Payments giant Block announced on Thursday that it will finally give the general public a taste of its Bitcoin self-custody wallet, Bitkey, in an external beta. (The company, headed by former Twitter CEO Jack Dorsey, previously conducted an in-house beta open only to Block employees.)
Bitkey will partner with Cash App, another Block product, as well as the U.S.-based crypto exchange Coinbase to enable users to transfer Bitcoin directly into customers’ wallets.
Users will be able to buy crypto from the two platforms when the Bitcoin-only wallet is formally launched outside beta, Lindsey Grossman, the business lead for Bitkey, told Coins2Day.
“Our strong belief is that self-custody is the best place to hold and manage your Bitcoin,” she said, adding later: “If anything goes wrong with a custodial platform, you know that—this industry has had a lot of ups and downs—you’re protected.”
The step forward in the development and eventual launch of Bitkey is part of the payments giant’s larger bet on Bitcoin and Web3.
In 2018, Dorsey, a Bitcoin evangelist, integrated Bitcoin buying and selling into Cash App. Formerly called Square, the company then said in 2021 that it would rebrand itself as Block, emphasizing its new focus on Bitcoin and blockchain. In 2022, the payments firm unveiled that it was developing a Bitcoin hardware wallet, with a developer sharing images of the device a month later.
On a video call with Coins2Day, Grossman briefly flashed the wallet, a flat hexagonal device with a fingerprint scanner that fits into one’s palm. Bitkey’s hardware component is one-third of a “multisig,” or multisignature, setup.
Like multifactor authentication, where platforms like Google ask users to provide a password as well as enter a code sent to their cell phones to access their accounts, multisignature wallets require sign-offs on multiple keys to approve any transaction. To be valid, the majority of keys require sign-offs.
Bitkey has three keys. One is on users’ cell phones, another is stored on the hexagonal piece of hardware, and Block holds the final key. To pay for coffee with, say, Bitcoin, a user needs to sign off on the transaction on both their hardware device and cell phone.
(Bitkey allows wallet holders to set a floor for when they’ll need to use their hardware device, Grossman, the business lead, told Coins2Day. In other words, only with transactions above $100, for example, will users need both their cell phone and the Bitkey device to authorize the payment.)
Block holds the final key to circumvent the tricky problem with self-custody: As with cash, if users lose their keys, they lose their crypto. (See, for example, the man searching for a key to hundreds of millions of dollars in Bitcoin in a garbage dump.)
“We are able to help you recover your wallet and recover both your mobile key through a cloud backup and then also help you get a new piece of hardware and create a new hardware key,” Grossman told Coins2Day.
To test out Bitkey in the external beta, interested users need to fill out a short application. While Grossman declined to specify in which quarter Block plans to release the wallet, she did say the firm is aiming for later this year.
