Welcome back to Kaiser Report Summer Solution Series.
I'm Max Keiser with Stacey Herbert,
and today we're going to be talking about the many selves
of money, self-sovereignty, self-custody,
and self-reliance.
Joining us very quickly will be Jameson Lopp of Keys.Casa.
Stacey.
Yes, and I just do want to say, of course,
that Max and I did invest in Casa
because we use the service, and it's amazing, really.
So, Jameson, I want to look at a piece from Forbes magazine
that somebody was tweeting about,
and their article said that 15% of American adults
now own some form of cryptocurrency.
More than half of those invested for the first time
in the first half of 2020.
On average, they invested about $67.5 billion
in cryptocurrency, roughly $4,000 per person.
So, lockdown stimulus money has been good for a lot of people.
They're pouring their money into Robin Hood app,
and apparently many people are buying cryptocurrency.
If they're buying Bitcoin,
which they should be instead of crypto, what do they do now?
Like, you know, there's no bailout.
There's no second stimulus.
There's no sort of moral hazard available
in the Bitcoin space.
So, what do they do once they get that Bitcoin?
Should they take it off an exchange?
Should they put it on a hard wall?
What should they do?
Buying is only the first step.
Generally, when you're buying in this space,
you're not actually buying Bitcoin.
You're buying the promise of a Bitcoin or a Bitcoin IOU.
It is really similar to the banking system
in that, you know, you might have a website
that says you own a certain amount of money,
a certain amount of Bitcoin, a certain amount of whatever,
but when it comes down to it at the end of the day,
there's counterparty risk.
And as long as someone else
is actually holding on to that asset,
then it can be taken from you,
or any number of things can go wrong.
You might not be able to actually access it when you need it.
So, the first step is, you know, getting that IOU.
The next step is learning how you turn that
into the real asset that you control yourself.
So, Casa offers key management.
So, to all the newbies out there
who have apparently bought some Bitcoin this year,
what are the keys?
Why should they hire you to manage their keys, Jameson?
Well, the best way to describe what we do
is actually we help users help themselves.
We don't want to hold people's keys for them.
That would just make us another type of bank.
Instead, we want to give people software
that is user-friendly,
and we want to give them a level of service
that they're not gonna find
with any of the custodial providers out there,
where we are showing them how they actually create
and manage their own keys
and therefore control their own Bitcoin.
And that is, you know, where I think
a lot of the value proposition of Bitcoin is lying
is because you have the ability to be your own bank.
But unfortunately, it can be a very complicated
and tricky waters to navigate
because along with this power
comes a lot of responsibility
and a lot of ways that you can shoot yourself in the foot.
And that is why over the past decade,
many millions of Bitcoin have been lost
due to various mistakes that people have been made.
And we want to help people avoid all of those mistakes.
I will confess to myself,
having lost many Bitcoin in mistakes in the early days,
especially when there were very few services available
to help you protect your coins.
So, I mean, even for somebody like myself
who's been around since it was a dollar
and now it's over 11,000.
So, you know, it is a difficult learning curve.
And especially in this day and age
where there's an ever escalating amount of moral hazard
and intervention and rescues.
In 2008, 2009, 10, we had the rescue of the banking system,
the Goldman Sachs's and JP Morgan's of the world
that rescued from all their bad bets.
Now the entire world is being bailed out.
People are sitting at home earning 75% of Americans
now earn more money sitting at home,
being bailed out from this pandemic system.
So, you know, how does that like,
how have you seen the business?
Have you seen this increase in Bitcoin?
Because even Goldman Sachs now,
who is one of the recipients,
the walking embodiment of moral hazard,
they are saying that the dollar is toast,
that this is over because basically too many people
are being bailed out from their bad decisions.
We have certainly seen an uptick in inbound interest
of what some people call new coiners,
basically people who have not yet taken the plunge
and actually got ownership of any Bitcoin.
And what we found is that the service level
and the user friendliness that we're providing at Casa
is actually a very strong fit for people
who know nothing about Bitcoin,
but they want to get into it and want to immediately
take that next step of holding it themselves
because if they're getting into it right now,
then it's likely that they're doing so
because of the macro conditions,
because they want to avoid a lot of the counterparty risk
and the systemic issues.
And in order to do that,
in order to really take a hold of that value proposition,
they need to be holding and managing their own keys.
And that's where we can really lend a hand.
