Following the recent partnership between KeepKey and ShapeShift, KeepKey Founder and CEO Darin Stanchfield offered a few brief thoughts on bitcoin security and why hardware wallets may be the ultimate solution for mitigating consumer losses.
What’s behind the recent hacks involving bitcoin?
The problem with widespread hacks is not (exclusively) a bitcoin phenomenon, but rather a general problem with all types of networks and systems. Digital security is very hard. With bitcoin, the stakes are simply higher because of the irreversible nature of bitcoin transactions.
What’s the best way to assess whether a bitcoin wallet or exchange is safe?
With the rise of services like ShapeShift, it’s important to consider whether you actually need a wallet or exchange that requires custodianship over customer funds.
If you do find the need to use a third-party wallet, one where you are not in control of the private keys, you should carefully evaluate the risks you are taking in the event the wallet is hacked. You may want to diversify where your bitcoins are being held if that risk is too large. And of course, I would recommend taking ownership of your bitcoins and private keys using a hardware wallet like KeepKey.
Where do hardware devices currently stand in terms of providing a viable, alternative means of storing digital currency?
More and more people are coming to appreciate the idea of controlling their own private keys. A hardware wallet is a great way to do that securely. With security breaches continuing to take place, we have seen a huge increase in demand for our KeepKey devices.
Our goal is to make controlling your own cryptocurrency private keys secure and simple. We believe the more simple we can make our device and client, the more people will adopt our solution.
Given this, why wouldn’t everyone move to a hardware device?
Customers often choose the easiest solution, and unfortunately, in the past, that meant trusting your funds with a third party. I think we are approaching a point, if we are not already there, where storing your funds on a hardware wallet is just as convenient as a web wallet, but infinitely more secure.
What sorts of emerging trends in terms of bitcoin security do you believe we will see over the next 12-18 months?
The promise for bitcoin users is that they can become their own banks, and transact without counterparty risk. Depositing funds at exchanges is a legacy of the past, and I think we will slowly evolve to a world of decentralized exchange hubs like Shapeshift that have no need to hold customer funds, and act only as trade makers. Decentralized exchanges like this will pose much less incentive for hackers to attack. All this will provide a huge boost in security for the customers who opt to use these exchanges.
A serial entrepreneur, Darin sold his first company at the age of 26. After a successful stint running a very successful lead generation company, Darin discovered Bitcoin in 2011 and became an immediate champion of the technology. Stanchfield and his team later launched KeepKey and began shipping the company’s sleek hardware wallets in late September 2015 after a 19-month ramp-up period.