Latest / TFTC: A Bitcoin Podcast / #741: Solving The Wrench Attack with Max Guise

Transcript

#741: Solving The Wrench Attack with Max Guise · TFTC: A Bitcoin Podcast

• 0:00
  You've had a dynamic where money has become freer than free.
• 0:10
  We talk about a Fed just gone nuts.
• 0:13
  All the central banks going nuts.
• 0:16
  So it's all acting like safe haven.
• 0:18
  I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins.
• 0:25
  In the world of fiat currencies, Bitcoin is the victor.
• 0:28
  I mean, that's part of the bull case for Bitcoin.
• 0:31
  If you're not paying attention, you probably should be.
• 0:36
  Max, it's great to be here with you.
• 0:38
  Thanks for having me.
• 0:40
  Thanks for coming.
• 0:40
  We've got the new BitKey in my hand.
• 0:42
  Awesome.
• 0:42
  We just set it up, and I think a lot of people are going to be extremely happy with what you guys put together.
• 0:47
  I think based off our conversation, our ongoing conversations over the last year, I think we should start from the beginning.
• 0:55
  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.
• 1:07
  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.
• 1:21
  it's a no-go for them. There's too many sort of hurdles, seed phrases, having the hardware
• 1:30
  while thinking about how to secure it. And this is the design problem you guys have been focused
• 1:34
  on. So from first principles, how do you guys approach self-custody? Yeah, it's almost exactly
• 1:39
  as you described right up front, which is about the hardest problems in self-custody. And so
• 1:43
  the way we think about this is we want people to be able to own their own coins.
• 1:48
  And we know there are a lot of barriers to that.
• 1:50
  We know there are a lot of problems that they might not be able to solve themselves and
• 1:53
  for which they want and need great tools that make it really easy to get the right security,
• 1:58
  recovery, and privacy properties.
• 2:00
  And so we started looking at this as kind of that holistic problem right when we started
• 2:03
  developing Big Key.
• 2:04
  And we started with a really long list of things that we wanted to solve.
• 2:08
  And I think everybody knows you can't solve everything at once.
• 2:12
  And so we tried to hone in on what is it that's really in most people's way.
• 2:17
  And for us, the very first answer to that was really about recovery and ease.
• 2:20
  It was about safety, safety and ease of use.
• 2:23
  And what we were finding is that lots of people were turned away from self-pustody because
• 2:26
  the beginning of the process is a really long list of instructions.
• 2:32
  The setup process takes a while.
• 2:34
  Things are very technical and people were being sort of left having to protect a seed
• 2:37
  phrase that maybe they didn't fully understand and sort of had to go on an odyssey to design
• 2:41
  their own wallet.
• 2:43
  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.
• 2:49
  And what we brought to market was basically a comprehensive set of recovery tools.
• 2:54
  We really focused on that first.
• 2:56
  And we got the first Big Key hardware out there, the first Big Key recovery system out there.
• 3:00
  A lot of people start using it.
• 3:02
  And then one of the ways we work is we start listening to what our customers have to say and figuring out,
• 3:06
  was our vision of the next hardest problems right?
• 3:10
  And what we found was lots of the things that we were thinking about, our customers were thinking about too.
• 3:16
  And one of the next ones that we took on was privacy.
• 3:19
  So at some point, we should probably dig into some of the improvements we've made there.
• 3:23
  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.
• 3:34
  Maybe you get really good recovery properties or maybe you get really good security properties.
• 3:38
  but especially if it's like a collaborative custody system that integrates hardware and software.
• 3:43
  A lot of times that means giving up privacy, like maybe giving a third key in a two of three multi-sig
• 3:48
  up to another company that's going to be there and support you when you lose parts of your wallet.
• 3:54
  That comes with a privacy trade-off.
• 3:55
  That company can see your wallet, your balance, all the transactions that you've made in the past and future.
• 4:01
  And that's a trade-off that I think had been largely accepted.
• 4:04
  And we spent some time working on that problem, figuring out how can we make it better
• 4:07
  so that you can lean on a custodian exactly when you'd like to
• 4:11
  or lean on a self-custody system or collaborative custodian exactly when you'd like to,
• 4:18
  but maybe not have to give up all that privacy.
• 4:20
  And then what we're talking about today,
• 4:22
  and I think what you can see was one of the next biggest problems that we wanted to solve
• 4:25
  is coming back around to, in a system that does all of those things,
• 4:29
  adding additional on-device verification for transactions, transaction parameters,
• 4:35
  but not just some of those conventional things that are verified on screens and other solutions,
• 4:40
  but also like critical account security properties like emails associated with your account, SMS associated with your account, that sort of thing.
• 4:47
  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.
• 4:58
  I think this was the biggest point of feedback of the old BitKey that I always got.
• 5:02
  There's no screen.
• 5:03
  I need to be able to verify the receive address or the send address.
• 5:06
  And I think you guys did an incredible job of answering that question of when screen and if so, how.
