1
00:00:00,000 --> 00:00:09,960
You've had a dynamic where money has become freer than free.

2
00:00:10,800 --> 00:00:15,720
If you talk about a Fed just gone nuts, all the central banks going nuts.

3
00:00:16,320 --> 00:00:17,920
So it's all acting like safe haven.

4
00:00:18,460 --> 00:00:23,520
I believe that in a world where central bankers are tripping over themselves to devalue their

5
00:00:23,520 --> 00:00:28,500
currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.

6
00:00:28,500 --> 00:00:31,400
I mean, that's part of the bull case for Bitcoin.

7
00:00:31,820 --> 00:00:34,260
If you're not paying attention, you probably should be.

8
00:00:36,520 --> 00:00:38,080
Becca, welcome back to the show.

9
00:00:38,360 --> 00:00:38,800
Hey, Marty.

10
00:00:39,080 --> 00:00:40,080
Thanks for having me.

11
00:00:40,300 --> 00:00:41,080
Happy to be here.

12
00:00:42,140 --> 00:00:42,840
It's great to have you.

13
00:00:43,980 --> 00:00:49,520
I was just going through your X account while you were making coffee.

14
00:00:50,060 --> 00:00:50,220
Yeah.

15
00:00:51,080 --> 00:00:52,180
You guys are doing spaces.

16
00:00:52,300 --> 00:00:53,440
I think this is where I want to start.

17
00:00:53,520 --> 00:00:55,220
You guys are doing spaces, and I'm interested.

18
00:00:55,360 --> 00:00:56,360
I haven't been able to hop in.

19
00:00:56,360 --> 00:00:56,920
Mm-hmm.

20
00:00:56,920 --> 00:01:02,980
What are the number one questions that people have for you guys at AnchorWatch?

21
00:01:03,500 --> 00:01:10,980
Because I think you guys have built up the brand in an incredible way over the last few years.

22
00:01:11,360 --> 00:01:13,020
And brands well established.

23
00:01:13,320 --> 00:01:23,680
But this whole idea of ensuring your Bitcoin in cold storage with a unique custody setup that AnchorWatch has really pioneered.

24
00:01:24,200 --> 00:01:25,860
How comfortable are people with it?

25
00:01:25,860 --> 00:01:33,160
right now. Getting comfortable. So I think one of the amazing thing about our product or the

26
00:01:33,160 --> 00:01:38,940
kind of combination of our product is that it really is next level security. So the custody

27
00:01:38,940 --> 00:01:45,740
platform is in fact unique, but we would certainly say it's superior to legacy multi-sig. The

28
00:01:45,740 --> 00:01:52,780
insurance is unique, but that's a whole new concept. And so the reality is that it takes a lot to get

29
00:01:52,780 --> 00:01:58,080
people familiar with what we're offering. So what we find is that just actual long form

30
00:01:58,080 --> 00:02:04,000
content, you know, having the opportunity to have conversations with people is really important.

31
00:02:04,000 --> 00:02:11,520
So right now, what we've been doing spaces on regularly is inheritance. So we've been really

32
00:02:11,520 --> 00:02:16,580
highlighting how our custody platform works for inheritance, but we get lots of questions in

33
00:02:16,580 --> 00:02:22,800
general, just about how time locks work, how the key management happens, still questions on

34
00:02:22,800 --> 00:02:29,020
how it is that we're a required signer, but it also becomes self-custody, things like that.

35
00:02:29,100 --> 00:02:33,360
And then, of course, the insurance, what it covers, how you do claims, dollar denominated

36
00:02:33,360 --> 00:02:37,480
versus Bitcoin denominated. So there's lots to dive into when we talk to customers.

37
00:02:38,080 --> 00:02:44,540
Yeah. I mean, inheritance is a big one. I think that's that the inheritance question is

38
00:02:44,540 --> 00:02:50,400
planted in the back of the minds of many Bitcoiners and has been for many years, which is like,

39
00:02:50,480 --> 00:02:59,960
uh, like, uh, it's, it's a little iffy. It's a little iffy. I mean, it's, it's turned into

40
00:02:59,960 --> 00:03:08,100
a little bit of a joke, but what happens is people tell us about their treasure maps when

41
00:03:08,100 --> 00:03:14,120
we get on calls with, with customers and they start telling us like, Hey, I'm looking at you.

42
00:03:14,120 --> 00:03:32,700
I heard that you're really good for inheritance. I feel pretty good about my setup. I've, you know, I've walked my wife through it. But I'm just, I'm not quite confident, right? And so they tell us what their treasure map directionally is. They don't obviously share their exact details.

43
00:03:32,700 --> 00:03:39,280
but it always it's always a little bit of a scavenger hunt right so it's like a certain

44
00:03:39,280 --> 00:03:44,380
piece of information is in a file cabinet and then that takes them to the next piece of information

45
00:03:44,380 --> 00:03:52,100
and then maybe they say marty i put marty's name down as my trusted advisor um i i got

46
00:03:52,100 --> 00:03:59,380
there's a lot of people who put very specific uh bitcoiners down as their trusted advisor and

47
00:03:59,380 --> 00:04:04,920
their trusted helper. I have a feeling that a lot of the industry is putting the same five or 10

48
00:04:04,920 --> 00:04:12,160
names down from what we hear. And so there's a lot of confidence being put into these individuals

49
00:04:12,160 --> 00:04:17,320
that they're still going to be around and available to provide that guidance. So yeah,

50
00:04:17,320 --> 00:04:22,060
there's a lot of questions that we've tried to solve with the design of our product.

51
00:04:22,760 --> 00:04:25,980
Yeah. No, there was one point. I've never told Matt this, but there was one point

52
00:04:25,980 --> 00:04:29,540
where I was like, if anything happens to me, all right, here's where you go.

53
00:04:30,280 --> 00:04:34,060
You find this and then you just go, go ask Matt and he'll know what to do.

54
00:04:34,140 --> 00:04:36,860
Cause he'll see it and he'll know what to do. Like, it's like, well,

55
00:04:36,960 --> 00:04:41,200
at least, at least you and Matt, like it makes sense.

56
00:04:41,200 --> 00:04:46,500
But I think there's a lot of people who put down you and Matt who you've never

57
00:04:46,500 --> 00:04:50,940
had a conversation with. They just, based on your reputation that they,

58
00:04:51,100 --> 00:04:54,800
they say like, you can trust this guy. And, uh, you know,

59
00:04:54,800 --> 00:04:58,080
I think you, in fact, are like people's escape hatch.

60
00:04:59,180 --> 00:05:01,360
If you're out there and I'm your escape hatch, please.

61
00:05:02,700 --> 00:05:04,160
I don't want that responsibility.

62
00:05:04,160 --> 00:05:07,020
But I mean, I think what we're getting at is a highlight.

63
00:05:07,320 --> 00:05:15,420
It's like the ridiculous nature of how lackluster the solutions for this very important problem have been.

64
00:05:15,680 --> 00:05:17,160
Yeah, totally.

65
00:05:17,160 --> 00:05:35,500
Totally. I went through this myself before we had developed this for Anchor Watch where I had my own treasure map for my family. And I think it's a good one. It's straightforward. It wasn't overly complicated. It was easy to follow.

66
00:05:35,500 --> 00:05:44,520
And so I told my family, three different subsets of my family, you know, all you have to do is start in this location.

67
00:05:44,880 --> 00:05:52,020
And if you start in this location and you read what is there, it will get you all you need.

68
00:05:52,360 --> 00:05:52,840
Don't worry.

69
00:05:53,380 --> 00:05:56,640
And like four to six months later, I checked in with the family.

70
00:05:57,060 --> 00:06:00,840
And I was like, hey, remember the Bitcoin, the Bitcoin inheritance?

71
00:06:02,260 --> 00:06:03,480
What's that location?

72
00:06:03,480 --> 00:06:05,100
You know, where do you start?

73
00:06:05,500 --> 00:06:08,920
And two of the three subsets of my family didn't remember.

74
00:06:09,600 --> 00:06:11,180
Like, they just straight up didn't remember.

75
00:06:11,300 --> 00:06:12,980
One of them remembered with prompting.

76
00:06:13,780 --> 00:06:14,760
And that's freaky.

77
00:06:15,180 --> 00:06:16,020
Super freaky.

78
00:06:17,260 --> 00:06:17,460
Yeah.

79
00:06:17,460 --> 00:06:34,660
And, I mean, it kind of highlights the need for a protocol that sort of takes the onus of gathering the key information and getting access to the addresses out of the hands of the people who will be inheriting the Bitcoin.

80
00:06:35,500 --> 00:06:37,340
and is what you guys have been working on.

81
00:06:37,520 --> 00:06:37,820
Totally.

82
00:06:37,820 --> 00:06:42,880
So the way we actually execute the inheritance protocol

83
00:06:42,880 --> 00:06:45,040
is using what we call the recovery layer.

84
00:06:45,280 --> 00:06:49,780
So the custody solution that AnchorWatch bill is at its core,

85
00:06:50,100 --> 00:06:53,200
it is shared custody between the customer and AnchorWatch

86
00:06:53,200 --> 00:06:54,220
while you're insured.

87
00:06:54,560 --> 00:06:56,360
So customer has their own private keys.

88
00:06:56,760 --> 00:06:57,540
We don't have a backup,

89
00:06:57,860 --> 00:07:00,380
but we're also a required signer while you're insured.

