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You've had a dynamic where money has become freer than free.

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We talk about a Fed just gone nuts.

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All the central banks going nuts.

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So it's all acting like safe haven.

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I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins.

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In the world of fiat currencies, Bitcoin is the victor.

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I mean, that's part of the bull case for Bitcoin.

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If you're not paying attention, you probably should be.

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Max, it's great to be here with you.

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Thanks for having me.

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Thanks for coming.

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We've got the new BitKey in my hand.

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Awesome.

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We just set it up, and I think a lot of people are going to be extremely happy with what you guys put together.

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I think based off our conversation, our ongoing conversations over the last year, I think we should start from the beginning.

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The hard really honing on the hard problems of self custody and how you guys have approached that design problem as it pertains to Bitcoin self custody because not your keys not your coins.

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Obviously it's been a mean for well over a decade at this point. But for many people the sort of jumping over the hurdle of taking their coins off an exchange onto a hardware wallet.

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it's a no-go for them. There's too many sort of hurdles, seed phrases, having the hardware

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while thinking about how to secure it. And this is the design problem you guys have been focused

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on. So from first principles, how do you guys approach self-custody? Yeah, it's almost exactly

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as you described right up front, which is about the hardest problems in self-custody. And so

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the way we think about this is we want people to be able to own their own coins.

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And we know there are a lot of barriers to that.

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We know there are a lot of problems that they might not be able to solve themselves and

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for which they want and need great tools that make it really easy to get the right security,

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recovery, and privacy properties.

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And so we started looking at this as kind of that holistic problem right when we started

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developing Big Key.

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And we started with a really long list of things that we wanted to solve.

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And I think everybody knows you can't solve everything at once.

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And so we tried to hone in on what is it that's really in most people's way.

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And for us, the very first answer to that was really about recovery and ease.

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It was about safety, safety and ease of use.

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And what we were finding is that lots of people were turned away from self-pustody because

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the beginning of the process is a really long list of instructions.

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The setup process takes a while.

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Things are very technical and people were being sort of left having to protect a seed

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phrase that maybe they didn't fully understand and sort of had to go on an odyssey to design

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their own wallet.

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And I think anyone who's familiar with Big Key knows that we spent a lot of time trying to think about how to solve that.

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And what we brought to market was basically a comprehensive set of recovery tools.

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We really focused on that first.

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And we got the first Big Key hardware out there, the first Big Key recovery system out there.

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A lot of people start using it.

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And then one of the ways we work is we start listening to what our customers have to say and figuring out,

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was our vision of the next hardest problems right?

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And what we found was lots of the things that we were thinking about, our customers were thinking about too.

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And one of the next ones that we took on was privacy.

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So at some point, we should probably dig into some of the improvements we've made there.

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So one of the things that typically happens with systems that protect Bitcoin and self-custody systems in particular is that you have to make a trade-off.

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Maybe you get really good recovery properties or maybe you get really good security properties.

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but especially if it's like a collaborative custody system that integrates hardware and software.

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A lot of times that means giving up privacy, like maybe giving a third key in a two of three multi-sig

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up to another company that's going to be there and support you when you lose parts of your wallet.

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That comes with a privacy trade-off.

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That company can see your wallet, your balance, all the transactions that you've made in the past and future.

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And that's a trade-off that I think had been largely accepted.

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And we spent some time working on that problem, figuring out how can we make it better

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so that you can lean on a custodian exactly when you'd like to

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or lean on a self-custody system or collaborative custodian exactly when you'd like to,

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but maybe not have to give up all that privacy.

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And then what we're talking about today,

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and I think what you can see was one of the next biggest problems that we wanted to solve

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is coming back around to, in a system that does all of those things,

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adding additional on-device verification for transactions, transaction parameters,

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but not just some of those conventional things that are verified on screens and other solutions,

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but also like critical account security properties like emails associated with your account, SMS associated with your account, that sort of thing.

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And so what we're looking at with the newest BitKey is the same ease of use, the same seedless sovereignty, the same private multi-sig, but with on-device verification.

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I think this was the biggest point of feedback of the old BitKey that I always got.

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There's no screen.

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I need to be able to verify the receive address or the send address.

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And I think you guys did an incredible job of answering that question of when screen and if so, how.

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I mean, it takes up the full bottom of the wallet.

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And it's funny, we were going through the onboarding process of this, and I was using it like an old bit key, like looking at it this way.

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And you were telling me, like, no, there's a whole new UX.

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You need to look at the screen, and you put your finger on the back.

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So there's a new way of interacting with this ergonomically.

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which I like.

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One of the things I think, you know,

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as part of our, the core part of our development process

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is we do user research.

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So we sit down with customers, potential customers.

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We watch people use the devices that we make.

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We watch people use the software that we make.

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And that heavily informed the choices we made

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in like the send flow and some of the things

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that you'll see when you're sending from that device.

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And then what you were just describing

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is actually something that we're currently adding,

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some additional things to kind of help people

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use the new device in a way that's a little bit different.

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If you're an existing customer, you may have enrolled your thumb,

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has a fingerprint on it, be tapping on the stone side of the device.

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There's a little bit different flow with the new device.

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And then people who are brand new to BitKey,

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what we found is whenever they're using the device,

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they go straight for that.

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And so we paid a little bit of attention in our design process

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to what it looks like to upgrade from our first BitKey

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to the second BitKey.

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And so there's a whole flow dedicated to that

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that kind of walks you through how to do that safely, especially if you're holding a lot of Bitcoin on BitKey.

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Yeah. Well, speaking of new BitKey owners, that's actually one thing I'm curious to get some insight in from you is with the old BitKey even.

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I mean, again, radical changes to the traditional approach to hardware.

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There's no seed phrase. We've got this collaborative custody between the hardware wallet, the mobile app and blocks server in the cloud.

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A lot of Bitcoiners that have been around for a while, like, oh, this is completely new, this is completely far.

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But based off of all the user research that you've done and interviews that you've done,

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how have people that have gone from never having a hardware wallet to going straight to BitKey,

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what are some of the main responses they give when you ask why BitKey?

