Jack Dorsey Says Square May Build a Bitcoin Hardware Wallet
(Bloomberg) -- Square Inc. Chief Executive Officer Jack Dorsey said the digital-payments company is considering building a Bitcoin hardware wallet, a device that holds the digital currency but isn’t connected to the internet.
Hardware wallets are used by cryptocurrency investors who want an extra layer of protection from holding their coins on a web-enabled device. Wallets let crypto users hold coins and include a public and private key that acts as a blockchain address. Hackers have become adept at very sophisticated methods of stealing crypto that include taking over someone’s phone to access the private keys that are necessary to move Bitcoin, Ether and other digital assets.
Dorsey, who is also CEO of Twitter Inc. and a vocal proponent of Bitcoin, announced the plans in a tweet on Friday.
“If we do it, we would build it entirely in the open, from software to hardware design, and in collaboration with the community,” Dorsey wrote. “We want to kick off this thinking the right way: by sharing some of our guiding principles.”
Shares of San Francisco-based Square rose as much as 3.2% after the tweet and were recently trading at $214.37, a gain of more than 1%.
Bitcoin, Ether and many other cryptocurrencies surged to record highs this year before falling by about half. Banks, corporations and financial institutions are becoming more comfortable dealing in cryptocurrency and have seen huge customer demand for access to the market. Tesla Inc. and MicroStrategy Inc., as well as Square, are among corporations that hold Bitcoin on their balance sheets.
Surging purchases of Bitcoin have been a major boon for Square over the past year as more consumers have flocked to the cryptocurrency. Square takes a transaction fee when users buy or sell the cryptocurrency through its Cash App, but the profit the company makes on each transaction is small compared with the overall revenue generated.
Adding a hardware wallet to those existing services could make customers more loyal to Square. Even with their increased security, hardware wallets can be hacked to reveal the PIN code that unlocks the device. But in that case, the hardware wallet has to be in the hacker’s possession.
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