90
00:07:00,960 --> 00:07:03,560
After you're insured using TimeLock,

91
00:07:03,700 --> 00:07:04,960
so enabled by Miniscript,

92
00:07:04,960 --> 00:07:21,680
It goes to pure self-custody. So if we've disappeared off the face of the earth, if we were bad actors, if we refused to sign for any reason, it does become pure self-custody after your insurance policy ends. And that's why those private keys are truly your private keys. It is self-custody.

93
00:07:21,680 --> 00:07:27,880
right between those two layers though. So there's the, we're both required signers and then there's

94
00:07:27,880 --> 00:07:32,980
pure self custody right between those layers. There's a multi-institutional recovery, recovery

95
00:07:32,980 --> 00:07:38,120
layer. And so that's what we would use in the case of the death of a client. And that's the

96
00:07:38,120 --> 00:07:43,540
multi-institutional is where Anchor Watch has our keys. And then we have a recovery institution.

97
00:07:43,540 --> 00:07:48,620
We've chosen Coin Corner, their regulated exchange out of the Isle of Man, been around for 10 years,

98
00:07:48,620 --> 00:07:54,780
never had any losses, Bitcoin only. So they have their own set of recovery keys. So if the client

99
00:07:54,780 --> 00:08:01,360
dies, the time lock will open to that recovery layer a month before your insurance policy ends.

100
00:08:01,680 --> 00:08:09,100
And we could move the Bitcoin from this impaired vault into a brand new vault. So if you die early

101
00:08:09,100 --> 00:08:13,820
in your policy, so if you get hit by a bus, you know, just a month into the policy or something,

102
00:08:14,240 --> 00:08:18,600
what we would tell the beneficiary is like, okay, your Bitcoin is going to sit here safe and sound.

103
00:08:18,620 --> 00:08:26,240
We know that you don't have access to your spouse's keys or if it's a trustee, that's fine, whoever the beneficiary is.

104
00:08:27,860 --> 00:08:33,120
But let's say on September 12th, that's when this recovery layer will come open.

105
00:08:33,440 --> 00:08:37,260
We would work with the beneficiary to understand their intentions.

106
00:08:37,480 --> 00:08:39,340
Do you want to continue hodling the Bitcoin?

107
00:08:39,860 --> 00:08:43,960
If so, if you'd like to be our customer, we'll get you set up on a brand new vault.

108
00:08:44,120 --> 00:08:45,040
We'll take care of you.

109
00:08:45,460 --> 00:08:46,940
You'll get your own signing devices.

110
00:08:46,940 --> 00:08:48,080
We'll educate you.

111
00:08:48,620 --> 00:08:54,980
If you need to liquidate it to take care of family matters, you know, we'll assist you in getting the Bitcoin where it needs to go.

112
00:08:55,940 --> 00:08:57,900
And then that layer is also insured.

113
00:08:57,900 --> 00:09:08,620
So if you have questions on like, well, how do I really know Anchor Watch and Coin Corner won't misuse the multi-institutional custody to steal the customer funds?

114
00:09:08,720 --> 00:09:11,560
That is specifically covered by the insurance policy.

115
00:09:11,620 --> 00:09:18,360
And that's why that recovery layer happens while you're still insured, because it gives you that peace of mind that we can't misuse it.

116
00:09:18,620 --> 00:09:23,360
The way time locks work in Bitcoin, though, is once they're available, they're always available.

117
00:09:23,360 --> 00:09:38,440
So even if you passed away very close to the end of the policy and it actually the vault then did go into self custody and maybe the beneficiary just didn't get in touch with us because they were busy with other things or maybe they didn't get in touch with us at all.

118
00:09:38,440 --> 00:09:44,460
And we had to look for them and like find out why we weren't hearing from the clients.

119
00:09:44,460 --> 00:09:50,680
eventually when we find that beneficiary, once available, always available. So that recovery

120
00:09:50,680 --> 00:09:57,060
layer is still available even after the vault is in self-custody. So that's how it can be foolproof

121
00:09:57,060 --> 00:10:04,800
because it really doesn't matter when the event happens, we will still be able to assist

122
00:10:04,800 --> 00:10:08,920
in recovering the assets. And then we have the legal side of it as well and making sure that

123
00:10:08,920 --> 00:10:13,660
we have documentation and everything is very, very clear for your trust attorneys, estate attorneys.

124
00:10:13,660 --> 00:10:15,600
We dealt with it all on that side, too.

125
00:10:16,380 --> 00:10:27,580
Well, that's a natural segue into my next question, which is how are the estate planners and attorneys that you've interacted with interacting to this solution?

126
00:10:28,020 --> 00:10:29,120
Really positively.

127
00:10:29,300 --> 00:10:33,580
So we consulted with a number of them in the design of how we did.

128
00:10:33,740 --> 00:10:36,720
So this came to life in our terms of service.

129
00:10:36,720 --> 00:10:44,360
So when you actually read the language there, it's very clear, very easy to understand how we approach account ownership.

130
00:10:45,340 --> 00:10:51,500
We're very clear that AnchorWatch never claims that we have ownership over a customer's assets.

131
00:10:51,920 --> 00:10:59,820
So we're always looking for the rightful owner, and the rightful owner is either the customer themselves or their beneficiary or their estate.

132
00:10:59,820 --> 00:11:08,180
And so it goes through from a legal standpoint, kind of the order of operations and who we view as that rightful owner.

133
00:11:08,580 --> 00:11:13,340
It goes through the steps needed to kick off the inheritance protocol.

134
00:11:13,660 --> 00:11:15,800
You would submit a debt certificate.

135
00:11:16,660 --> 00:11:20,460
Depending on certain states, they require some additional documentation.

136
00:11:21,060 --> 00:11:23,840
But then we would be able to recover that asset.

137
00:11:23,840 --> 00:11:30,080
And we also built into the customer dashboard really easy to access instruction sheets.

138
00:11:30,180 --> 00:11:33,820
So there's a button that you can click right there in your dashboard.

139
00:11:34,140 --> 00:11:38,920
It will give you a PDF that can be put in your file cabinet, given to your beneficiaries

140
00:11:38,920 --> 00:11:42,040
or given to your lawyer or your trust attorney.

141
00:11:43,020 --> 00:11:46,980
And it shortcuts the path to the recovery.

142
00:11:47,140 --> 00:11:51,380
So it explains that this client, this individual has an account at AnchorWatch.

143
00:11:51,400 --> 00:11:53,240
It explains who AnchorWatch is.

144
00:11:53,240 --> 00:12:06,900
It shares our license numbers, three different forms of contact information, and just clarifies to whomever is going to be kicking off that protocol that you don't need to file an insurance claim.

145
00:12:07,160 --> 00:12:08,380
This isn't an insurance claim.

146
00:12:08,460 --> 00:12:10,800
And it just takes them right through that and makes it super easy.

147
00:12:11,020 --> 00:12:15,420
So the attorneys who have looked at it, very happy with it.

148
00:12:15,720 --> 00:12:19,240
And it's also flexible in terms of the trusts themselves.

149
00:12:19,240 --> 00:12:25,600
themselves. So some people already have a revocable or irrevocable trust, we can ensure

150
00:12:25,600 --> 00:12:34,260
that that trust itself can be the client. Or we have other people who the individual is the client,

151
00:12:34,360 --> 00:12:39,840
but they have a trust set up. And if they pass away, the trust is the beneficiary. And so any

152
00:12:39,840 --> 00:12:45,760
of those are doable with us, we're happy to be flexible on that structure. Yeah, and it's,

153
00:12:45,760 --> 00:12:52,720
it's massive because i've had many conversations with estate planners and attorneys on this show

154
00:12:52,720 --> 00:12:59,380
throughout the years and the inheritance thing is always always uh just a headache in terms of

155
00:12:59,380 --> 00:13:04,560
it's typically the you know it's put on the estate planners to sort of figure out and really walk

156
00:13:04,560 --> 00:13:10,600
through with the individual um how this is actually going to happen when they pass and there is some

157
00:13:10,600 --> 00:13:14,880
trust involved in sense of like all right we're going to split up the keys and yeah have an

158
00:13:14,880 --> 00:13:19,700
attorney that has access to it but if you can codify it and that's the beauty of what you guys

159
00:13:19,700 --> 00:13:25,740
are building and the beauty of bitcoin more broadly is like as it matures you can codify it into

160
00:13:25,740 --> 00:13:32,700
like just suspending conditions on the protocol totally totally i mean and yeah additional

161
00:13:32,700 --> 00:13:39,320
functionality will become available as well when we you know when we make the transition to tap

162
00:13:39,320 --> 00:13:47,560
route. But even today that you can set up the key management today, you know, between trustees,

163
00:13:48,000 --> 00:13:52,360
for example, or between the lawyers, you can do that ahead of time if that was important to you.

164
00:13:52,360 --> 00:13:58,820
But I think the most important thing in in this is just that your beneficiaries don't need to

165
00:13:58,820 --> 00:14:05,380
understand Bitcoin. Like you can ensure that they will receive the benefit of your legacy

166
00:14:05,380 --> 00:14:12,080
without actually counting on them to understand key management or even know where things are.

167
00:14:12,220 --> 00:14:13,600
And I think that's a huge difference.

168
00:14:13,760 --> 00:14:15,540
It's a really huge difference.

169
00:14:15,660 --> 00:14:16,840
Even collaborative custody.

