Latest / The Paul Barron Crypto Show / Banks Are Breaking📉Algorand CEO Explains AI Threat

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Banks Are Breaking📉Algorand CEO Explains AI Threat · The Paul Barron Crypto Show

0:00
Speaker 1: Could quantum be a problem for banks and crypto? Today,
0:03
Speaker 1: we're going to be breaking that down with a very
0:05
Speaker 1: good guest today. It's going to be a good one.
0:06
Speaker 2: Let's just get started.
0:07
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Speaker 1: it out. Tell them we sent you. I want to
0:48
Speaker 1: bring in William Herkelrath, who is the new CEO over
0:51
Speaker 1: at Algorand. It has been a while since we've had
0:54
Speaker 1: someone on from Algorand.
0:55
Speaker 2: So William, welcome to the show. How are you?
0:58
Speaker 3: I'm quite well. Thank you very much. Appreciate it. All right.
1:01
Speaker 2: Well, let's get into a couple of things.
1:03
Speaker 1: We're going to learn a lot about what Algorand is
1:05
Speaker 1: doing around Q day and what kind of quantum threats
1:09
Speaker 1: you guys are seeing in the market that are kind
1:11
Speaker 1: of helping you that. But I want to lead off
1:12
Speaker 1: with the first story here that kind of sets the
1:15
Speaker 1: tone here. And that is, is the U.S. banking system
1:17
Speaker 1: really ready for a post-quantum future? As you guys know,
1:22
Speaker 1: there is a lot of situations around quantum and the
1:25
Speaker 1: potential threat here When you look at the current banking industry,
1:30
Speaker 1: how far away are they, do you think, from full preparedness?
1:36
Speaker 3: Oh, I think they themselves would admit that many of
1:40
Speaker 3: them haven't even started. So very far away is the
1:43
Speaker 3: easy way to answer that question. And there's been, I think,
1:48
Speaker 3: a lot of big debate as to when they have
1:51
Speaker 3: to be ready. So I think a lot of them
1:52
Speaker 3: are still trying to ask the question as to what
1:54
Speaker 3: the timings are here. It wasn't until recently... that people
1:58
Speaker 3: thought that what might be a 2032 problem or a
2:01
Speaker 3: 2033 problem is now probably more likely to be a
2:04
Speaker 3: 2028 or 2029 problem. So it's been very recent that
2:07
Speaker 3: people have really escalated that topic.
2:10
Speaker 1: In the article we just showed, this was kind of
2:12
Speaker 1: an interesting point, and that is the result of an
2:15
Speaker 1: unusual contradiction. The federal government has imposed a deadline on
2:19
Speaker 1: itself while leaving the financial system largely to an advisory timetable.
2:24
Speaker 2: So it appears.
2:26
Speaker 1: The government's trying to prep, they've got a timeline, but
2:28
Speaker 1: they're not putting anything out there for one of the
2:30
Speaker 1: major industries in the US. And if we had a
2:33
Speaker 1: financial system shutdown or even the threat of a major
2:36
Speaker 1: bank shutdown, that would be pretty significant in the markets,
2:39
Speaker 1: much less just in general, I think to kind of
2:43
Speaker 1: call a lot of the fears of consumers. First of all,
2:47
Speaker 1: do you feel like the banks can really accelerate to
2:49
Speaker 1: get ready for this? Or is this something that is
2:51
Speaker 1: going to just happen and they're gonna have to work
2:54
Speaker 1: through it? Or do you think AI, may aid in
2:57
Speaker 1: being able to prep these banks.
3:00
Speaker 3: I think ai is both a threat to having these
3:04
Speaker 3: things be broken sooner and it's also the aid that
3:06
Speaker 3: we'll probably be using to help us get ready for
3:08
Speaker 3: those threats at the same time i think ai is
3:10
Speaker 3: going to be a big part of this story regardless
3:12
Speaker 3: i i think my only guess on why they are
3:16
Speaker 3: focusing on their own uh systems before they decide what
3:19
Speaker 3: to issue to the banking industry as a standard There
3:22
Speaker 3: was some pushback. In Europe, they have issued standards and
3:25
Speaker 3: they have issued hard deadlines. And I think the banking
3:29
Speaker 3: industry was a little bit like, hey, listen, this is
3:31
Speaker 3: still a little unknown. You can't be giving us requirements
3:35
Speaker 3: just yet. It's still early days. So they might just
3:37
Speaker 3: be reacting to that. But the reality is that once
3:40
Speaker 3: people decide what they want to do here, then the
3:43
Speaker 3: regulations will come. We'll get very specific rules, I suspect.