• 5:15
  I mean, it takes up the full bottom of the wallet.
• 5:17
  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.
• 5:24
  And you were telling me, like, no, there's a whole new UX.
• 5:26
  You need to look at the screen, and you put your finger on the back.
• 5:29
  So there's a new way of interacting with this ergonomically.
• 5:32
  which I like.
• 5:33
  One of the things I think, you know,
• 5:35
  as part of our, the core part of our development process
• 5:37
  is we do user research.
• 5:39
  So we sit down with customers, potential customers.
• 5:42
  We watch people use the devices that we make.
• 5:44
  We watch people use the software that we make.
• 5:46
  And that heavily informed the choices we made
• 5:49
  in like the send flow and some of the things
• 5:51
  that you'll see when you're sending from that device.
• 5:54
  And then what you were just describing
• 5:55
  is actually something that we're currently adding,
• 5:57
  some additional things to kind of help people
• 5:59
  use the new device in a way that's a little bit different.
• 6:03
  If you're an existing customer, you may have enrolled your thumb,
• 6:06
  has a fingerprint on it, be tapping on the stone side of the device.
• 6:10
  There's a little bit different flow with the new device.
• 6:13
  And then people who are brand new to BitKey,
• 6:15
  what we found is whenever they're using the device,
• 6:18
  they go straight for that.
• 6:19
  And so we paid a little bit of attention in our design process
• 6:22
  to what it looks like to upgrade from our first BitKey
• 6:26
  to the second BitKey.
• 6:27
  And so there's a whole flow dedicated to that
• 6:29
  that kind of walks you through how to do that safely, especially if you're holding a lot of Bitcoin on BitKey.
• 6:33
  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.
• 6:42
  I mean, again, radical changes to the traditional approach to hardware.
• 6:47
  There's no seed phrase. We've got this collaborative custody between the hardware wallet, the mobile app and blocks server in the cloud.
• 6:55
  A lot of Bitcoiners that have been around for a while, like, oh, this is completely new, this is completely far.
• 7:01
  But based off of all the user research that you've done and interviews that you've done,
• 7:07
  how have people that have gone from never having a hardware wallet to going straight to BitKey,
• 7:12
  what are some of the main responses they give when you ask why BitKey?
• 7:17
  Yeah, I think by far and away the first thing I'd highlight is the onboarding time.
• 7:21
  So the time from unboxing Bickey, either this one or the first Bickey, is very short.
• 7:31
  And minutes, minutes from opening the box to making your first Bitcoin transaction.
• 7:38
  And that's something that we thought needed to be a core part of this.
• 7:42
  The door into self-custody should be incredibly easy.
• 7:45
  And so we spent a lot of time optimizing that in the first Bickey.
• 7:50
  And I think what we saw is that process alone brought a lot of new people into self-custom.
• 7:56
  We saw people choosing it because now is the time for them to take the plunge.
• 8:00
  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,
• 8:10
  there's finally something that you can use to do this.
• 8:13
  And I love that every time we see it.
• 8:15
  And so we saw a lot of that.
• 8:16
  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.
• 8:28
  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.
• 8:34
  They'd set it up themselves.
• 8:35
  Frankly, they'd taken a lot of pain in doing so over many years, especially people who'd been in for a long time.
• 8:41
  And we found that they loved BitKey too.
• 8:43
  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.
• 8:53
  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.
• 9:03
  And it's always awesome to see that here.
• 9:05
  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?
• 9:20
  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.
• 9:28
  Like, maybe you lose your phone and you lose your hardware.
• 9:33
  I'll use that as an example.
• 9:34
  So you lose both.
• 9:35
  That one's not unintuitive, but a lot of people, when they're first looking at BitKey,
• 9:40
  they wonder what happens if I lose my phone or what happens if I lose my hardware,
• 9:43
  and they're very easy answers to those questions in our system.
• 9:46
  But then they start to get to things like, what if I lose both?
• 9:49
  And we have a recovery contact solution for that.
• 9:51
  They get to questions like, what happens if Block goes out of business and isn't making BitKey anymore?
• 9:56
  And we have our emergency exit kit for that.
• 9:58
  And we had to go through all of these different cases of, well, what if somebody lost their phone
• 10:03
  and then they click these buttons and then they got a new device and they started onboarding
• 10:08
  but they didn't finish it and then they pick it back up later.
• 10:11
  And the team has spent so much time looking closely at making all of those flows really
• 10:16
  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
• 10:30
  I think that task is really kind of
• 10:32
  the invisible complexity under the hood.
• 10:34
  And the way I think about that is
• 10:36
  when we take on complexity
• 10:37
  and we sort of hide it from customers,
• 10:42
  then they don't have to deal with it.
• 10:43
  And that's what a tool is for.
• 10:46
  And that's what it is.
• 10:46
  I mean, this is but one ingredient to everything you guys are doing across the whole block family of companies dedicated to that.
• 10:55
  I mean, every company within block is dedicated to Bitcoin one way or another now.