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Yeah, I think by far and away the first thing I'd highlight is the onboarding time.

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So the time from unboxing Bickey, either this one or the first Bickey, is very short.

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And minutes, minutes from opening the box to making your first Bitcoin transaction.

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And that's something that we thought needed to be a core part of this.

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The door into self-custody should be incredibly easy.

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And so we spent a lot of time optimizing that in the first Bickey.

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And I think what we saw is that process alone brought a lot of new people into self-custom.

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We saw people choosing it because now is the time for them to take the plunge.

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We saw people buying five, ten-plus big keys and gifting them to others and saying to that person that they've been talking about getting off the exchange with,

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there's finally something that you can use to do this.

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And I love that every time we see it.

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And so we saw a lot of that.

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And then something that we also saw and that is definitely part of what led to our latest and newest BitKey is that we also saw a lot of Bitcoiners using it.

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People who had held Bitcoin for a really long time, familiar with a lot of other products, had already, they knew the value of self-custody.

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They'd set it up themselves.

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Frankly, they'd taken a lot of pain in doing so over many years, especially people who'd been in for a long time.

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And we found that they loved BitKey too.

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And so we started hearing from, especially that part of our customer set, that they'd love to have a screen and have that option on BitKey to do this kind of on-device verification.

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And so we really saw a bunch of different people using BitKey, which is one of the things that every time we launch a product, we get surprised by some of the things that people do with it.

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And it's always awesome to see that here.

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What are some of the non-obvious pitfalls, edge cases, or design decisions that most people are probably unaware of when it comes to designing a hardware wallet, let alone one like the one that you guys are putting out?

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I think the thing I'd highlight here is that the set of things that can happen to people when they're self-custiguing their coins is unbelievably large.

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Like, maybe you lose your phone and you lose your hardware.

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I'll use that as an example.

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So you lose both.

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That one's not unintuitive, but a lot of people, when they're first looking at BitKey,

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they wonder what happens if I lose my phone or what happens if I lose my hardware,

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and they're very easy answers to those questions in our system.

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But then they start to get to things like, what if I lose both?

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And we have a recovery contact solution for that.

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They get to questions like, what happens if Block goes out of business and isn't making BitKey anymore?

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And we have our emergency exit kit for that.

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And we had to go through all of these different cases of, well, what if somebody lost their phone

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and then they click these buttons and then they got a new device and they started onboarding

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but they didn't finish it and then they pick it back up later.

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And the team has spent so much time looking closely at making all of those flows really

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robust and accounting for all those cases to make sure that this just works In all the cases where you can lose things you get a new phone with different app versions different firmware versions We covered so much that it

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I think that task is really kind of

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the invisible complexity under the hood.

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And the way I think about that is

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when we take on complexity

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and we sort of hide it from customers,

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then they don't have to deal with it.

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And that's what a tool is for.

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And that's what it is.

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I mean, this is but one ingredient to everything you guys are doing across the whole block family of companies dedicated to that.

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I mean, every company within block is dedicated to Bitcoin one way or another now.

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It's something I talked about with Miles in November during the Cash App launch, but like the pace at which you guys have been shipping,

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whether it's at Square, Cash App, now with BitKey, the new BitKey, Proto, obviously with the rig.

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It's been astonishing.

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And as an outsider looking in, going back to this conference last year, actually, where Miles was on stage talking about the progression of Bitcoin within the block ecosystem, there seems to be a sense of urgency behind what you guys are building in an attempt to get these tools into individuals' hands so they can actually leverage Bitcoin the right way.

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Is that sort of vibe that I'm getting from the outside looking in, correct?

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Absolutely.

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So there's a phrase that I use a lot internally and lots of us use internally, which is everyday matters.

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And it's one of these things that sounds obvious on its face.

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Of course, every day matters. Why wouldn't it?

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But the difference between teams and people that operate like every day truly matters

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and any other mode of operation is radically different.

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And I think the thing that's really interesting is with that sense of urgency,

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with acting with urgency, it's sort of front of mind for us.

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We're also suddenly more focused.

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We have an incredible amount of AI tools at our fingertips that we've been leveraging to move faster, move more correctly, move more robustly.

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And honestly, the pace has been awesome.

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The other thing, too, and I think you'll see here at the conference, like we've really started to connect the dots.

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So, you know, in the past, we've talked about our goal being to make Bitcoin everyday money.

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And we've talked about doing that by making it secure with things like BitKey and Proto.

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We've talked about making it more accessible with the Cash App Exchange functionality that we originally introduced now seven to eight years ago.

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And then making it usable every day with some of the things you've seen from Square and Cash App in activating payments over the past year.

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And now that we've started to really bring those things together, I think the whole is greater than the sum of the parts.

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And we're really cooking.

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Yeah.

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I mean, you can see a day in the life of a Square merchant going about their business, accepting payments.

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Maybe it's fiat to Bitcoin.

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And then at the end of the day, they want to take some off the platform and put it into self-custody.

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It could easily integrate with this.

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And it's an urgency that I've, again, recognized.

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But I really appreciate it because I do think for the longest time, we're at the Bitcoin conference.

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And there's a lot of well named particulars. There's a lot of sort of themes that have emerged in recent years where it's focused on Bitcoin as this digital reserve asset, this digital gold that never moves.

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There's no velocity to it. There doesn't need to be.

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And while I will be the first to defend the properties of Bitcoin as a quasi-digital gold and an incredible reserve treasury asset, that's not enough for me.

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Bitcoin is meant to be peer-to-peer cash.

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And I think I feel very fortunate that a company like Block is out there really keeping that ethos of, no, it's going to be everyday money out there.

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Because it is an uphill battle.

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I would argue it may be more of an uphill battle than it was a decade ago with Bitcoin.

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It's because this digital gold reserve asset narrative has taken hold.

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Yeah.

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And it's, do you think it will be everyday money?

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I do. I do.

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And I think you can see the pieces coming together to make that happen.

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So one of the things I really like to illustrate this with is actually the Square use case.

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So a merchant accepting Bitcoin is the type of thing that I think to lots of folks might sound like a science project.

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And obviously not at this conference, but when you look at sellers broadly,

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their problems are about operating their business, they're about margins.

