Keeping your bitcoin safe is one of the most important parts of hodling bitcoin. Generally speaking, hardware wallets offer the most security, while sacrificing on convenience. For the most privacy, cash is the best option available. Opendime is the perfect mixture of both security and privacy. It’s a hardware wallet that holds a single bitcoin address and private key all on a USB stick that fits on your keychain. When it comes time to spend it, it can be used as anonymously as cash.
What Is Opendime?
Opendime by CoinKite (Affiliate) is a unique hardware wallet that holds a single Bitcoin address and private key all on a USB stick that can be spent as privately and anonymously as cash.
Opendime is actually one of the best ways to use bitcoin anonymously. It’s one of the few Bitcoin USB sticks in the industry that’s capable of doing what it does. While your desktop wallets and mobile wallets can directly connect to the internet by themselves, you need to plug hardware wallets into a computer before they can send transactions.
Opendime is currently the only Bitcoin USB stick that is able to connect with any computer and both generate a Bitcoin address and private key in a secure offline environment as well as send and receive bitcoin entirely offline with anyone.
Fittingly, it’s often referred to as the cypherpunk “piggy bank” as a nod to cypherpunk cred sticks.
How Does OPENDIME Work?
When you first plug in an unused OpenDime, it generates a unique Bitcoin private and public key pair on the device itself. No one knows what the private key is — not even the owner. You can’t get the private key until you “unseal” the device. The public key, on the other hand, becomes available so that you it can receive bitcoin like any other Bitcoin address.
Since it’s a Bitcoin USB stick, anyone can simply plug the Opendime into a USB port to check its balance and verify that no one already spent the bitcoin that’s stored on it.
You can spend the Opendime in two ways:
- Keep the Opendime sealed and pass it on to someone else to spend it as a private, anonymous cash-like transaction.
- Unseal the Opendime by breaking its physical seal on the device, revealing the private key.
After unsealing the device, you can use the private key to send bitcoin from the device into another wallet if you so choose. In any case, after you spend the Opendime once, you can’t spend it again.
Only 2 Miner Fees
Since you only pay a miner fee when you send bitcoin TO the device and when you remove the bitcoin FROM the device, there are only 2 miner fees associated with each Opendime. Every time the device changes ownership, there are no on-chain transactions so there are no miner fees and no waiting for on-chain confirmations.z
One Time Use
Like a piggy bank, once you destroy it to remove the money contained inside, you can no longer use that piggy bank. Opendime works the same way.
Once you have unsealed your Opendime, it is no longer usable as a bitcoin wallet and it should be destroyed.
Why Is OPENDIME Important?
Due to the public nature of the blockchain, every time you send bitcoin, you are making an on-chain transaction that is publicly visible to the entire world.
What separates Opendime from all of the other hardware wallet devices in the space is its unique ability to spend bitcoin offline and off-chain. Instead of signing transactions with the private key and sending a transaction on the blockchain, Opendime keeps the private key hidden from the owner of the device and the entire device is exchanged just as privately and anonymously as cash.
Not only is this method of using bitcoin more private, but it also helps to grow the total number of HODLers, because bitcoin stored on an Opendime is not on an exchange.
HODL
In order to actually HODL your bitcoin, you need to be the one who is in control of the private keys. This is often called having “Proof of Keys”. Keeping your bitcoin on an exchange like is NOT HODLing because you are not the one in control of the private keys.
When you use a standard hardware wallet, you are the one in control of your private keys since the keys are stored on the device itself. When you want to send any bitcoin from your hardware wallet, you sign the Bitcoin transaction with your private keys before broadcasting it to the network.
Each Opendime USB stick is a device for hodling a private key. So if any bitcoin lives on an Opendime, it’s impossible for that bitcoin to be sold on an exchange. If it is not residing in the exchange’s custody, no one can downward pressure on the price through selling or lose it to an online hack. The only way to get the bitcoin from an Opendime is to have physical access to the device.
In short, when you use an Opendime, you are taking advantage of the unique layer-one scaling solutions being built, helping to create more hodlers, and helping to increase the price of bitcoin by taking self custody.
Privacy & Anonymity
Opendime is likely the single most private Bitcoin wallet on the market. Once you’ve sent some bitcoin to the Opendime’s Bitcoin address, the device acts as “physical bitcoin” and can change ownership countless times without any additional on-chain transactions. Therefore, ownership is as private and anonymous as cash each and every time it gets passed around.
To better understand how an Opendime works, let’s compare it to a clear glass piggy bank.
Imagine that you had a clear glass piggy bank with a $100 USD gift card in it. Anyone and everyone could easily see the contents of the piggy bank and verify that there is, in fact, a $100 gift card inside. You could trade the piggy bank with anyone who was willing to accept it as payment. This same process could take place as many times as the buyer is willing to accept the bank as payment.
As soon as someone decides that they want to remove the $100, they would need to irreversibly damage the piggy bank by smashing it, thus releasing the money inside.
Opendime works in a similar fashion. When you send bitcoin to the device, you can check the balance of the device and spend it as anonymously as cash, which gives the bearer of the stick as much anonymity and privacy as cash. In the same fashion, you can unseal the Opendime and remove the bitcoin stored within it.