170
00:14:17,500 --> 00:14:23,100
Collaborative custody provides amazing backstops against a single point of failure.

171
00:14:23,100 --> 00:14:32,280
But for inheritance, it still requires that the beneficiary have at least partial access to private key material

172
00:14:32,280 --> 00:14:37,180
and can handle it well for a long time.

173
00:14:37,540 --> 00:14:38,880
So it's a big improvement, I think.

174
00:14:39,700 --> 00:14:44,200
Yeah, and I think one of the things that makes these conversations

175
00:14:44,200 --> 00:14:48,840
or the thought of just like inheritance planning around Bitcoin specifically

176
00:14:48,840 --> 00:14:54,600
is so daunting is that it has been historically a pretty involved process

177
00:14:54,600 --> 00:15:01,220
of literally setting up legal structures and processes with estate lawyers.

178
00:15:01,220 --> 00:15:14,540
And I think in terms of the process of getting onboarded into Anchor Watch's Inheritance Protocol, what's the time look like from like, all right, I'm going to do this too.

179
00:15:14,800 --> 00:15:25,565
It set up and we good to go I mean from the point in time that somebody reaches out to us and they interested to become a customer to having an insured vault with the inheritance protocol set

180
00:15:25,565 --> 00:15:32,945
up is less than a week. And really that, that timeframe is just mainly to send them their

181
00:15:32,945 --> 00:15:38,005
signing devices because they set up their private keys themselves on brand new signing devices.

182
00:15:38,285 --> 00:15:44,665
And so just the mail time. So a few days we would quote them, they fill out the application. That's

183
00:15:44,665 --> 00:15:50,505
like a 15 minute thing. And then we'll send them the welcome kit that has the signing devices and

184
00:15:50,505 --> 00:15:55,665
some goodies. And then it's just setting up an onboarding call and going through and creating

185
00:15:55,665 --> 00:16:00,625
their vault. During the application, that's when they provide their beneficiary and their secondary

186
00:16:00,625 --> 00:16:06,325
beneficiary and contact information for both. And then from there, everything about the

187
00:16:06,325 --> 00:16:11,245
inheritance protocol is just built into our services. We don't charge extra for it. If we

188
00:16:11,245 --> 00:16:15,965
do need to assist the beneficiary and recover it we don't charge a finder's fee or anything like

189
00:16:15,965 --> 00:16:21,345
that this is just this is just part of our services and it's just built into everything

190
00:16:21,345 --> 00:16:28,105
that we do natively yeah and i guess on top of that like since you guys have been out market

191
00:16:28,105 --> 00:16:35,305
really hitting the pavement and uh telling people like hey you should be insuring your bitcoin we

192
00:16:35,305 --> 00:16:42,005
have always a london cover letter you can insure against five dollar wrench attack losing your

193
00:16:42,005 --> 00:16:49,725
private keys which is also a big a big thing yeah like how how would you describe the state of

194
00:16:49,725 --> 00:16:56,885
the market in terms of people understanding the importance of like insuring your bitcoin and

195
00:16:56,885 --> 00:17:04,365
really taking care of it i think i mean it's definitely coming along we it it is better

196
00:17:04,365 --> 00:17:10,685
understood at the commercial level, for sure. So commercial clients who already are buying

197
00:17:10,685 --> 00:17:19,825
insurance on other aspects of their business and are used to needing to secure insurance to provide

198
00:17:19,825 --> 00:17:26,085
comfort to others, right? So I mean, if you think about directors and officers insurance, for

199
00:17:26,085 --> 00:17:33,245
example, you know, the company might buy that for themselves and they are the customer of that

200
00:17:33,245 --> 00:17:38,525
insurance. But really, the reason that you do that is to give peace of mind to your board members,

201
00:17:38,625 --> 00:17:44,345
right? So you wouldn't want to serve on a board if the company didn't have D&O in place. And so

202
00:17:44,345 --> 00:17:50,145
this concept of having insurance not only to protect yourself, but to also protect other

203
00:17:50,145 --> 00:17:56,705
stakeholders is really important. So fiduciaries, fund managers, company business treasuries,

204
00:17:56,705 --> 00:18:04,825
Bitcoin treasury co's, they definitely are all seeing the benefit and they see that having it

205
00:18:04,825 --> 00:18:10,985
insured, having in very secure custody makes LPs feel better, makes investors feel better,

206
00:18:11,205 --> 00:18:16,985
makes regulators feel better. So that's definitely coming along on the individual side.

207
00:18:16,985 --> 00:18:26,945
Um, uh, I would say, especially at the mid and higher level, uh, policy size where people are

208
00:18:26,945 --> 00:18:32,845
really thinking about wrench attacks, um, it's definitely hitting home. So I think this wrench

209
00:18:32,845 --> 00:18:39,225
attack thing in the, you know, over the last six months has been really intense, like really,

210
00:18:39,365 --> 00:18:45,705
really intense. They've been accelerating, uh, significantly they're happening in the first

211
00:18:45,705 --> 00:18:53,405
world. They're getting violent early. So it used to be kidnappings in the first world anyway,

212
00:18:53,945 --> 00:18:59,545
for recent history for the last decade or so. You know, a kidnapping would happen,

213
00:18:59,545 --> 00:19:06,225
a ransom situation would happen, and it would take some time to actually build to violence.

214
00:19:06,445 --> 00:19:11,425
But recently, over the last six months, they're going straight to violence. These are tactics

215
00:19:11,425 --> 00:19:16,865
that we're seeing more in like Central and South America cartel kidnappings where they would go

216
00:19:16,865 --> 00:19:23,685
straight to chopping off a finger, pulling out fingernails, things like that. And crypto wrench

217
00:19:23,685 --> 00:19:29,405
attacks are going that direction right now. So it's definitely on people's minds. And the other

218
00:19:29,405 --> 00:19:35,365
thing that's very interesting in terms of the reports is that if you look through the publicized

219
00:19:35,365 --> 00:19:39,005
reports, there's a lot more that happened that are not publicized. But if you look through the

220
00:19:39,005 --> 00:19:45,245
publicized reports, you'll see that the size of attack is less than you would expect. The ones

221
00:19:45,245 --> 00:19:51,885
that make the news are like 10 million, 20 million. They're significant dollars. But if you look at the

222
00:19:51,885 --> 00:19:57,645
people who are actually attacked, it's like husband and wife kidnapped and held in their home and

223
00:19:57,645 --> 00:20:07,405
tortured for $268,000 or $300,000. A guy was murdered, I think in December for $58,000 of

224
00:20:07,405 --> 00:20:14,465
crypto. And so I think just having any amount and being public about it actually puts you at risk.

225
00:20:14,865 --> 00:20:21,485
And insurance really is the solution to that because you can have very clever key management

226
00:20:21,485 --> 00:20:26,625
and risk management concepts. You can have your passphrase, you can have decoy wallets,

227
00:20:26,625 --> 00:20:32,445
you can have multi-sig. But at the end of the day, if a gun gets pointed at your kid's head,

228
00:20:32,445 --> 00:20:41,085
generally, you know, people hand it over. And so insurance serves a really important purpose.

229
00:20:41,085 --> 00:20:48,445
It's really the only backstop. And even giving your keys to a custodian, you know,

230
00:20:48,825 --> 00:20:54,045
even that does not solve a problem. So I've talked to people who are like, look, I don't want the

231
00:20:54,045 --> 00:20:59,965
counterparty risk of a sole custodian. That's, you know, the antithesis to my owning a Bitcoin.

232
00:20:59,965 --> 00:21:05,305
However, I'm thinking about it because I just don't want that risk in my home.

233
00:21:06,025 --> 00:21:09,085
But the reality is, even if you don't hold your keys,

234
00:21:09,605 --> 00:21:12,845
wrench attacks are still a possibility

235
00:21:12,845 --> 00:21:15,405
because they can still just put the gun to your head

236
00:21:15,405 --> 00:21:17,165
and tell you to make a withdrawal.

237
00:21:17,885 --> 00:21:19,285
So it's a new paradigm.

238
00:21:19,785 --> 00:21:21,805
And I don't even think I've mentioned this to you.

239
00:21:21,885 --> 00:21:25,085
We actually just started selling K&R insurance.

240
00:21:25,245 --> 00:21:29,345
So kidnap and ransom insurance, we're able to sell that as of last week.

241
00:21:29,345 --> 00:21:56,105
We'll start marketing it soon. But it's a different policy from our wrench attack policy, our custody policy. And so they actually cover different aspects of this risk. So our Anchor Watch custody policy, if you're a customer, if your Bitcoin is forced to be sent, so gun is to your head or my head or coin corners, any heads, right?

242
00:21:56,105 --> 00:22:02,405
If the guns are pointed and the Bitcoin moves as part of the theft, that is covered by our policy.

243
00:22:03,065 --> 00:22:17,405
So ours covers the loss of the asset itself, whereas the K&R policy covers a whole bunch of things, a lengthy list of coverages that are all specific to a kidnapping situation.

244
00:22:17,405 --> 00:22:21,565
So it covers the ransom, which is different from losing the asset.

245
00:22:21,565 --> 00:22:32,885
So if instead of saying, send us your Bitcoin, if they said your family has to gather $5 million and send it to us in whatever currency, that would be covered by KNR.