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If a seller is already a Bitcoiner, then they're interested in this.

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But I think what we see is that people are getting interested in it because of what it can mean for their business.

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So when a seller uses fiat, accepts fiat payments, there's a 3% fee taken by the networks.

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And on the consumer side, you typically see that maybe on a receipt you are upset about the fee that you got charged,

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or maybe you see a sign at a merchant tacking on a fee, or maybe occasionally on a larger ticket thing,

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you might change the payment method you use and that sort of thing.

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And most people on the consumer side, it's an annoying couple of percent.

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But the thing I like to bring this back to is that for a business that maybe on a great day makes 15% margin and maybe on a medium day is a 10% margin and maybe has some bad days, 3%, we just talked about 20 to 30% of their profits.

211
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That 3% is computed on the ticket sales, not their profits.

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And so it's huge for them.

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00:15:58,362 --> 00:16:08,682
And so, you know, the interest that we're seeing from sellers, some of it's from Bitcoiners, but some of it is from people that just want to get around the fact that they're getting eaten alive by this sort of thing.

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00:16:08,782 --> 00:16:12,462
And so that's not a block fee. That's not a square fee. Those are network fees.

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00:16:12,602 --> 00:16:15,542
And so we want to enable square seller businesses with that.

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And I think those types of things like those are that's the beginning of really making Bitcoin everyday money is having those those exact benefits to bring people in, even if it's not on their radar yet.

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Yeah. I mean sticking on the sellers because that's the one thing I've been curious about since you guys launched it in November.

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How's that how's that been going in terms of the reaction of sellers that were maybe not even Bitcoin curious but just realizing like oh this thing's here.

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00:16:45,642 --> 00:16:55,402
I'm probably not the right person to talk to the whole whole of that. But the one thing that I'll highlight is that it's incredible how much Bitcoiners have come out to support that

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that activation.

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Sellers get a bunch of influx of people coming around

222
00:17:01,702 --> 00:17:03,302
realizing that Bitcoin's accepted there.

223
00:17:03,502 --> 00:17:05,242
The Bitcoin map put a lot of sellers

224
00:17:05,242 --> 00:17:07,082
in front of local Bitcoiners and so on.

225
00:17:08,042 --> 00:17:10,062
And we've seen a lot more people turning it on

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00:17:10,062 --> 00:17:12,722
and starting to get the benefits.

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00:17:13,122 --> 00:17:14,902
So a lot of momentum.

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00:17:15,502 --> 00:17:17,062
And I think you're gonna see a lot more

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00:17:17,062 --> 00:17:17,722
from us in that area.

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00:17:17,722 --> 00:17:19,522
Seth Freaks, this rip of TFTC

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was brought to you by our good friends at BitKey.

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You have one key on the hardware wallet, one key on your mobile device, and Block stores

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who have Bitcoin on exchanges and have for a long time, but haven't taken a step to self-custody

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because they're worried about the complications of setting up a private public key pair, securing

239
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that seed phrase, setting up a pin, setting up a passphrase.

240
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Again, BitKey makes it easy to use, hard to lose.

241
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It's the easiest zero to one step,

242
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your first step to self-custody.

243
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If you have friends and family on the exchanges

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who haven't moved it off, tell them to pick up a BitKey.

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248
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All right, freaks, you know me.

249
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You know I don't take sponsor money from products

250
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I wouldn't use myself.

251
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So listen up.

252
00:18:17,982 --> 00:18:20,682
The AVEN Bitcoin Visa card is one of the most interesting things

253
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I've seen in the Bitcoin lending space in a long time. Here's the deal. You can get a line of credit

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up to a million dollars backed by your Bitcoin without selling a single sat. No gains, no annual

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fees, no minimum draws, and your Bitcoin is custodied by BitGo, which is one of the most

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trusted names in digital asset security. AVEN never lends it out. There's no rehypothecation.

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longer than most lenders out there or go interest only for up to five years. Rates start at 7.99%

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APR for a product that lets you keep your stack and still access liquidity. It's hard to beat.

260
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I mean, the duration in the rates is the best I've seen in the market to date. You also get 2%

261
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262
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If you've been stacking for years and you need liquidity without triggering the taxable event,

263
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this is worth a serious look. Go to aven.com slash Bitcoin. That's A-V-E-N.com slash Bitcoin.

264
00:19:21,062 --> 00:19:25,602
Check it out. I'll bring it back to the new BitKey. I mean, you alluded to it, but again,

265
00:19:25,622 --> 00:19:28,582
I just went through the onboarding process when we were outside before we hit record.

266
00:19:29,342 --> 00:19:34,062
And I think the intuitive nature by which I was telling you is you'll do something on the screen,

267
00:19:34,122 --> 00:19:38,222
like put an email in, put a phone number in, put a recovery thing in. You'll do it on the device

268
00:19:38,222 --> 00:19:43,742
first and me as somebody who knows what's happening i imagine it's storing that in the secure enclave

269
00:19:43,742 --> 00:19:50,542
and then i'm interacting with the mobile app and basically using nfc to move that information from

270
00:19:50,542 --> 00:19:56,142
the hardware device to the phone and so it's there and it's in two places at once but between the

271
00:19:56,142 --> 00:20:03,982
secure enclaves the i don't know how to describe it like the peace of mind of like maybe i'm a power

272
00:20:03,982 --> 00:20:07,582
user and i understand this but i have a feeling it'll be intuitive for many the fact you have to

273
00:20:07,582 --> 00:20:11,662
to do it here first and then you have this like active communication between the device and your

274
00:20:11,662 --> 00:20:17,802
phone. There's something, I don't know, very like wow to me. Like oh it is really on here and I have

275
00:20:17,802 --> 00:20:22,582
to transfer it here. Yeah the core property of requiring hardware for critical actions like that

276
00:20:22,582 --> 00:20:28,322
signature happens entirely on the device and you see exactly what's happening, you know exactly

277
00:20:28,322 --> 00:20:32,622
what's going on at every moment during the process. I do think that that adds to peace of mind for

278
00:20:32,622 --> 00:20:39,622
I think we started off with kind of focusing a lot on kind of the onboarding process and the speed of that.

