Square to Build Hardware Wallet for Cryptocurrency. How it Works
Square has confirmed that it will be initiating plans to develop a new tool for Bitcoin. Square’s hardware lead Jesse Dorogusker announced in a Tweet on June 9, that the company is going to begin building a hardware wallet and accompanying service for the cryptocurrency, Bitcoin. This is being undertaken in an attempt to bring the crypto coin into the mainstream.
“We have decided to build a hardware wallet and service to make bitcoin custody more mainstream. We’ll continue to ask and answer questions in the open. This community’s response to our thread about this project has been awesome – encouraging, generous, collaborative, & inspiring,” said Dorogusker.
In response to the tweet, Square’s CEO Jack Dorsey responded saying, “With that, @jessedorogusker, I, and team will listen and continue the conversation. And we’ll set up a dedicated Twitter and github account if we decide to build. We’ll update this thread with that information when we’re ready. Thanks!”
Earlier in June, Dorsey had released a string of tweets on his handle wherein he put it out that the company was considering the possibility of making such a device. Dorogusker, in a thread, tweeted out: “Our next step is to build a small, cross-functional team, which will be led by @max_guise (welcome back!!). We will incubate this full-stack of tech, design, product, manufacturing, and supply chain with @templetonthomas & Square’s hardware team to start with a strong foundation.”
What is a Hardware Wallet?
A hardware wallet is essentially a special type of cryptocurrency storage that maintains and secures the user’s private crypto keys in the hardware device. It is known for providing security and utility when users are interacting with blockchains. The device allows you to work on multiple blockchains at the same time. This translates to the utility factor as users can manage Bitcoin as well as Ethereum & Alt. Coins, Lumens, and more on a single device.
Everything is also backed up and accessible with a recovery phrase or in simpler terms, a password/key. It is usually in the form of a small, portable, plug-in device that allows you to access your cryptocurrency from where ever you might be. It should be noted that the cryptocurrency is not stored within the hardware of the wallet itself. It is stored in the blockchains. The wallet merely allows you to access them in a portable fashion, much like a credit card can access your account from any ATM or swiping platform. The wallet opens the address on the blockchain where the crypto assets exist.
The advantages are that it is extremely secure in the realm of cyberspace as it is a hardware device. It also isolates your key or access from the rest of the Internet, which brings down the likelihood of online attacks.
Here is How it Generally Works
You merely plug in the device to a system (computer or laptop) and unlock it with your PIN code. Then you proceed with the transaction on the system. Once done, you have to confirm the same on the device’s screen. Without your unique digital signature stored, which is stored on that device, the blockchain cannot be accessed. With this secure piece of hardware, one can even perform wallet-to-wallet trades or transfers.