Coinkite Drops Consumer Wallet for Enterprise Bitcoin Hardware Pivot

Bitcoin technology startup Coinkite has announced it is winding down its web wallet in an effort to focus on enterprise hardware products.

The phasing out of the product, Coinkite said in a blog post, will take place over the course of 30 days, after which users logging into the site will automatically have their balances withdrawn. The company indicated there would be an additional process for any unclaimed funds leftover from the transaction.

In interview, Coinkite CEO Rodolfo Novak said that the startup is keen to move away from software, as he indicated resources are being drained at the company by the “amount of bullshit” involved in offering the service.

Novak told CoinDesk:

"We want to write software, not deal with lawyers and DDoSing."

Novak also cited the high cost of offering reliable free software services as another pain point considered in the transition.

Founded in 2012, Coinkite has long offered prominent developer tools, including API and wallet products that the company once lauded as more decentralized and more privacy-friendly than alternatives.

"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 continued.

Coinkite encouraged wallet users to switch to products available from Bitcoin.org, Bitcoin Core, Electrum and Ledger.

Microsoft’s lunch

Novak said Coinkite now plans to focus on creating bitcoin transaction processing hardware, a product it positioned as one that would appeal to more lucrative enterprise users.

Notably, Novak positioned such a device as a more secure alternative to cloud-based services such as Microsoft Azure. 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 did not offer a timeline for the products, but suggested announcements on its latest offerings would be ready soon. Additional products Coinkite will now focus on include physical bitcoins and bitcoin payment terminals.

More details on the service shutdown can be found here.

New versus old image via Shutterstock