Who Should Use OPENDIME?
While Opendime is one of the best wallets for privacy in the entire Bitcoin space, it doesn’t come without a learning curve. We would suggest this device if you are at least an intermediate Bitcoin user, but anyone comfortable with the learning curve can learn how to use Opendime!
If you’re comfortable setting up an Opendime and understand that you don’t have access to the private key, and can only spend it once, then you should feel comfortable using it in your own life or for friends and family.
- Spend it by passing it on to other bitcoiners for private transactions.
- Introduce a family member to Bitcoin in a unique way that teaches them the fundamentals of sending and receiving bitcoin.
- Store it somewhere safe but easy to access to use in case of emergency.
- Travel with larger sums of money more easily than physical cash.
- Use it as a backup for while you’re traveling in case you can’t access traditional Bitcoin wallets.
Anyone can benefit from the additional privacy that Opendime offers, so if you’re interested in using Opendime for yourself, there are all kinds of different scenarios where it could be useful.
The Obvious Opendime Risk (And Its Advantage)
As with all products, each comes with its own set of pros and cons. While Opendime is a truly amazing device, it’s designed with a single risk point intentionally to mitigate all other potential risk vectors. That risk point is that Opendimes have NO backups, unlike traditional Bitcoin wallets.
Since the private key is never revealed to the user without unsealing the device, you are unable to back up the private key. Opendime works just like cash so if your device is lost, stolen or damaged, there is no recourse for you. Your bitcoin is gone forever. Also, since the Opendime is just a Bitcoin USB stick, you will lose all of your funds if you break the device by sitting on it in your pocket or otherwise losing the device, so treat it with care.
You may think that having no backup is a bad idea. For long-term bitcoin storage, it is a bad idea. But by using the Opendime for private payments or as a physical gift — and ensuring that the recipient understands the risks too — it’s an invaluable tool for privacy and for hyperbitcoinization.
If you’re looking for a long-term wallet for Bitcoin storage, check out our favorite Bitcoin-only wallets, learn how to properly manage your own seed phrase, and research seed phrase storage products to ensure it lasts a lifetime.
Suggested Features
While we personally love this device, we do think that there are some changes that could be made to make the device more useable and provide more value to the bitcoin space.
Here are just a few things that we wish were possible with an Opendime.
1. Different Colors
We know that Opendime is currently only available in black but we think that having multiple colors of USB stick would enable the bitcoin community to “assign” each color a fixed denomination of bitcoin in the same way that certain fiat notes are different colors (like EUR, AUD, NZD and many others).
We think that if Opendime were available in many of the colors that fiat money is available, we could begin to establish a system that would make it easier for the community to begin to use bitcoin as cash in the real world.
This could even be taken a step further if payment requests could somehow be built into the functionality of each colored device.
2. Payment Requests
When you set up your Opendime, you need to drag and drop an image file or two into your Opendime and the device generates a legacy bitcoin address that you can send bitcoin to.
We think that a payment request for a fixed amount could help to incentivize bitcoiners to only send round numbers to each device and we would slowly see a denomination system emerge from the bitcoin community.
This would work especially well with the different colors that we mentioned above. If fixed payment requests were pre-programmed into each color, we could begin to establish a standard for which bitcoin payments could become cash.
3. Private Reuse
When you unseal your Opendime, you are exposing the private key and it is no longer a trustless device. What if you still wanted to use the device for your own personal use as a sort of paper wallet?
What if you could wipe the device after you’ve revealed the private key and generate an entirely new private key and address? This device couldn’t be used as cash but it could be a way to generate a private key and address offline.
Note: If something like this was implemented, it would only be usable as a wallet for your own personal use. This could not be exchanged as a trustless device since the device has been punctured but it could still be used to generate private keys and corresponding addresses for the owner of the device.
4. Address Destruction
If the above “Private Reuse” is not possible, we think there should be a way to destroy the information on the device itself.
After you unseal your Opendime to reveal the private key, the physical wallet still exists and if someone were to get a hold of it after the balance has been removed, there is a potential loss of privacy for the last owner of the device. If there was a way to erase all of the device data on an Opendime, privacy could be preserved.
This might already be possible but we aren’t sure. This also becomes a moot point if it is possible to create a new address after the private key has been revealed. If point #4 were to be implemented, then each address that you used previously could be overwritten and privacy would be preserved.
Final Thoughts
Hopefully after this Opendime review, you’ve learned all you need to know to make a more informed decision. If you are looking for a way to spend bitcoin like a physical transaction, Opendime is currently the best option. You only need to make an on-chain transaction when you send TO the device and when you want to redeem the bitcoin on the device itself, but the device can change ownership countless times in between each transaction due to the trustless nature of how they are built.
While WE LOVE Opendime, we do feel that some changes could be made to help the Bitcoin space grow faster and farther than it already is. If they came in different colors, made payment requests instead of just static legacy addresses, had personal reuse, and address destruction, we feel that it could provide much more utility to the Bitcoin space while still providing as much privacy as it does now. If you like this Opendime review but have more questions about the device and how it works, you can visit the Opendime FAQ page.
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