Jack Dorsey’s Block (the company formerly known as Square) announced today that it is releasing 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 hasn’t specified the price of the product yet.
Block’s pitch 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-custodial wallets put the onus on users to remember — or store securely — passwords or long seed phrases to unlock their accounts. The Pronto team at Block, which worked on developing the Bitkey wallet, said that it solved this problem by using a two-of-three authentication mechanism.
Two keys lie with the customer: the hardware wallet and a mobile app. Bitkey stores the third key on its server. The company argues that by having access to just one key, it can’t access or move customers’ Bitcoins.
Image Credits: Block
Block said that it uses its server-side key only 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, it said that specifics of how the recovery will work will be part of a future update.
“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,’” Lindsey Grossman, Business Lead for Bitkey said in a statement.
The company first announced Bitkey in March 2022, but it only tested the product internally for a while. In June, Dorsey said that the Block team was opening up beta access to the hardware product to the general public.
Block has partnered with crypto exchange Coinbase and the company’s own Cash App to help people easily buy or transfer (or both) Bitcoins to the hardware wallet. The company said that the ability to transfer Bitcoin from Coinbase and Cash App will be rolled out immediately with other features coming later.
Hardware wallet startups such as Ledger and Trezor have launched multiple products in the past few years to help crypto novices store their digital assets easily. Ledger and Trezor also support other crypto assets beyond Bitcoin, which can be useful if you’re not a so-called Bitcoin maximalist.