246
00:22:33,245 --> 00:22:50,365
The most important thing, especially if you're a high profile person, if you are known to be, you know, a Bitcoin holder, if you're public, if you're a company executive, the KNR policy covers the hostage negotiators.

247
00:22:50,365 --> 00:23:16,165
And so that is actually very expensive and very important. So if you didn't have coverage, your first call would be to 911, right, that, you know, my family member, my business partner was kidnapped. And then if you wanted to bring in professional hostage negotiators, you'd be like Googling them and trying to vet them. And then once you had chosen one, then they want you to wire them a retainer for their services.

248
00:23:16,165 --> 00:23:22,165
And so then you're not quite sure if you're even if they're good, if it's worth this money and if they're even honest.

249
00:23:22,165 --> 00:23:29,185
And are you wiring money? So it totally removes that because our K&R policy is also backed by Lloyd's of London.

250
00:23:30,385 --> 00:23:36,825
And and so Lloyd's and these these insurance syndicates have all the very best crisis response teams.

251
00:23:36,825 --> 00:23:40,345
So the hostage negotiators, they're all on retainer.

252
00:23:40,465 --> 00:23:44,225
And so as soon as a claim comes in, you've got that resource.

253
00:23:44,225 --> 00:23:46,045
It's working for you immediately.

254
00:23:46,045 --> 00:23:47,985
They're coordinating with law enforcement.

255
00:23:48,865 --> 00:23:52,285
And so they're going to take over from there and resolve the situation.

256
00:23:52,285 --> 00:23:53,585
So it's the cost of that.

257
00:23:53,665 --> 00:23:55,845
But more importantly, it's just having that service.

258
00:23:56,285 --> 00:24:02,085
And then there's a whole, you know, it also covers medical expenses, income loss, like,

259
00:24:02,445 --> 00:24:08,105
you know, if you need time to recover after that event, mentally or physically, it cover

260
00:24:08,105 --> 00:24:13,385
it, you know, if a murder happens, it covers things, you know, regarding the recovery of

261
00:24:13,385 --> 00:24:20,125
the body, things like that. It's, it's, look, it's pretty morbid stuff, but we're going to say

262
00:24:20,125 --> 00:24:26,525
we're getting morbid here, but it's, it's pretty, it's pretty heavy, but it does actually provide

263
00:24:26,525 --> 00:24:32,065
all that coverage. And so they're, they're good to go hand, hand in hand alongside each other

264
00:24:32,065 --> 00:24:39,405
because they cover the full aspect of the risk. But that, I mean, look, it is, it is hitting home

265
00:24:39,405 --> 00:24:46,765
for a lot of people because these attacks are very frequent now. I think overall, I'm not trying

266
00:24:46,765 --> 00:24:54,965
to fear monger. I think overall, this is still a low risk or a low frequency situation. It's still

267
00:24:54,965 --> 00:25:01,305
very unlikely, but it is accelerating significantly. And because of starting to sell K&R,

268
00:25:01,805 --> 00:25:08,785
we have additional visibility into attacks that don't make the press. And there's a lot, right?

269
00:25:08,785 --> 00:25:24,885
If you were a victim of one of these and it was resolved, right, whether it was resolved with the person getting arrested and no money sent or it was resolved by a ransom having been paid and you walked away safely.

270
00:25:25,545 --> 00:25:30,865
Either way, there's a lot of people that if that happened, you don't actually want it in the news, right?

271
00:25:30,885 --> 00:25:35,945
If you're able to keep it on the DL, you'll do so because it just invites more attention to you.

272
00:25:35,945 --> 00:25:40,445
So there's a significant number, you know, for everyone that's reported.

273
00:25:41,565 --> 00:25:44,485
There's a good handful that are not not reported.

274
00:25:44,645 --> 00:25:45,645
So it's a real problem.

275
00:25:45,645 --> 00:26:07,625
Yeah, and I think the publicly available data I last heard cited a couple of weeks ago was that up until mid-June of this year, there was 30 public sort of kidnapping attempts and attacks on individuals to give up their Bitcoin and crypto.

276
00:26:08,145 --> 00:26:08,305
Yeah.

277
00:26:08,505 --> 00:26:11,305
And last year, it was 30 for the whole year.

278
00:26:11,405 --> 00:26:12,305
For the whole year, yeah.

279
00:26:12,305 --> 00:26:19,025
And then on top of it, then there's a whole bunch more that are not on that list at all as well.

280
00:26:19,745 --> 00:26:28,705
And then, I mean, and those are only really the first world ones or the ones that made Western media as well.

281
00:26:28,705 --> 00:26:42,765
And then there's an entirely whole separate thing of small dollar attacks that are happening, you know, that happen in poorer countries in Asia and Africa that those don't make the list at all.

282
00:26:42,885 --> 00:26:47,065
But I think, you know, it's it is a real problem.

283
00:26:47,065 --> 00:26:49,385
And this year in particular has been a big uptick.

284
00:26:49,745 --> 00:26:53,765
Yeah, the France, the France string was interesting.

285
00:26:53,765 --> 00:26:58,765
Because he had that guy in Morocco who was essentially, he was young too.

286
00:26:58,845 --> 00:27:05,445
He was like 26 and he was contracting out kidnappers and friends to go after all these people.

287
00:27:05,765 --> 00:27:11,645
He wasn't very good at it, but didn't get away with a ton at the end of it.

288
00:27:11,725 --> 00:27:15,065
But yeah, I mean, he wreaked a lot of havoc for sure.

289
00:27:15,505 --> 00:27:15,725
Yeah.

290
00:27:16,065 --> 00:27:16,765
It's pretty crazy.

291
00:27:19,345 --> 00:27:23,445
It's a bit morbid and unnerving to talk about, but it's important to talk about.

292
00:27:23,445 --> 00:27:28,425
it's important that people are aware of these risks and the fact that there are ways to protect

293
00:27:28,425 --> 00:27:37,505
yourself against them or mitigate the risk. And we try to do both, right? We're definitely trying

294
00:27:37,505 --> 00:27:42,845
to mitigate as much as we can just by being our client in the way that the keys are distributed.

295
00:27:42,845 --> 00:27:49,245
It would be really challenging to steal your Bitcoin. If you're an Anchor Watch customer,

296
00:27:49,245 --> 00:28:11,385
You know, we have plenty of opportunities to slow down the process. We're a required signer. Even if there is a situation that we're aware of, we always have the opportunity to pull in law enforcement as soon as we're aware. So, you know, we can we can help to mitigate. But, you know, we have to protect it from the other side, too.

297
00:28:11,385 --> 00:28:16,745
And the other side is if it's successful, then it's covered by the insurance.

298
00:28:16,945 --> 00:28:24,945
And in that way, if you're in that situation, you don't have to be trying to outsmart the people and try to outthink them.

299
00:28:25,165 --> 00:28:31,945
Like you really can just focus on keeping yourself safe and just understand that the Bitcoin, you know, it's not a risk of ruin.

300
00:28:32,165 --> 00:28:34,445
We've removed that particular risk.

301
00:28:34,445 --> 00:28:41,845
And so in that situation, you can simply focus on doing what you need to do to survive, survive that event.

302
00:28:41,845 --> 00:28:49,645
yeah and transitioning to uh less morbid but just as important i think for

303
00:28:49,645 --> 00:28:54,105
through your business i mean like having been in the market now for as long as you guys have

304
00:28:54,105 --> 00:29:02,785
i think one of the core theses of of your business and why we're proud to back you and excited to

305
00:29:02,785 --> 00:29:10,385
back you at 1031 is like the diversification that you guys bring uh alloys of london and

306
00:29:10,385 --> 00:29:17,065
reinsurers in terms of the quality of the premium revenue and more importantly, the uncorrelated

307
00:29:17,065 --> 00:29:22,285
nature of the premium revenue. Yes. Is that being validated in your mind?

308
00:29:23,425 --> 00:29:26,465
Say what was that question? Is that that's being validated?

309
00:29:26,865 --> 00:29:33,225
Oh, yeah. I mean, I think it's it's a really cool thing about how we are fitting into traditional

310
00:29:33,225 --> 00:29:39,605
insurance. So I mean, insurance is a capital market. So the reinsurers or the insurers,

311
00:29:39,605 --> 00:29:45,225
they have their pool of capital, their reserve capital, and they can allocate it to really

312
00:29:45,225 --> 00:29:46,185
whomever they want.

313
00:29:46,385 --> 00:29:53,485
So it's like they have, there's a pie of insurance dollars that can be set against whatever risks

314
00:29:53,485 --> 00:29:54,245
they want.

315
00:29:54,665 --> 00:29:58,465
And so a certain large portion of that pie is property insurance.

316
00:29:59,045 --> 00:30:02,945
Within that property insurance, there's a little sliver called specie.