• 10:59
  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,
• 11:05
  whether it's at Square, Cash App, now with BitKey, the new BitKey, Proto, obviously with the rig.
• 11:11
  It's been astonishing.
• 11:12
  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.
• 11:31
  Is that sort of vibe that I'm getting from the outside looking in, correct?
• 11:36
  Absolutely.
• 11:36
  So there's a phrase that I use a lot internally and lots of us use internally, which is everyday matters.
• 11:42
  And it's one of these things that sounds obvious on its face.
• 11:45
  Of course, every day matters. Why wouldn't it?
• 11:48
  But the difference between teams and people that operate like every day truly matters
• 11:54
  and any other mode of operation is radically different.
• 11:59
  And I think the thing that's really interesting is with that sense of urgency,
• 12:03
  with acting with urgency, it's sort of front of mind for us.
• 12:06
  We're also suddenly more focused.
• 12:09
  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.
• 12:18
  And honestly, the pace has been awesome.
• 12:21
  The other thing, too, and I think you'll see here at the conference, like we've really started to connect the dots.
• 12:25
  So, you know, in the past, we've talked about our goal being to make Bitcoin everyday money.
• 12:32
  And we've talked about doing that by making it secure with things like BitKey and Proto.
• 12:37
  We've talked about making it more accessible with the Cash App Exchange functionality that we originally introduced now seven to eight years ago.
• 12:47
  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.
• 12:55
  And now that we've started to really bring those things together, I think the whole is greater than the sum of the parts.
• 13:02
  And we're really cooking.
• 13:04
  Yeah.
• 13:04
  I mean, you can see a day in the life of a Square merchant going about their business, accepting payments.
• 13:13
  Maybe it's fiat to Bitcoin.
• 13:15
  And then at the end of the day, they want to take some off the platform and put it into self-custody.
• 13:20
  It could easily integrate with this.
• 13:21
  And it's an urgency that I've, again, recognized.
• 13:26
  But I really appreciate it because I do think for the longest time, we're at the Bitcoin conference.
• 13:32
  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.
• 13:47
  There's no velocity to it. There doesn't need to be.
• 13:50
  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.
• 14:03
  Bitcoin is meant to be peer-to-peer cash.
• 14:05
  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.
• 14:15
  Because it is an uphill battle.
• 14:17
  I would argue it may be more of an uphill battle than it was a decade ago with Bitcoin.
• 14:22
  It's because this digital gold reserve asset narrative has taken hold.
• 14:29
  Yeah.
• 14:30
  And it's, do you think it will be everyday money?
• 14:33
  I do. I do.
• 14:34
  And I think you can see the pieces coming together to make that happen.
• 14:38
  So one of the things I really like to illustrate this with is actually the Square use case.
• 14:43
  So a merchant accepting Bitcoin is the type of thing that I think to lots of folks might sound like a science project.
• 14:52
  And obviously not at this conference, but when you look at sellers broadly,
• 14:56
  their problems are about operating their business, they're about margins.
• 15:00
  If a seller is already a Bitcoiner, then they're interested in this.
• 15:03
  But I think what we see is that people are getting interested in it because of what it can mean for their business.
• 15:08
  So when a seller uses fiat, accepts fiat payments, there's a 3% fee taken by the networks.
• 15:17
  And on the consumer side, you typically see that maybe on a receipt you are upset about the fee that you got charged,
• 15:24
  or maybe you see a sign at a merchant tacking on a fee, or maybe occasionally on a larger ticket thing,
• 15:29
  you might change the payment method you use and that sort of thing.
• 15:33
  And most people on the consumer side, it's an annoying couple of percent.
• 15:36
  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.
• 15:53
  That 3% is computed on the ticket sales, not their profits.
• 15:56
  And so it's huge for them.
• 15:58
  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.
• 16:08
  And so that's not a block fee. That's not a square fee. Those are network fees.
• 16:12
  And so we want to enable square seller businesses with that.
• 16:15
  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.
• 16:27
  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.
• 16:35
  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.
• 16:45
  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
• 16:55
  that activation.
• 16:58
  Sellers get a bunch of influx of people coming around
• 17:01
  realizing that Bitcoin's accepted there.
• 17:03
  The Bitcoin map put a lot of sellers
• 17:05
  in front of local Bitcoiners and so on.
• 17:08
  And we've seen a lot more people turning it on
• 17:10
  and starting to get the benefits.
• 17:13
  So a lot of momentum.
• 17:15
  And I think you're gonna see a lot more
• 17:17
  from us in that area.
• 17:17
  Seth Freaks, this rip of TFTC
• 17:19
  was brought to you by our good friends at BitKey.
• 17:21
  BitKey makes Bitcoin easy to use and hard to lose.
• 17:24
  It is a hardware wallet that natively embeds into a two or three multi-sig.
• 17:29
  You have one key on the hardware wallet, one key on your mobile device, and Block stores
• 17:34
  a key in the cloud for you.
