified the price of the product.
Block’s proposition to Bitcoin holders is that using a self-custodial crypto wallet is more secure than keeping their crypto assets in custodial wallets or exchanges.
Self-controlled wallets put the burden on users to remember — or securely store — passwords or long phrases to unlock their accounts. The Pronto team at Block, which worked on developing the Bitkey wallet, said it solved this problem by using a two-out-of-three authentication mechanism.
Two keys reside on the client: the hardware wallet and a mobile app. Bitkey stores the third key on its server. The company claims that with access to a single key, it cannot access or move customers’ Bitcoins.
Image Credits: block
Block said it only uses its server-side key to authenticate transactions to move Bitcoin when they just have their phone and to recover their account when their device or phone is lost. The company said the server-side key will also be able to handle the scenario when a customer loses both the phone and the hardware wallet. However, he said the details of how the recovery will work will be part of a future update.
“People who hold Bitcoin on exchanges and custodial platforms today are often hesitant to move to self-custodial wallets because they’re nervous about making mistakes, especially with the historical requirement that you have to securely store 12- or 24-word passwords called “phrases initial”. Lindsey Grossman, Bitkey’s Chief Business Officer, said in a statement.
The company initially announced Bitkey in March 2022, but only tested the product internally for a while. In June, Dorsey said the Block team was opening beta access to the hardware product to the general public.
Block has partnered with crypto exchange Coinbase and the company’s Cash App to help people easily buy or transfer (or both) Bitcoins to the hardware wallet. The company said the ability to transfer Bitcoins from Coinbase and the Cash App will be released immediately with other features coming later.
Hardware wallet startups like Ledger and Trezor have released several products in recent years to help crypto novices easily store their digital assets. Ledger and Trezor also support other cryptoassets beyond Bitcoin, which can be useful if you’re not a so-called Bitcoin maximalist.