3:47
Speaker 1: Yeah, I'm a little bit concerned because I don't think
3:49
Speaker 1: we see the kind of technology prowess in this administration
3:53
Speaker 1: that can kind of prep for this. I know that's
3:55
Speaker 1: what Sachs was supposedly going to be doing, David Sachs.
3:59
Speaker 1: But we don't really have a lead out there that's
4:00
Speaker 1: kind of pushing this forward. And I think we need it.
4:04
Speaker 1: So this is going to be something to watch for sure.
4:07
Speaker 1: Q-Day could arrive before quantum computers are commercially useful. This
4:11
Speaker 1: is coming, obviously, in from the EU. So it brings
4:14
Speaker 1: up a topic that I think is important for our audience,
4:16
Speaker 1: and that is When you look at hacks that are
4:19
Speaker 1: happening today, many of the vectors that are out there
4:23
Speaker 1: are being hacked by both black hat and white hat hackers.
4:27
Speaker 1: They're getting access to some of these vectors that are
4:30
Speaker 1: kind of honeypots of data waiting on quantum or even
4:36
Speaker 1: advanced AI to be able to actually pierce that data
4:39
Speaker 1: and utilize it. Is that something people should be worried
4:43
Speaker 1: about right now, even before quantum potentially becomes a problem?
4:48
Speaker 3: I mean, that has a very common perspective. That's my perspective, yes.
4:52
Speaker 3: Any data that's stolen, even if it's encrypted today, and
4:55
Speaker 3: you can't decrypt it today, can be decrypted in the future.
5:00
Speaker 3: So that is exactly what that harvest now, decrypt later references.
5:03
Speaker 3: And people are acquiring huge amounts of data with the
5:08
Speaker 3: notion that they'll be able to get at it later. Absolutely.
5:11
Speaker 1: I know that Algorand has worked a lot to try
5:13
Speaker 1: to advance your preparation for QDAE.
5:17
Speaker 2: But how close is it?
5:19
Speaker 1: This is kind of isolating down in three papers, three months,
5:22
Speaker 1: now rewriting the whole quantum threat timeline. And there's a
5:26
Speaker 1: few points right here that I wanted to hit on,
5:29
Speaker 1: especially around crypto, which is talking about major crypto, including Bitcoin, Ethereum,
5:34
Speaker 1: virtually every major cryptocurrency could be broken with fewer than
5:38
Speaker 1: half a million physical qubits. So when you look at that,
5:43
Speaker 1: And the potential here, how close do you think Q
5:45
Speaker 1: Day is? I know you guys are preparing for this.
5:47
Speaker 1: So what is your target zone?
5:52
Speaker 3: So we are going to be fully, I think, completely
5:54
Speaker 3: ready by the end of 2027 to be perfect. Honestly,
5:57
Speaker 3: we'll be 90% ready much sooner than that. There's things
5:59
Speaker 3: around the edges that we feel like we're going to really,
6:02
Speaker 3: really need to do to harden it. But we are already,
6:04
Speaker 3: all of the accounts on Algorand today are already quantum resistant.
6:08
Speaker 3: The wallet infrastructure is quantum resistant. So the most important
6:11
Speaker 3: pieces we're already ready today with. And around the edges,
6:17
Speaker 3: there's work to be done in the next few quarters.
6:19
Speaker 1: I'm kind of curious, where do you find developers that
6:24
Speaker 1: can develop against quantum risk?
6:28
Speaker 3: Actually, the math is the hard part. It's not to
6:32
Speaker 3: downplay the development effort, but it's actually understanding how the
6:34
Speaker 3: math works and making sure that you can do that
6:37
Speaker 3: correctly is where a lot of the challenges. So it's
6:39
Speaker 3: the cryptography space rather than the developers. Once the cryptographers
6:43
Speaker 3: have worked it all out, the developers can bring it
6:47
Speaker 3: to production in a reasonable timeframe. But we've got some
6:50
Speaker 3: great folks that have been with the Algorand for four
6:53
Speaker 3: or five years. We've been doing this for a long time.
