Introducing Bitkey. An all-new Bitcoin wallet from Jack Dorsey’s payments giant, Block. Boasting a unique design and integrated fingerprint sensor, this NFC Bitcoin wallet is Block’s pioneering foray into Bitcoin-centric hardware solutions. But have they delivered a product that lives up to the expectations of consumers and is it really a hardware wallet? In this video I’ll be giving you my honest opinion on the Bitkey. Before we dive in, a quick disclaimer. This video is not sponsored and I purchased this product with my own money. The video is however made possible by those of you support my work through membership or by purchasing my courses at haydenotto.com. Check out the link in the description to learn more and thank you guys so much for the support.
Price & Unboxing
If you’re looking to purchase a Bitkey, it’s going to set you back $150 USD. This puts it in the price bracket of more premium hardware wallets such as the Ledger Nano X or Trezor Model T. Included in the package is the Bitkey itself, a USB C to USB A cable and some documentation you’re probably never going to read. The Bitkey’s hexagonal design is unlike any other hardware wallet I’ve tested. Its front face has the appearance of a natural stone with swirls and flecks throughout. I quite like it, although looks can be deceiving as it’s only a plastic cover. Embedded in the surface you’ll also find the fingerprint sensor that, when touched, will light up an LED in the center of the device to show it’s been activated. The Bitkey’s rear face is metallic gold and probably made of aluminum. The surface has been laser engraved to feature the Bitkey logo and information about the manufacturer. On one of the device’s 6 sides, you’ll find a USB C port that is used solely for charging. Apart from that, the Bitkey has no other physical features. There’s no buttons and no screen as you might be used to on other hardware wallets.
As such, to set up the Bitkey you’ll need to download the accompanying app from your respective app store – it’s compatible with mobile devices only and can’t be used with PC’s. The wallet creation process is straight forward, might I even say noob friendly, although that does come with some major tradeoffs which I will soon discuss. The app will first ask to pair with your Bitkey, which is done by tapping the fingerprint sensor and then holding it to the back of your phone. I found that it can be a bit picky about where you hold it, and you’ll only get a successful connection when it’s held steadily in a specific spot. At this point you’ll need to tap your finger repeatedly on the fingerprint sensor to record your fingerprint, after which your wallet is seemingly created. You’ll then be prompted to store an encrypted backup of your wallet on Google Drive and there’s no choice in the matter. So, if you don’t use Google services, tough luck. Finally, after collecting your email address and setting notification preferences, you can begin using the Bitkey.
Features
The app is very much bare bones, supporting only basic functionality like the ability to purchase, receive and send Bitcoin. If you’re looking for bells and whistles, including support for other cryptocurrencies, you’ll have to look elsewhere. To fund your wallet, purchases of Bitcoin can be made through Coinbase, which is integrated with the Bitkey app. If you choose to receive Bitcoin from other sources, the app will display an address for you in both QR code and plaintext formats with the ability to easily generate new addresses for enhanced privacy. Once Bitcoin arrives in your wallet your phone will send you a notification and the transaction will appear under the recent activity heading. At the top of the screen the Bitcoins held in your wallet are displayed as well as their current dollar value. These display units can be changed in the settings, but the support for fiat currencies is limited with only USD, Euro and Pounds available. When it comes to spending Bitcoin with the Bitkey app, it can be done in 2 different ways. For convenience a feature called mobile pay is offered that allows you to set a daily spend limit that does not require use of the hardware wallet for authentication, only your phone. This would be good for buying your daily coffee, for example, without the need to carry the Bitkey device with you. If your transaction exceeds this daily limit however, you’ll need authenticate your fingerprint on the Bitkey and then touch the device to the back of your phone to authorize the transaction. Another function in the wallet is called Trusted Contacts and, as the name implies, you can authorize a trusted contact the ability to help regain access to your funds in the event you lose both your phone and your Bitkey device. The purpose of this optional feature is to have the contact verify your attempt to recover your wallet, using the Google Drive backup, is authentic and not that of an attacker.
How it works
Based on what you’ve heard so far, you may be wondering how transaction singing works on the Bitkey. It’s a 2 of 3 multi-sig wallet, which has 3 keys and requires any 2 of those 3 to sign transactions. This is not unique to Bitkey, but it may be the first wallet to implement this in the way it has. The first key is what they call the mobile key, which is stored on your phone and what was encrypted and backed up to Google drive during the wallet setup process. The second key is stored on the Bitkey device and the third is stored on Block’s servers. This explains how you can send transactions without the Bitkey, and how you can recover your funds if you lose both your phone or your Bitkey. The rationale of this setup, I presume, is to make things as bulletproof as possible for average users who may be more prone to losing their wallet backup and thus access to their funds. It sounds eerily identical to Ledger Recover program and we all know how well that announcement was received by cryptocurrency holders, including their own customers. It wasn’t.
The Trade Offs
As a result of Block’s design choices, there is not much to like with this wallet beyond its interesting physical looks. But when you’re dealing with money, the number 1 priority is security. While block never refers to the Bitkey as a hardware wallet, instead saying it’s a self-custody wallet, I’d argue that it isn’t even that because you’re really only the sole custodian of 1/3 of your wallet. It would have been better if they at least gave you an option to have full custody, by providing the complete private key to you so that it can be backed up like you would any other wallet; both software and hardware. When it comes to the fingerprint sensor, it’s convenient but also a security flaw. If someone is trying to steal your Bitcoin, they could physically force you to put your finger on the Bitkey and more than likely you’re also using your fingerprint to unlock your phone which would give them access to 2 of the 3 keys. The lack of a display is another issue, which means you must put full trust in the Bitkey software installed on your phone to verify addresses to which you are sending or receiving. This software is of course open to the possibility of being compromised as it’s on an internet connected device. Furthermore, the reliance on Block’s server results in zero privacy for Bitkey users. Not only do they know your email address, phone number and Google account, but it’s now tied to every Bitcoin transaction you make and addresses you interact with. Large companies also have a tendency for selling user data to the highest bidder and cannot be trusted, particularly when it comes to your financial information. One last criticism is that Jack Dorsey himself promised that the code for this product would be open source, and you may think that Block delivered on that last month when they published this article titled “sharing the code behind Bitkey”. The truth they published it under the Commons Clause license which has many extra conditions attached. Also in its current state, you can only verify the integrity of packages and binaries on the Android application with promises of IOS coming soon.
Conclusion
In the end, I’m not sure where Bitkey thinks they fit into the market and what they are offering people that competitors aren’t already. Do I recommend it? Absolutely not, it’s probably the worst wallet I’ve ever tested and I honestly had higher expectations for a product coming from such a large company. For the same price you could go and buy a Ledger Nano X which has countless more features and support for pretty much any cryptocurrency you’d want to store. For half the price you could get a lesser model Ledger that still beats the Bitkey by orders of magnitude. If you’re interested in the Bitkeys recovery features where it’s near impossible to lose access to your wallet, then you also have the option of signing up for Ledger Recover which is essentially the same service. If you enjoyed my review of the Bitkey, make sure to give this video a thumbs up and subscribe to the channel for more awesome crypto content. Stay tuned and I hope to see you guys in the next video.