279
00:20:39,622 --> 00:20:53,504
I think what we found is once we were able to really optimize those things the next step beyond that is we can give even more peace of mind beyond the weight and the beauty of the hardware and the ease of the software By showing people along the way

280
00:20:53,504 --> 00:20:55,724
exactly what they're confirming,

281
00:20:56,364 --> 00:20:57,964
I think people really get a lot out of that.

282
00:20:58,304 --> 00:20:58,444
Yeah.

283
00:20:59,244 --> 00:21:02,704
And speaking of the screen,

284
00:21:03,324 --> 00:21:05,704
what was the hardest part about incorporating this?

285
00:21:05,704 --> 00:21:08,084
I know with the old BitKey,

286
00:21:08,424 --> 00:21:10,324
you guys designed it and said we're not going to do a screen.

287
00:21:10,324 --> 00:21:11,724
and it's a little too much work.

288
00:21:11,804 --> 00:21:14,504
What convinced you and gave you the confidence

289
00:21:14,504 --> 00:21:15,904
to build a screen into this specifically?

290
00:21:16,084 --> 00:21:17,744
On the convinced part, our customers.

291
00:21:18,144 --> 00:21:19,344
So listening to customers,

292
00:21:20,164 --> 00:21:23,124
understanding what they want to see from us and why.

293
00:21:23,744 --> 00:21:24,784
As we went through that,

294
00:21:24,924 --> 00:21:27,304
we realized that while maintaining

295
00:21:27,304 --> 00:21:28,944
the same great properties of Bickey,

296
00:21:29,184 --> 00:21:29,904
we could add this.

297
00:21:30,484 --> 00:21:33,724
And I think that's something that as we saw more usage,

298
00:21:34,504 --> 00:21:35,804
understood what people loved

299
00:21:35,804 --> 00:21:37,784
and wanted changed about Bickey,

300
00:21:38,144 --> 00:21:39,104
just fell out naturally

301
00:21:39,104 --> 00:21:42,484
in a way that I'm glad we're delivering on.

302
00:21:43,604 --> 00:21:47,024
And then on the confidence part, the team's great,

303
00:21:47,264 --> 00:21:49,444
and the team's built very complicated hardware

304
00:21:49,444 --> 00:21:50,864
across the Square portfolio.

305
00:21:51,724 --> 00:21:53,544
But this type of development's never easy.

306
00:21:54,224 --> 00:21:57,664
And I think the very direct answer on the hardest part

307
00:21:57,664 --> 00:22:00,004
is that coordinating between the phone

308
00:22:00,004 --> 00:22:02,264
and the hardware is not easy.

309
00:22:02,964 --> 00:22:06,564
A lot of thought went into what the phone shows at one time

310
00:22:06,564 --> 00:22:08,204
and what the hardware shows at another time.

311
00:22:08,204 --> 00:22:11,244
And these things are part of a really big recovery system.

312
00:22:11,464 --> 00:22:13,784
It's not just a pure signing device.

313
00:22:14,504 --> 00:22:16,504
Viki itself isn't even just a wallet.

314
00:22:16,804 --> 00:22:18,144
It's a whole system.

315
00:22:18,144 --> 00:22:22,484
And so we put a lot of thought into how you maintain the state across those two things,

316
00:22:22,484 --> 00:22:25,064
like you're signing a particular action here.

317
00:22:25,064 --> 00:22:29,264
But then what do you show on the phone during that time?

318
00:22:29,264 --> 00:22:31,064
And how do you make sure that it's intuitive for people?

319
00:22:31,064 --> 00:22:34,504
And so you'll even see things like some color matching of what's being

320
00:22:34,504 --> 00:22:36,724
and some animation matching of what's being displayed

321
00:22:36,724 --> 00:22:38,344
when it's time to bring the devices together.

322
00:22:38,684 --> 00:22:43,164
And lots of details that our designers and firmer engineers and so on

323
00:22:43,164 --> 00:22:44,984
spent a lot of time perfecting for you.

324
00:22:45,304 --> 00:22:47,524
You mentioned it briefly earlier, too, but I think it's important,

325
00:22:47,864 --> 00:22:53,324
particularly if you're cycling either wallets or you're changing an email address

326
00:22:53,324 --> 00:22:58,644
or contact information on the back end, there's a whole process that goes into that as well.

327
00:22:58,644 --> 00:23:02,724
With a lot of devices, if you're using a hardware device just as a signing device

328
00:23:02,724 --> 00:23:07,444
and maybe that's the entirety of a product is to provide a signing advice.

329
00:23:07,564 --> 00:23:13,324
And then maybe over here you have systems that folks build that the product is that system.

330
00:23:13,524 --> 00:23:16,184
Maybe you integrate other third-party hardware with it and so on.

331
00:23:18,024 --> 00:23:19,424
Bickey has all of these problems.

332
00:23:19,664 --> 00:23:23,124
Bickey does both of those things, and therefore we have all of the problems to solve in self-custody.

333
00:23:23,624 --> 00:23:27,944
And as a result, we end up with a system that includes things like a recovery email

334
00:23:27,944 --> 00:23:30,104
that we let you know if something is happening with your wallet.

335
00:23:30,104 --> 00:23:36,004
And it's actually an account critical, security critical action to change that.

336
00:23:36,224 --> 00:23:37,904
And so we want you to confirm that on hardware.

337
00:23:38,324 --> 00:23:39,504
With the first bit key, you tap.

338
00:23:39,644 --> 00:23:43,504
With the second bit key, you actually can directly confirm what the email is being changed to.

339
00:23:43,884 --> 00:23:44,044
Yeah.

340
00:23:44,824 --> 00:23:46,564
No, I mean, especially in today's day and age,

341
00:23:46,664 --> 00:23:51,504
all the phishing attacks and $5 wrench attacks are going on.

342
00:23:51,504 --> 00:23:57,804
Having to confirm on the hardware is something I'm becoming more confident

343
00:23:57,804 --> 00:24:03,204
will be a prerequisite for interacting with wallets in the future.

