Bitkey Introduces New Privacy Feature to Its Bitcoin Wallet
Block, the financial technology company founded by Jack Dorsey, announced on November 4 the integration of the Chain Code Delegation technology into its Bitcoin wallet, Bitkey. The update is designed to strengthen privacy for users managing their multi-signature wallets.
How Bitkey�s Collaborative Model Works
Bitkey operates on a �2-out-of-3� multi-signature model. In this setup, three separate keys are created: one is stored in a hardware device, another in a mobile app, and a third is managed through Bitkey�s encrypted servers. To authorize transactions, users need access to any two of these keys.
While Block�s servers participate as a third party to help with mobile transaction signing and account recovery, the company does not have direct access to user funds. However, this model may allow the server to access certain metadata, such as transaction-related information or wallet address derivations.
Chain Code Delegation and Its Impact
The recently added Chain Code Delegation technology aims to reduce the amount of information shared with Block�s servers. The feature allows users to retain their chain code�a cryptographic element used to generate derived addresses within a wallet. As a result, the server collaborator only receives the information strictly necessary for each transaction. During account recovery, the set of unspent transaction outputs (UTXOs) is temporarily shared, but Bitkey states it does not store or retain these details.
Bitkey also plans to introduce a verification tool, enabling users to independently confirm that no information is retained by the company during the recovery process. According to Bitkey, the update will be rolled out in the coming weeks.
Open Initiative and Industry Implications
The Chain Code Delegation technology is based on a Bitcoin Improvement Proposal (BIP) developed by Jurvis Tan, a Bitcoin community contributor and staff member at Block. The BIP is public and open for review. Bitkey claims to be the first Bitcoin wallet to integrate this technology and invites other wallet providers to consider adoption.
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