317
00:30:02,945 --> 00:30:12,145
uh specie is uh kind of small weird things so fine arts and uh expensive jewelry things like that so

318
00:30:12,145 --> 00:30:19,725
most of our coverage falls within specie and then there's crime as well uh that's also like internal

319
00:30:19,725 --> 00:30:30,145
crime and that's part of property as well and so when lloyd's looks at us we are a way to have

320
00:30:30,145 --> 00:30:50,090
access to a risk that is uncorrelated from the rest of the property bucket So property is dominated by homeowners especially in the last five to six years Homeowners is dominated by wildfires and hurricanes And so you have these weather

321
00:30:50,090 --> 00:30:55,250
events or these fire events, and they can have major wipeout years. And hurricanes in particular

322
00:30:55,250 --> 00:31:01,370
have wreaked all sorts of havoc on the insurance industry. And so we can come in and we,

323
00:31:01,370 --> 00:31:07,810
while there are risks of physical disasters causing a Bitcoin loss, it's very small,

324
00:31:07,910 --> 00:31:13,430
right? Because of the way keys are distributed and we're a required signer. So really, we provide

325
00:31:13,430 --> 00:31:21,970
a completely uncorrelated pool of dollars that help them balance their own portfolios,

326
00:31:21,970 --> 00:31:27,310
because they have their own risk appetite, they have their own KPIs. And so we come in and we're

327
00:31:27,310 --> 00:31:34,870
just this very nice kind of uncorrelated pool of money that comes in and balances their own

328
00:31:34,870 --> 00:31:44,090
portfolio. And we hope that because our custody is so secure, you know, we hope that we will

329
00:31:44,090 --> 00:31:51,010
continue to have low losses. And therefore, the insurance industry will continue to see Bitcoin

330
00:31:51,010 --> 00:31:53,190
as a good risk to insure.

331
00:31:53,730 --> 00:31:55,350
And what that will mean over time

332
00:31:55,350 --> 00:31:57,390
is that over time,

333
00:31:57,550 --> 00:31:59,010
the costs will come down

334
00:31:59,010 --> 00:32:00,730
and the dollars will get bigger

335
00:32:00,730 --> 00:32:01,830
because they'll say,

336
00:32:01,930 --> 00:32:03,370
look, we're willing to open up

337
00:32:03,370 --> 00:32:05,490
a bigger sliver of pie

338
00:32:05,490 --> 00:32:07,350
for Bitcoin insurance.

339
00:32:09,030 --> 00:32:10,790
And that pie will get bigger.

340
00:32:11,030 --> 00:32:12,830
The costs will go down a bit

341
00:32:12,830 --> 00:32:14,870
because you've proven to us

342
00:32:14,870 --> 00:32:17,130
that the custody is very safe.

343
00:32:17,310 --> 00:32:19,090
And so we'll just continue

344
00:32:19,090 --> 00:32:20,450
getting more and more access

345
00:32:20,450 --> 00:32:22,050
to the capital markets that way.

346
00:32:23,310 --> 00:32:26,330
Yeah, I think there's a good sort of parallel

347
00:32:26,330 --> 00:32:29,990
to a disconnection in the market that exists right now

348
00:32:29,990 --> 00:32:33,150
in Bitcoin lending where if you do it in a way

349
00:32:33,150 --> 00:32:36,130
where you're not rehypothecating, unchained,

350
00:32:36,730 --> 00:32:40,030
has really led the way in terms of their collaborative custody.

351
00:32:40,650 --> 00:32:42,650
Bitcoin and escrow sits in a multi-sig.

352
00:32:42,650 --> 00:32:44,290
You can audit it on chain.

353
00:32:45,470 --> 00:32:47,610
And just the nature of Bitcoin as collateral

354
00:32:47,610 --> 00:32:49,890
despite how it's custody.

355
00:32:50,350 --> 00:32:52,310
Just run with the assumption it's not rehypothecated.

356
00:32:52,470 --> 00:32:55,010
Like it is literally the collateral's there.

357
00:32:55,290 --> 00:32:59,350
If you're the lender and you need to recoup your principal

358
00:32:59,350 --> 00:33:01,050
because the borrower's not paying it back,

359
00:33:02,150 --> 00:33:07,330
Bitcoin trades 24-7, 365, sell, get your principal back, you're good.

360
00:33:07,670 --> 00:33:09,850
Very little risk of losing your principal.

361
00:33:10,270 --> 00:33:13,850
I think what you guys are doing on the insurance side,

362
00:33:13,850 --> 00:33:14,810
it's like the same thing.

363
00:33:14,810 --> 00:33:35,950
If you can ensure that you mitigate the risk of loss to a very small surface area due to the nature of how you guys are leveraging mini scripts, when people are holding a policy with you, it's like, oh, like this is relatively low risk, like the cost of that capital should come down.

364
00:33:35,950 --> 00:34:04,430
That's definitely our thesis. So we are already insuring private loans. So loans where an individual has negotiated a Bitcoin backed loans with their own bank. And the bank agreed to do it. They negotiated terms on their own, but the bank stipulated that they wanted the collateral insured. And so they ended up using us for insured custody. And we were able to do kind of a side letter to their loan agreement.

365
00:34:04,430 --> 00:34:27,010
And so that's already in place today. And we do think over time, though, you know, if you have a loan with uninsured collateral versus a loan with insured collateral, we think it will be bring down the cost of the of the loan for the borrower, just because it gives a lot more peace of mind to the lender that, in fact, the collateral will stay safe.

366
00:34:27,010 --> 00:34:41,510
So we're going to be offering that within our own platforms next year. So in 2026, you can borrow against your Bitcoin in our platform. But we're also talking to really the majority of the Bitcoin back loans in the space already.

367
00:34:41,510 --> 00:34:47,410
So we announced that we'll be ensuring arch lending a couple of weeks ago.

368
00:34:47,570 --> 00:34:55,150
So that will be coming out shortly as soon this year, talking to some of the other lending platforms.

369
00:34:55,330 --> 00:34:58,650
So I think this this idea is catching on very, very well.

370
00:34:58,650 --> 00:35:01,290
And it's appealing to both borrowers and lenders.

371
00:35:01,450 --> 00:35:03,190
Nobody wants the collateral to disappear.

372
00:35:03,590 --> 00:35:07,370
The, you know, the benefit of the product disappears if you can't trust it.

373
00:35:07,370 --> 00:35:24,350
And then I think, you know, we always looked to the mortgage industry as an example. And, you know, so banks will let you highly lever the house itself, highly lever, but they do have that rule that you have to have insurance.

374
00:35:24,350 --> 00:35:28,870
You can't close on a mortgage without the asset being insured.

375
00:35:29,070 --> 00:35:32,970
If you don't have insurance even for a day, you can't close on the house.

376
00:35:34,090 --> 00:35:39,830
And so we just view, especially as banks come on, that they will, and I think they will,

377
00:35:40,150 --> 00:35:42,270
start doing Bitcoin-backed loans themselves.

378
00:35:42,530 --> 00:35:45,290
I mean, the broader PradFi banking, I think they will.

379
00:35:45,830 --> 00:35:51,050
But I do suspect they will actually stipulate that the collateral has to be insured.

380
00:35:51,050 --> 00:35:58,330
um that's a little different from the the guidance that came out this week too uh which is was a cool

381
00:35:58,330 --> 00:36:04,410
cool development i think for bitcoiners yeah and this is this is going to sound weird to anybody

382
00:36:04,410 --> 00:36:11,450
listening to this but like this is what gets me going uh because there's i just hopped off of

383
00:36:11,450 --> 00:36:16,750
spaces earlier today and people are like oh like it doesn't seem like uh layer twos and all that

384
00:36:16,750 --> 00:36:21,470
are having that success that they should be like defi is not really materializing on top of bitcoin

385
00:36:21,470 --> 00:36:27,990
it's like listen it's all interesting cool like lightning's awesome it works but let's be real

386
00:36:27,990 --> 00:36:33,170
there's an order of operations to all this uh bitcoin's going to succeed number one more people

387
00:36:33,170 --> 00:36:40,490
need to adopt it uh and come to the realization that i should be receiving receiving this as

388
00:36:40,490 --> 00:36:45,670
income or selling goods for it and so like there's going to be a a period of time between now and when

389
00:36:45,670 --> 00:36:54,210
And that is sort of widely the way people use Bitcoin widely.

390
00:36:54,710 --> 00:36:54,930
Really?

391
00:36:55,650 --> 00:37:07,430
Before that, like we've talked about this many times off air, but like I think we've had many conversations about this with Anchor Watch and the 1031 team.

392
00:37:07,430 --> 00:37:29,890
Like the next order of operations is Bitcoin as a collateral asset throughout the traditional financial system, the Bitcoinization of finance and a critical building block to enabling that and getting people comfortable with using Bitcoin as a pristine collateral asset in traditional financial products is insurance.

393
00:37:29,890 --> 00:37:32,910
And so that's what I want to get through to anybody listening to this.

394
00:37:33,190 --> 00:37:38,750
Talking about insurance may seem boring at times, may seem a little morbid at times.

395
00:37:38,830 --> 00:37:52,450
But if we're talking about fundamental building blocks for actually integrating Bitcoin into the financial system, this is like a table stakes needs to be there, needs to be in the market and available to people.

396
00:37:52,450 --> 00:37:55,370
And I mean, it does make sense, right?

397
00:37:55,370 --> 00:38:02,430
Like the idea of using a high amount of leverage, like right now, like loans are very over collateralized.

398
00:38:02,490 --> 00:38:05,830
Even that's that's a temporary, I think.

399
00:38:06,150 --> 00:38:06,350
Right.

400
00:38:06,410 --> 00:38:11,430
I think that's a temporary reality of the development of using Bitcoin as collateral.

401
00:38:11,790 --> 00:38:17,130
I think that those collateralization rates will come down, but insurance will help that, I think.

402
00:38:17,210 --> 00:38:22,750
Because, again, like it it's fair that a lender wants to feel confident.

403
00:38:23,250 --> 00:38:23,490
Right.