344
00:24:03,484 --> 00:24:05,584
You need to physically see it here,

345
00:24:05,784 --> 00:24:08,024
especially in the world of AI and all this.

346
00:24:10,364 --> 00:24:12,764
Bringing it back to the atoms of it,

347
00:24:12,944 --> 00:24:16,744
which is you need the thing physically in your hand to change everything,

348
00:24:17,324 --> 00:24:20,204
I think gives me incredible peace of mind.

349
00:24:20,924 --> 00:24:23,144
Well, since you mentioned the atoms of it,

350
00:24:24,164 --> 00:24:26,564
I'm sort of glossing over all the difficult parts.

351
00:24:26,564 --> 00:24:31,124
like developing hardware is never easy and you know the team spent a lot of time doing

352
00:24:31,764 --> 00:24:38,164
extensive reliability testing dropping in from different heights um you know accelerated aging

353
00:24:38,164 --> 00:24:45,124
and and and that sorts of those sorts of tests saltness things like this uh and um we uh you know

354
00:24:45,124 --> 00:24:48,804
we want to make sure that you know whenever we add a component like a display like that doesn't come

355
00:24:48,804 --> 00:24:55,524
for free that comes with very intentional choices about the design and the quality and the implementation

356
00:24:55,524 --> 00:25:00,544
and really there's a whole journey involved in bringing that into the system and starting to

357
00:25:00,544 --> 00:25:04,564
rethink how we can protect even more of the system with this edition.

358
00:25:04,864 --> 00:25:08,484
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It's been drinking it pretty consistently every day for two years now.

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They also have creatine packets.

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They have these creatine packets as well.

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Seriously, game changer in our house.

406
00:27:04,084 --> 00:27:04,804
My wife drinks it.

407
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I drink it.

408
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Our boys drink it.

409
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Stay hydrated.

410
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It's a beautiful thing.

411
00:27:09,644 --> 00:27:11,264
I mean, you mentioned it before we started hitting record,

412
00:27:11,384 --> 00:27:14,704
but it's been in the headlines a lot this year,

413
00:27:14,764 --> 00:27:17,024
particularly out of France, the wrench attacks,

414
00:27:17,024 --> 00:27:24,304
the attacks on Bitcoin holders broadly, particularly in that country, but outside of that country

415
00:27:24,304 --> 00:27:28,624
as well. And this is something you guys, I don't think you guys have completely solved it with this,

416
00:27:28,624 --> 00:27:33,744
but I think that is a problem that goes into the thought behind the design of what you guys are

417
00:27:33,744 --> 00:27:38,464
building or one of the bigger problems that you're attempting to alleviate.

418
00:27:39,024 --> 00:27:43,504
Yeah, I think this really comes back to the sort of hardest problems in self-custody list. And

419
00:27:43,504 --> 00:27:46,184
And this is one of the next ones.

420
00:27:46,864 --> 00:27:51,444
So, you know, you mentioned Bickey hasn't solved it today, and I wouldn't claim that we have.

421
00:27:51,604 --> 00:27:52,824
In fact, I think nobody's solved it.

422
00:27:52,864 --> 00:27:54,064
I think it's an industry problem.

423
00:27:54,624 --> 00:28:00,764
And I think we see that with both the attacks that we've seen in France and also lots of the attacks we've started to see in the United States.

424
00:28:01,704 --> 00:28:02,964
It feels like there's an acceleration.

425
00:28:02,964 --> 00:28:05,324
I think it's pretty clear there is one.

426
00:28:05,804 --> 00:28:11,424
And Jameson Lopp's, you know, chronicling of all of these, of course, can help put some numbers behind that.

427
00:28:11,424 --> 00:28:16,604
And it's something that I think is on lots of Bitcoiners' minds.

428
00:28:17,384 --> 00:28:24,944
And I think lots of the solutions that people ideate about today, it's often things like a duress wallet.

429
00:28:26,004 --> 00:28:34,304
It's things that make an assumption that during a really horrible, violent attack,

430
00:28:34,724 --> 00:28:40,864
that certain things are going to hold true that in our thinking through this problem space, we question.

431
00:28:41,424 --> 00:28:49,444
We think that, you know, even if you're holding a lot of Bitcoin, most people, there's a lot more important things in life that are if they're suddenly threatened.

432
00:28:49,764 --> 00:28:57,424
Like, it doesn't matter what kind of practicing you did with lying about your balance or, you know, hoping an attacker hadn't done their research beforehand.

433
00:28:57,664 --> 00:28:59,664
And so I think this is an unsolved problem.

434
00:29:00,264 --> 00:29:05,784
And the team has spent some time thinking about and kind of designing a solution that we think is interesting.

435
00:29:06,364 --> 00:29:09,204
It's not something that, you know, it's not in BitKey today.

436
00:29:09,204 --> 00:29:13,364
It's actually something that we're kind of at the stage where we'd love community feedback and engagement.

437
00:29:14,344 --> 00:29:21,464
But basically, our line of thinking is that we need to combine a couple of elements.

438
00:29:22,224 --> 00:29:27,104
What we really want is to set up a situation where the Bitcoin just can't actually move right away.

439
00:29:27,764 --> 00:29:32,664
We think that velocity is one of the best possible tools that we can give people.

440
00:29:32,664 --> 00:29:39,144
meaning that in some of the attacks and in almost all of the attacks, I think that Jameson is

441
00:29:39,144 --> 00:29:47,064
primal, they're less than 24 hours. Their attacker showed up and they weren't putting themselves at

442
00:29:47,064 --> 00:29:52,564
risk trying to hold people hostage for a week or a month. And so a lot of our focus is on how can

443
00:29:52,564 --> 00:29:59,284
we provide a really safe and easy to use time lock capability that would allow people to set some

444
00:29:59,284 --> 00:30:03,704
parameters around how fast their Bitcoin can move and find something that works for them for this type of protection.

445
00:30:04,664 --> 00:30:10,464
And it sounds like the sort of thing that you know you can Google time locks if you don't already know what they are.

446
00:30:10,544 --> 00:30:14,264
And it's intuitive and and you might think that's an easy solution.

