Bitkey is a new self-custody Bitcoin wallet developed by Block, a company co-founded by Jack Dorsey.
The Bitkey wallet recently became available for purchase. It consists of a mobile app, a hardware device, and a set of recovery tools.
Notably, the wallet doesn’t require the user to store a backup seed phrase, instead, a wallet backup is stored by Block. However, Block cannot move a user’s funds by themselves, and the user has full control of their Bitcoin at all times. This is because Bitkey uses a 2-of-3 multi-signature wallet configuration, which works as follows:
Bitkey 2-of-3 Multisignature Wallet
The Bitkey wallet has three keys:
- A mobile key stored on the user’s phone
- A hardware key stored on the Bitkey hardware device
- A third key is maintained by Block on their servers
- To move funds or take any security-related actions, two out of these three keys are required.
- This means the user controls two of the three keys (the mobile key and the hardware key), while Block controls the third key.
- The user’s two keys can be used independently to approve transactions up to a pre-configured spending limit. For transactions above that limit, the user needs to use both their mobile and hardware keys.
- If the user loses access to one of their two keys (e.g. their phone or the Bitkey hardware device), they can still recover access to their funds by working with Block to use the third key. This is facilitated through Bitkey’s recovery features like Cloud Backup, Delay and Notify, and Social Recovery.
- The 2-of-3 multisignature design aims to provide a balance between security and usability. It ensures the user maintains control over their funds, while also allowing for recovery options if one of the user’s keys is lost.
The wallet is accessible in over 95 countries and is available for sale, with shipping expected to start in early 2024. The device costs $150 (USD).
The wallet is designed to connect to Block’s payments platform, Cash App, and Coinbase to facilitate the buying and selling of Bitcoin within the app.
