iOS Users Get First ‘Decentralized’ Bitcoin Wallet with Breadwallet

Jon Southurst (@southtopia) | Published on September 13, 2014 at 16:55 BST

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Users of iOS devices can now download a decentralized wallet app that connects directly to the bitcoin network, making it different from other server-based products on the market.

Breadwallet is the first bitcoin wallet app of its kind on Apple’s platform. Its creator says users are not vulnerable to server downtime or the hacking attacks that sometimes strike centralized providers, and wallet management remains straightforward enough for the average user.

It is now featured on the ‘Choose Your Bitcoin Wallet’ page at bitcoin.org, and has received favorable comments from users on Reddit. A video demonstration of the app is here.

Security features

Instead of running through central servers, Breadwallet accesses the bitcoin network directly, using ‘simplified payment verification’ (SPV). Developer Aaron Voisine said he prefers this to other iOS apps that are “server-trusting” or just “wrappers around web windows”, building his own SPV backend from scratch.

Breadwallet is a BIP32 HD or ‘hierarchical deterministic’ wallet, which means all of a user’s bitcoin addresses (public and private) and balances can be recovered with a single unique phrase. Provided you remember the phrase, users’ wallets will never need backups and can be restored on other devices even if the original is lost, broken or stolen.

Breadwallet PIN entry screen

That being so, Breadwallet is staking a claim as iOS’s first decentralized bitcoin wallet. The Android version of Hive wallet is built on Mike Hearn’s bitcoinj and thus is listed as ‘decentralized’ by bitcoin.org, but its iOS version is not.

Hive does, however, use a similar deterministic tree structure (BIP39) to Breadwallet, meaning backup phrases from each app may be used on the other.

Choosing a more secure platform

Voisine said he chose iOS because he wanted to create an app that anyone could use relatively safely, without needing to know how to secure a desktop or Android device – something even more technical users often struggle to do properly.

He said:

“As bitcoin grows to become a major world currency, malware theft is going to be a huge problem. Stealing digital cash is way more lucrative than turning people’s machines into spambots or stealing credit cards.”

Apple’s tight grip over its native platform was actually the best way to reduce the threat of malware, he added. Further, iOS is the only popular platform that hardware-encrypts the filesystem by default, giving added protection to users who lose physical access to their devices.

However, Voisine said that users of ‘jailbroken’ iOS devices should not install Breadwallet – or any kind of bitcoin wallet.

“You’re going to get robbed because you think you know more than you actually do. Any jailbreak app has total control of your phone and your wallet. I understand the temptation to use it with a little bit of money, but you will get lazy because it will be convenient to use right up until it isn’t.”

He added that he wanted to make a wallet with a “beautiful, convenient user experience that is also as secure as possible for people who have zero understanding of computer security.”

Bitcoin matures on iOS

Bitcoin users with iOS devices have seen a dramatic improvement in wallet options in just the past few months. No sooner had Apple quietly ceased its policyagainst bitcoin wallet and payment apps in June, than the first examples began to appear.

There are now over 10 wallet and payment options available on iOS, includng Blockchain, Gliph, Hive, Coin Pocket, Bity and GreenAddress.

Voisine, who has been a mobile developer for six years, was previously the lead iOS developer for Yammer, as well as co-founder of Lightt Inc.

He said he was convinced Apple would change its policy on bitcoin apps eventually, and set to work months before the decision was made in order to be ready to submit on the first day Apple allowed it.

The long head start turned out to be prudent – the biggest challenge Voisine faced was building the app’s SPV mode bitcoin network client portion. No-one had written this for iOS previously, and it took him six months to complete, he said:

“All the Android wallets that are SPV use Mike Hearn’s bitcoinj, which took over a year to write.”

Digital currency and bowl backer Bitcoin seeks to broaden its appeal as a form of payment

Those are some of the things now available for purchase in St. Petersburg using bitcoin.

BitPay, a bitcoin payment processing company, said Friday it hopes to have 100 local businesses accepting the digital currency in time for the Dec. 26 Bitcoin St. Petersburg Bowl — an NCAA-sanctioned post-season college football game.

It also wants to install 30 bitcoin ATMs across the region that customers can insert U.S. dollars for bitcoins stored in mobile wallets on smartphones.

"Our goal is to create a permanent bitcoin hub in St. Petersburg," said BitPay co-founder and CEO Stephen Pair, during a St. Petersburg Chamber of Commerce event.

So far, a handful of businesses have signed on with BitPay, including the St. Petersburg Museum of History, Ferg's Sports Bar and Grill, Green Bench Brewery Co. and Hotel Zamora in St. Pete Beach. Centerplate concessions at Tropicana Field, the site of the college football bowl game, will also take bitcoin.

"We think having bitcoin will put us out to a niche market that normally wouldn't ever think about us," said James Parrish, the history museum's marketing director. "We're expecting to get a lot more business because of it."

In June, BitPay became the title sponsor of the bowl game for the next three years, replacing Beef O'Brady's, a Tampa-based restaurant chain that held the naming rights since 2009. Terms of the deals weren't announced, but BitPay officials said they paid ESPN in bitcoin.

Introduced in 2009, bitcoin is a deregulated and, to some, still controversial form of currency exchanged without the 1.5 or 3 percent transaction fee charged by most credit card companies. Its value has fluctuated wildly, from a few U.S. dollars per bitcoin to more than $1,000. This week, after falling to its lowest point since May, it settled at about $516.

People can buy bitcoin through a private exchange (bitstamp.net is a popular one) or create them by completing a lengthy mathematical algorithm, a process known as mining that requires special computer equipment. At BitPay, all 70 employees receive a percentage of their pay in bitcoin.

Bitcoin users tend to be highly educated men ages 17 to 54, about the same audience that likes college football. St. Petersburg bowl officials expect BitPay's involvement will generate interest in the game beyond sports and boost awareness of bitcoin worldwide.

"I would hope that 50 percent of the stadium will be filled with people who want to spend bitcoin," Pair said.

ATM accepting three major cryptocurrencies Bitcoin, Dogecoin and Litecoin opens in ACT

The alternative online currencies are gaining traction nationally, with observers estimating there are close to 50,000 users in Australia.

The ATM is the first of its kind in Australia to trade all three digital currencies, but others have appeared in capital cities specifically for bitcoin users.

Alex Hume from the group behind setting up the new ATM, Bit2Bit, said more users and businesses were becoming interested in the online currencies.

"I suspect that bitcoins are going to take off, and with all these other cryptocurrencies coming on board I think it's going to become a huge part of retail, even in the next five to 10 years," he said.

Bitcoin explained: digital millionaires

Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.

Mr Hume said there were at least nine businesses in Canberra accepting bitcoin, including the local bus system ACTION.

That is up from only four companies a month ago.

"There's a lot of people interested in it, a lot of them are quite young," Mr Hume said.

Chris Guzowski from the Australian Digital Currency Commerce Association said there are close to 1,000 Australian businesses that now accept the alternative currencies.

"The usage has been very impressive, so it's clearly a technology that people are excited about," he said.

"Early adopters are with enthusiasm telling their friends about it and there's an upward trend of adoption."

 

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