- >Jack Dorsey, Square Want to Build An Open-Source Crypto Wallet
Jack Dorsey, Square Want to Build An Open-Source Crypto Wallet
Jack Dorsey, the CEO of Square has been a long time supporter of Bitcoin. For a couple of years now, Jack’s own twitter bio contains only a single word; bitcoin. Within the Bitcoin world, Square is known for developing and building The Cash app. It just so happens to be one of the most popular Bitcoin applications in America.
Buying Bitcoin through the Cash App is a smooth and seamless experience. Because of this, Jack and Square’s app has gained a certain amount of loyalty within the Bitcoin community. They’re now going for bonus points by committing to creating an open-source hardware wallet for bitcoin.
Keegan Francis | Jun 9, 2021
It Would Be Open Source Just Like Bitcoin
There are really only a handful of open source hardware wallets, the Cobo Vault being one of them. Being open source comes with added benefits from establishing trust and transparency with customers. Bitcoiners, especially the maximalists out there, really appreciate open source products over anything else. This is because of the deep seeded mistrust in institutions and tech goliaths that have repeatedly violated the trust and privacy of their user base. In essence, open source is the product world’s manifestation of a core ethos of Bitcoin; Don’t trust, Verify.
Security vs. Useability
One of the banes of widespread cryptocurrency adoption is how difficult it is to use wallets. Much of the difficulty completely goes away when using custodial services such as exchanges. However, this means users are often trading useability for security. In the crypto world, it’s been historically difficult to do both. This is an area that requires meaningful, and thoughtful innovation to take place. If cryptocurrency is ever to take over the world, like so many of us want it to, we need to figure out how to marry useability with security.
This is precisely what Square has decided to focus on for their hardware wallet. Within the Twitter thread announcing the hardware wallet, Jack elaborated upon this exact point.
“Custody doesn’t have to be all-or-nothing,” he continued. “We can probably simplify custody through “assisted self-custody.” Assisted requires great product design: minimal setup time, relying on existing devices, and end-to-end reliability.”
Introducing Assisted Self Custody
It is likely that the crypto world will see a wave of innovation take place around assisted self custody products. Hexa wallet is one such wallet that has implemented similar features. They’ve made use of Bitcoin’s multisig functionality, and obscured the language around it. Private Keys and mnemonic phrases are now “recovery phrases” held by you and your “guardians”.
Here in 2021, it may be safe to say that wherever you are, one of your friends or family members is a Bitcoin or crypto fanatic. You will be able to make these people your guardians. This gives them the ability to assist you with wallet recovery, should you run into any trouble. This is a beautiful solution, as it allows you to pick your helper, without giving them full access to your wallet. It allows you to retain sole ownership over your keys, without the messy headache of writing down 12 word phrases.
The Problems that Lie Ahead
While assisted self custody is a reasonable solution for Hexa Wallet, (a software wallet), new challenges present themself when implementing a similar schema on a hardware wallet.
The traditional implementation of a hardware wallet has been to store the private key for signing transactions. How exactly might this work when combined with the idea that other people hold part of the key? While the pathway forward is somewhat known, exactly what obstacles to overcome are still unknown.
Building With the Future in Mind
Jack stated outright that the wallet should be able to function independently of Square or Cash App. This ensures that the device is not reliant on the company, and thus protected in the event that Cash App, Square, or Jack himself is reprimanded from authorities.
A shutdown of any of these entities resulting in non-function hardware wallets would violate the tenet of decentralization.
Built to Interface with Layer-2 Scaling Solutions
Most Bitcoin hardware wallets are not compatible with the lightning network, or other layer-2 scaling solutions.
According to Jack, the ability to interface with various layer-2 solutions is essential for growth. This is not too hard to agree with, if you’ve ever sent a Bitcoin transaction, it takes 60 minutes, and costs you $5+. These high fees and wait times will no longer take Bitcoin to the level of global payment network and reserve currency status. Layer-2 is a must, and with that, must also come sophisticated, yet simple hardware wallet solutions.
Next Generation of Hardware Wallets
So there you have it, Jack Dorsey has officially introduced what the rest of the industry will soon recognize is the next generation of hardware wallets. That is, assisted custody, multi layer, open source, highly usable hardware wallets.
Friendly competition between this yet-to-be wallet and existing ones is always welcome. At the end of the day, competing products are supposed to make the whole space better. Ledger, Trezor, and Cobo all will need to keep tabs on Square and their project if they want to keep up with what is coming next.