It’s the first mergers-and-acquisitions deal for the Seattle-based KeepKey since its founding in 2014, and the acquisition was made entirely in bitcoin.
“We have had a very close relationship with MultiBit since we announced our own product last year in July,” said KeepKey founder and CEO Darin Stanchfield in email correspondence with CoinReport. “They were quick to add support for KeepKey to MultiBit, and we have stayed in constant contact.”
For a while, KeepKey had considered acquiring the UK-based MultiBit, Stanchfield said. His company approached the desktop bitcoin wallet maker with the idea a few weeks ago, and it was open to discussions.
“MultiBit has excellent KeepKey support, and offers many advanced features that our Chrome extension doesn’t offer,” Stanchfield explained. “We target our Chrome extension to new bitcoin users whereas MultiBit is geared for the well-weathered bitcoiner. We believe users should have choices, and this filled the obvious need for our bitcoin-versed customers. MultiBit also works without a hardware wallet, and still offers this best security you can get in a hardware-free setup.”
KeepKey values privacy just as much as security, and MultiBit has made recent moves to prioritize privacy.
In February, the Open Bitcoin Privacy Project released its second report rating bitcoin wallets. Out of 20 wallets ranked, the MultiBit HD wallet placed 11th. The report noted the wallet had a “unique privacy quirk” in which, by default, one out of every several transactions included a small donation out to the wallet’s developers.
Stanchfield told CoinReport MultiBit had discontinued its fee collection mechanism, known as BRIT, in April, enhancing privacy even more. According to MultiBit’s website, BRIT has been removed in version 0.3.0 and higher.
“MultiBit used the BRIT feature to fund the development. All small amount of bitcoin would be sent to MultiBit every several transactions,” Stanchfield explained. He added, “This is not ideal for privacy because anyone can look at the blockchain and through careful analysis determine that MultiBit wallets were being used by linking through the MultiBit donation address. By the time we approached MultiBit, the feature had been removed.”
If KeepKey’s wallet had been included in the Open Bitcoin Privacy Project report, Stanchfield believes it would have ranked high.
“Security and privacy are top factors whenever we consider how features will be implemented,” he said. “For example, KeepKey Chrome Wallet supports multiple accounts that can be named (“Bitcoin Savings” and “Rainy Day Fund.”) This meta information is encrypted using KeepKey, in the background and automatically. Without an attached KeepKey which has been actively authenticated with a PIN, this meta information cannot be viewed.”
Now with KeepKey’s involvement with MultiBit, “you can expect to see continued focus on privacy,” Stanchfield said. “For example, we have an immediate plan to add CoinJoin support to MultiBit, and users can expect to see that in the coming months. As far as I know, we are the first desktop client to have this on the roadmap.”
KeepKey’s guiding principle, Stanchfield explained, is financial counterparties should not be opaque parties, and instead should employ open source hardware and software, allowing for transparency and third party validation.
“With our acquisition of MultiBit, KeepKey can now serve this promise of trustless finance to many more people, including those who cannot justify a dedicated hardware solution,” he said. “At the same time, it solidifies a pro-feature solution for our current KeepKey customers.”
In a blog post about the acquisition, MultiBit’s developers said KeepKey is committed to maintaining MultiBit HD as an open source MIT license project going forward. Both parties agree that MultiBit Class has “reached the end of its life,” the blog post said, with the developers encouraging those still using Classic to migrate to HD as soon as possible.
MultiBit considers KeepKey “excellent custodians” of its product going forward, said MultiBit CEO Gary Rowe in a press release sent to CoinReport. “We are moving on to other projects and are delighted that the KeepKey team have stepped up to continue development of our software. Their commitment means that existing users can continue to use Bitcoin with confidence.”
The choice to make the deal entirely with bitcoin was clear for both parties, said Stanchfield, explaining that KeepKey hadn’t converted the bitcoin it received from product sales. The company is always searching for opportunities to use the digital currency with its suppliers and vendors. The transaction had near instant settlement with bitcoin, he said, so MultiBit did not have to wait for funds to clear at its bank.
MultiBit users should expect to receive immediately the same dedicated customer support KeepKey offers its hardware clients, said Stanchfield. “MultiBit will remain one of the best desktop wallet clients available, and we will keep it 100% free and open source.”
He added, “Going forward, KeepKey will continue to work toward making trustless finance easy for everyone. ‘Easy’ encompasses a lot of things: great security and great privacy that just work so that users do not have adjust settings or know how it is working for it function perfectly.”
Images courtesy of KeepKey via PR firm Wachsman PR