404
00:38:23,490 --> 00:38:30,050
Like that's that's a very reasonable, a reasonable basis to start this discussion.

405
00:38:30,710 --> 00:38:40,270
And so having the insurance there actually just that is the way institutions gain confidence is is it removes the risk of a of a wipeout.

406
00:38:41,170 --> 00:38:52,430
And I think, you know, the guidance this week from the FHFA that, you know, Pulte tweeted out the other day, you know, it's a step in that direction.

407
00:38:52,430 --> 00:38:58,010
It's that guidance was not about Bitcoin as collateral for a mortgage.

408
00:38:58,150 --> 00:39:10,350
It was about guidance on taking into account somebody's Bitcoin to determine if they are like their total assets and if they're a good credit worthy.

409
00:39:10,690 --> 00:39:14,090
Yeah. Yeah. Yeah. And so, I mean, I think it's a step in the right direction.

410
00:39:14,090 --> 00:39:18,350
I think it's still up to individual banks and bank officers.

411
00:39:18,350 --> 00:39:23,990
Like, I think it comes down to individuals, how they actually put that, bring that to life.

412
00:39:24,110 --> 00:39:26,470
But it's certainly it's certainly promising.

413
00:39:26,470 --> 00:39:35,610
And like I said, we've we've already done private loans where a bank officer was open to to viewing Bitcoin as collateral itself.

414
00:39:36,290 --> 00:39:44,290
And we were able to help help out with that and make that happen for those customers who otherwise, you know, just would not have been able to get that deal done.

415
00:39:44,290 --> 00:39:52,430
And by doing it, they're getting better rates than some of the companies that are operating in the space specializing it.

416
00:39:52,430 --> 00:39:58,570
Like if they had a really long-term relationship with their bank, they're getting good rates as long as the insurance is in place.

417
00:39:59,010 --> 00:40:00,930
Yeah, it makes sense.

418
00:40:01,450 --> 00:40:09,810
And it's great to see that there are individual bank officers out there willing to understand this and be like, okay, yeah, this makes a lot of sense.

419
00:40:09,810 --> 00:40:16,450
And I mean, to that point, going back to the LTV, the LTV, I think it serves two purposes.

420
00:40:16,630 --> 00:40:21,330
One, for the lender or the liquidity provider that's giving the cash to the lender.

421
00:40:21,730 --> 00:40:21,870
Right.

422
00:40:22,550 --> 00:40:25,010
This is a bit foreign to us.

423
00:40:25,290 --> 00:40:28,810
We need to have some assurances about we want it over collateralized.

424
00:40:29,530 --> 00:40:29,770
Right.

425
00:40:30,170 --> 00:40:30,670
Their benefit.

426
00:40:30,830 --> 00:40:36,510
And then the borrower's benefit too, considering the historical price volatility of Bitcoin up to this point.

427
00:40:36,510 --> 00:40:39,570
I think people may not like it.

428
00:40:39,570 --> 00:40:47,050
you need to put up $2 of Bitcoin to get a dollar and a loan back. But I think considering the price

429
00:40:47,050 --> 00:40:51,930
volatility historically, like that is a good buffer. And like, it's just like sort of guard

430
00:40:51,930 --> 00:40:57,870
rails for borrowers to make sure you don't get blown out. Totally, totally. And yeah, I think

431
00:40:57,870 --> 00:41:02,910
it seems like on the borrower side, they're, they're more than willing to do it right now.

432
00:41:03,070 --> 00:41:07,410
And, you know, we'll see what happens with price action too. Like, I don't know where you are on,

433
00:41:07,410 --> 00:41:12,050
on four-year cycles versus are you a cycle guy or a slow grind?

434
00:41:12,050 --> 00:41:15,010
I'm getting yelled at for even mentioning the potential for a super cycle,

435
00:41:15,130 --> 00:41:15,990
so I'm not going to say it.

436
00:41:16,290 --> 00:41:18,110
Okay. Are you a super cycle guy?

437
00:41:18,430 --> 00:41:20,130
I make fun of super cycles.

438
00:41:20,750 --> 00:41:22,950
Yeah. I'm becoming more convinced.

439
00:41:23,130 --> 00:41:25,670
So, like, it's just going to be a boring grind up into the right.

440
00:41:25,670 --> 00:41:30,630
So, I mean, that seems to be the sentiment at the moment.

441
00:41:30,770 --> 00:41:32,690
I've always been pretty hardcore on, like,

442
00:41:32,730 --> 00:41:35,470
you follow the pattern until the pattern breaks,

443
00:41:35,470 --> 00:41:38,990
And right now we're still on a four year four year pattern.

444
00:41:38,990 --> 00:41:56,510
But I will say if if we do transition to the slow grind up, I think it actually it does ease the transition into TradFi because it means that they can start modeling Bitcoin in a more predictable manner.

445
00:41:56,510 --> 00:42:06,870
And so things like LTV or the rates, you know, looking at how they view collateral, looking at it in terms of your overall financial health.

446
00:42:07,370 --> 00:42:22,450
If TradFi can actually say, look, you have this much Bitcoin and sure, there's some volatility, but we can trust that if you have this amount of Bitcoin a year from now, you'll still have this amount of Bitcoin or maybe it's going to be worth more.

447
00:42:22,450 --> 00:42:29,990
that's easier for them to stomach to understand to model uh you know at the aggregate for their

448
00:42:29,990 --> 00:42:37,070
own financial models than something that's having 80 drawdowns um so i mean i we'll we'll see what

449
00:42:37,070 --> 00:42:42,530
actually happens but if it does transition to a slow grind up i actually think it it enables

450
00:42:42,530 --> 00:42:47,590
faster transition of integration into financial products and then that slow grind turns into a

451
00:42:47,590 --> 00:42:52,430
hyper bitcoinization real quick when it's like oh why are we gonna but i'm in ganda i mean going

452
00:42:52,430 --> 00:42:57,830
back like going back to like building blocks and table stakes for this to be enabled again like i

453
00:42:57,830 --> 00:43:02,730
think what you're building is critical to that what you and the team at anchor watch are building and

454
00:43:02,730 --> 00:43:07,730
then like we were in dc last week we're talking with andrew homes like if you think of like what

455
00:43:07,730 --> 00:43:13,190
they're doing at battery like if we i don't know if it's this cycle next cycle a couple cycles from

456
00:43:13,190 --> 00:43:20,210
now but you can squint and see if the traditional financial system obviously andrew and the team at

457
00:43:20,210 --> 00:43:24,330
new market who spun out battery they're coming from the traditional financial system they're

458
00:43:24,330 --> 00:43:30,290
pretty comfortable very comfortable with bitcoin as collateral with that that like we're going back

459
00:43:30,290 --> 00:43:36,230
to like cycle theory discussions about what's happening like if that takes hold reaches a

460
00:43:36,230 --> 00:43:42,290
critical mass like you're taking bitcoin off the market and holding it off for long durations and

461
00:43:42,290 --> 00:43:50,250
And that's where you can get a liquidity profile and volatility profile that it makes sense for all this stuff.

462
00:43:50,250 --> 00:43:56,690
Yeah, battery. I mean, battery and what Andrew has built there and the team is one of my favorite.

463
00:43:57,270 --> 00:44:05,270
It really is. It's I met them really when they were first launching, which was right around the same time we were launching as well.

464
00:44:05,270 --> 00:44:15,170
And so both our companies have kind of grown and been working through kind of this hybrid Bitcoin TradFi world.

465
00:44:15,510 --> 00:44:20,530
And so we end up, you know, at the same events and speaking to the same people.

466
00:44:20,670 --> 00:44:24,830
So I've had the opportunity to watch them develop as we've grown as well.

467
00:44:25,650 --> 00:44:27,330
And I just I'm a huge fan.

468
00:44:27,430 --> 00:44:29,270
I think it's a really clever.

469
00:44:29,430 --> 00:44:30,810
It's very simple, right?

470
00:44:30,810 --> 00:44:40,990
Like it's a very simple blend of Bitcoin and a traditional investable asset class, but it's one that benefits the individual or the business taking the loan.

471
00:44:40,990 --> 00:44:49,670
And obviously, you know, the the ideas that it will provide good returns both to them and to battery themselves.

472
00:44:49,670 --> 00:45:06,530
And I just think it's a very approachable way to pull capital in, get it, you know, long term holders in a very approachable way that you don't have to be a maxi to understand the model and to be willing to take a step into Bitcoin adoption.