6:55
Speaker 3: This is not a new strategy for us. We did
6:58
Speaker 3: our first state proof, quantum state proof in 2022. So
7:01
Speaker 3: we're two or three years into our journey already.
7:04
Speaker 1: Other issues that are happening is we've got banks now
7:07
Speaker 1: being hacked all over the world, really, open source AI
7:10
Speaker 1: agent hacks in South Korean banks. This has exposed a
7:13
Speaker 1: whole bunch of records. When you look at that, first
7:16
Speaker 1: of all, are you guys examining how some of these
7:20
Speaker 1: hacks are taking place so you can use them as learnings?
7:22
Speaker 2: What are you watching right now?
7:27
Speaker 3: To be perfectly honest, the most important thing that we're
7:29
Speaker 3: working on is the math, is the cryptography, is the
7:32
Speaker 3: protocol level to make sure that it's functioning. And it's
7:34
Speaker 3: also things like compression sizes, bit sizes. There's a lot
7:38
Speaker 3: of work here that people I think are probably overlooking.
7:43
Speaker 3: All of these calculations are much more complicated, higher level math.
7:47
Speaker 3: And a lot of the systems that we're used to,
7:49
Speaker 3: we're used to instant finality on everything we do in
7:52
Speaker 3: our lives, right? As we do these new types of
7:55
Speaker 3: handshakes and this new type of cryptography, we have to
7:58
Speaker 3: prepare ourselves that if we don't do the right things,
8:00
Speaker 3: things are going to go slower. So that's what we're
8:03
Speaker 3: focused on more is making sure that our thing works
8:05
Speaker 3: really well and it works really, really quickly. And we
8:08
Speaker 3: haven't spent too much time. I think the attack vectors
8:11
Speaker 3: are pretty well known. So we're more in the solution
8:14
Speaker 3: space than focusing on the attack vectors.
8:16
Speaker 1: For our audience, I think people need to be aware
8:19
Speaker 1: that there's a lot of fourth party and even third
8:22
Speaker 1: party incidents that are occurring. What we mean by that
8:25
Speaker 1: is it's not necessarily the banks themselves in some cases
8:29
Speaker 1: that are being exploited. What you're dealing with is some
8:34
Speaker 1: of the supply chain that's happening here. So that gets
8:37
Speaker 1: into a whole new layer because now you've got supply
8:39
Speaker 1: chain vendors, people that maybe don't necessarily deal with this
8:43
Speaker 1: on an everyday basis, especially around security. So it is
8:46
Speaker 1: a challenge right now. Do you think that is the
8:48
Speaker 1: weak link right now across both quantum and advanced AI?
8:53
Speaker 3: Well, absolutely. First of all, and you mentioned at the
8:56
Speaker 3: beginning that the government is saying that they need to
8:58
Speaker 3: be quantum resistant by some sort of date. Guess that
9:01
Speaker 3: means that everybody who sells to the government, everybody that
9:05
Speaker 3: has them as a client is probably going to be
9:08
Speaker 3: asked that very hard question as to what extent they
9:11
Speaker 3: have solved all those problems if they want to get
9:12
Speaker 3: those government contracts. So This is how it tends to
9:15
Speaker 3: work through the supply chain is that the vendors start
9:17
Speaker 3: to become basically demanding of it. The banks will do
9:21
Speaker 3: the same thing. The banks will require all of their
9:23
Speaker 3: vendors to be quantum resistant and that's how it'll force
9:26
Speaker 3: everyone to get to that level.
9:28
Speaker 1: That's what concerns me because every project I've seen the
9:32
Speaker 1: government launch, 99.99% is much further out in terms of
9:39
Speaker 1: their target date. even if they're trying, which they don't
9:42
Speaker 1: really have a target date right now, even if they're
9:44
Speaker 1: trying to get there, this seems to be just comfort
9:47
Speaker 1: speak trying to get people to say, okay, don't worry
9:50
Speaker 1: about it. But in reality, this could be much bigger overall.