447
00:30:14,904 --> 00:30:20,544
But it's far from easy. And so you know looking at you know in something like the big key system

448
00:30:20,544 --> 00:30:25,684
directionally where we're headed is to provide a vault.

449
00:30:25,684 --> 00:30:33,024
we'll use that term to describe it here, where basically between BitKey hardware and BitKey servers,

450
00:30:33,964 --> 00:30:38,344
your default path is a withdrawal from the vault if you want to move your money.

451
00:30:38,344 --> 00:30:42,684
And when you do that, BitKey hardware and BitKey servers enforce biometric, basically,

452
00:30:42,804 --> 00:30:50,204
liveness checks and enforce a delay parameter. So, like, check that you can put your finger on

453
00:30:50,204 --> 00:30:55,004
the hardware and maybe authenticate to the BitKey app and then show that to the server,

454
00:30:55,004 --> 00:30:56,364
or start a timer.

455
00:30:56,364 --> 00:30:57,644
And then when that timer expires,

456
00:30:57,644 --> 00:30:59,544
check those things again and allow money to move

457
00:30:59,544 --> 00:31:01,464
and let people configure what that time delay is.

458
00:31:01,464 --> 00:31:03,784
Maybe set that time delay to a week or a month,

459
00:31:03,784 --> 00:31:15,206
depending on your parameters maybe longer And then we started going down this rabbit hole and we said okay well it gotta still still be self So part of what the time lock serves is that after a certain point it unlocks

460
00:31:16,206 --> 00:31:25,806
That policy of biometric check, delay, biometric check resolves, and you can just move your funds in the same way you can today with Big Key when you have the hardware and phone in your hand.

461
00:31:26,546 --> 00:31:28,526
And then we said, okay, well, there's still a problem there.

462
00:31:29,126 --> 00:31:33,446
What if the attacker runs off with your keys and they just wait for that time lock to expire?

463
00:31:33,446 --> 00:31:40,126
So they show up at your house, they take your big key and your phone or your hardware wallet and your phone, and they leave.

464
00:31:41,606 --> 00:31:50,966
And that's where we started to realize that, okay, actually, we can do even better than that with what we call an ejection destination.

465
00:31:52,006 --> 00:31:55,326
So after the time lock, send it to a different wallet.

466
00:31:55,466 --> 00:31:57,786
And this is where it gets really tricky and where we want community feedback.

467
00:31:58,666 --> 00:32:02,066
This is the type of thing that could be a friend's self-custody wallet.

468
00:32:02,066 --> 00:32:05,646
It could be another setup. It could be custodial wallet.

469
00:32:06,286 --> 00:32:08,686
And the idea is that you should never be using these.

470
00:32:09,246 --> 00:32:12,486
This only gets used in a situation where you actually got attacked

471
00:32:12,486 --> 00:32:16,326
and they actually left with their keys for a really long time beyond that time lock.

472
00:32:16,646 --> 00:32:21,026
The default is that instead, actually, you withdraw from the vault

473
00:32:21,026 --> 00:32:23,126
before that time lock expires, and the app helps you do that.

474
00:32:23,666 --> 00:32:26,786
So not solved yet, but that's kind of the design thinking,

475
00:32:26,926 --> 00:32:28,646
and we're going to share a little bit more about that,

476
00:32:29,066 --> 00:32:30,706
and we'd love to hear thoughts and feedback,

477
00:32:30,706 --> 00:32:35,526
and also frankly feedback about whether or not we should build it because we're trying to develop our roadmap in public

478
00:32:35,526 --> 00:32:38,026
and this sort of thing we'd love to hear thoughts on.

479
00:32:38,746 --> 00:32:41,326
I mean, off the bat, I'm hearing this for the first time.

480
00:32:41,426 --> 00:32:43,126
I'm just hearing this for the first time.

481
00:32:43,686 --> 00:32:47,226
Yeah, I think it's a really creative solution.

482
00:32:49,966 --> 00:32:54,206
Particularly the time delay, because that's the biggest thing.

483
00:32:54,306 --> 00:32:58,206
It's like, okay, somebody comes to your house, move it now, move it now, okay.

484
00:32:58,686 --> 00:32:59,846
I care about my life and my budget.

485
00:33:00,706 --> 00:33:04,006
Okay, I'm going to initiate the move.

486
00:33:04,946 --> 00:33:05,966
Now you have to wait a month.

487
00:33:06,446 --> 00:33:07,326
Okay, good luck.

488
00:33:08,006 --> 00:33:08,146
Yeah.

489
00:33:08,606 --> 00:33:09,466
Get out of my house.

490
00:33:10,626 --> 00:33:13,306
No, it's a shame that we have to worry about this, though.

491
00:33:13,546 --> 00:33:13,766
I agree.

492
00:33:13,866 --> 00:33:18,466
And it's one of the hardest things to design around.

493
00:33:19,466 --> 00:33:21,126
Yeah, and actually on that topic,

494
00:33:21,246 --> 00:33:23,106
one thing we realized while we were looking at this

495
00:33:23,106 --> 00:33:26,606
is that BitKey might be uniquely suited to design for it.

496
00:33:26,706 --> 00:33:30,426
And the reason for that is actually one that I think is a little bit controversial,

497
00:33:30,426 --> 00:33:32,326
which is that Bickey doesn't use seed phrases.

498
00:33:33,386 --> 00:33:36,286
And the reason it's uniquely suited to rent-a-tax

499
00:33:36,286 --> 00:33:37,606
is because in that setting,

500
00:33:38,386 --> 00:33:39,746
seed phrases are a vulnerability.

501
00:33:40,646 --> 00:33:41,746
They're too instant.

502
00:33:42,146 --> 00:33:42,826
They're too portable.

503
00:33:43,306 --> 00:33:44,706
Like, somebody can take and leave with this,

504
00:33:44,766 --> 00:33:46,006
and it's very hard to protect it.

505
00:33:46,686 --> 00:33:48,686
And really, you know,

506
00:33:48,966 --> 00:33:51,606
what we want to rely on here is Bitcoin transactions

507
00:33:51,606 --> 00:33:53,466
for moving money between wallets.

