It is near impossible to miss the noise around crypto and the horror stories of rogue operators (FTX anyone?). Block (formerly Square) has launched launched Bitkey, their brand new self-custody bitcoin wallet in 95 countries.
Before I go further, the let’s answer the question on who is behind Block? It is not some random developer but Jack Dorsey of the co-founder and former CEO of Twitter (now known as X) fame.
In a huge win for local bitcoin owners, a majority of whom still hold their bitcoin on exchanges despite the uncertainty around them. Now, a year on from the FTX exchange collapse that impacted 50,000 Aussies, unfortunately “self-custody” is still not an option many people are knowledgeable about.
In market research conducted earlier this year, Block found that 53% of Aussies said they had no knowledge of the term “self-custody” with only 17% declaring they felt confident in understanding how they could use self-custody wallets to store their crypto assets securely. Bitkey’s mission to give people more control over their bitcoin comes to life with an easy-to-use self-custody bitcoin wallet for people who want to truly own their bitcoin safely.
Today, the vast majority of the millions of bitcoin owners keep their bitcoin in the custodial platforms or exchanges where they bought it, leaving them under the control of the custodian. Accessing self-custody solutions where people can truly own the keys to their bitcoin still often relies on a complex set of devices or long passwords that people need to remember to be able to recover their money in case of loss.
Block’s self-custody bitcoin wallet, Bitkey, is the safe, easy way to own and manage bitcoin. As an innovative multi-signature self-custody wallet, Bitkey provides unique recovery tools that give customers multiple ways to recover their money, so they can take their bitcoin off exchanges and truly own it themselves.
Bitkey includes a mobile app, hardware device, and a set of recovery tools in case the customer loses the phone, their hardware, or both. Built by the Proto team at Block, Bitkey is now available for pre-orders at bitkey.world, with shipping starting in early 2024. Thomas Templeton, who leads the Proto team, said, “The bitcoin decentralized payments network has the potential to create a more inclusive financial system for all, especially those who have traditionally been underserved. In the future, we believe customers will demand ownership and self-custody because it brings peace of mind, reduces dependence on any one entity, and puts individuals in control of their own bitcoin. With Bitkey, we are building a safe and easy way for people all around the world with different levels of experiences with bitcoin to take control of their finances on their terms.”
Ease of use and peace of mind
A critical part of making self-custody more accessible is providing forgiving recovery experiences that prioritise both simple and secure paths to help customers recover their money when something goes wrong, without the burden of having to remember long passwords. According to Lindsey Grossman, Business Lead for Bitkey, “People holding bitcoin on exchanges and custodial platforms today are often hesitant to move to self-custody wallets because they are nervous about making mistakes, especially with the historical requirement that you must safely guard 12 or 24-word long passwords called ‘seed phrases’. People have often felt stuck: worried about the lack of control they might experience on a custodial platform or exchange, yet also anxious about the unforgiving product experiences that exist in other self-custody wallets historically available. With Bitkey, we wanted to build a product that helps bring everyone to self-custody, combining robust security and recovery options, with a simple customer experience that puts them in control of their money.”
Bitkey addresses this with a unique 2-of-3 multi-signature design that doesn’t require customers to remember long passwords or seed phrases: it uses three keys to secure bitcoin, and any two keys working together are needed to move bitcoin or approve other security-related actions like initiating recovery or modifying security settings.
Bitkey puts two keys in customers’ hands: one is in the mobile app, which enables customers to make bitcoin transactions easily on their mobile phone, track their balance, and manage security preferences; and the second customer-held key is in the hardware device, securely stored offline. The hardware key serves two main purposes: an extra layer of security to co-sign money movements (based on a customer-set limit); and enables recovery when customers lose their phone.
A third key is on Bitkey’s server and is used for only two things: to help customers move bitcoin with just their phone for the transactions they choose to make on the go without their hardware device, and to help customers recover their wallet if they lose their phone or hardware – or even both. Importantly, because Bitkey only has access to one, not two or three keys in this 2-of-3 multi-signature wallet, Bitkey cannot access or move a customer’s bitcoin without them. This puts customers in true control of their money, while giving them peace of mind that they can recover their money if they lose something.
Helping bring more bitcoin to self-custody
Part of Bitkey’s mission relies on connecting people across two worlds: the world of today’s domestic or regional centralised fiat monetary systems, and bitcoin’s distributed, borderless financial system. In June 2023, coinciding with the kick-off of the external beta program that launched that month, Bitkey announced its first two partnerships with Coinbase, a leading global exchange, and Cash App, a leading financial services app and part of the Block ecosystem, to help people easily and transfer their bitcoin off exchanges and custodial platforms, making the journey to self-custody easier.
Thanks to these partnerships, Bitkey customers are able to choose a partner they would like to transfer or buy bitcoin with and then initiate a transfer from that partner to self-custody in their Bitkey wallet – all through a seamless integration. The transfer and buy+transfer features will roll out in a staggered approach, starting with the ability to transfer existing bitcoin from Coinbase and Cash App available immediately upon the product’s launch. These two partnerships are the first of more to come globally. More information on our partner integrations can be found in our blogpost ‘Welcoming our first global partners: Coinbase and Cash App’.
Bitkey can be purchased at AUD$250 and is now available for pre-orders at bitkey.world, with shipping starting in early 2024.
Editor’s note, it seem Bitkey at this point will only support Bitcoin (BTC).