• 17:36
  This is an incredible hardware device for your friends and family, or maybe yourself
• 17:40
  who have Bitcoin on exchanges and have for a long time, but haven't taken a step to self-custody
• 17:45
  because they're worried about the complications of setting up a private public key pair, securing
• 17:50
  that seed phrase, setting up a pin, setting up a passphrase.
• 17:52
  Again, BitKey makes it easy to use, hard to lose.
• 17:55
  It's the easiest zero to one step,
• 17:57
  your first step to self-custody.
• 17:59
  If you have friends and family on the exchanges
• 18:01
  who haven't moved it off, tell them to pick up a BitKey.
• 18:03
  Go to BitKey.world, use the key TFTC20
• 18:06
  at checkout for 20% off your order.
• 18:09
  That's BitKey.world, code TFTC20.
• 18:12
  All right, freaks, you know me.
• 18:13
  You know I don't take sponsor money from products
• 18:15
  I wouldn't use myself.
• 18:17
  So listen up.
• 18:17
  The AVEN Bitcoin Visa card is one of the most interesting things
• 18:20
  I've seen in the Bitcoin lending space in a long time. Here's the deal. You can get a line of credit
• 18:24
  up to a million dollars backed by your Bitcoin without selling a single sat. No gains, no annual
• 18:30
  fees, no minimum draws, and your Bitcoin is custodied by BitGo, which is one of the most
• 18:35
  trusted names in digital asset security. AVEN never lends it out. There's no rehypothecation.
• 18:40
  You stay in control. And guess what? You can lock in a fixed rate for up to 10 years. That's 10 times
• 18:46
  longer than most lenders out there or go interest only for up to five years. Rates start at 7.99%
• 18:52
  APR for a product that lets you keep your stack and still access liquidity. It's hard to beat.
• 18:57
  I mean, the duration in the rates is the best I've seen in the market to date. You also get 2%
• 19:03
  unlimited cash back every time you use the card, spend fiat, keep your Bitcoin, the whole game.
• 19:08
  If you've been stacking for years and you need liquidity without triggering the taxable event,
• 19:13
  this is worth a serious look. Go to aven.com slash Bitcoin. That's A-V-E-N.com slash Bitcoin.
• 19:21
  Check it out. I'll bring it back to the new BitKey. I mean, you alluded to it, but again,
• 19:25
  I just went through the onboarding process when we were outside before we hit record.
• 19:29
  And I think the intuitive nature by which I was telling you is you'll do something on the screen,
• 19:34
  like put an email in, put a phone number in, put a recovery thing in. You'll do it on the device
• 19:38
  first and me as somebody who knows what's happening i imagine it's storing that in the secure enclave
• 19:43
  and then i'm interacting with the mobile app and basically using nfc to move that information from
• 19:50
  the hardware device to the phone and so it's there and it's in two places at once but between the
• 19:56
  secure enclaves the i don't know how to describe it like the peace of mind of like maybe i'm a power
• 20:03
  user and i understand this but i have a feeling it'll be intuitive for many the fact you have to
• 20:07
  to do it here first and then you have this like active communication between the device and your
• 20:11
  phone. There's something, I don't know, very like wow to me. Like oh it is really on here and I have
• 20:17
  to transfer it here. Yeah the core property of requiring hardware for critical actions like that
• 20:22
  signature happens entirely on the device and you see exactly what's happening, you know exactly
• 20:28
  what's going on at every moment during the process. I do think that that adds to peace of mind for
• 20:32
  I think we started off with kind of focusing a lot on kind of the onboarding process and the speed of that.
• 20:39
  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
• 20:53
  exactly what they're confirming,
• 20:56
  I think people really get a lot out of that.
• 20:58
  Yeah.
• 20:59
  And speaking of the screen,
• 21:03
  what was the hardest part about incorporating this?
• 21:05
  I know with the old BitKey,
• 21:08
  you guys designed it and said we're not going to do a screen.
• 21:10
  and it's a little too much work.
• 21:11
  What convinced you and gave you the confidence
• 21:14
  to build a screen into this specifically?
• 21:16
  On the convinced part, our customers.
• 21:18
  So listening to customers,
• 21:20
  understanding what they want to see from us and why.
• 21:23
  As we went through that,
• 21:24
  we realized that while maintaining
• 21:27
  the same great properties of Bickey,
• 21:29
  we could add this.
• 21:30
  And I think that's something that as we saw more usage,
• 21:34
  understood what people loved
• 21:35
  and wanted changed about Bickey,
• 21:38
  just fell out naturally
• 21:39
  in a way that I'm glad we're delivering on.
• 21:43
  And then on the confidence part, the team's great,
• 21:47
  and the team's built very complicated hardware
• 21:49
  across the Square portfolio.
• 21:51
  But this type of development's never easy.
• 21:54
  And I think the very direct answer on the hardest part
• 21:57
  is that coordinating between the phone
• 22:00
  and the hardware is not easy.
