Casa's New Seedless Bitcoin Wallet Meets its Critics
US-based crypto security specialist Casa claims that their new wallet is a solution to the problem of complicated seed phrase management, particularly for the "first-time Bitcoiners." Critics have their doubts, leading a discussion on the wallet's possible shortcomings.
Self-custody is considered by many crypto enthusiasts the only way to hold bitcoin (BTC) and other cryptocurrencies safely over long periods of time. But with it also comes the need to write down and manage seed phrases for recovery purposes, which can expose users who don’t have the experience to properly secure their seeds to a number of threats of coin loss.
According to a recent blog post published by the company, the new Casa Wallet will offer a completely seedless setup with only an email address and a first name (or alias) needed to get started. They describe it as an "easy self-custody wallet [...] great for first-time Bitcoiners and for securing smaller balances."
Instead of asking new users to write down the infamous mnemonic seed phrase – which new crypto users often fail to keep safe – Casa’s app will generate a key to be stored on the user’s phone in addition to an encrypted back-up. The backup key will then be “split across” Casa and the user’s cloud provider, which is either Google or Apple, the company wrote.
What this means is that only the user can access the back-up key by using both his iCloud/Google credentials and his Casa credentials, the New York-based firm explained.
Potentially!— Casa (@CasaHODL) June 15, 2020
In 2020 we're focusing heavily on key management + multisig through the Keymaster app.
Additionally, Casa says that the wallet is free to download, and operates on the same technology as the firm’s existing Keymaster app, or the multisignature vault, which is reserved for paying members only.
“While Casa memberships are custom-built for long time HODLing [...] Casa Wallet is perfect for securing smaller amounts of BTC, and it’s a great way to introduce anyone to being their own bank with Bitcoin,” the company said about their new wallet solution.
Although appreciating some of the app's features, Bitcoin entrepreneur Matt Odell found an issue with the company's "built for privacy" claim, calling it misleading. While Nick Neuman, Casa's CEO, argued that the team will continue improving on the privacy feature, Odell stated that "if it were me I would either remove the section or add a note that Casa knows IP address(es) and addresses/transactions/balances."
Strong claim considering:— Matt Odell (@matt_odell) June 15, 2020
- no Tor support
- no full node support
- email address required to use
On a positive note the app is slick and I appreciate the coin control option (although being able to add labels would be appreciated). pic.twitter.com/VfDCutC4Av
Counterarguments were given too, particularly that focusing on and adding all possible privacy features would make it difficult for a new Bitcoiner to use the app, hence going against the purpose of the app. Counter-counterarguments were of the "newcomers should do more research" variety.
The transition to seedless wallets in general has been criticized by some, with for example Unchained Capital’s Chief Strategy Officer Dhruv Bansal saying last year that he thinks it's “insane to run seedless.”