CoolWallet: Leo Treasure talks about super-safe and convenient bitcoin storage
Friday 30 January 2015
The bitcoin protocol is incredibly secure. The encryption used is so powerful that the fastest computers theoretically possible could not crack it in the lifetime of the universe. Unfortunately, though, a chain is only as strong as its weakest link. True cold storage might be rock solid, but people use hot wallets to access their coins and spend them easily – and this is where hackers can exploit vulnerabilities.
BitScan talks to the aptly-name Leo Treasure, who is pioneering a way of combining the security of cold storage with the convenience of a hot wallet: the CoolWallet.
At this stage in bitcoin’s adoption, being hacked or scammed is almost a right of passage. For Leo Treasure, the mistake was as simple as connecting to a public wi-fi whilst on holiday in Bali. A series of unplanned transactions and 750 bitcoins later, he was poorer to the tune of a six-figure sum.
‘I’d just given a talk at the Perth bitcoin meetup saying how I was going to move all my coins over
to multi-sig, but I didn’t act quick enough,’
Initially dismayed, the experience later prompted him to think of better solutions. Although Leo still agrees there is a place for multi-sig, his imagination was fired by the idea of the CoolWallet. After all, the average user just wants a straightforward and secure way to both store and use their bitcoins – and this fit the bill perfectly.
Convenient cold storage
The CoolWallet is ‘the most convenient cold storage method that has ever been designed’. It is a credit card-sized device with an e-paper display that shows the bitcoin balance and fiat equivalent of the amount to be transferred out of cold storage when a transaction takes place. It can generate almost unlimited private keys for cold addresses, and when the user wants to make a transfer, the transaction is signed on the CoolWallet itself: the keys never leave the card. The transaction is then pushed to the network using a paired smartphone, tablet or computer.
Not content with this impressive security, usability is right at the top of the list. As well as being extremely simple and intuitive to use, with just one button and a ‘tap tap’ approach to send the transaction to your device simply by touching it against the phone or tablet, the CoolWallet is flexible and waterproof too.
Developing the ultimate bitcoin solution
One of the great strengths of the CoolWallet is that it’s completely standalone and never needs connecting to the bitcoin network itself. The lack of a specifically physical connection is also a big bonus – even the Trezor requires a USB connection. ‘CoolWallet is certainly going to be the most convenient and secure option for two reasons,’ says Leo. ‘Firstly, it can process transactions through the mobile app via wireless connection: Bluetooth and Near Field Communication (NFC). It works both ways and users do not need to bring any cables or computers with them when they go to pay. Secondly, it is credit card-sized so it fits into your everyday wallet.’
As an additional safety measure, Leo and the team built in a neat feature. ‘CoolWallet has an optional perimeter alarm that uses the smartphone app to push a notification if it’s out of the configurable range (1-10 meters). This makes it a lot harder to lose your CoolWallet.’ Put simply, it’s a very neat and technologically savvy approach to the problem of secure bitcoin storage and use.
Needless to say, this kind of tech doesn’t come into existence overnight, and it’s been a long road – at least, by crypto standards. For traditional manufacturing, the team has moved blazingly fast. ‘We have been working on CoolWallet for 10 months,’ states Leo. ‘We started from scratch and partnered with Security and Integrated Circuit design experts. The CoolWallet uses Elliptic Curve Cryptography (ECC) in the Secure Element SLE97 chip which is one of the most widely deployed and trusted technologies for protecting data at the enterprise level. It is both physically and electronically tamper-resistant, which ensures that data stays protected.’
There were some significant issues in getting the project off the ground, not least because some of the major pieces of the puzzle did not yet exist. Their solution was to build them themselves.
‘We found it challenging to get the CoolWallet working wirelessly. For the connection, we opted to adopt Bluetooth Low Energy (BLE) and Near Field Communication (NFC) for greater compatibility with various types of devices. It is definitely not easy because different brands (Apple, HTC or Samsung, etc.) have different systems – both hardware and firmware – with various restrictions to communicate with other devices.
‘To overcome this we tackled operating systems one by one. We designed a protocol for each of them. For example, the iPhone has not yet released its developer libraries for implementing NFC. So we were forced to design a Bluetooth communication method for the iPhone! For HTC, we needed to develop both Bluetooth and NFC options for users who have the latest technology and want to use it, as well as people with legacy Bluetooth.’
Another problem was battery charging. ‘CoolWallet’s battery needs to be charged once every few days, depending on how much use it gets. Initially, we wanted to have a charger that charged the card through its chip. However, we wanted CoolWallet to remain wireless because that is its unique feature that makes it so cool. Currently, there is no NFC charger on the market yet (not even the industrial market). We had to design an NFC charger ourselves, so we did!’
Launching the CoolWallet
The CoolWallet is designed to be used without the need to sign up to any other services, fitting with the preferred ethos of the bitcoin community: proprietary software is not popular. ‘People will be able to use the CoolWallet without relying on any intermediaries, not even us. Our smartphone app source code and API will be completely open source so developers will be able to integrate CoolWallet into their own applications.’
Testing for the CoolWallet beta should be finished in February, and the first CoolWallets will ship to customers in the next two months. ‘We will launch an Indiegogo campaign by the end of January and we’re currently working on our own online shop to accept pre-orders in Bitcoin, at http://coolbitx.com/coolwallet/index.html.’ The crowdfunding price will be in the $100 range.
Leo’s interests are mainly geared towards bitcoin at the moment. ‘The current hardware design of the CoolWallet does allow us to implement a Litecoin wallet,’ he says. ‘However, our first priority is to support bitcoin. Other crypto coins, while possible to implement, would take us some more time to design. Again, if there’s enough interest we can look at implementing other crypto coins.’
More broadly, he sees the coming months as a coming-of-age period for bitcoin, as more and more solutions for user-friendly security become available. ‘I think the options for storing bitcoin will gradually expand as developers iron out bugs and work on usability. In the coming years I believe there will be fewer hacks and a general growth in confidence of bitcoin as a safe store of value from the broader market. A recent article talked about how blockchain technology may benefit the insurance industry. I think Bitcoin security services and products will be the conduit through which value can be stored and smart contracts will flow through, offering people and corporations much more flexibility and oversight of their money as well as risk minimisation.’
There’s no denying that the CoolWallet is a very slick and smart solution to a serious problem in the bitcoin space. You can find out more and keep up to date with developments on the CoolWallet website. You should also check out progress of their crowdfund campaign here.
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