• 22:02
  A lot of thought went into what the phone shows at one time
• 22:06
  and what the hardware shows at another time.
• 22:08
  And these things are part of a really big recovery system.
• 22:11
  It's not just a pure signing device.
• 22:14
  Viki itself isn't even just a wallet.
• 22:16
  It's a whole system.
• 22:18
  And so we put a lot of thought into how you maintain the state across those two things,
• 22:22
  like you're signing a particular action here.
• 22:25
  But then what do you show on the phone during that time?
• 22:29
  And how do you make sure that it's intuitive for people?
• 22:31
  And so you'll even see things like some color matching of what's being
• 22:34
  and some animation matching of what's being displayed
• 22:36
  when it's time to bring the devices together.
• 22:38
  And lots of details that our designers and firmer engineers and so on
• 22:43
  spent a lot of time perfecting for you.
• 22:45
  You mentioned it briefly earlier, too, but I think it's important,
• 22:47
  particularly if you're cycling either wallets or you're changing an email address
• 22:53
  or contact information on the back end, there's a whole process that goes into that as well.
• 22:58
  With a lot of devices, if you're using a hardware device just as a signing device
• 23:02
  and maybe that's the entirety of a product is to provide a signing advice.
• 23:07
  And then maybe over here you have systems that folks build that the product is that system.
• 23:13
  Maybe you integrate other third-party hardware with it and so on.
• 23:18
  Bickey has all of these problems.
• 23:19
  Bickey does both of those things, and therefore we have all of the problems to solve in self-custody.
• 23:23
  And as a result, we end up with a system that includes things like a recovery email
• 23:27
  that we let you know if something is happening with your wallet.
• 23:30
  And it's actually an account critical, security critical action to change that.
• 23:36
  And so we want you to confirm that on hardware.
• 23:38
  With the first bit key, you tap.
• 23:39
  With the second bit key, you actually can directly confirm what the email is being changed to.
• 23:43
  Yeah.
• 23:44
  No, I mean, especially in today's day and age,
• 23:46
  all the phishing attacks and $5 wrench attacks are going on.
• 23:51
  Having to confirm on the hardware is something I'm becoming more confident
• 23:57
  will be a prerequisite for interacting with wallets in the future.
• 24:03
  You need to physically see it here,
• 24:05
  especially in the world of AI and all this.
• 24:10
  Bringing it back to the atoms of it,
• 24:12
  which is you need the thing physically in your hand to change everything,
• 24:17
  I think gives me incredible peace of mind.
• 24:20
  Well, since you mentioned the atoms of it,
• 24:24
  I'm sort of glossing over all the difficult parts.
• 24:26
  like developing hardware is never easy and you know the team spent a lot of time doing
• 24:31
  extensive reliability testing dropping in from different heights um you know accelerated aging
• 24:38
  and and and that sorts of those sorts of tests saltness things like this uh and um we uh you know
• 24:45
  we want to make sure that you know whenever we add a component like a display like that doesn't come
• 24:48
  for free that comes with very intentional choices about the design and the quality and the implementation
• 24:55
  and really there's a whole journey involved in bringing that into the system and starting to
• 25:00
  rethink how we can protect even more of the system with this edition.
• 25:04
  What's up, Faris? This is brought to you by our good friends at CrowdHealth. I've been a happy
• 25:08
  CrowdHealth member for almost five years now. My wife and I have had two children while we've been
• 25:12
  on CrowdHealth, and I actually just got the last bill for our third child funded. It was $6,157.
• 25:18
  CrowdHealth negotiated down to $2,309, and we only paid $500. The rest was crowdfunded
• 25:24
  by the CrowdHealth network.
• 25:26
  If you're sick of health insurance premiums
• 25:28
  and having to pay deductibles
• 25:30
  and getting ripped off at the hospital,
• 25:33
  join CrowdHealth.
• 25:33
  It's an alternative way to pay for your healthcare.
• 25:36
  It's not health insurance.
• 25:36
  It's crowdfunded healthcare.
• 25:38
  As you can tell, they negotiate prices for you.
• 25:41
  You pay in cash.
• 25:42
  It's much cheaper.
• 25:43
  Overall, we're much happier.
• 25:44
  They have incredible perks.
• 25:45
  Go to joincrowdhealth.com slash TFTC
• 25:47
  to sign up five years on CrowdHealth,
• 25:50
  not looking back.
• 25:51
  Joincrowdhealth.com slash TFTC.
• 25:53
  Use the promo code TFTC.
• 25:54
  Once you set up your account, you're going to get $99 a month for your subscription for the first three months.
• 25:59
  What's up, freaks?
• 26:00
  This rep was brought to you by our good friends at Salt of the Earth.
• 26:05
  It's so delicious.
• 26:06
  This is my pink lemonade electrolyte mix.
• 26:09
  It's pink Himalayan salt.
• 26:11
  There's no sugar.
• 26:13
  It's way better than LMNT liquid IV.
