Financial services company Square has announced plans to build a hardware wallet for Bitcoin. The company’s CEO Jack Dorsey revealed the project via his Twitter handle. Dorsey claims that the entire design and development will be open source and will involve the crypto community.
Dorsey added that their product will be inclusive following Bitcoin’s principles of censorship resistance and permissionless. Therefore, their solution will be non-custodial and created for a global audience. Dorsey added:
Much respect to everyone who has gotten us this far. What are the biggest blockers to get a non-custodial solution to the next 100M people?
Square’s CEO believes BTC custody to be a complicated problem for users and exchange platforms. Some “circumstances” could reveal to users without control over a wallet’s private keys that they hold an IOU. This financial instrument is used for some entities to acknowledge a debt to a client.
In other words, if the regulatory outlook around cryptocurrencies changes, for example, some centralized exchange users could discover that they don’t actually own their assets until they have complete control over their private keys. Self-custody can be troublesome, but Dorsey believes in a middle ground.
Custody doesn’t have to be all-or-nothing. 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. How should we be thinking about assisted solutions?
Bitcoin Is For Everyone
Square’s CEO said their solution will consider mobile users and will try to give them an “excellent experience despite its shortcomings”. In doing so, Dorsey expects more people to adopt BTC and attract more users.
Again, this objective comes with many dangers and complications. An easy-to-use and friendly interface for users with less technical skills must have the right balance and features. Dorsey said:
Safety is complicated. For any wallet product, we consider safety failures to stem from one of three types of events: availability failures (“sunken gold”), security failures (“pirated gold”), and discretionary actions (“confiscated gold”).
Dorsey believes some aspect of self-custody, such as the protection and recovery of sensitive information is “not yet mainstream-ready”. He reiterated the need to reach a balance to attract users and maintain security. For that layer-2 solutions could critical.
Layer 2 is essential for growth. The orders-of-magnitude growth we imagine requires a mix of custodial, off-chain, and second layer solutions that allow people to ‘get off of 0.’ What tech investments can enable seamless, scalable, L2 native support for a hardware wallet?
Finally, Square’s CEO and one of its executives, Jesse Dorogusker, will keep an open dialogue on this subject. For the project, Dorsey and its team will set up a dedicated Twitter account and a GitHub account, if their plans enter a development phase.
Square and Jack Dorsey have made many contributions to Bitcoin’s development. The company has an active grant program to support core developers. Dorsey participated in the Bitcoin 2021 Conference and seemed bullish on the cryptocurrency’s future. He said Bitcoin has “changed everything”; it has left financial institutions and banks purposeless.
"Whatever I can do, whatever my companies can do to make [Bitcoin] accessible to everyone, that is what I will do for the rest of my life." –@jack
— Bitcoin 2021 (@TheBitcoinConf) June 4, 2021
Bitcoin trades at $36,815 with losses across the board.