Our multisignature key model

We have noticed a lot of buzz around our product so recently after our launch. Thank you all for your interest! There seems to be some confusion about our private key model, so we thought we would clarify how our system works.

The most common misconception that we have noticed is the idea that we control the majority of your private keys. This is not true.

As you may know, our system uses a 2-of-3 multisignature signing scheme for bitcoin transactions. The three bitcoin private keys are generated in separate locations, and are never exchanged over a network. The three keys are as follows:

1. A device private key which is generated on your Case, using a secure random number generator. Our dedicated cryptographic processor uses thermal noise to generate a random key. This key is generated once the Case is in your hands during first time setup, and never leaves the device. We do not ship any devices with pre-baked private keys.

2. A server private key is generated on our servers. Again, this key never leaves our servers, and is the only private key that we control.

3.a. The third private key is meant for recovery. We have a partnership with Third Key Solutions to provide an easy option for a recovery key. If your Case is lost or stolen, you can initiate a recovery process that includes rigorous protocols with strict operational procedures. The most important piece of this is that we are never given the recovery key. Instead, Third Key Solutions signs a “sweep transaction” when a recovery is initiated and it passes their internal sanity checks. More details to come on our process with Third Key Solutions in a future blog post!

3.b. For advanced users who wish to provide their own recovery key, it is still very simple to use. When you are setting up your device and you have selected the self-storage option for the third key, you will be prompted to scan an extended public key (xpub) via BIP-0032 that we will use to create multisignature addresses and redeem scripts. We never have access to your self-stored private key!

The disadvantage of storing your own recovery key is the responsibility that comes with it. If you lose your Case, we can provide you with a raw transaction for you to inspect and sign with the private key associated with the scanned public key. If you lose your self-stored private key and your Case at the same time, you no longer have 2 out of the 3 keys, and your funds are not recoverable!

Security is an enormous concern for us at Case, and we know it is for you too. This is why we have introduced an option for the extremely security-conscious to take a more active role in the security of their bitcoin. We hope this information gives you peace of mind, and look forward to hearing your feedback!

Our multisignature key model

Case launches pre-sale at TechCrunch Disrupt!

We’re so excited to have launched the pre-sale of Case at TechCrunch Disrupt. It was such an honor to take part in the event, and we’re thrilled to finally open up our pre-sale of 1,000 individually numbered wallets! Make sure you place your order promptly because a limited number of devices are available for the first shipment this Summer.

Engineering a truly secure and simple bitcoin wallet has been a long process, and we have been eager to finally reveal the first generation of Case. Back in late 2014 we manufactured our first small batch of devices, and have continued to run more small batches in the first few months of 2015. Just last week we were in New York demoing the device to Inside Bitcoins conference attendees, which was the very first time that we had unveiled Case to the community.

Case creates more opportunities to use bitcoin by employing GSM networks to relay transactions in over 100 countries, without having to rely on your phone or computer for an Internet connection. We’ve also equipped Case with biometric authentication, which adds an additional layer of security and allows you to establish ownership of your device. Ownership of a physical key increases the protection and security of your bitcoin. The key on the device is generated on first-time setup; we never ship devices with pre-generated private keys. Case Wallet_Product Location_Stephen S Reardon Photography_08190 copy

We’re also excited to announce that we’ve partnered with Third Key Solutions to offer you optional key storage services that safeguard your recovery key. In the unfortunate situation where your device is damaged or lost, Third Key Solutions will assist Case with migrating your funds to a new wallet. Third Key Solutions has the reputation and dedication to ensure a secure recovery process. If you’d prefer, we also offer you the option to import your own third private key.

We’ve worked very hard on Case and we know there is more work to do. We know that the Bitcoin community is very passionate and involved, and we welcome their feedback so that we can continue working hard to make the best Case possible.

Thank you so much for your continued support – we look forward to getting Case in your hands.

TechCrunch Disrupt NY 2015 is TechCrunch’s sixth annual conference in New York City. The format combines top thought-leader discussions with new product and company launches. Morning executive discussions debate technology-driven disruptions in many industries, while the afternoons are reserved for the Startup Battlefield, where some 30 new companies will launch for the first time onstage, selected to present from numerous applications received from around the world. The winning company will receive a $50,000 grand prize and the Disrupt Cup at the conclusion of the conference. The conference is May 4-6, 2015 at the Manhattan Center, 311 West 34th Street (at 8th Ave.) Manhattan.

Case launches pre-sale at TechCrunch Disrupt!

Bitcoin Increases Financial Inclusion

Case recognizes the importance of financial inclusion. Our device is available in 120 countries at launch, and that number is fundamental to the creation of new global consumers. 2.5 Billion adults are unbanked because they do not own enough assets to participate in a traditional banking system. These 2.5 billion people own goods that are valuable in local markets, but will not have the same value globally. Bitcoin is the vehicle that gives value to various goods on a global scale. A small landowner in Kenya cannot create a tangible claim to his property if he cannot create a document proving ownership that is universally accepted. The blockchain assigns value to assets that can be exchanged globally.