9:54
Speaker 1: So that's a concern I have right now that I
9:56
Speaker 1: think is going to be an issue going forward.
9:59
Speaker 2: What about post-quantum security?
10:01
Speaker 1: Once we do get to a point where we have
10:04
Speaker 1: a Q-day occur, the kind of security mechanisms that could
10:08
Speaker 1: be put in place, even with companies like yourself, what
10:11
Speaker 1: do you guys, do you have kind of a plan
10:13
Speaker 1: after this occurs?
10:16
Speaker 3: Well, so basically what we're doing is making sure that
10:19
Speaker 3: everything that we build right now is already quantum secure, right?
10:21
Speaker 3: So as we bring new features to market, each and
10:24
Speaker 3: every one of those new features is going to be
10:25
Speaker 3: quantum secure, which means that we don't need to worry
10:27
Speaker 3: about exactly when Q day comes. The day it comes
10:30
Speaker 3: won't impact us because our systems won't be vulnerable. That
10:33
Speaker 3: is the same recommendation we're giving to our partners. That
10:36
Speaker 3: is pretty much the thread that's running through our entire
10:40
Speaker 3: organization at this point. And that is, again, all those
10:44
Speaker 3: little edge cases that I mentioned that aren't yet PQ secure,
10:47
Speaker 3: that's what we're harping to make sure that we do
10:50
Speaker 3: meet those timelines.
10:51
Speaker 1: Are you guys at all worried about the social engineering
10:55
Speaker 1: aspect of it?
10:56
Speaker 2: Revolut, this is a good example of it.
10:58
Speaker 1: They exposed a lot of KYC data after they had
11:02
Speaker 1: a fraudulent government email that was passing their security checks.
11:06
Speaker 1: So basically what it was was social engineering that worked
11:10
Speaker 1: its way through. It wasn't really a hack. It was
11:12
Speaker 1: basically just social engineering, which has been around for 30 years.
11:15
Speaker 1: So That seems to be almost a human element that
11:19
Speaker 1: could end up piercing some of these veils that could
11:23
Speaker 1: even get past this quantum secure layer. So are you
11:26
Speaker 1: guys trying to deal with that?
11:29
Speaker 3: There's only so much we can do. Our specialty happens
11:33
Speaker 3: to be in the post-quantum area. That's the AI threat
11:36
Speaker 3: that people are talking about. The fact that AIs are
11:38
Speaker 3: getting better and better and better at figuring out. The
11:41
Speaker 3: one thing I think how where these overlap is that
11:43
Speaker 3: if you... AIs are finding... tremendous vulnerabilities in existing 32-bit encryption,
11:50
Speaker 3: which is the most common encryption that's out there today.
11:53
Speaker 3: And not because they're brute forcing it, because they have
11:56
Speaker 3: powerful computers, just because the AI is finding these ends,
11:59
Speaker 3: social engineering and other ends into that. And so people
12:02
Speaker 3: are asking themselves, well, we have to fix those holes anyhow.
12:05
Speaker 3: If we're going to fix those holes today, are we
12:07
Speaker 3: really going to do it first on the old cryptography
12:10
Speaker 3: and then do it again three years from now in
12:12
Speaker 3: a post-quantum way? So, so I think what we're hearing
12:15
Speaker 3: is some demand is like, well, we might as well go, let's,
12:18
Speaker 3: let's look at post-quantum right now. If we're going to
12:20
Speaker 3: do this anyhow, let's look at it. Let's look at
12:22
Speaker 3: the full solution as to what we need to do
12:24
Speaker 3: over the, you know, and get that done today. So that's,
12:26
Speaker 3: it's escalating, I think, demand for, for what we can
12:29
Speaker 3: bring to the table, which is, you know, I guess
12:30
Speaker 3: positive for us, but, but no, the reality is social
12:33
Speaker 3: engineering is something that, that no, no piece of math
12:36
Speaker 3: can get around. If an AI figures out how to
12:38
Speaker 3: get your passwords, there's not much I can do about it, unfortunately.
12:42
Speaker 2: I'm looking here at your resume.
