Dec 13, 2023

Last week, Jack Dorsey's fintech company Block (SQ) unveiled its self-custody bitcoin wallet Bitkey for pre-order in more than 95 countries.

Video transcript

Check. Dorsey's Fintech company block has launched its self custody Bitcoin Wallet. Biy for preorder in more than 95 countries that happened last week. Joining us now to discuss is Max guys, the Bitcoin wallet lead at Block Max. Welcome to the show. Good morning. Thanks for having me. Thanks for being here. Now, congratulations on the launch. This launch last week in over 95 countries. Are you able to give us an update on how many pre orders you've received so far? I can't talk about specific numbers, but I'm really excited that we're available in 95 countries and that we've seen orders from quite a few of them already. Uh And I think maybe I'll take a quick step back and just talk about what bike is. Uh So Biy is a self custody Bitcoin wallet with a mobile app, a secure hardware device and a set of recovery tools. And what Biy does is put the keys that actually represent Bitcoin ownership in people's hands. And that's because today, most people don't actually hold the keys, they control their Bitcoin instead they leave them on an exchange or a custodial platform. Typically the one where they bought their Bitcoin in the first place and that leaves them open to a couple of significant risks. One is mismanagement of funds like what we've seen with FTX not that long ago that uh people were recommending FTX is a fantastic place to buy and store Bitcoin. Uh The second is packing, uh large exchanges become a big centralized target for Attackers. And then the third is something we call the paper cuts of self custody. Uh When you know, a custodial platform holds the keys to Bitcoin make, they make the rules, they decide how much money you can move to whom and when and what bike does is put keys in customers hands and put them in control. So as you mentioned, so much of the transactions happen on centralized exchanges. So what happens for the user, how does the user, uh let's say the average retail user who knows how to trade crypto uh on, on and essentially I'm not going to name any names but can they, how easy is it for them to on uh offload those crypto onto their, onto their uh device or, or wallet and then back on to the exchange when they want to get out of, out of their position. So this is a really important question because today, we believe that the vast majority of Bitcoin owners actually do need to be able to move to and from their local currencies. Uh whether that's, you know, right, when they use a local currency to purchase Bitcoin and then move that to self custody or if that's, you know, they need to pay a bill or they want to move their, their crypto or Bitcoin for any reason, they need to move it back to an exchange. And with, in the bike mobile app, we're making that really easy by integrating with exchanges. So we actually partnered with NAS partnerships with Coinbase uh and Cash app. And uh what we are doing is, is basically through the bit key app connecting people directly to the custodial platforms that are relevant to them in their area and making it really easy to seamlessly move Bitcoin out of an exchange and into bit key uh when they, they buy and back if they need to offload. Uh That's not the only way that you can move Bitcoin to and from Biy. Uh And between a custodial platform, Biy is a Bitcoin wallet so you can transfer to and from any Bitcoin address any Bitcoin wallet. Uh You know, even without this, this these partnerships just make it easier. You know, we mentioned that you've launched in 95 countries. I asked our last guest about marketing strategy. I know B block has done a fair bit of research on the needs of folks, especially when it comes to Bitcoin outside of the United States, any particular region you're focusing on. Uh it's a little early to say one of the really neat things about launching in such a broad set of countries is we get to see a lot of traction in different areas. Uh What I will share here is that when we've done customer research and through both our, our marketing and, and early insights into uh into our orders, uh we see traction in a lot of different use cases. So we have, you know, folks who are uh holding long term uh in the US, for example, but we also have a lot of customers that we've talked to uh who are subject to inflation and maybe immediately moving, you know, their paycheck into Bitcoin, but have expenses later that month that they're moving right back out and they want a safe place to hold that in the interim. And so we're seeing traction in both you, you mentioned questions or uh concerns about what custodians uh allow people to uh withdraw and, and, and the like uh some of that has to do, of course with AM L uh and, and others, other issues with antiterrorism and the like as well. So uh in this situation with the, with the device, what exact with big key, what exactly happens um in that regard? I, I mean, like I, is there any in what, what are the security risks so to speak? And I'm not talking about security in terms of getting hacked, but I'm talking about actual, I don't know uh bad guys using it to get money out from one place to another. I mean, we have a war, potentially a couple of wars going on right now and some of it might be financed with Cryptocurrency, whether we like to admit it or not. Uh, I'm sorry, what, what was, what was the question? So, what is it, are there any safeguards with that? I mean, if it can, let's say Vladimir Putin go, you know what, this, this this thing that the, that the block put out is pretty cool. I'm gonna be using that to, to uh get some money into, to Russia so I can finance a war or I don't know Hamas or something like what do you guys have any safeguards for that? Like what's going on here? Yeah. So, so the reality is the, the focal point for uh the kinds of regulations that you're getting at is actually on exchanges. It's where uh at the point of purchase, at the point of sale. Uh And you know, I've talked before about exchange partners that we work with and that's where you would expect to see. Um and, and, and where custodial platforms are actually regulated quite differently than self custody solutions. So uh today in general, uh self custody like biy, for example, is related the way consumer electronics are uh the way hardware and software tools are as opposed to um you know, some of the contrasting situations that the custodial platforms are subject to. So if I, if I have a, if somebody has a friend, let's say, I don't know. So somebody in Hamas has a friend who has a nice Coinbase account, they could conceivably put it on the device, hand it over to them and be like, hey, good luck guys have fun with that. We don't, we don't sell big key to sanction countries or sanctioned individuals. We're a eu and uh and us company and we're subject to comply with sanctions law. But conceivably that somebody who is in a san non sanctioned country could then turn over can then turn over the thing to, to somebody who is in a sanctioned country and then can they use it from there? Uh Because of the sanctions regulations, there are some features of Biy that aren't available in a sanction country even if that happens. OK. All right. And, and quickly before we go, we had Ledger on the show yesterday. We, of course, all remember earlier this year, Ledger received criticism for their recover uh program. It's still launched. They still are uh trucking forward, talk to us about B Key's recovery tools. How do, how are they different or are are they similar? Uh So what we're trying to do with Biy is make self custody a realistic option for a very broad audience. And a big part of that for us is blunting what we call the sharp edges of self custody and a lot of that stems from the potential for accidental loss. We've all forgotten passwords, gotten locked out of accounts. Uh, and what we're focused on is bringing a set of familiar tools that can keep people safe, uh, without the kinds of highly technical set up and without being burdened with a 12 or 24 word password that, you know, you can't lose and you can't let anybody see. And these are the kinds of things that uh most of the alternatives uh result in today and often leave people in an unsafe state. And so uh the way we're solving this is using an underlying feature of the Bitcoin protocol called multi signature and bit key is what we call two of three wallet. There are actually three keys, any two of them are required to move money. We put two keys in customers hands, one in the mobile app, which is the primary interface that people use to own and manage their Bitcoin with bit key and one in the secure hybrid device. So that is kept offline. Uh The third key is held by block and that's used for really two things. One is to give customers flexibility to spend up to a mobile, uh spend up to a limit that they configure using just their phone and block. Uh and also to help people recover when they lose their phone, their hardware device or even both. And we think this is a really important aspect. We, we need to have a familiar and easy experience uh, for people who are leaving their coins on custodial platforms today and are used to the kinds of convenience that come with, with custodians. All right, Max, we are going to have to leave it there. Congratulations on the, on the launch. Thank you for joining us and we look forward to inviting you back to, to chat about how the launch goes and, and um, you know, maybe what, what countries are, are picking up Becky more than others. Thanks for joining us. Awesome. Thank you. That was Block Bitcoin Wallet. Lead max guys.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.