Hardware wallet users seeking offline security have had few good options. Some run a computer disconnected from the internet to store private keys. Others write the keys on paper and hope the physical
Hardware wallet users seeking offline security have had few good options. Some run a computer disconnected from the internet to store private keys. Others write the keys on paper and hope the physical document stays safe. Neither approach feels reliable to most people. Over the past few years, companies began selling purpose-built hardware wallets, devices designed to handle bitcoin storage without the headache of improvisation.
KeepKey entered this market with a sleek black box as its flagship device. Unlike some competitors that focused on bitcoin alone, KeepKey supported a range of altcoins from the start. Last week the company announced its first acquisition: Multibit, a software wallet that had attracted a following. The deal was paid for entirely in bitcoin.
CEO Darin Stanchfield explained how the acquisition came together. "We have worked with Multibit since we launched the product last September, we've always loved their product and began to talk internally about a way to bring it into the company, so we pitched them an idea about a month ago, they seemed interested and it made a lot of sense for both parties. It was a really quick deal, both in the decision and transition."
The acquisition targets a market gap Stanchfield identified: people new to bitcoin who don't own enough to justify a hardware wallet purchase yet. "When you buy a hardware wallet you have to hold enough funds to really justify the purchase. Currently, there's a lot of "Bitcoiners" who don't own enough yet as they are just getting into it, so instead they download a wallet for their computer. We wanted to help those people as they are the type of user that will eventually transition to needing a hardware wallet. I think in time you'll see our competitors do something very similar," he said. By offering both software and hardware solutions, KeepKey aims to keep users engaged as their holdings grow.
The question of Ethereum support comes up at KeepKey a lot. The company plans to add it. "There is a huge demand for Ethereum and we get asked this a lot. Ethereum developers recently reached out to us, so we helped them by supplying them with the resources needed to integrate this into our client. Work has been advancing and this should be ready in a month or two," Stanchfield said.
Getting bitcoin to mainstream users means solving problems that go far beyond security. Stanchfield pointed to one of the biggest obstacles: people have trouble buying bitcoin in the first place. KeepKey customers ask the company how to acquire more coins, and some mistakenly think KeepKey sells bitcoin. "I think people still find it difficult to actually buy bitcoin. A lot of our customers get the device and then ask us how to actually get more bitcoin for it. Others find our phone number online and call us thinking we have sell bitcoin and we then refer them to Coinbase or Local Bitcoins, so I see that as a hindrance, however, I think that the hindrances that do exist are just temporary," Stanchfield said.
The future of finance may favor companies pursuing self-custody solutions like KeepKey. PayPal filed a patent for a modular payment system, raising questions about whether established financial firms might build their own hardware wallets. Stanchfield expressed skepticism about that prospect. "It's so hard to say, typically in Western finance you have a custodian and I think that the early Bitcoin services really followed that strategy because it's the norm but I think that the long-term promise is that you don't need a counterparty for transactions. I think that eventually you'll see more hardware, more of the approach we are taking so that you are the controller of your keys and your assets are decentralised and not at any one location."