12:44
Speaker 1: And it's got two decades of AI enterprise, institutional finance, blockchain.
12:52
Speaker 2: You were a co-founder.
12:53
Speaker 1: You also did some leadership roles at Chainlink and Curve.
12:57
Speaker 1: So when you look at the overall industry, you know
13:00
Speaker 1: what's up. When you look at the overall industry right now,
13:03
Speaker 1: who would you say are the blockchains out there that
13:06
Speaker 1: are closest to a solution outside of what you guys
13:10
Speaker 1: are doing at Algorand? If you look at just the
13:12
Speaker 1: industry in general.
13:15
Speaker 3: So there's not that many. I mean, we are really
13:17
Speaker 3: proud to be the forefront. That's kind of why you
13:20
Speaker 3: said I was newly in this role. This is the
13:22
Speaker 3: one I wanted, right? What was my next job? What
13:24
Speaker 3: is that I wanted to do? I wanted to be
13:26
Speaker 3: in the post-quantum space. And this was kind of the
13:27
Speaker 3: only play. The NEAR protocol has got some great stuff.
13:32
Speaker 3: They're also working on some really important things. There's other
13:35
Speaker 3: parties out there that have some things working in labs,
13:38
Speaker 3: in a labs environment. But as far as Being fully post-quantum,
13:42
Speaker 3: working in production, doing millions of post-quantum transactions, there really
13:47
Speaker 3: isn't anyone else just quite yet. That's where we are.
13:49
Speaker 3: We're far ahead of the game. Again, we've been working
13:52
Speaker 3: on this for three years. I guess the one thing
13:55
Speaker 3: that I get nervous about is that everyone thinks they're
13:57
Speaker 3: going to be able to make this transition quickly and easily.
14:00
Speaker 3: It's just not that true. It's taken a long time
14:03
Speaker 3: to get us where we are. Other people will be
14:04
Speaker 3: able to do it faster because they'll be able to
14:06
Speaker 3: learn from what we've done. But it's not a two-day process.
14:10
Speaker 3: It's a very long process to work yourself down this road.
14:13
Speaker 1: Okay, so you look at a lot of these models
14:15
Speaker 1: that are being advanced right now in AI. So devs,
14:19
Speaker 1: as well as the math that's going into this kind
14:22
Speaker 1: of development, is being advanced pretty significantly. And I would
14:25
Speaker 1: say by this time next year, you could probably take that.
14:30
Speaker 2: On an order of magnitude.
14:32
Speaker 1: In terms of growth and opportunity, wouldn't that allow a
14:35
Speaker 1: lot of these projects to be able to catch up
14:38
Speaker 1: as long as AI is actually advancing fast enough?
14:42
Speaker 3: I think that that is absolutely their belief, and there
14:46
Speaker 3: are many people who have that belief. I actually don't
14:48
Speaker 3: agree with that philosophy, personally. I don't think that... Because
14:53
Speaker 3: my experience, while I think you can... Doing the math
14:56
Speaker 3: and actually knowing how to put that math in practice
14:58
Speaker 3: are completely different things. Building an algorithm that works, but
15:02
Speaker 3: versus building an algorithm that can actually achieve finality in
15:05
Speaker 3: less than one second are totally different things. There's a
15:10
Speaker 3: lot of art to this. It's not just hardcore brute
15:13
Speaker 3: force math, and it's not just hardcore brute force engineering,
15:16
Speaker 3: which is what AIs specialize in doing. Obviously, they're getting
15:21
Speaker 3: better and better. I do think they're going to be helpful.
15:23
Speaker 3: There's no question. But there are real challenges, particularly with
15:27
Speaker 3: blockchains and decentralized situations that that require, there's a lot
15:32
Speaker 3: more work here than I think people are aware.
15:34
Speaker 1: Do you think it's being overblown at all? Because you
15:38
Speaker 1: hear some analysts out there and researchers that are claiming
15:42
Speaker 1: that quantum is a very narrow vector and in many
15:45
Speaker 1: cases it could not necessarily advance to where it's going
15:49
Speaker 1: to cause problems in all these different areas. It's designed
15:52
Speaker 1: to really cause, or excuse me, answer very narrow, explicit
15:56
Speaker 1: questions particular challenges, do you think it is being overblown
16:00
Speaker 1: or do you feel like this is, no, this is
16:02
Speaker 1: the thing we have to watch out for?