473
00:45:06,530 --> 00:45:12,670
um i'm yeah i think it's i think it's great and so again going to the price action and

474
00:45:12,670 --> 00:45:18,910
does that model work better on a uh a four-year cycle or a slow grind up and i think

475
00:45:18,910 --> 00:45:26,170
on on that product in particular i think it works either way um you know either way they can manage

476
00:45:26,170 --> 00:45:33,690
that product that benefits the the borrower uh in either scenario it's cool yeah just extend your

477
00:45:33,690 --> 00:45:38,730
duration as long as possible capture totally stay in cycles capture multiple cycles but i mean to

478
00:45:38,730 --> 00:45:45,750
that point of um hitting the road and bumping elbows with the battery team at events that maybe

479
00:45:45,750 --> 00:45:52,990
don't cater exactly to bitcoiners like what is your perception on the sort of acceptability as

480
00:45:52,990 --> 00:46:13,395
bitcoin broadly in in the trad fi world as you been i think it is changing rapidly to our benefit as Bitcoiners You know I think the initial kind of steps into TradFi were almost the degen side of TradFi

481
00:46:13,395 --> 00:46:20,175
initially over the last few years. So it was like the more aggressive hedge funds managers,

482
00:46:20,175 --> 00:46:26,195
right would would have exposure but now it really is it's becoming more conservative

483
00:46:26,195 --> 00:46:35,095
um you know bond obviously obviously bond traders uh are getting involved who were traditionally a

484
00:46:35,095 --> 00:46:42,735
a more conservative investment class pensions um but just talking to wealth managers they're all

485
00:46:42,735 --> 00:46:51,555
their clients have bitcoin it was always kind of set aside uh just like as the part of their

486
00:46:51,555 --> 00:46:57,435
clients portfolios that they didn't actually touch or speak to and now they're educating themselves

487
00:46:57,435 --> 00:47:07,875
um they're not resistant uh they're curious um they're making plays they're advocating to their

488
00:47:07,875 --> 00:47:13,975
own leadership to allow themselves to like interact with their clients about it so i think

489
00:47:13,975 --> 00:47:21,055
it's actually changing really quickly uh like really quickly like in in this year alone it's

490
00:47:21,055 --> 00:47:25,735
i feel like it's different now than it was at the beginning of the year yeah well

491
00:47:25,735 --> 00:47:32,755
on the perception of tradify changing like that's one thing i think a lot of bitcoiners have top of

492
00:47:32,755 --> 00:47:39,575
mind particularly in the last year or two whether it's strategy the etfs the emergence of the

493
00:47:39,575 --> 00:47:46,295
treasury company in public markets meeting that has been becoming a fervor and you could see it

494
00:47:46,295 --> 00:47:52,895
turn into a mania as we as we head towards the end of the year all these guys are cussing with

495
00:47:52,895 --> 00:47:59,675
the single point of failure sort of uh yeah custody solutions like coinbase fidelity whatever

496
00:47:59,675 --> 00:48:06,695
it may be i mean this is your pinned tweet about like uh make sure you know like it's

497
00:48:06,695 --> 00:48:11,815
that you're insured make sure you understand what that actually means we've talked about this before

498
00:48:11,815 --> 00:48:19,055
in the context of other exchanges that will market that your coins are are insured if you're holding

499
00:48:19,055 --> 00:48:24,915
them if you're custodying with them but it's really just a small minority it's effectively

500
00:48:24,915 --> 00:48:31,835
uninsured yeah and that's a pet peeve of mine obviously that's like they're like to what we're

501
00:48:31,835 --> 00:48:37,435
saying earlier like you could imagine a scenario like drawing on the analog of mortgages where

502
00:48:37,435 --> 00:48:44,675
if you're going to begin to integrate this into the trad fi system like insurance is demanded by

503
00:48:44,675 --> 00:48:50,295
some of our stakeholders within some of these agreements and like could it actually be a forcing

504
00:48:50,295 --> 00:48:57,555
function to drive these larger institutions to more optimal custody setups like anchor watch i

505
00:48:57,555 --> 00:49:03,655
think so so historically insurance just wasn't available or it wasn't cost effective if if it

506
00:49:03,655 --> 00:49:10,955
was available and now it is i think there's anchor watch has uh kind of one hurdle to get past to

507
00:49:10,955 --> 00:49:17,655
really uh become a viable option for a lot of companies and that's that we're becoming a qualified

508
00:49:17,655 --> 00:49:27,055
custodian. So we talked to lots of publicly traded companies and fiduciaries, and they're like,

509
00:49:27,115 --> 00:49:33,735
I like the custody model a lot. It makes sense. We need the insurance. I need that for sure.

510
00:49:33,735 --> 00:49:40,715
But are you a QC? And we were not. So we are in the middle of that process, and we will become

511
00:49:40,715 --> 00:49:48,335
a qualified custodian this fall. And then at that point, I think what we will see is that we become

512
00:49:48,335 --> 00:49:54,175
the anchor watch is actually one of the top options for these Bitcoin treasury co's. The

513
00:49:54,175 --> 00:49:59,915
companies themselves, the leaders of them, they understand the risks of putting out a honeypot at

514
00:49:59,915 --> 00:50:06,175
an uninsured custodian, sole custodian, but they still do need to check the boxes. The insurance is

515
00:50:06,175 --> 00:50:11,235
a way to set them apart. It helps them raise money. Because again, it makes the investors

516
00:50:11,235 --> 00:50:19,995
feel confident that it's safe. And it just gets away from, you know, this. And look, one inside

517
00:50:19,995 --> 00:50:28,015
bad actor, you know, what I fear is that a bad actor will have gotten a job at a large custodian,

518
00:50:28,015 --> 00:50:34,655
and will spend years infiltrating their systems to plan a large heist.

519
00:50:34,655 --> 00:50:41,655
And if you read the fine print on the ETFs, you know, even the ETFs in their prospectus,

520
00:50:42,335 --> 00:50:43,855
they say that this is uninsured.

521
00:50:44,995 --> 00:50:51,215
And effectively, if the principle is lost, there's no recourse, right?

522
00:50:51,575 --> 00:50:54,375
That's not ideal, right?

523
00:50:54,375 --> 00:51:23,575
So, yeah, we view this and ourselves as actually the responsible alternative. And what we think will happen is once we have QC under our belt, I think what we'll see is something of fiduciary flight, where if you're a fiduciary and you're responsible, how can you pay, you know, BIPs for uninsured custody versus maybe slightly more, not even a large amount more, but just slightly more for insured custody?

524
00:51:23,575 --> 00:51:49,515
If you're a fiduciary responsible for your client's funds, it just doesn't make sense. And in fact, paying significant BIPs for uninsured custody, even that you have questions on, right? Because there is certainly a cost to maintaining a very secure system. So I'm not saying it should be free. It just can't be. This is an expensive thing to maintain security at that level.

525
00:51:49,515 --> 00:52:02,515
But once you have hit a certain infrastructure standpoint in terms of your costs, then at that point, storing private keys is a low lift activity.

526
00:52:03,295 --> 00:52:13,055
It's a tiny piece of data, right, that you can store all the world's Bitcoin on Google, Google Drive or AWS for like 20 bucks a year.

527
00:52:13,055 --> 00:52:30,495
So it's not about size of the data. It's about security. And at some point, paying BIPs just for the security of the platform, I think the market will push back on that to a certain extent.

528
00:52:30,495 --> 00:52:35,495
But paying for insurance, insurance, you're actually securing the collateral.

529
00:52:35,975 --> 00:52:45,155
So that's why it is BIPs is because the more insurance you want, the more collateral that needs to sit in reserve, they're ready to cover financial obligations.

530
00:52:45,815 --> 00:52:55,995
And so you are actually accessing the capital market with when you buy insurance and you're purchasing that promise, that guarantee of being your fail safe.

531
00:52:55,995 --> 00:52:57,335
Yeah, that risk transfer.

532
00:52:57,335 --> 00:53:05,355
And to your point earlier, like, who's to say that having the insurance doesn't unlock some level of capital on the other side?

533
00:53:05,575 --> 00:53:12,035
You do the cost benefit analysis of like, it's worth the BIPs because you're going to make X amount of money on the back end.

534
00:53:12,035 --> 00:53:12,895
You'll make X amount more.

535
00:53:13,095 --> 00:53:14,015
Yeah, I think so.

536
00:53:15,515 --> 00:53:16,795
Seems like it could be a big market.

537
00:53:17,855 --> 00:53:20,235
It does seem like it's going to be a big market.

538
00:53:21,075 --> 00:53:23,175
We're excited about it, in fact.

539
00:53:23,175 --> 00:53:34,435
So it's been a fun year for us because a lot of things are happening that are the premises for why we built Anchor Watch, right?

540
00:53:34,575 --> 00:53:42,995
So we are getting the enjoyment right now of it's the satisfaction of having skated to where the puck was headed.

541
00:53:44,115 --> 00:53:46,335
And that feels really good.

542
00:53:46,335 --> 00:53:58,315
It feels like all the work that we had done, I mean, even before launch, right, we were so heads down and building towards this vision of what we thought would be happening in two to five years.

543
00:53:58,315 --> 00:54:01,895
And here we are a couple of years later and it's starting to happen.

544
00:54:02,535 --> 00:54:03,275
It's awesome.

545
00:54:03,395 --> 00:54:13,475
It's like it's just kind of things that we predicted and not us alone, but things that we felt strongly enough that it was worth leaving our careers and building a company for.