508
00:33:53,706 --> 00:33:55,746
And that's kind of the core primitive

509
00:33:55,746 --> 00:33:57,866
and the recovery system around Bickey

510
00:33:57,866 --> 00:34:01,606
that makes it safe to not use a seed phrase

511
00:34:01,606 --> 00:34:05,586
kind of sets up the key to be in a position to solve this.

512
00:34:05,826 --> 00:34:08,466
So that's part of why we want feedback is, you know,

513
00:34:08,506 --> 00:34:11,846
if this is the kind of thing that we can help solve for the industry in a unique way,

514
00:34:12,106 --> 00:34:13,086
we'd love to be able to do that.

515
00:34:13,766 --> 00:34:20,306
I'm going to hold your feet to the fire and talk about potential protocol upgrades.

516
00:34:20,306 --> 00:34:23,906
Something like OpVault or a Covenants proposal make this easier for you guys?

517
00:34:24,226 --> 00:34:27,086
Or personally as an engineer, are they something?

518
00:34:27,266 --> 00:34:27,626
Potentially.

519
00:34:27,866 --> 00:34:33,806
Potentially. I mean, I think the thing that's interesting is it's not required for us.

520
00:34:33,806 --> 00:34:41,886
And that's largely because when you have something like the BitKey server involved, you can rely on it for policy enforcement.

521
00:34:42,586 --> 00:34:45,166
It doesn't need to be enforced by the protocol.

522
00:34:45,546 --> 00:34:53,646
Right. So you can basically lean on and, you know, we could talk about the trust assumptions in this, but you can lean on BitKey servers to enforce that time delay.

523
00:34:53,646 --> 00:35:05,266
And, you know, the underlying protocol usage can use existing time lock mechanisms without further upgrades to implement something like I was describing.

524
00:35:05,446 --> 00:35:12,126
Now, are there proposals that could potentially allow for different properties of wrench attack solutions?

525
00:35:12,246 --> 00:35:12,806
Yeah, absolutely.

526
00:35:13,246 --> 00:35:18,726
But then you get into lots of other tradeoffs that will probably be a whole other episode.

527
00:35:18,726 --> 00:35:33,506
Well, I think chain code delegation is a great example of designing something to increase privacy in a way that is enabled by the protocol in combination with your servers at the Square.

528
00:35:33,506 --> 00:35:38,506
and Afshin arbed out, just launched Sigbash,

529
00:35:39,346 --> 00:35:44,286
which is this similar blinded signing server,

530
00:35:44,286 --> 00:35:47,426
which I think that's one thing I'm passionate about

531
00:35:47,426 --> 00:35:51,206
is exploring the design landscape of Bitcoin

532
00:35:51,206 --> 00:35:53,126
as it exists today,

533
00:35:53,126 --> 00:35:55,186
even if it involves bringing in some trade-offs.

534
00:35:55,186 --> 00:35:59,226
Because in a lot of cases, the trade-offs are worthwhile.

535
00:35:59,226 --> 00:36:00,906
It's something I personally can stomach.

536
00:36:00,906 --> 00:36:01,906
I won't speak for everybody,

537
00:36:01,906 --> 00:36:03,406
but I look at chain code delegation

538
00:36:03,406 --> 00:36:05,206
and something like SIG Bash.

539
00:36:05,346 --> 00:36:07,006
I'm like, yeah, these trade-offs actually make sense to me.

540
00:36:07,406 --> 00:36:10,666
Yeah, and honestly, that's kind of how Bickey started, right?

541
00:36:11,006 --> 00:36:14,526
There was a privacy trade-off when we first introduced it.

542
00:36:14,806 --> 00:36:18,226
You know, using the 203 multi-SIG that we began with

543
00:36:18,226 --> 00:36:19,766
as a privacy trade-off.

544
00:36:20,226 --> 00:36:24,706
We, on the back end, have a descriptor for the wallet

545
00:36:24,706 --> 00:36:26,646
that would allow Bicblock servers

546
00:36:26,646 --> 00:36:28,766
to know about your balance, for example.

547
00:36:29,346 --> 00:36:30,926
And with chain code delegation,

548
00:36:30,926 --> 00:36:35,706
we wanted to take a huge step really for big key,

549
00:36:35,766 --> 00:36:37,406
but also for the industry in terms of the,

550
00:36:37,666 --> 00:36:38,426
that type of trade off.

551
00:36:38,426 --> 00:36:42,786
We wanted it to be possible to get the benefits of leaning on somebody to hold a

552
00:36:42,786 --> 00:36:43,706
third key for you,

553
00:36:44,466 --> 00:36:47,866
all the recovery and safety benefits while not having the same privacy

554
00:36:47,866 --> 00:36:48,486
downsides.

555
00:36:49,146 --> 00:36:55,986
And so chain code delegation uses some relatively deep cryptographic magic

556
00:36:55,986 --> 00:36:57,866
that I won't go into extreme detail here.

557
00:36:57,946 --> 00:36:58,906
So I don't bore everybody.

558
00:36:58,906 --> 00:37:08,086
basically to make it so that Bickey servers aren't sitting there with that descriptor of the wallet,

559
00:37:08,386 --> 00:37:10,026
knowing the balance, knowing the history.

560
00:37:11,386 --> 00:37:17,246
And excited that the team formulated that into a BIP proposal, BIP89,

561
00:37:17,666 --> 00:37:20,666
and also look forward to feedback on that.

562
00:37:21,666 --> 00:37:24,326
So we were talking about it in Georgia at the Proto event.

563
00:37:24,446 --> 00:37:25,206
We were teasing it.

564
00:37:25,706 --> 00:37:27,446
And again, going back to the pace of shipping,

565
00:37:27,446 --> 00:37:30,366
I think it was less than a month later you guys had it live and then tomorrow.

566
00:37:31,406 --> 00:37:32,366
So that was cool to see.

567
00:37:32,926 --> 00:37:33,446
All right.

568
00:37:33,786 --> 00:37:38,946
Before we wrap up here, what is your biggest hope for this new BitKey launch?

569
00:37:39,306 --> 00:37:44,826
What reaction are you hoping Bitcoiners have when they see this at the market?

