Obelisk Team Re-brands to Foundation Devices (FD), Forks Coldcard Wallet to the Passport Pre-order — And is Funded by Inflection, associated with Erik Voorhees (Who Owns Keepkey).
During the 2017 bull run, people had a lot of spare money to throw around. ICO’s were the popular outlet for newly green crypto gamblers and many lost their shirts to these pump and dump scams.
But another less known scam of a sort proliferated the crypto space during this time.
Failed crypto hardware projects.
These were often pre-orders for mining hardware that over-promised on performance and shipping times, but in reality, failed to deliver by a civil-suit margin.
One example of such a hardware scheme was Squirrel Research Labs, as initially promoted by Kristy-Leigh Minehan, aka OmgAGirl. This venture sold over a million dollars worth of FPGA’s, promoted as hardware that would be able to mine Monero.
Instead of Monero, this hardware was only able to mine a handful of altcoins. No one broke even on these FGPA’s.
Another one of these failed hardware schemes was launched in late 2017 by Obelisk Inc. a Boston based operation. Lead by Siacoin developer David Vorick, and operated by Zach Herbert, Ken Carpenter and Jacob Johnston. Obelisk became a nightmare for it’s customers and operators.
Here are the highlights of the Obelisk train wreck:
- They advertised that their ASIC units would be built and shipped by June 30th 2018. These units only started to arrive in late September of 2018. Three months late.
- For this delay, Obelisk pledged to pay compensation to customers. That compensation, though “credited” to obelisk accounts, was never paid out.
- In addition, the ASIC units that arrived hashed at a rate of 66% the advertised hashrate. They were useless against competitor ASIC manufacturers, who had delivered their more powerful ASIC’s on time before Obelisk.
- As a result, many Obelisk SC1 miners begged Vorick to fork the Siacoin blockchain in order to kick the competitions ASIC’s off the network. Siacoin lead developer and Obelisk CEO, Vorick, initially resisted this idea, since this would invalidate Siacoins immutability and decentralization. Eventually he capitulated and forked Siacoin so that only his ASIC’s could mine Siacoin on October 31st 2018. The Siacoin price dumped soon after, and has since languished.
- Furthermore, Obelisk pledged a coupon of 250$ and 800$ for each ASIC purchased. These coupons are now worthless.
- They pledged to release financial statements of salaries and to honor refund requests. These statements never materialized, and refund request were ignored.
- Their last effort was to launch a GRIN ASIC miner, and they accepted funds for a batch to be produced. But soon after, they had to refund customers due to a lack of interest and funding. Customers were refunded for the dollar amount in Bitcoin they paid at the time of purchase.
- There were multiple other issues…
All these mishaps occurred while Zach Herbert, Ken Carpenter and Jacob Johnston were operating Obelisk Inc.
After several lawsuits and the the destruction of Obelisk’s brand and reputation, these three literally moved down the street and rebranded to a new crypto hardware company without the legal and reputational baggage of the Obelisk brand. Foundation Devices (FD). But to make matters stranger, the above FD employees are still listed on Obelisks website as employed by Obelisk. Their “first” FD product is an open-sourced Bitcoin only hardware wallet, called Passport.
That’s because the passport is a fork of Coinkite’s open source Bitcoin only Coldcard wallet. In essence their first product, the passport, is a clone of the Coldcard.
On its own, a non-contentious clone (or fork) of the Coldcard would maybe be an interesting project. After all, it’s just “building on each other’s accomplishments”, though I’d hardly call the Obelisk dumpster fire an accomplishment. More like a pattern of duplicitous behavior.
As a result of this borderline IP theft by foundation devices, Coinkite is studying whether to change their software and hardware licensing to a more commercially restrictive alternative, as a defensive measure against this encroachment.
An understandable move. However, Coinkite is the well-earned spearhead for open-source Bitcoin wallets in the space today. They did all the work up front, made a massive bet on Bitcoin only hardware, and it payed off. But now going forward, we could have the FD team as the default unearned leader for open source Bitcoin hardware wallets…
So where does that leave us. Will the foundation team fully understand the Coldcard firmware code they are using, but did not write?
Sounds like a security risk, never mind the ethical concerns, borderline IP-theft and the failed crypto hardware dumpster fire that is Obelisk Inc. Makes you wonder if they’ll apply the same low standard for safe guarding your Bitcoin keys.
I’d rather not find out.
Bitcoiners want their hardware wallet provider to have an ethic that closely aligns with the Bitcoin ethos. I would argue that forking the Coldcard wallet is tantamount to legal IP-theft. In any case, having a history of low integrity and breaking your word doesn’t help the FD team either.
Therefore, if you care about the Bitcoin ethic, ethos, and the security of your own funds, don’t buy a forked hardware wallet. You could buy two Coldcard wallets and a couple Opendime’s for the same price as a FD passport anyways ($299).
In conclusion, you’ve been warned.
Don’t take my word for it. Verify, don’t trust.
Addendum: I would have liked to stop here, but this rabbit hole keeps going, so bare with me here.
I think it’s worth knowing that one of the investors behind Foundation Devices is Inflection. A fund that has a history of investing in…
One of the venture advisors for this fund is Erik Voorhees, the guy behind the Shapeshift platform and the hardware wallet, Keepkey.
Both these products have fallen out of favor with most Bitcoiners, due to the high KYC demands of the Shapshift platform and issues with the keepkey itself. Though there may be more to this that I’m not aware of.
Funnily enough, the keepkey is originally a cloned fork of the Trezor wallet.
Looks like history is repeating itself.
In any case, it appears that Erik Voorhees is continuing his support for companies that fork and clone Bitcoin hardware wallets.