• 26:15
  I went through a big electrolyte kick, testing them all out, and I landed on this, settled on this,
• 26:22
  It's been drinking it pretty consistently every day for two years now.
• 26:26
  It is my favorite.
• 26:27
  This is the pink lemonade.
• 26:29
  They have orange here.
• 26:31
  As you can see, this one's ripped.
• 26:33
  I had this on the train ride back from New York last night.
• 26:36
  I'm always stocked up with these things.
• 26:37
  They also have creatine packets.
• 26:38
  Very convenient, particularly if you're traveling and you like to work out.
• 26:41
  You can get those brain juices flowing.
• 26:43
  They have these creatine packets as well.
• 26:45
  They're about to launch a bunch more flavors.
• 26:48
  lemon lime, watermelon, and a few others as well.
• 26:53
  So go check it out.
• 26:55
  Go to drinksauté, D-R-I-N-K-S-O-T-E dot com.
• 26:59
  Use the code TFTC for 15% off.
• 27:01
  Seriously, game changer in our house.
• 27:04
  My wife drinks it.
• 27:04
  I drink it.
• 27:05
  Our boys drink it.
• 27:07
  Stay hydrated.
• 27:08
  It's a beautiful thing.
• 27:09
  I mean, you mentioned it before we started hitting record,
• 27:11
  but it's been in the headlines a lot this year,
• 27:14
  particularly out of France, the wrench attacks,
• 27:17
  the attacks on Bitcoin holders broadly, particularly in that country, but outside of that country
• 27:24
  as well. And this is something you guys, I don't think you guys have completely solved it with this,
• 27:28
  but I think that is a problem that goes into the thought behind the design of what you guys are
• 27:33
  building or one of the bigger problems that you're attempting to alleviate.
• 27:39
  Yeah, I think this really comes back to the sort of hardest problems in self-custody list. And
• 27:43
  And this is one of the next ones.
• 27:46
  So, you know, you mentioned Bickey hasn't solved it today, and I wouldn't claim that we have.
• 27:51
  In fact, I think nobody's solved it.
• 27:52
  I think it's an industry problem.
• 27:54
  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.
• 28:01
  It feels like there's an acceleration.
• 28:02
  I think it's pretty clear there is one.
• 28:05
  And Jameson Lopp's, you know, chronicling of all of these, of course, can help put some numbers behind that.
• 28:11
  And it's something that I think is on lots of Bitcoiners' minds.
• 28:17
  And I think lots of the solutions that people ideate about today, it's often things like a duress wallet.
• 28:26
  It's things that make an assumption that during a really horrible, violent attack,
• 28:34
  that certain things are going to hold true that in our thinking through this problem space, we question.
• 28:41
  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.
• 28:49
  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.
• 28:57
  And so I think this is an unsolved problem.
• 29:00
  And the team has spent some time thinking about and kind of designing a solution that we think is interesting.
• 29:06
  It's not something that, you know, it's not in BitKey today.
• 29:09
  It's actually something that we're kind of at the stage where we'd love community feedback and engagement.
• 29:14
  But basically, our line of thinking is that we need to combine a couple of elements.
• 29:22
  What we really want is to set up a situation where the Bitcoin just can't actually move right away.
• 29:27
  We think that velocity is one of the best possible tools that we can give people.
• 29:32
  meaning that in some of the attacks and in almost all of the attacks, I think that Jameson is
• 29:39
  primal, they're less than 24 hours. Their attacker showed up and they weren't putting themselves at
• 29:47
  risk trying to hold people hostage for a week or a month. And so a lot of our focus is on how can
• 29:52
  we provide a really safe and easy to use time lock capability that would allow people to set some
• 29:59
  parameters around how fast their Bitcoin can move and find something that works for them for this type of protection.
• 30:04
  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.
• 30:10
  And it's intuitive and and you might think that's an easy solution.
• 30:14
  But it's far from easy. And so you know looking at you know in something like the big key system
• 30:20
  directionally where we're headed is to provide a vault.
• 30:25
  we'll use that term to describe it here, where basically between BitKey hardware and BitKey servers,
• 30:33
  your default path is a withdrawal from the vault if you want to move your money.
• 30:38
  And when you do that, BitKey hardware and BitKey servers enforce biometric, basically,
• 30:42
  liveness checks and enforce a delay parameter. So, like, check that you can put your finger on
• 30:50
  the hardware and maybe authenticate to the BitKey app and then show that to the server,
• 30:55
  or start a timer.
• 30:56
  And then when that timer expires,
• 30:57
  check those things again and allow money to move
• 30:59
  and let people configure what that time delay is.
• 31:01
  Maybe set that time delay to a week or a month,
• 31:03
  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
• 31:16
  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.
• 31:26
  And then we said, okay, well, there's still a problem there.
• 31:29
  What if the attacker runs off with your keys and they just wait for that time lock to expire?
• 31:33
  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.
• 31:41
  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.
• 31:52
  So after the time lock, send it to a different wallet.
• 31:55
  And this is where it gets really tricky and where we want community feedback.
