Twitter’s CEO, Jack Dorsey, just confirmed recently that his other company, Square, is working on creating a new wallet for Bitcoin. The new wallet will be a so-called ‘assisted custody hardware wallet’ — a product that Dorsey hinted at last month.
Square to launch an assisted-self-custody wallet
Dorsey made the announcement on Twitter, alongside the hardware lead, Jesse Dorogusker. The original announcement came on June 4th, when Dorsey said that Jesse Dorogusker, himself, and their team are considering creating a new hardware wallet, and if they opt to build it, they will create a dedicated Twitter and Github account.
Over a month has passed since then, and Dorsey confirmed that this is happening earlier today, July 9th, by retweeting Dorogusker’s own announcement. The announcement says “We have decided to build a hardware wallet and service to make bitcoin custody more mainstream. We’ll continue to ask and answer questions in the open. This community’s response to our thread about this project has been awesome — encouraging, generous, collaborative, & inspiring.”
He also stressed that there are still a lot of questions and issues to reconcile, and for now, the team decided to start with Bitcoin first, global distribution, and multisig, in order to achieve assisted-self-custody. He also added that they plan to prioritize mobile use.
So, the next step will be the creation of a small, cross-functional team that will be led by Max Guise.
What is assisted-self-custody?
With assisted-self-custody being a fairly new concept, Dorsey explained that it means that the company wishes to provide a simplified experience when it comes to managing a hardware wallet. He noted that custody itself does not have to be all-or-nothing. Basically, assisted requires a great product design, meaning relying on devices that already exist, minimal setup time, as well as end-to-end reliability.
Crypto custody has grown to be quite a hot topic over the last 12 months since crypto prices started to grow. Following the price crash caused by COVID-19 fears in mid-March 2020, crypto prices quickly started to recover and head towards their previous heights. However, once they reached those heights, they continued going up. It took some time — several months, in fact — for some major resistances to be breached, but once that was done, coins headed for the moon.
Bitcoin itself struggled for months to go beyond $9,500 last summer and early fall. However, after breaking this level, it started climbing little by little, first reaching its old ATH at $20,000, and then skyrocketing all the way up to $64.8k in the first half of 2021. Its surging price led the entire crypto industry up, and whenever the prices are growing so quickly, new investors are coming by the millions. And, as many are well aware — they all engage in speculation.
Hardware wallets — pros and cons
Hardware wallets are well-known as the safest way to store cryptocurrencies. They allow users to be the holders of their own private keys, and their coins are stored on a device that has no connection to the internet. As long as the user takes steps to properly secure the device and prevent it from being stolen, lost, or damaged — they have nothing to fear, as the window of opportunity for hackers to invade it and steal cryptocurrencies is extremely small.
One problem with them, however, is that an average user finds them too complicated to learn how to use. As many likely know, hardware wallets are the most secure because they are the least convenient. In other words, users need to be in front of a computer in order to access their coins, which means that they cannot trade on the go.
The alternative is to store funds on exchanges, but that would mean that the users are not the sole owners of their cryptos. Plus, there are risks of hacks, the exchange crashing or freezing the funds for some reason, and alike, all of which are the issues seen in traditional finance, which crypto users have been trying to distance themselves from since the invention of the industry.