546
00:54:13,475 --> 00:54:18,955
um you know they're they're starting to happen it's and i think it's going to keep happening and

547
00:54:18,955 --> 00:54:23,975
we're going to crush it's going to be awesome no it's it's been completely gratifying to watch

548
00:54:23,975 --> 00:54:29,535
as you've been building this out over the course of the last three four years and uh

549
00:54:29,535 --> 00:54:36,435
what uh what people often worry about is like like you have two like when you build for this moment

550
00:54:36,435 --> 00:54:40,795
yeah there's like two outcomes it's like the dog that finally caught the car or like you built for

551
00:54:40,795 --> 00:54:45,035
this outcome so that you could sprint and it's been fun i think you guys are squarely in the

552
00:54:45,035 --> 00:54:48,895
ladder sort of outcome which is like is it's not like you caught the car it's like what do we do

553
00:54:48,895 --> 00:54:54,515
it's like no we've been waiting for this like let's go and run yeah and i mean yeah at this

554
00:54:54,515 --> 00:54:59,915
point it's like the car the car's getting the speed and we're we're right alongside it right

555
00:54:59,915 --> 00:55:07,555
now and uh it's it's gonna get insane and uh you know we're ready for it we're ready for it like

556
00:55:07,555 --> 00:55:13,915
we were just off calls with Lloyd's this morning, um, getting extra capacity. Uh, and I think,

557
00:55:13,915 --> 00:55:20,375
you know, just little anchor watch startup anchor watch, we're going to double the amount of

558
00:55:20,375 --> 00:55:26,495
insurance capacity that's available to this industry, you know, in a year. That's, that's

559
00:55:26,495 --> 00:55:33,195
crazy. That's crazy. Like we, and we did that through tech by the way, right? Like through

560
00:55:33,195 --> 00:55:41,195
really educating them on how we can diversify risk like we talked about earlier, but also

561
00:55:41,195 --> 00:55:47,395
diversify the risk of key management as well. And by giving them that confidence that, hey,

562
00:55:47,415 --> 00:55:55,515
we can actually limit your losses meaningfully at the aggregate by the way that we do key management,

563
00:55:56,135 --> 00:56:01,075
you know, was the difference that made them unlock a huge pool of capital that previously

564
00:56:01,075 --> 00:56:07,375
wasn't available. Yeah. And what can anybody who's listening to this, how do you think they

565
00:56:07,375 --> 00:56:12,555
should take action? What do you guys need right now? What would your message be to anybody

566
00:56:12,555 --> 00:56:19,475
listening to this? Yeah. I mean, look, I think we covered on a bunch of stuff, right? So I think

567
00:56:19,475 --> 00:56:25,555
if you're an individual and any of the earlier part of the conversation, whether it was kind of

568
00:56:25,555 --> 00:56:30,275
protecting yourself from wrench attacks or inheritance, you know, we're happy to

569
00:56:30,275 --> 00:56:35,815
bring you on as a customer, you can reach out to me, Becca at Anchor Watch, or you can sign up for

570
00:56:35,815 --> 00:56:41,535
a calendar event directly from our website at anchorwatch.com, and we'll get you squared away.

571
00:56:42,195 --> 00:56:46,615
And if you're an institutional customer, if you're one of these larger players and you're

572
00:56:46,615 --> 00:56:51,135
trying to look down the road at your options, if you're diversifying custody, if you're trying to

573
00:56:51,135 --> 00:56:56,495
understand your custody options, your insurance options, I can also write custom policies.

574
00:56:56,495 --> 00:57:11,255
So if you're a large player and what I've described isn't exactly the insurance that you're looking for and you're looking for some other level of insurance coverage on your Bitcoin or the custody of your Bitcoin, let me know.

575
00:57:11,255 --> 00:57:17,855
And for the right size clients, we can do that directly with Lloyd.

576
00:57:17,915 --> 00:57:22,395
So we can get you a custom Lloyd's policy that's really oriented to your exact business.

577
00:57:22,615 --> 00:57:25,035
And we're always happy to talk to those people, too.

578
00:57:25,035 --> 00:57:26,695
so just get in touch

579
00:57:26,695 --> 00:57:30,155
I want to stress

580
00:57:30,155 --> 00:57:32,135
I'm trying to figure out like

581
00:57:32,135 --> 00:57:34,295
it's not boring to beckon I

582
00:57:34,295 --> 00:57:36,915
sure insurance is a boring

583
00:57:36,915 --> 00:57:38,395
to many of you but

584
00:57:38,395 --> 00:57:41,195
it cannot be overstated how important

585
00:57:41,195 --> 00:57:43,275
something like this is to unlock

586
00:57:43,275 --> 00:57:45,255
the wave of

587
00:57:45,255 --> 00:57:47,155
capital that gets comfortable with

588
00:57:47,155 --> 00:57:48,915
Bitcoin that many have been talking about

589
00:57:48,915 --> 00:57:51,215
it's like a literal critical

590
00:57:51,215 --> 00:57:53,295
piece of infrastructure that

591
00:57:53,295 --> 00:57:54,895
enables all this

592
00:57:54,895 --> 00:58:00,075
So I just want to thank you, Rob, the team at Anchor Watch for putting in the time.

593
00:58:00,275 --> 00:58:01,035
It's been a grind.

594
00:58:01,655 --> 00:58:04,235
And like you said, you've been building for this moment.

595
00:58:04,315 --> 00:58:05,015
The moment is coming.

596
00:58:05,015 --> 00:58:12,235
And I just couldn't be happier for you guys considering watching you guys do this over the last few years.

597
00:58:12,475 --> 00:58:20,075
And I know you're going through a bit of a personal battle right now.

598
00:58:20,075 --> 00:58:27,255
And I think it would be remiss of me not to mention just how impressive you are individually.

599
00:58:27,795 --> 00:58:28,495
Thank you.

600
00:58:28,555 --> 00:58:38,635
Do all this with what you're going through and doing a class and strength that I only wish I had.

601
00:58:39,435 --> 00:58:43,635
Well, I'm at the very beginning of it.

602
00:58:43,635 --> 00:58:53,975
So I'm sure I will have my days here as we go into later in the summer and the fall where things are going to get a lot tougher.

603
00:58:55,795 --> 00:59:00,015
But today I feel good.

604
00:59:00,375 --> 00:59:01,535
Today I feel strong.

605
00:59:02,955 --> 00:59:06,835
You know, this is one of my last podcasts where I still have the hair.

606
00:59:07,275 --> 00:59:09,395
That's going soon.

607
00:59:09,395 --> 00:59:13,755
And that's going a week from Friday is when that that will happen.

608
00:59:13,875 --> 00:59:16,455
So I'll have my all of my moments for sure.

609
00:59:16,455 --> 00:59:26,935
But the support of you and, you know, the 1031 team and just the Bitcoin community has been very transformational for me, really.

610
00:59:27,215 --> 00:59:32,275
And having having Anchor Watch, the team is so good.

611
00:59:32,455 --> 00:59:36,875
They're so strong that there's there's really no impact to the business right now.

612
00:59:37,435 --> 00:59:38,855
And that will continue.

613
00:59:38,855 --> 00:59:47,635
And so that gives me a lot of strength and having the opportunity to at times, you know, just be focused on work is wonderful.

614
00:59:48,655 --> 00:59:55,475
I love Anchor Watch and I love what I think, like what you said, I think we built it for a reason.

615
00:59:55,595 --> 00:59:57,715
I think it's going to improve adoption.

616
00:59:58,355 --> 01:00:02,575
I think it brings more adoption and liquidity to Bitcoin.

617
01:00:02,575 --> 01:00:06,475
and the opportunity, despite all this stuff going on,

618
01:00:06,575 --> 01:00:09,895
to take a few hours and just focus on that,

619
01:00:10,395 --> 01:00:13,835
it's a good escape from it all, and I'm grateful to have it.

620
01:00:14,495 --> 01:00:18,075
Well, we're all grateful for you and what you're building, Becca.

621
01:00:18,755 --> 01:00:19,935
This has been incredible.

622
01:00:20,415 --> 01:00:20,855
Thank you.

623
01:00:22,595 --> 01:00:25,655
Hey, it's scary to think about.

624
01:00:26,155 --> 01:00:29,155
Inheritance, insurance, rent tax, but you've got to think about it

625
01:00:29,155 --> 01:00:29,795
if you're out there.

626
01:00:29,795 --> 01:00:31,475
You do. I can tell you.

627
01:00:32,575 --> 01:00:33,515
You got to think about it.

628
01:00:33,575 --> 01:00:35,975
So go hit up Becca and the team at Anchor Watch.

629
01:00:36,215 --> 01:00:37,875
Start thinking about it if you haven't already.

630
01:00:38,435 --> 01:00:40,655
And we'll catch up.

631
01:00:40,695 --> 01:00:44,035
There's plenty that's going to happen between now, the end of the year.

632
01:00:44,035 --> 01:00:51,395
Yeah, next time we talk about how we turn on the Bitcoin yield flywheel using insurance.

633
01:00:52,095 --> 01:00:53,515
We'll just get really exciting.

634
01:00:53,715 --> 01:00:55,155
That's going to be a big one.

635
01:00:55,315 --> 01:00:58,815
You know, the question is very controversial in the space.

636
01:00:58,895 --> 01:01:00,055
Where does the yield come from?

637
01:01:00,135 --> 01:01:01,175
Well, but I can tell you.

638
01:01:01,175 --> 01:01:03,155
I can tell you right where it comes from.

639
01:01:03,255 --> 01:01:04,835
It comes from insurance premiums.

640
01:01:04,995 --> 01:01:07,455
So yeah, let's do that one next time.

641
01:01:07,835 --> 01:01:10,355
I would love to dive into that topic sometime soon.

642
01:01:10,495 --> 01:01:12,575
It is literally the only thing that makes sense

643
01:01:12,575 --> 01:01:14,375
in terms of Bitcoin yield to me right now.

644
01:01:14,515 --> 01:01:16,075
But we'll do a deep dive on that.

645
01:01:16,115 --> 01:01:17,375
All right, we'll jump into that one.

646
01:01:17,515 --> 01:01:18,275
Thanks for having me.

647
01:01:18,755 --> 01:01:19,915
All right, peace and love, freaks.