How bitcoin holds valueBitcoin Value

Bitcoin is a viable form of currency because it meets the defined characteristics of money. The characteristics of money are defined as scarcity, divisibility, portability, durability, fungibility, and recognizability:

  • Scarcity: There will only be 21 million bitcoin ever created
  • Divisibility: Bitcoin is divisible by 8 places (Unit Table)
  • Portability: Bitcoin has both digital and physical forms. You can carry a higher value of bitcoin than silver for example
  • Durability: Storage capabilities of wallets allow long term storage of bitcoin. Keys give the final authorization to exchange bitcoin held inside of a paired wallet. A key can be stored in a safety deposit box, on a cloud server, or on the wallet device itself for an extended period of time
  • Fungibility: A bitcoin is worth the same as another bitcoin. Users in the bitcoin economy accept each bitcoin by a majority consensus. There are no ‘safe’ or ‘bad’ bitcoins. All coins are valid and prices of an individual bitcoin are interchangeable
  • Recognizability: Block explorers display transactions that transmit to the blockchain. This trust-less network of validated funds maintain a record of the amount of bitcoin in each wallet. Each transaction is signed by both parties recognizing the amount of bitcoin being sent to the specified address

Scarcity creates a predictable rate of how many bitcoins will enter the market. If demand does not match the level of inflation, the price will fluctuate. Bitcoin’s overall market share is relatively small, which causes the price of bitcoin to shift when significant amounts of money are exchanged. Bitcoin’s price adjusts based on supply and demand, and the number of transactions (transaction volume) is a direct reflection of bitcoin adoption.

HacksilverIf bitcoin as a currency does not reach a high level of adoption, it will still hold value. Hacksilver was used by the Vikings as a means to exchange currency, and it still holds value today even though it is no longer in circulation. As long as there are people using bitcoin it will always hold value. The usefulness of bitcoin boils down to trusting the reliability of transactions recorded on the decentralized ledger. These validated transactions are referred to as blocks. It takes approximately ten minutes to solve, or validate, a block. Each validated block increases the validity of previous transactions.

It is difficult to translate how bitcoin works to those with lackluster technology experience. An analogy is a great way to parallel features of the blockchain in terms that are easier to understand. Andreas Antonopoulos gives a relevant analogy describing the scaling difficulty of validating blocks relating to Sudoku puzzles.

Adjusting Difficulty

Sudoku puzzles are easily provable by verifying that there are no repeating numbers between each row and column. A person can not solve a puzzle by inserting random numbers into each space. Imagine a room with 20 people solving the same Sudoku puzzle. The amount of rows and columns in this Sudoku have been formulated to be solved in approximately 10 minutes. An announcement was made that the first person to solve the puzzle will be awarded 25 bitcoin. As the timer begins people immediately start walking towards the front of the room to have their puzzle solution validated. After 9 minutes of continuous attempts, someone discovers the correct solution and receives the 25 bitcoin reward.

The next round begins, and someone solves the puzzle in 8 minutes. The puzzle is made more difficult because rounds are being solved in less than ten minutes. More rows and columns are added to increase the average time needed to solve the puzzle. After a few more rounds, a large crowd enters the room and now 200 people are attempting to solve the puzzle within 10 minutes. More rows and columns are added to the puzzle to adjust for the number of new players. The players continue to randomly guess and check their answers until the correct answer is discovered. That random element is similar to the bitcoin protocol as cryptographic nonces assign difficult mathematical problems to each transaction for verification. Miners are consistently attempting to validate these transactions.

Advantages of bitcoin over other non-traditional currencies

The benefit of bitcoin varies from person to person. Bitcoin will not be the most convenient payment solution for many individuals with already established banking systems. People without access to banking services in the developing world value a currency that is backed by an algorithm and not a central authority. Bitcoin gives unbanked users the ability toM-Pesa assign a global value to their goods. The need to participate in a global economy is forcing unbanked individuals to use unsafe alternative currencies. The lack of a traditional banking system in Kenya created a market using M-Pesa mobile minutes. M-Pesa allows mobile users to exchange money into M-Pesa units and exchange M-Pesa between customers. The increase in exchanging mobile minutes as a form of payment showcases the need for reliable financial services. The financial inclusion that Bitcoin offers is important to the developing world.

Bitcoin use creates a challenging learning curve for new users that want to use the technology properly. The challenge of making bitcoin easy to use and secure revolves around wallet security. Case is leading by example by engineering a secure device that is easy-to-use, especially for users that are not technically savvy. Properly storing your private key is not a compromise that any bitcoin user should make when selecting a bitcoin wallet. We are creating a product that is easy enough for novices to use without compromise important security features.

Follow us to learn more about how Case is creating a secure bitcoin wallet without compromising your security.

Bitcoin Increases Financial Inclusion