San Francisco-based payments solutions provider, Square, has reportedly decided to make its cryptocurrency cold storage technology fully open-source.
Alok Menghrajani, a software engineer at Square, noted in a blog post published on October 23rd that the source code, software development kit (SDK), and documentation for the company’s cold storage solution is now accessible on Github’s repositories.
Standard HSM Encryption
Referred to as “Subzero”, Square’s offline storage product for Bitcoin (BTC) is used by the company to securely store crypto assets for its clients. The technology used by Square to develop its cold storage solution is based on standard hardware security module (HSM) encryption – which manages cryptographic keys on physical computing devices.
Square’s other financial products, such as those used to make payments, also use HSM technology to manage users’ private keys. Commenting on how Square’s technology works, Menghrajani said the programmable HSM allows users to easily transfer bitcoin from a web-based hot wallet to an offline storage space at any given time.
In order to maximize security, bitcoin stored in Square’s cold storage devices may only be transferred to online hot wallets if authorization has been given through multi-party signatures.
Other security-related features supported by Subzero include the ability to program “preset rules” such as conditional transfers.
Users may set specific conditions on bitcoin transfers that only allow the cryptocurrency to be sent from offline storage to crypto addresses owned by Square. Explaining how Square’s crypto technology is “future compatible”, Alok Menghrajani said:
The HSM is programmable, allowing us to support bitcoin wallets today while giving us the flexibility to implement other protocols in the future.
Founded in 2010 by the 41-year-old billionaire, Jack Dorsey, Square Inc. was only a small business platform that allowed users to make payments using credit or debit cards from their smartphones.
However, Square has been aggressively expanding its operations since then, and in November of 2017 the company began supporting bitcoin trading through its Cash app. As CryptoGlobe reported in mid-August, Square’s Cash app now lets users buy and sell bitcoin in all 50 US states.
Competing With PayPal
Notably, the Cash app was launched four years after Square’s competitor, PayPal, launched Venmo, which is a peer-to-peer (P2P) payment app for smartphones.
As covered, Paul Condra, a research analyst at Credit Suisse, had said:
We believe bitcoin and other crypto sales represent a potential mid/long term growth opportunity for Square and we are positive on the strategy. This strategy could also drive greater adoption of Square Cash and we note SQ is well positioned to potentially facilitate crypto-payment purchases at Square merchants at some point in the future.