Coinkite is expanding its solution offering toward secure private key storage for Bitcoin businesses.
Until now, Coinkite has specialized in Bitcoin POS terminals and debit cards, as well as a secure wallet. They will be leveraging their custom-built Hardware Security Module (HSM) technology already used for their debit card customers to provide cold storage for exchanges and other online wallet companies.
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By introducing this type of solution, Coinkite is changing gears somewhat from its previous strategy, which shied away from cold storage. Then, the priority was to provide full transparency and immediate access to funds, without clients having to fret about their existence or if they are being used as “play money”. For enterprises however, the dynamic is different as there is more at stake and a differing set of priorities.
The launch of the business-focused solution comes at an opportune time for Coinkite, as several exchanges have grappled with hacking attempts, DDoS attacks and the “malleability” issue, which are of constant concern as long as storage is connected online.
By the same token, they face a potential challenge when it comes to the lead times required to release funds for clients of these businesses. This is especially relevant for large withdrawals in a short period of time, when, for example, markets are gripped by mass fear and clients flood the exchange with huge withdrawal orders. This may not be a non-issue though, as such runs on exchanges were themselves driven by client fears as to the security of their funds, which is already pre-empted by the solution.