Recently, a leading web wallet provider, Blockchain.info, was compromised and user funds were stolen. This event brought added attention to the importance of proper security precautions and protocol. Many Blockchain.info users chose to leave the service for more secure competitors; Coinkite is encouraging new signups with new features and less fees.
On Tuesday, Coinkite announced a new starter membership that has no fees as long as you store less than 1 bitcoin in their hosted wallet. Bitcoin stored on their multisignature platform do not count towards the 1 bitcoin limit. Furthermore, Coinkite claims to be one of the most privacy and security conscious Bitcoin platforms available, so we reached out to their CEO and Founder Rodolfo Novak for a quick interview.
Most important of all, you don’t have to trust us, you can generate the keys offline and only upload the public address. -Rodolfo Novak
CEO Founder, Coinkite.com
First, can you tell us a little about yourself and the Coinkite team.
Coinkite is a bitcoin platform. We are one of the leading bitcoin wallets offering the only HSM in the market, multi-signature, bank-grade security, and amazing developers' API platform. Most importantly, we offer hard-core privacy by never touching FIAT and not having to be an MSB.
I was born in Sao Paulo, Brazil and I have been working with Internet and product development since I was a teenager. I came to Canada just over a decade ago.
In late 2011, Peter (my Coinkite cofounder) bumped into the Bitcoin Whitepaper. From there, we build BTCLook.com, which was a visualizer of the blockchain. Then, we started thinking about tools that the Bitcoin space needed in order to grow. We came to the conclusion that it needed to be easier and more secure for merchants to accept Bitcoin. So we started building a hardware POS. Once that was ready, we looked into the space and we couldn't find a suitable Bitcoin wallet, so we started building Coinkite. We had a few challenges along the way, like keeping private keys secure, but scalable. With Peter's background in secure embedded devices, we knew HSMs were the only practical solution (the competition is also catching on to that now!). We investigated the HSM manufacturers and none of them are able to do the Bitcoin curve. So there we were again, taking on another large project and just building it ourselves. All these things came together as Coinkite, which is a full platform for Bitcoin.
Why should someone use Coinkite over other wallet providers?
Privacy, Security and Functionality. Coinkite is in a unique position because we have hardware development experience. We've built the only Bitcoin HSM (Hardware Security Module). That gives us a tremendous advantage. We can scale hierarchical deterministic and multi-signature wallets in ways that our competition simply can't. As a matter of fact, some of our competitors already use our API and are on the waiting list to buy our HSMs. It's really the only practical way to scale Bitcoin wallets and APIs.
Most important of all, you don’t have to trust us, you can generate the keys offline and only upload the public address.
You seem to make privacy a key priority with your product, can you elaborate on some of the features that Coinkite implements in order to protect your users?
We believe one of the biggest features of bitcoin is privacy, so when we built our system, we did it in a way that respects that. Coinkite is BIP32 Hierarchical Deterministic (HD) for both hot-wallets and multi-signature, that allows users to not re use addresses. We go beyond that by offering Tor via .onion address, no servers in the USA and most importantly not touching fiat (dollars).
You are based in Canada, correct? Since you take user privacy so seriously, it appears that many of your users are completely anonymous to you, will this become an issue with Canadian authorities? Should anonymous users be worried that you will be forced to lock anonymous accounts and implement KYC/AML rules by the Canadian Government? What assurances can you make to anonymous users who are worried about that possibility?
Because there are no official guidance from our government, we prefer not to speculate.
A key aspect of your product is your strong multi-signature implementation, can you tell us a little about what makes your implementation unique among the competition?
We think giving power and control to users is what makes it so powerful.
Use the familiar Coinkite web interface to easily create vouchers, email money, pay for things, transfer money between your accounts and everything else. Multisig accounts are fully integrated into Coinkite’s web interface and our API for developers.
You control the signing rules for your account (M-of-N), and we also use this technology to allow multiple Coinkite users to share access to a common account. Finally all kinds of business accounts are possible (and easy too!) with Bitcoin.
With this new feature, we wanted to be able to offer something to the crypto-currency advocates that are nervous whenever a service holds their precious private keys. Therefore, if you choose, any or all of the private keys for a shared account can be kept secret from Coinkite. We are using BIP32 extended public keys, and every payment address for the account will be unique.
You claim that Coinkite runs a full reserve and that each user can download an audit report proving the reserves. Can you explain to our users how that audit report works?
Your funds are segregated and allocated to your own private key. We believe that all web wallets, exchanges and websites holding your funds should provide proof of reserves.
The audit report backs up our commitment to be completely transparent about what we do with your deposits.
This downloadable CSV has very useful columns, including: date, time and running totals for each crypto-currency.
This downloadable CSV is easy to understand and includes, for every deposit of your account: the pubkey address, transaction number which created it and full UTXO pointer. Of course the usual date, time and running totals for each crypto-currency are there too. But with the UTXO pointers you can look up your coins on any third party block chain explorer site and verify that your coins are there still.
We support the audit report on multi-signature accounts as well, and with that type of account, you can keep the private keys from Coinkite entirely so there is no concern that we can move your money without permission.
The whole point is for user to not rely on trust, and audit themselves again the Blockchain.
It appears that you don't currently have any smartphone apps, is there a reason for this? Do you plan on releasing them in the future?
We have plans and have some cool projects in the works, but no ETA.
Many of your competitors offer a completely free product, while you guys offer a free product alongside premium subscription offerings, can you explain the reasoning behind this decision?
We just started offering our starter plan completely free! Anyone can use the core features of Coinkite for free now.
Thanks Rodolfo, we appreciate you taking the time to speak with us.
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