Square Building Hardware Wallet For Cryptocurrencies

Square is working on a hardware wallet for cryptocurrency and is putting together a team of engineers to get the process started, Reuters reported on Friday (July 9), citing tweets from Square Hardware Lead Jesse Dorogusker.

“Our next step is to build a small, cross-functional team,” Dorogusker tweeted in a question and answer session. The Q&A was a follow-up to a series of tweets in June by Square CEO Jack Dorsey that floated the idea of a hardware wallet.

Dorogusker tweeted that the team will be led by Square Crypto Wallet Lead Max Guise and that “we will incubate this full-stack of tech, design, product, manufacturing, and supply chain,” with Square Hardware engineer Thomas Templeton.

While hardware wallets can be used offline or online, cryptocurrencies are not actually stored there; they always live on the blockchain. The hardware wallet stores a user’s private key, which in turn opens the lock to an address on the blockchain where the assets reside, according to a blog post by Relay Radar. 

Hardware wallets are a non-custodial wallet, where the user controls their private keys, “which in turn control your cryptocurrency and prove the funds are yours,” according to the post. 

Custodial wallets give a third party control over a user’s private key and are typically web-based exchanges.

The Twitter Q&A started just before U.S. Sen. Elizabeth Warren (D-Massachusetts) tweeted about the cryptocurrency market and the risk to consumers and financial markets, Reuters reported.

“Cryptocurrency exchanges don’t have the same commonsense regulations as traditional securities exchanges to protect consumers from scams or manipulation. I’m asking the SEC to explain how it can close the regulatory gaps & ensure a safe crypto marketplace,” Warren tweeted.

Dorsey’s hardware announcement on June 4 indicated that Square was looking into the best way to build a hardware wallet for bitcoin. 

“If we do it, we would build it entirely in the open, from software to hardware design, and in collaboration with the community,” he said.