570
00:37:45,386 --> 00:37:48,526
I'd love to bring more people into BitKey who haven't taken the plunge yet.

571
00:37:49,266 --> 00:37:52,906
So we had a lot of people come by the booth when we were selling in person last year.

572
00:37:52,986 --> 00:37:54,206
We're doing the same at the conference here.

573
00:37:54,206 --> 00:37:59,966
So if you're around in Vegas, I hope that we get to see you.

574
00:38:00,326 --> 00:38:12,406
But I think bringing even more folks onto Viki and getting the safety benefits, getting the security benefits, getting the privacy benefits, and finally having something that's really easy to use that gives you all three of those.

575
00:38:12,766 --> 00:38:12,926
Okay.

576
00:38:13,566 --> 00:38:15,926
Well, Max, I know you're a very busy man.

577
00:38:16,266 --> 00:38:17,126
You guys are setting up.

578
00:38:17,246 --> 00:38:20,026
You're getting ready for a big week here at the conference.

579
00:38:20,026 --> 00:38:22,246
So thank you for taking some time to sit down with me.

580
00:38:22,246 --> 00:38:25,726
And honestly, congrats and thank you.

581
00:38:25,866 --> 00:38:27,486
This is a beautiful piece of hardware.

582
00:38:27,486 --> 00:38:32,326
And I think a lot of Bitcoiners are going to love this product and share it.

583
00:38:32,506 --> 00:38:33,646
That's the one thing you were saying earlier.

584
00:38:34,186 --> 00:38:36,166
People love buying BitKey's a share with people.

585
00:38:36,306 --> 00:38:39,666
We've been doing BitKey giveaways for, I think, over a year now at TFTC.

586
00:38:39,866 --> 00:38:42,866
And that is the number one use case the winner uses it for.

587
00:38:42,946 --> 00:38:44,646
They say, hey, I've got one already.

588
00:38:44,706 --> 00:38:49,026
I'm going to give it to my dad or uncle who hasn't moved it off the exchange yet.

589
00:38:49,166 --> 00:38:49,546
I love it.

590
00:38:49,686 --> 00:38:50,346
It's a great gift.

591
00:38:50,346 --> 00:38:55,706
easy to use, hard to lose, and now even easier to use, more intuitive with the screen. So congrats.

592
00:38:56,106 --> 00:38:58,586
Thank you. Thank you, Max. Thanks for having me on. Peace and love, freaks.

593
00:38:59,466 --> 00:39:04,106
All right, so we just finished recording. Before we came in here, Max set me up with my new BitKey.

594
00:39:04,586 --> 00:39:12,106
We funded it with 50,000 sats worth of Bitcoin, $39.18. Sats are cheap right now. We're going to

595
00:39:12,106 --> 00:39:16,346
complete the circle. It's confirmed on chain so we can send from this wallet. So I'm going to send

596
00:39:16,346 --> 00:39:19,346
back to another wallet that I control.

597
00:39:19,906 --> 00:39:21,346
Let the glare of the light in here.

598
00:39:22,526 --> 00:39:23,006
Boop, boop, boop.

599
00:39:24,146 --> 00:39:25,426
I'm going to send $36.

600
00:39:26,166 --> 00:39:28,846
I'm going to send 45,000 sats back.

601
00:39:29,706 --> 00:39:30,326
I'm going to continue.

602
00:39:31,466 --> 00:39:31,946
Slow.

603
00:39:35,086 --> 00:39:36,726
Loading the transaction on the phone.

604
00:39:37,646 --> 00:39:38,826
I'm going to review on BitKey.

605
00:39:40,186 --> 00:39:41,086
Hold it here.

606
00:39:41,086 --> 00:39:42,346
Address.

607
00:39:44,286 --> 00:39:44,566
AC1Q.

608
00:39:44,946 --> 00:39:45,746
All right.

609
00:39:45,806 --> 00:39:46,306
Looks good.

610
00:39:46,346 --> 00:39:55,286
I'm gonna confirm here. The address is good. I'm gonna confirm the amount that

611
00:39:55,286 --> 00:40:02,746
looks right. Signing on the device.

612
00:40:05,946 --> 00:40:09,466
Initiating transaction.

613
00:40:16,346 --> 00:40:16,906
Done.

614
00:40:18,926 --> 00:40:19,486
Sent.

615
00:40:20,426 --> 00:40:20,826
All right.

616
00:40:20,946 --> 00:40:21,406
That worked well.

617
00:40:22,846 --> 00:40:23,326
Congratulations.

618
00:40:23,726 --> 00:40:24,086
Thank you.

619
00:40:24,486 --> 00:40:26,206
First transaction on the newest wiki.

620
00:40:26,446 --> 00:40:26,766
Is it?

621
00:40:27,466 --> 00:40:27,806
Love that.

622
00:40:27,806 --> 00:40:28,206
Well, for you.

623
00:40:28,286 --> 00:40:28,566
For me.

624
00:40:29,786 --> 00:40:30,426
Hell yeah.

625
00:40:30,686 --> 00:40:31,266
Congrats, man.

626
00:40:31,466 --> 00:40:31,866
This is awesome.

627
00:40:31,866 --> 00:40:32,106
Thanks.

628
00:40:32,306 --> 00:40:34,226
Thank you for listening to this episode of TFTC.

629
00:40:34,706 --> 00:40:38,286
If you've made it this far, I imagine you got some value out of the episode.

630
00:40:38,686 --> 00:40:42,646
If so, please share it far and wide with your friends and family.

631
00:40:42,746 --> 00:40:44,106
We're looking to get the word out there.

632
00:40:44,106 --> 00:40:51,126
also wherever you're listening whether that's youtube apple spotify make sure you like and

633
00:40:51,126 --> 00:40:56,506
subscribe to the show and if you can leave a rating on the podcasting platforms that goes a

634
00:40:56,506 --> 00:41:02,646
long way last but not least if you want to get these episodes a day early and ad free make sure

635
00:41:02,646 --> 00:41:09,446
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636
00:41:09,446 --> 00:41:15,366
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637
00:41:15,366 --> 00:41:22,486
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