Amid escalating interest in the Ethereum blockchain platform, a group of software engineers at bitcoin security specialist BitGo have created a multi-signature wallet offering
The news follows the release of the first production version of the Ethereum platform, Homestead, last week. At the time, Ethereum’s developers also released Mist, a more user-friendly wallet that would allow users to deploy smart contracts and store ethers, the digital currency that powers its applications.
Despite this progress, however, wallet development on Ethereum has perhaps lagged behind, an issue creator Vitalik Buterin recently told CoinDesk that he hopes the wider open-source blockchain community will help it address.
Signs are emerging that this is already happening organically.
Ben Chan, Mason Borda and Barath Chandrashekar, software engineers at BitGo, have released Ether.li, a multisig, two-factor authentication wallet for storing and transmitting ethers, the native token on the Ethereum network, in part to apply their expertise to this challenge.
“There has been a lot more interest in ether recently,” Chan explained. “I, myself, got into ether pretty early on during the early stages of the project and I was looking to find a model to store ether. At the time, I could only find two kinds of wallets.”
The problem, Borda and Chan explained in interview, was that there were technical tradeoffs to running a wallet.
Borda said:
“The desktop wallets that are available today look great and aren’t challenging to use, but there is a huge technological limitation, which is the requirement of the running node in the background. If you wanted a wallet accessible from any device or computer, there were single-signature wallets.”
Borda went on to argue that a user would be making a significant technological compromise by going with the convenient route of using an accessible wallet.
While Borda and Chan both work for BitGo, they were quick to comment that this product is not being released officially under the BitGo banner. However, Borda explained that the launch has the blessing of the startup.
“[CEO] Mike [Belshe] encouraged us to launch this,” he said.
Multi-sig and Ether.li
Creating a wallet on Ether.li takes only about one minute, a speed that’s faster than bitcoin wallet users may be used to. With shorter block times, syncing the blockchain’s full history with the wallet is therefore shorter.
“When you sign up and create a wallet, it actually deploys a multisig contract onto the Ethereum blockchain,” Chan said. “This is a 2-of-3 multisig contract. This kind of model is standard in bitcoin.”
Unlike a single-signature wallet, a multi-sig, 2FA wallet requires that there be more than one signature approving a transaction. In the example of a 2-of-3 multisig contract, the first signature would be the user on the wallet, but the second might be a SMS text sent from BitGo.
“When you want to make a withdrawal or send your funds, one of the signers for that contract, one signature would be the web client and then BitGo,” Borda said. “[BitGo] only applies that signature when we get a SMS from the user confirming that they want to send it.”
For example, if a user wanted to send Ether to someone else, they would initiate the transaction on Ether.li. They would then wait for a text message that asked for a code, which is the second signature. The user would put that code in and this would send the ether to its destination.
In the event that individuals lose their private keys he said: “Multi-sig lets you get around that problem.”
Both developers did caution that this wallet was still in its early stages. In the FAQ, the team said:
“Our decision to release this product was based on demand and out of a personal need for better security. However, we caution that this wallet has not undergone a security audit.”
BitGo and Ethereum
Ether.li is being released, the team says, out of a desire to get something out to the market in a relatively short timeframe.
Despite this, he said BitGo intends to apply its technology for use in the Ethereum space, provided a market continues to develop.
“We consider ourselves a security company,” Belshe told CoinDesk. “Our work has been entirely in keeping the bitcoin currency safe and the same problems you have protecting bitcoin in an online world you have in protecting any cryptocurrency. We think we can provide value in the Ethereum space.”
While BitGo did not have anything official to announce at the time of the interview, Belshe did say that his firm would be launching an industry-grade Ethereum wallet “very soon.”
He concluded:
“We actually haven’t really planned to announce anything yet, but we’re going to be in the Ethereum space.”
BitGo image via Facebook