This means that even in the event of Coinbase’s untimely demise, bitcoins “stored” in the Coinbase multisig vault would still be accessible to the user. Users would be able to use open source tools, like this one, to recover their bitcoins. Though this Bitcoin technology functionality has been available for a while, widespread implementation of multisig security has still been lacking.
Coinbase explained the value of a multisig vault on their blog:
Our new Multisig Vault gives the customer complete control of their own private keys. Coinbase has no ability to move funds (which means you are safe from Coinbase being hacked, going bankrupt, or anyone seizing your bitcoin). It also means that you as a customer have much greater responsibility in storing your backup key securely. If you lose this backup and forget your multisig password, Coinbase cannot help you recover your bitcoin. For this reason, we only recommend this feature for advanced users.
Most Bitcoiners now understand, especially through their personal experiences, that Bitcoin isn’t for everyone. That doesn’t mean that Bitcoin’s benefits can’t be felt by everyone though. There are users that will only ever use Coinbase’s basic features; however, the hope is that every user eventually learns enough about Bitcoin to become an “advanced user” that desires control of his or her private key. Coinbase Vault is going to become an increasingly attractive proposition to individuals and businesses, especially those that would be unable to set up a multisig implementation on their own. Many companies are currently in the Bitcoin multisig space; however, Coinbase is the first to deliver to both individuals and businesses on a large scale.
What do you think about multisig vaults? Comment below!
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Last modified (UTC): October 29, 2014 20:52