16:03
Speaker 3: I think both things can be true at the same time.
16:08
Speaker 3: I think that the problem with it is that even
16:12
Speaker 3: if it's only a 1% chance, it's complete and utter failure.
16:17
Speaker 3: I mean, like I think it's 1% of a complete
16:19
Speaker 3: and utter disaster. Like when we were talking about the AI,
16:22
Speaker 3: one of the AI guys said, well, look, there's only
16:24
Speaker 3: a 10% chance that AI is going to wipe out
16:26
Speaker 3: the human race. Even if that's a 1% chance, I'm
16:30
Speaker 3: not too happy with that. It doesn't have to be
16:33
Speaker 3: a large percentage chance for us to still need to
16:35
Speaker 3: take this seriously. Look, I think it is probably coming
16:40
Speaker 3: faster than people think. Every time I read a new paper,
16:43
Speaker 3: someone has figured out how to bring this Q date
16:45
Speaker 3: forward an extra year or something. To not prepare for it,
16:49
Speaker 3: I think, is pretty naive. From what I can tell,
16:52
Speaker 3: every Fortune 500 CISO has to have this on their
16:56
Speaker 3: 2027 roadmap. They have to be spending money in this
16:58
Speaker 3: area in order to keep their boards happy. So we
17:01
Speaker 3: know that there's major investment coming this way.
17:04
Speaker 1: You guys have announced that Algorand says that your mainnet
17:07
Speaker 1: has passed more than 2.7 million post-quantum transactions.
17:12
Speaker 2: So you said.
17:13
Speaker 1: Earlier in the interview that you're 90% there right now.
17:15
Speaker 2: Is that right?
17:20
Speaker 3: What I meant to say is, so that is absolutely true,
17:22
Speaker 3: the 2.7 million post-quantum transactions. I'm saying that 90% of
17:27
Speaker 3: all of the things that you would need to do
17:28
Speaker 3: on a blockchain are already secured by post-quantum. To get
17:31
Speaker 3: us to the full, to get us to that end,
17:33
Speaker 3: that's what we continue to work on. There's other little
17:35
Speaker 3: areas in and around digital assets that we're working on
17:39
Speaker 3: to get us the full spirit. But we can already
17:42
Speaker 3: do what most of these institutions want to do with
17:45
Speaker 3: prospective digital assets. We've got the minting and the burning
17:47
Speaker 3: of the ability to hold those in custody, to interact
17:51
Speaker 3: with those in a fully post-quantum manner, that is already
17:54
Speaker 3: live and in production, and that's what we're pushing out
17:56
Speaker 3: to the market right now.
17:58
Speaker 2: So, William, you've been in the business for a while.
18:00
Speaker 1: You've seen kind of all sides of it from the finance,
18:02
Speaker 1: the tech, and obviously the.
18:03
Speaker 2: Advanced narrative around blockchain.
18:06
Speaker 1: What would you say to banks that are out there
18:08
Speaker 1: trying to prepare for this right now?
18:10
Speaker 2: What do they do first?
18:13
Speaker 3: Well, there's a lot of complicated things that they need
18:16
Speaker 3: to do just with their internal systems that's going to
18:18
Speaker 3: be solved by the Microsofts and the Oracles of the world.
18:22
Speaker 3: That's not problems that we're looking at. But I will
18:25
Speaker 3: say to them with respect to digital assets themselves, if
18:28
Speaker 3: you are wanting to work in the digital asset industry,
18:31
Speaker 3: if you're tokenizing your assets, you're creating stable coins, you're
18:35
Speaker 3: working in that area whatsoever, and you're doing so all
18:37
Speaker 3: on the old cryptography stack, you're going to have to
18:40
Speaker 3: redo all of that. And so our message to them
18:43
Speaker 3: We would love to get in that office right now
18:45
Speaker 3: and help show you how to get this done in
18:47
Speaker 3: a post-quantum way today. So make sure you handle this.
