Coinkite terminates web wallets to focus on enterprise hardware

Prominent Bitcoin startup platform CoinKite that has bestowed the Bitcoin community with secure web wallets, easy merchant tools and developer API has announced to terminate the service in an effort to focus on enterprise hardware products. According to Coinkite’s blog post, the phase-out from its current roster of services will play out over the next 30 days, and users who do not withdraw their existing funds from their wallets would be automatically credited back their amount once the wallets are closed.

Victim of “state-sponsored” harassment?

Founded in 2012, Coinkite unveiled the “easiest and safest” way to use and accept Bitcoin, standing by its tagline that read “the world’s most advanced web wallet system” — “empowering its customers and merchants with the best transaction platform with Bitcoins and other crypto currencies,” both in the virtual and physical world. Since its launch in 2013, Coinkite has been confronting legal issues and Distributed Denial of Service (DDoS) attacks while rolling out its operations. Also, as a centralized service, government agencies and state actors have been consistently harassing the company with attempts to intrude into their clients’ privacy. Such factors might have sparked the decision to pull plug on the Web Wallet service.
“Being a centralized Bitcoin service does attract attention from state actors and other well funded pains in the butt, and as a matter of fact, we’ve been under DDoS since the first month we launched—over three years,” said the Coinkite team. “Plus we have put real fiat dollars into our lawyers’ pockets, to defend our customers from their own governments. This is not what we love to do, which is coding and delivering awesome services.”
In an interview with Coindesk, Rodolfo Novak, Chief Executive Officer, Coinkite, explained his decision, stating that the company wanted to move away from software as their meagre resources were being drained by the “amount of bullshit” involved with running the service.
“We want to write software, not deal with lawyers and DDoSing… One of the main issues with SaaS is all the free users and need support and we want to provide good support. All these things have costs,” Novak explained.
Furthermore, Novak cited the escalating expense of offering reliable cost-free software services also posed a serious problem leading to this transition. Currently, Coinkite is encouraging its wallet users to switch to other products available from, Bitcoin Core, Electrum and Ledger.

Bitcoin hardware for enterprises

On April 11, all Coinkite web wallet users and developers will lose their access to their web wallets and will be requested to withdraw balances on login. The team further explained that TOR access will be terminated, API will be disabled and zero balance accounts will be automatically closed. Coinkite would now shift its focus to creating Bitcoin transaction processing hardware, a product that would come across as appealing to more lucrative enterprise users. Notably, Novak holds that such a device would be a more secure alternative to cloud-based services such as Microsoft Azure. Interestingly, the comments come at a time when Microsoft is ramping up its Blockchain-as-a-Service testbed with the goal of a more formal Spring launch.
“It’s not safe to use hosted services,” Novak said. “It’s important to have servers that are meant to transact funds and that use Bitcoin business logic.”
Novak has not announced any staunch deadlines for the new product, but implicitly mentioned that it would be hitting the road pretty soon.

Abhinav Mohapatra

An author who has a keen interest for the ‘off-beat’ <!--more-->An author who has a keen interest for the ‘off-beat’, he has covered and explored multiple facets of the marketing, advertising

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