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The big change that will seriously improve the security of bitcoin

Tech innovator Block has launched Bitkey – a multi-signature, self-custody bitcoin ‘wallet’.

Tech innovator Block has launched Bitkey – a multi-signature, self-custody bitcoin ‘wallet’. Photo: Block

With the price of bitcoin at record highs, and the reliability of bitcoin exchanges increasingly in question, owners are becoming increasingly aware of ensuring their assets are secure and that they can manage those assets themselves.

With those thoughts top of mind for many bitcoin owners, tech innovator Block has launched its solution, Bitkey – a multi-signature, self-custody bitcoin ‘wallet’ that not only makes it almost impossible for bitcoin owners to lose their assets, but is also touted as so user-friendly, anyone could set up and use it.

Bitkey, now available in Australia and New Zealand and 90+ other countries, features three access keys: One via a mobile app where users can access their digital wallets and view their balances; one on a hexagonal hardware device; and a third housed on the Block server in the event of a user losing their wallet.

Bitkey

Bitkey, now available in Australia and New Zealand and 90+ other countries. Photo: Block

Bitkey’s two of three multi-signature design requires any of two keys working together to allow a user to either move funds or approve security-related actions (see video).

Because users hold two of the three keys (mobile app and hardware device), Block cannot access a customer’s bitcoin without them.

Owners unlock the Bitkey device with their fingerprint, then simply tap the device with their phone which is connected to the device using NFC technology.

Thomas Templeton, the Proto* Lead at Block, says many bitcoin owners have been understandably hesitant about migrating from conventional, external exchanges to self-custody solutions.

Self-custody solutions to date have tended to involve a complex set of devices or long, hard-to-remember passwords, he says.

Another hurdle has been the use of sight-sensitive passwords used to recover access to lost or stolen wallets, while many bitcoin owners have simply been anxious in general about having to manage their assets themselves on self-custody platforms.

But Block – the company behind Square and Afterpay – has overcome those concerns with a simple and highly intuitive system that offers significantly higher levels of security making it “virtually impossible” for users to lose their bitcoin, he argues.

“Self-custody is not new, and owning your own key is not new,” Mr Templeton says.

“But what is unique with Bitkey is its simplicity. What our system does is take all of the benefits of [traditional] custodial exchanges, but puts them in your hands.

“It’s ridiculously easy to set up – any person can set it up in a few minutes – and another big difference between us and other self-custody products is Bitkey’s recovery tools. You never have to worry about losing your bitcoin, and that is the biggest worry [for users] in self-custody today.”

The other benefit of Bitkey’s self-custody solution was that it negated user concerns about the potential for outages on traditional exchanges.

“If you see a [bitcoin] price movement and want to move your money quickly, what happens if your exchange has an outage or some kind of technical issue? With Bitkey, you never have to worry about that.”

Block’s foray into self-custody was a potent act of belief in the future of bitcoin and its utility as a currency of the future, Mr Templeton says.

“The reason why Block has invested so confidently in bitcoin is because we see this growing as a utility … it’s already the native currency of the internet and we see bitcoin as having huge potential, because it’s not owned by a single company, or by any government. It is truly borderless, and if you have the internet, you can use bitcoin.”

Bitkey sells for $250, but as Mr Templeton points out, the device is hefty – and with good reason.

“It is made from real stone so it looks and feels substantial. It’s heavy, you can really feel it. If you’re storing substantial money in something, you want it to feel substantial, not some plastic USB drive, but something durable and enduring.”

* Proto is the team at Block behind Bitkey and their bitcoin-mining efforts

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