18:52
Speaker 3: Get this done. There's no reason to be incurring all
18:54
Speaker 3: this tech debt or putting your clients' assets at risk
18:59
Speaker 3: using the old stack when the new stack already exists.
19:02
Speaker 3: That much we can solve today. The other issues in
19:04
Speaker 3: their systems are not things we're focused on just yet.
19:07
Speaker 1: We've had a chance to interview a lot of different
19:09
Speaker 1: people on this very subject, and especially around AI and
19:12
Speaker 1: some of the vector exposure that's happening around these hacks.
19:15
Speaker 1: Do you foresee a major AI hack on a major
19:20
Speaker 1: bank in the U.S.
19:22
Speaker 2: Before the end of this year?
19:25
Speaker 3: I don't know the timing, but it's going to happen.
19:28
Speaker 3: I can't see the timing, but I think so. I mean, look,
19:32
Speaker 3: these things happen all the time. We've We're both old
19:35
Speaker 3: enough to have seen them happen multiple times.
19:37
Speaker 2: We haven't seen one of those happen, though.
19:39
Speaker 1: A major AI hack where you see real Americans lose
19:43
Speaker 1: access to their accounts, possibly maybe just lose the entire amount.
19:47
Speaker 1: Who knows how agents could get in there and and
19:50
Speaker 1: potentially work. But this is the concern I have. And it's,
19:54
Speaker 1: I think a lot of experts out there have kind
19:55
Speaker 1: of voiced this is that the banking systems are not
19:58
Speaker 1: ready for this.
20:00
Speaker 3: Yeah, no, I think you're right. I don't know the
20:01
Speaker 3: timing of it. I will admit, I don't think it's
20:03
Speaker 3: a quiet, you don't think that's not a quantum threat.
20:05
Speaker 3: That's just, that's just the generic social engineering threat, the
20:08
Speaker 3: AI threat. Um, I think about that a lot and
20:12
Speaker 3: there's no doubt in my mind that there's going to be,
20:14
Speaker 3: that's why I actually, I don't like the word Q
20:18
Speaker 3: day because that implies that there's some magic day where
20:20
Speaker 3: all of a sudden everything's at risk. I think we're
20:22
Speaker 3: just going to see these incremental risks are just going
20:24
Speaker 3: to grow. It's more of a spectrum rather than a
20:27
Speaker 3: single point in time.
20:29
Speaker 2: All right.
20:29
Speaker 1: So you guys have unveiled your roadmap for resilience by 2027.
20:34
Speaker 1: Does that mean you're going to be full quantum resistant?
20:38
Speaker 1: by the end of this year or is it going
20:39
Speaker 1: to happen next year?
20:41
Speaker 3: So as I said, all of the digital asset work,
20:44
Speaker 3: the vast majority of things that banks need to do
20:47
Speaker 3: with digital assets today, we already are quantum resistant with.
20:51
Speaker 3: Full quantum resistance, there's things around the edges again, like
20:54
Speaker 3: the way that consensus is exactly calculated, the way that
20:57
Speaker 3: randomness is assigned to validators. These are highly technical things.
21:02
Speaker 3: Those items are going to be coming in the first
21:04
Speaker 3: few quarters of 2027. So that's why we are giving
21:08
Speaker 3: ourselves a little bit more of a buffer, but most
21:11
Speaker 3: of what people need to do today, we already are
21:13
Speaker 3: prepared and ready for providing them a fully post-quantum solution.
21:17
Speaker 1: So how would, okay, so explain to our audience for
21:21
Speaker 1: Algorand to be able to solve this problem and let's
21:25
Speaker 1: go with it, you guys fix this, or you have
21:27
Speaker 1: something that's in place for 2027.
21:31
Speaker 2: What would be the effect on the market.
21:34
Speaker 1: Especially the financial industry, How would you guys go out
21:37
Speaker 1: and assist the rest of the market to kind of
21:40
Speaker 1: prepare for this?
