Javier Hernandez Block, Inc. recently unveiled Bitkey, a pioneering self-custody bitcoin wallet that departs from the norm by not using passwords or seed phrases. Instead, Bitkey is based on a novel 2-of-3 multi-signature recovery method.
Revolutionary Bitkey Wallet Abandons Conventional Seed Phrases
Developed by Block, Inc. (previously known as Square, Inc.), Bitkey is an innovative bitcoin (BTC) wallet system comprising a mobile application, a hardware component, and a collection of recovery tools. Diverging from typical non-custodial wallets, Bitkey forgoes the standard use of seed phrases. It features a 2-of-3 multi-signature format, providing the user with two keys – one integrated in the mobile app for regular transactions and another in a separate hardware device for enhanced security. The third key, managed by Bitkey, is used for recovery purposes.
Lindsey Grossman, Bitkey’s Business Lead, commented on the current hesitation among bitcoin holders on exchanges and custodial platforms to switch to self-custody wallets due to concerns over error-prone seed phrases. “Seed phrases,” typically 12 or 24 words long, have been a source of anxiety for users wary of losing control on custodial platforms or dealing with user-unfriendly experiences of existing self-custody wallets.
Grossman further stated:
“Our goal with Bitkey was to create a solution that encourages widespread adoption of self-custody, blending strong security and recovery options with a user-friendly experience that gives customers full control over their funds.”
Block and Bitkey’s move away from traditional seed phrases is part of a broader industry trend. Binance recently introduced a self-custody Web3 wallet using a shared key system. Ledger, a leading hardware wallet manufacturer, also launched a similar shared key shard system for recovery. While Bitkey retains one key, it stresses its inability to access the funds without the other two keys.
“Bitkey’s third key, stored on our server, serves two purposes: it facilitates bitcoin transactions directly from the phone when the hardware device is not present and assists in wallet recovery in case the phone or hardware is lost. It’s crucial to note that Bitkey cannot access or move a customer’s bitcoin independently as it only holds one key in this 2-of-3 multi-signature setup,” detailed Bitkey’s announcement.
We invite your views and insights on the Bitkey wallet and the general shift away from traditional seed phrase methods in wallets. Please share your thoughts and opinions on this topic in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Bitkey Wallet
What is Bitkey and who developed it?
Bitkey is an innovative self-custody bitcoin wallet introduced by Block, Inc., which was formerly known as Square, Inc. It features a unique 2-of-3 multi-signature mechanism and eliminates the need for traditional seed phrases.
How does Bitkey differ from traditional bitcoin wallets?
Unlike standard bitcoin wallets that rely on seed phrases for security, Bitkey uses a 2-of-3 multi-signature approach. This includes two user-held keys – one in a mobile app for regular transactions and another in a hardware device for added security, plus a third key held by Bitkey for recovery purposes.
What was the motivation behind creating Bitkey?
Bitkey was created to address the common hesitations and difficulties faced by bitcoin holders on exchanges and custodial platforms, particularly the challenges associated with managing long seed phrases and the fear of making mistakes in self-custody wallets.
Can Bitkey access a user’s bitcoin independently?
No, Bitkey cannot independently access or move a user’s bitcoin. Although it retains one key as part of its recovery process, it requires at least two out of the three keys in the multi-signature wallet to access funds, ensuring user control and security.
More about Bitkey Wallet
- Block Inc.’s Official Announcement
- Overview of Bitcoin Wallet Security
- Understanding Multi-Signature Wallets
- Trends in Cryptocurrency Wallets
3 comments
Finally, someone’s making crypto wallets user-friendly, always hated those long seed phrases, Bitkey’s approach seems way easier.
Hmm, interesting move by Block Inc, But I’m a bit skeptical, How safe is this 2-of-3 multi-sig thing really? anyone got more info?
Not sure if i’d trust a third party with one of my keys, even if its for recovery. kinda defeats the purpose of self-custody doesn’t it?