Payments Startup Square Is Open-Sourcing Its Bitcoin Cold Storage

[Magician]

Mobile payments startup Square is making its bitcoin cold storage solution open-source.

Alok Menghrajani, a security engineer at Square, published a blog post on Tuesday, announcing that the documentation, code, and tools of the company's Subzero bitcoin cold storage solution are now publicly available on Github.

Menghrajani said Square uses Subzero to hold bitcoin assets on its users' behalf in an offline environment, which is based on a hardware security module (HSM) – the same technology Square has been using to store encrypted keys for its other payments services.

Menghrajani added that since the underlying HSM is "programmable," the company has developed a technology that can send bitcoin from a hot wallet to the cold storage at any time. When doing the opposite, however, the program requires multi-party signatures to initiate a transaction to bring bitcoin storage from offline to online.

Further, Menghrajani said the programming could also enforce certain preset rules, such as only sending bitcoin from the cold storage to Square-owned addresses.

"The HSM is programmable, allowing us to support bitcoin wallets today while giving us the flexibility to implement other protocols in the future," he added.

Square, founded by the co-founder and CEO of Twitter Jack Dorsey, first announced its move into offering bitcoin trading service via its Cash App in November last year.

The firm further expanded the bitcoin trading function to all 50 states in the U.S. in August this year after the business unit booked small margins for the firm in the first two quarters in 2018.

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