21:42
Speaker 3: So we provide a tech stack, first and foremost, that
21:45
Speaker 3: the financial industry can use. Specifically today, that tech stack
21:50
Speaker 3: is focused on digital assets only. We are thinking about
21:53
Speaker 3: other markets we can get and be helpful with throughout
21:56
Speaker 3: 2027 once we kind of nail down the digital assets
21:59
Speaker 3: side of the equation fully and completely. And that tech
22:02
Speaker 3: stack is such that those companies can be working with
22:06
Speaker 3: it effectively right away. So just like they would be
22:09
Speaker 3: working with the tech stack on Ethereum, or they might
22:12
Speaker 3: be working on one of the other blockchains, ours is
22:16
Speaker 3: one that they can work with. And we have a
22:17
Speaker 3: multi-chain solution so that it's easy to be interoperable with
22:21
Speaker 3: ourselves and some of the other blockchains out on the market.
22:23
Speaker 3: But that's effectively what we offer. And so when we
22:25
Speaker 3: say we're going to help them, we can do consulting,
22:28
Speaker 3: but we can also just bring them in, physically give
22:30
Speaker 3: them this tech stack, give them a custody, give them
22:32
Speaker 3: a wallet solution, give them what they need and a
22:36
Speaker 3: key solution to get to market.
22:38
Speaker 1: So it sounds like you guys are prepared and maybe
22:41
Speaker 1: digital assets really are in more of a good position
22:45
Speaker 1: to be protected first. Beyond that, is that correct?
22:49
Speaker 2: Is that what you're saying?
22:51
Speaker 3: Well, that's what we've solved for first. I agree that
22:54
Speaker 3: there's another big market out there that we're excited to
22:56
Speaker 3: go help with, but that happens to be what we've
22:58
Speaker 3: solved for first, and that's what we're focusing on first.
23:02
Speaker 1: All right, with that being said, obviously you guys know
23:04
Speaker 1: who your target zones are in terms of web, we'll
23:08
Speaker 1: call it web two companies that are out there, whether
23:11
Speaker 1: it's the banking, the medical industry, the real estate, hospitality.
23:15
Speaker 1: I mean, there's all sorts of companies sectors out there.
23:18
Speaker 1: Is banking the number one target for you guys once
23:21
Speaker 1: you start to move outside of the blockchain element?
23:25
Speaker 3: Yeah, that's our current expertise. That's where we know the best.
23:30
Speaker 3: And I think that's where the threat is the largest,
23:33
Speaker 3: to your point. Are you anticipating any deals in 2027
23:35
Speaker 3: with major banks? I think so, yeah, absolutely. Can't announce anything,
23:47
Speaker 3: but conversations are very positive as we stand right now
23:50
Speaker 3: with how we can be helpful to them. They need
23:53
Speaker 3: to be learning. They need to be working on this.
23:55
Speaker 3: They have budgets in 2027 to bring in partners and
23:58
Speaker 3: bring in experts and be testing stacks and getting POCs ready.
24:03
Speaker 3: All of that activity is going to happen, whether it's
24:04
Speaker 3: with us or whether it's with other people. These deals
24:07
Speaker 3: will be announced. Everyone wants to say that they have
24:11
Speaker 3: something on that roadmap next year.
24:12
Speaker 1: Well, you know, this is going to be such an
24:14
Speaker 1: interesting flip of the coin if a crypto company is
24:21
Speaker 1: the savior to.
24:22
Speaker 2: The banking industry. I mean, that to me is just perfect.
24:25
Speaker 2: It's the way the story should end.
24:28
Speaker 3: I like to say that the purpose of us is
24:30
Speaker 3: to bring the word cryptography back into crypto. I think crypto, unfortunately,
24:33
Speaker 3: has that kind of a negative connotation, but it did
24:35
Speaker 3: come from the word cryptography. The world's, many of the
24:38
Speaker 3: world's cryptographic experts are obviously working in our industry. So
24:42
Speaker 3: it shouldn't be too surprising that the crypto industry, which
24:45
Speaker 3: is a cryptography industry, would have some expertise in this area.
24:50
Speaker 2: Yeah, I love it.
24:51
Speaker 1: William, thanks so much for stopping in today. We're going
24:53
Speaker 1: to keep a close eye on Algorand and what you
24:56
Speaker 1: guys are up to because this could become something big
24:59
Speaker 1: and very fast. So thanks for coming in.
25:00
Speaker 3: Amazing. Thank you so much.
25:09
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25:11
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25:14
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25:15
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