By Justin O’ Connell,
When Opendime made its ‘bitcoin stick’ with multi-signature Bitcoin wallet provider Coinkite, it called it a ‘Bitcoin bearer bond’ – that is, a bond or debt security. The controversial product, much scrutinized in 2016 by Bitcoiners, experienced concerns over counterfeiting, as well as its closed-source nature. The company has responded to the counterfeiting concerns in Version 2.0, due in February 2017.
Opendime Version 1.0, a small USB stick that purported to allow one to spend bitcoins like a bearer instrument (which are unregistered; without records of ownership and transactions) by passing along a stick, was much discussed in Bitcoin forums in 2016. Another example of a bearer instrument would be a paper dollar bill.
Even Craig Watkins, a Bitcoin core wallet maintainer, analyzed the wallet in a long thread on Github about the legitimacy of the ‘bitcoin stick’, in which users lamented the ironically closed-source nature of the Bitcoin hardware device. One could check the balance on their USB by connecting to a device.
Opendime announced, on December 27, Version 2.0 of their bearer bond, and it could mean that a version 2.0 of ‘bitcoin cash’, improving upon popular but ink-dependent paper wallets, is coming to market in 2017.
To allay some user concerns, Opendime will add a special security chip to “defeat any attempt at building counterfeit or cloned Opendime” copycats. The company, which is accepting pre-orders and plans to ship Version 2.0 in February, also announced new external designs including a new unsealing mechanism, a lanyard hold.
A New Security Chip
Opendime highlighted first a security upgrade to the ‘Bitcoin Stick.’
The newly-integrated Atmel ATECC508A chip can hash the SHA-256 encryption model, the same encryption grade Bitcoin uses, do true random number generating (TRNG), and sign public keys (ECDSA) on the NIST 256-bit curve “P256.”
The chip, which contains a number of secret keys impossible to extract, holds a “factory key” that only Coinkite factory knows – an aspect of the design sure to make Bitcoin purists nervous.
“We will publish the public part of this key, and you can use the signatures that this chip makes to verify that you are connected to a real Opendime,” the company states in its press release. “It will also verify that it’s a unique device and that it’s paired to the microprocessor that it was originally built with.”
By integrating ECDH (Elliptic Curve Diffie-Hellman) security protocol, the Atmel security chip could make Opendime an “ultra-secure method” for operations like encryption/decryption key agreement. The chip also uses ECDSA (Elliptic Curve Digital Signature Algorithm) for sign-verify authentication purposes.
“With ECDH and ECDSA being built right in, this device is ideal for the rapidly growing IoT market by easily supplying the full range of security such as confidentiality, data integrity, and authentication to systems with MCU or MPUs running encryption/decryption algorithms,” according to Atmel’s website.
Atmel states that the security chip “employs ultra-secure hardware-based cryptographic key storage and cryptographic countermeasures which are more secure than software-based key storage.”
The new ‘bitcoin stick’ security chip is optional to verify, but “you can be 100% sure that you are talking to a genuine Opendime” if it is, according to the company.
Digital Piggy-Bank
Opendime markets their product as a “digital piggy-bank.” This is because, in order to access the bitcoin, the stick must first be opened. While Version 1.0 used a long tab in the board’s center, the new model entails sticking a paperclip or wire into a small hole on the back. “With a firm jab, you will break the seal that’s on the other side and unlock the Bitcoin in the device,” the company states.
“Selling out our Opendime V1 batch of a few thousand units validated the USB credit stick concept,” CEO Rodolfo Novak told Bitcoin.com. “We believe that with the improvements in Opendime V2, we will make an even bigger dent in the Bitcoin off-chain physical transaction and privacy markets. Aside from typical in-person exchanges (i.e. LocalBitcoin) in the West, current developments in capital controls in places like India present a huge opportunity for the “better world currency” (Bitcoin) to flourish. Opendime makes Bitcoin accessible to non-tech users who will take advantage of these opportunities.”
Bitcoin News reviewed the Opendime “Bitcoin Stick” in August 2016, then dubbed by the company “The First Hardware Bitcoin Bearer Bond.”
A simple to use and easy to understand model enables Opendime to function like cash and also perform ‘off-chain’ transactions (by handing it over). The small design precludes the existence of a screen, but even then the product should be easily understood by a novice, and that’s what perhaps makes it an enticing advent.
Before it’s to be recommended by bitcoiners everywhere, the ‘bitcoin stick’ is likely to undergo continued scrutiny, in particularly for its closed-source design and centrally stored private keys.