Know Your Custodian: The Security and Reliability of Blink, Your Everyday Bitcoin Wallet

Security is not just a feature at Blink; it's a commitment.

Know Your Custodian: The Security and Reliability of Blink, Your Everyday Bitcoin Wallet
January 17, 2024
Pretyflaco

As a custodial service committed to revolutionizing the bitcoin experience, we at Blink understand the importance of balancing accessibility with top-notch security. Our users are often drawn to us seeking more efficient, low-cost alternatives to the traditional bitcoin mainchain transactions, without sacrificing security and ease of use. In this article, we outline the core security principles and measures that make Blink a secure and trustworthy platform for managing your bitcoin transactions.

Why Choose Custodial Services?

The shift towards custodial services like Blink is driven by the desire for reliable, efficient, and user-friendly bitcoin transactions. Our services ensure lower transaction fees, unlock seamless operations, and eliminate the need for technical knowledge in managing Lightning nodes or liquidity. We make bitcoin transactions accessible for everyone, regardless of their technical background.

The Foundation of Trust: Galoy Open Source Software

At Blink, our platform is built on Galoy, an open source infrastructure stack designed for enterprise scale Bitcoin and Lightning applications. Open source software is crucial in ensuring security through transparency. It allows users and developers worldwide to scrutinize, verify, and improve our software, ensuring ongoing enhancement of our security features.

User Deposits: Secure, Accessible, and Fully Reserved

At Blink, we prioritize not just the security, but also the complete integrity of user deposits through a balanced and transparent approach:

  • Cold Storage: To ensure robust security against a variety of threats such as hacking and physical breaches, we secure a majority of user deposits in geographically distributed multisig cold storage. This method eliminates single points of failure, safeguarding your assets.
  • Hot Wallet: For efficient and affordable transactions, a percentage of deposits are kept in a hot wallet within a redundant architecture Lightning Node. This balance between hot and cold storage optimizes both security and transaction efficiency.

Crucially, Blink operates on a full reserve basis. This means users can withdraw their bitcoin at any time, even in the event of a simultaneous withdrawal by all users, akin to a bank run. We stand by the reliability of our full reserve model and even encourage our users to participate in the traditional Proof-of-Keys Day on January 3rd. While currently the verification of our full reserve status is demonstrated through our ability to service a bank run, our team is actively exploring ways to provide cryptographic proof of reserves for user deposits in the future. This commitment to transparency and security is a cornerstone of our service, giving you the confidence to trust Blink with your bitcoin transactions.

Unwavering Vigilance: Continuous Monitoring

Security is as much about people as it is about technology. Our team of dedicated engineers is on-call 24/7/365, monitoring and maintaining the integrity of our systems. This constant vigilance allows us to rapidly address any potential issues and maintain a secure environment for our users.

Enhanced Account Safety: OTP, TOTP, and SIM Swap Protection
At Blink, we understand the critical importance of safeguarding against security threats like SIM swap attacks. To enhance account safety, we have implemented a multi-tiered security strategy:

  • One-Time Password (OTP): Blink accounts can be accessed with OTPs, ensuring a secure and user-friendly login process.
  • Email Address as a Security Layer: After registration, users have the option to add an email address to their account. This step adds an additional security layer, allowing users the option to remove phone number-based logins. This is particularly beneficial for those who prioritize security over phone-based convenience.
  • Two-Factor Authentication (2FA) with TOTP: For heightened security, Blink users can further secure their accounts with Two-Factor Authentication using Time-Based One-Time Passwords (TOTP). This feature adds an additional level of verification, significantly enhancing account security and integrity.

Each of these measures is designed to provide robust protection for our users, ensuring their Blink experience is not only convenient but also securely fortified against potential threats.

Regulatory Compliance and Oversight

Incorporated in the Republic of El Salvador as BBW, S.A. de C.V., Blink operates under the regulatory oversight of three major bodies:

  • BCR (Banco Central de Reserva de El Salvador): Ensures financial stability,  development of the payment system and adherence to monetary policies.
  • SSF (Superintendencia del Sistema Financiero): Oversees our compliance with the Regulations of the Bitcoin Law and AML/CFT regulatory framework, maintaining transparency in our operations.
  • UIF (Financial Investigation Unit of the Attorney General's Office of the Republic of El Salvador): Protects against financial crimes, further ensuring the integrity of our operations.

It's important for bitcoin custodians to find and work with bitcoin-friendly jurisdictions. Aligning with regions that understand and support the unique needs of bitcoin operations not only ensures regulatory compliance but also fosters a more supportive environment for innovation and growth in the Bitcoin space. For more insights, read "The Bullish Case for Bitcoin Custodians".

Final Thoughts

At Blink, we believe in providing a service where security and convenience coexist. Our commitment to robust security measures, regulatory compliance, and user-friendly features makes us a trusted custodian in the bitcoin community. We continue to evolve and adapt, always prioritizing the safety and satisfaction of our users in the ever-changing Bitcoin landscape. Entrust your transactions to Blink, where your bitcoin journey is secure, efficient, and accessible.

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