• 31:58
  This is the type of thing that could be a friend's self-custody wallet.
• 32:02
  It could be another setup. It could be custodial wallet.
• 32:06
  And the idea is that you should never be using these.
• 32:09
  This only gets used in a situation where you actually got attacked
• 32:12
  and they actually left with their keys for a really long time beyond that time lock.
• 32:16
  The default is that instead, actually, you withdraw from the vault
• 32:21
  before that time lock expires, and the app helps you do that.
• 32:23
  So not solved yet, but that's kind of the design thinking,
• 32:26
  and we're going to share a little bit more about that,
• 32:29
  and we'd love to hear thoughts and feedback,
• 32:30
  and also frankly feedback about whether or not we should build it because we're trying to develop our roadmap in public
• 32:35
  and this sort of thing we'd love to hear thoughts on.
• 32:38
  I mean, off the bat, I'm hearing this for the first time.
• 32:41
  I'm just hearing this for the first time.
• 32:43
  Yeah, I think it's a really creative solution.
• 32:49
  Particularly the time delay, because that's the biggest thing.
• 32:54
  It's like, okay, somebody comes to your house, move it now, move it now, okay.
• 32:58
  I care about my life and my budget.
• 33:00
  Okay, I'm going to initiate the move.
• 33:04
  Now you have to wait a month.
• 33:06
  Okay, good luck.
• 33:08
  Yeah.
• 33:08
  Get out of my house.
• 33:10
  No, it's a shame that we have to worry about this, though.
• 33:13
  I agree.
• 33:13
  And it's one of the hardest things to design around.
• 33:19
  Yeah, and actually on that topic,
• 33:21
  one thing we realized while we were looking at this
• 33:23
  is that BitKey might be uniquely suited to design for it.
• 33:26
  And the reason for that is actually one that I think is a little bit controversial,
• 33:30
  which is that Bickey doesn't use seed phrases.
• 33:33
  And the reason it's uniquely suited to rent-a-tax
• 33:36
  is because in that setting,
• 33:38
  seed phrases are a vulnerability.
• 33:40
  They're too instant.
• 33:42
  They're too portable.
• 33:43
  Like, somebody can take and leave with this,
• 33:44
  and it's very hard to protect it.
• 33:46
  And really, you know,
• 33:48
  what we want to rely on here is Bitcoin transactions
• 33:51
  for moving money between wallets.
• 33:53
  And that's kind of the core primitive
• 33:55
  and the recovery system around Bickey
• 33:57
  that makes it safe to not use a seed phrase
• 34:01
  kind of sets up the key to be in a position to solve this.
• 34:05
  So that's part of why we want feedback is, you know,
• 34:08
  if this is the kind of thing that we can help solve for the industry in a unique way,
• 34:12
  we'd love to be able to do that.
• 34:13
  I'm going to hold your feet to the fire and talk about potential protocol upgrades.
• 34:20
  Something like OpVault or a Covenants proposal make this easier for you guys?
• 34:24
  Or personally as an engineer, are they something?
• 34:27
  Potentially.
• 34:27
  Potentially. I mean, I think the thing that's interesting is it's not required for us.
• 34:33
  And that's largely because when you have something like the BitKey server involved, you can rely on it for policy enforcement.
• 34:42
  It doesn't need to be enforced by the protocol.
• 34:45
  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.
• 34:53
  And, you know, the underlying protocol usage can use existing time lock mechanisms without further upgrades to implement something like I was describing.
• 35:05
  Now, are there proposals that could potentially allow for different properties of wrench attack solutions?
• 35:12
  Yeah, absolutely.
• 35:13
  But then you get into lots of other tradeoffs that will probably be a whole other episode.
• 35:18
  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.
• 35:33
  and Afshin arbed out, just launched Sigbash,
• 35:39
  which is this similar blinded signing server,
• 35:44
  which I think that's one thing I'm passionate about
• 35:47
  is exploring the design landscape of Bitcoin
• 35:51
  as it exists today,
• 35:53
  even if it involves bringing in some trade-offs.
• 35:55
  Because in a lot of cases, the trade-offs are worthwhile.
• 35:59
  It's something I personally can stomach.
• 36:00
  I won't speak for everybody,
• 36:01
  but I look at chain code delegation
• 36:03
  and something like SIG Bash.
• 36:05
  I'm like, yeah, these trade-offs actually make sense to me.
• 36:07
  Yeah, and honestly, that's kind of how Bickey started, right?
• 36:11
  There was a privacy trade-off when we first introduced it.
• 36:14
  You know, using the 203 multi-SIG that we began with
• 36:18
  as a privacy trade-off.
• 36:20
  We, on the back end, have a descriptor for the wallet
• 36:24
  that would allow Bicblock servers
• 36:26
  to know about your balance, for example.
• 36:29
  And with chain code delegation,
• 36:30
  we wanted to take a huge step really for big key,
• 36:35
  but also for the industry in terms of the,
• 36:37
  that type of trade off.
