Bitcoin startup Coinkite has announced it will phase out its popular online wallet system over the course of 30 days and its team will refocus on enterprise hardware products.
"We are winding down the web wallet part of Coinkite so that our team can focus on a number of new products that are more decentralized and embodied as hardware products. We’re still big Bitcoin fans, supporters and Hodlrs, and although Coinkite has been great adventure in the SaaS [software as a service] business, we want to spend more time where our heart is, hardware products, software-"not-as-a-service", and other exciting new possibilities," Coinkite said in a blog post on the company's website.
Coinkite, which was founded in 2012 and is based in Canada, developed a reputation as a leading bitcoin payment processor due to its decentralisation and focus on user security and privacy. These included encrypted passwords, a full reserve bitcoin wallet and a rule that it would not send out links to reset passwords if users forgot them.
In the post, Coinkite's management said the decision to shut down its bitcoin wallets followed ongoing interference from state-sponsored threat actors and DDoS (distributed denial-of-service) attackers who have been targeting the company ever since its launch over three years ago.
"Being a centralized bitcoin service does attract attention from state actors and other well-funded pains in the butt, and as a matter of fact, we’ve been under DDoS since the first month we launched – over three years – yay. Plus, we have put real fiat dollars into our lawyers’ pockets, to defend our customers from their own governments. This is not what we love to do, which is coding and delivering awesome services," the company said.
On an immediate basis, everything will work as usual, but no new user sign-ups or API keys will be accepted.
The company will continue to wind down its services over the next two weeks and, after 30 days, the company has said it will offer "some sort of manual process to claim amounts" on any unclaimed deposits.
Bitcoin and blockchain, the underlying software that underpins cryptocurrencies, have overtaken other online payment systems such as mobile payments in the past couple of years.