Realizing true ownership
Block, an American fintech company led by Jack Dorsey, announced on the 7th that it has launched Bitkey, a self-custody wallet for the crypto asset (virtual currency) Bitcoin (BTC), in more than 95 countries on six continents. .
This wallet consists of three parts: a hardware device, an app, and a recovery tool. Although it has launched, deliveries are scheduled to begin in early 2024, and pre-orders are currently being accepted. Bitkey’s mission is to provide true ownership and control to Bitcoin owners.
We’re excited to announce people in 95+ countries can now pre-order Bitkey!
Bitkey is the self-custody bitcoin wallet with an app to send on the go, hardware to protect your savings, and recovery tools in case you lose your phone, or hardware, or both. https://t.co/OR60vH6InG pic.twitter.com/5UbjkhePc3
— Bitkey (@Bitkeyofficial) December 7, 2023
What is a self-custody wallet?
A wallet that you use to manage your own private keys and hold assets, rather than an exchange. It is also called “self-hosted” or “self-managed”.
▶️Virtual currency glossary
In its announcement, Block pointed out that many Bitcoin owners entrust their control of their Bitcoins to exchanges or custody service companies. In this case, for example, if the exchange goes bankrupt, users will not be able to access their assets.
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To avoid these risks, Block developed Bitkey. On the other hand, self-custody wallets require time and effort not found on the traditional internet, such as having to manage private keys and seed phrases by oneself. Bitkey has also addressed this challenge.
Bitkey’s business lead said the following in this announcement:
People who hold Bitcoin at exchanges and custodial services companies are often reluctant to move their assets to self-custody wallets. This is because they feel uneasy about storing 12 or 24 seed phrases.
We created Bitkey to make self-custody technology available to everyone.
How Bitkey works
Bitkey uses a “2 of 3” multisig mechanism to eliminate the need to manage long character strings such as seed phrases. With two of the three keys, you can transfer Bitcoin, restore and modify your wallet, and change your security settings.
Block stores only one key on Bitkey’s server. Only this “Server key” is given the ability to support asset recovery. For example, if you lose a hardware device, you can link it to your smartphone and send assets to the key of the new hardware device.
Block explains that this mechanism solves the inconvenience inherent in self-custody while giving owners the right to manage their assets.
Bitkey costs $150 (approximately 21,000 yen). The ordering webpage says delivery is expected in late February or early March.
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Realizing the mission
In a statement, Block said Bitkey’s mission can only be realized by connecting the centralized fiat financial system with the decentralized, borderless Bitcoin system.
Bitkey has already announced that it will collaborate with Coinbase and Block’s financial app “Cash App.” This collaboration will allow users to easily move their Bitcoins and seamlessly utilize self-custody services.
Users will be able to send Bitcoin from Coinbase, Cash App, or after purchasing Bitcoin. Initially, it will be limited to Coinbase and Cash App, but the company plans to expand this collaboration worldwide.
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