• 36:38
  We wanted it to be possible to get the benefits of leaning on somebody to hold a
• 36:42
  third key for you,
• 36:44
  all the recovery and safety benefits while not having the same privacy
• 36:47
  downsides.
• 36:49
  And so chain code delegation uses some relatively deep cryptographic magic
• 36:55
  that I won't go into extreme detail here.
• 36:57
  So I don't bore everybody.
• 36:58
  basically to make it so that Bickey servers aren't sitting there with that descriptor of the wallet,
• 37:08
  knowing the balance, knowing the history.
• 37:11
  And excited that the team formulated that into a BIP proposal, BIP89,
• 37:17
  and also look forward to feedback on that.
• 37:21
  So we were talking about it in Georgia at the Proto event.
• 37:24
  We were teasing it.
• 37:25
  And again, going back to the pace of shipping,
• 37:27
  I think it was less than a month later you guys had it live and then tomorrow.
• 37:31
  So that was cool to see.
• 37:32
  All right.
• 37:33
  Before we wrap up here, what is your biggest hope for this new BitKey launch?
• 37:39
  What reaction are you hoping Bitcoiners have when they see this at the market?
• 37:45
  I'd love to bring more people into BitKey who haven't taken the plunge yet.
• 37:49
  So we had a lot of people come by the booth when we were selling in person last year.
• 37:52
  We're doing the same at the conference here.
• 37:54
  So if you're around in Vegas, I hope that we get to see you.
• 38:00
  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.
• 38:12
  Okay.
• 38:13
  Well, Max, I know you're a very busy man.
• 38:16
  You guys are setting up.
• 38:17
  You're getting ready for a big week here at the conference.
• 38:20
  So thank you for taking some time to sit down with me.
• 38:22
  And honestly, congrats and thank you.
• 38:25
  This is a beautiful piece of hardware.
• 38:27
  And I think a lot of Bitcoiners are going to love this product and share it.
• 38:32
  That's the one thing you were saying earlier.
• 38:34
  People love buying BitKey's a share with people.
• 38:36
  We've been doing BitKey giveaways for, I think, over a year now at TFTC.
• 38:39
  And that is the number one use case the winner uses it for.
• 38:42
  They say, hey, I've got one already.
• 38:44
  I'm going to give it to my dad or uncle who hasn't moved it off the exchange yet.
• 38:49
  I love it.
• 38:49
  It's a great gift.
• 38:50
  easy to use, hard to lose, and now even easier to use, more intuitive with the screen. So congrats.
• 38:56
  Thank you. Thank you, Max. Thanks for having me on. Peace and love, freaks.
• 38:59
  All right, so we just finished recording. Before we came in here, Max set me up with my new BitKey.
• 39:04
  We funded it with 50,000 sats worth of Bitcoin, $39.18. Sats are cheap right now. We're going to
• 39:12
  complete the circle. It's confirmed on chain so we can send from this wallet. So I'm going to send
• 39:16
  back to another wallet that I control.
• 39:19
  Let the glare of the light in here.
• 39:22
  Boop, boop, boop.
• 39:24
  I'm going to send $36.
• 39:26
  I'm going to send 45,000 sats back.
• 39:29
  I'm going to continue.
• 39:31
  Slow.
• 39:35
  Loading the transaction on the phone.
• 39:37
  I'm going to review on BitKey.
• 39:40
  Hold it here.
• 39:41
  Address.
• 39:44
  AC1Q.
• 39:44
  All right.
• 39:45
  Looks good.
• 39:46
  I'm gonna confirm here. The address is good. I'm gonna confirm the amount that
• 39:55
  looks right. Signing on the device.
• 40:05
  Initiating transaction.
• 40:16
  Done.
• 40:18
  Sent.
• 40:20
  All right.
• 40:20
  That worked well.
• 40:22
  Congratulations.
• 40:23
  Thank you.
• 40:24
  First transaction on the newest wiki.
• 40:26
  Is it?
• 40:27
  Love that.
• 40:27
  Well, for you.
• 40:28
  For me.
• 40:29
  Hell yeah.
• 40:30
  Congrats, man.
• 40:31
  This is awesome.
• 40:31
  Thanks.
• 40:32
  Thank you for listening to this episode of TFTC.
• 40:34
  If you've made it this far, I imagine you got some value out of the episode.
• 40:38
  If so, please share it far and wide with your friends and family.
• 40:42
  We're looking to get the word out there.
• 40:44
  also wherever you're listening whether that's youtube apple spotify make sure you like and
• 40:51
  subscribe to the show and if you can leave a rating on the podcasting platforms that goes a
• 40:56
  long way last but not least if you want to get these episodes a day early and ad free make sure
• 41:02
  you download the fountain podcasting app and go to fountain.fm to find that five dollars a month
• 41:09
  get you every episode a day early ad free helps the show gives you incredible value
• 41:15
  so please consider subscribing via fountain as well thank you for your time and until next time