So to give people an idea of the service,
I think people are probably familiar with the idea
of wealthy people go into a Swiss bank account
or a Swiss bank or a private bank,
and they go to the safe deposit boxes
and the bank has a key and you've got a key
and you have to open the bank deposit box simultaneously
and then you have access to that box.
So with Casa, it's a variation on this theme
where it's a vaulting service and you have multiple keys
and they're held in various locations,
but everything is completely under control
of the user or the person
who's actually the owner of those coins.
And the method is really ingenious.
It uses both these new hardware wallets,
cold storage wallets.
It uses all kinds of security apparatus
that gives a state-of-the-art vaulting services
for Bitcoiners.
My question is that more and more you hear about people
talking about, don't talk about your Bitcoin
that you have any Bitcoin
because you're gonna get a $5 wrench attack.
You're gonna get attacked.
People are gonna come into your home.
You're gonna get kidnapped.
But as services like Casa become more prevalent,
that argument kind of diminishes a little bit
because it's not like the old days
where people actually have like paper wallets
stuffed in a book somewhere in their bookshelf.
If they have multiple signature or multiple key access
on a vaulting service, which is like Casa,
I think it may enter a new period in this industry
where people kind of understand that individuals,
they don't keep their coins in their home anymore.
It's vaulted in a very secure location.
I think that's a huge leap forward, Jameson.
Do your thoughts.
There is a reason why banks exist.
There's a reason why a lot of people choose
not to keep all of their cash or gold
under their mattress at home.
It's because that does create a lot of risk
for physical attacks.
So we're currently in this era of Bitcoin
where a lot of people are keeping the keys
to their digital gold literally under their mattress
or in some drawer at home
where they are susceptible to physical coercion.
And the amazing thing about this protocol
is that we have not only the ability
to create vault-like solutions,
but we can go a step further.
We can do better than a bank vault
because even a bank vault is a single point of failure
where a catastrophe could potentially destroy
that single physical location.
Now we can distribute the keys
and you can distribute them as far as wide as you want
depending on your threat assessment.
And we'll talk through with our clients
what their own trade-offs are that they're willing to make.
But imagine at an extreme level,
we have people who are worried about even nation state risk
and they are distributing their keys
across different international borders
with countries that are not diplomatically friendly
with each other.
So it's an amazing level of redundancy and resilience
that we can create now in the digital form.
Right, it's like Bitcoin itself is gold,
except it's better.
Or CASA is like a vaulting service, but actually better.
So it's just an evolution
toward things getting better and better
because people want hard money,
they want uncompensatable money
and particularly in an environment of paper money
being printed by the trillions and trillions
every single day now.
I saw a statistic that America printed in the last month
more than they've printed in 200 years.
And it's just unbelievable
what's happening to the paper money.
Even the Economist magazine ran a story, free money.
So it tells you where we're going with this.
Absolutely, I mean, we don't need to throw out
thousands of years of physical security best practices.
We should still make use of them,
but now we can build on top of them and really step up our game.
I did hear, by the way, earlier,
some of your attack dogs in the background.
So I know you're not subject to the $5 rent attack,
but let's go over the security aspect of Bitcoin, okay?
Because, you know, again, there's a shift in mindset.
We're exiting the fiat system, even Goldman Sachs,
the main beneficiary of the fiat system
is saying that this is over.
So it's not like it's going to be easy.
No giant shifts in culture or monetary policy
or economics is ever a pleasant thing.
It's never easy.
So, you know, there is a learning curve
that you're going to have to climb onto
when you get into Bitcoin,
and many Americans are now buying Bitcoin, apparently.
So, like, what are, like, walk us through the process of,
you know, how the hardware wallet versus the multisig,
like, how it works with your multi-signature product?
The entire premise of what we've designed at CASA
is to eliminate single points of failure.
And there are a variety of different levels of security
that people can have in Bitcoin.
It's level zero is you don't even have your own keys.
You know, they're with a trusted third-party custodian.
The next level after that
is actually taking control of your keys
and perhaps putting them in a software wallet
on a phone or a laptop or whatever.
But then you've got to worry about a lot of things
like hackers because it's online.
Malware or other vulnerabilities can result
in those keys getting taken by someone
and then they take all of your money.
So, the step after that
is you want to get those keys off the internet.
And that's what these hardware devices are for.
We create this physical air gap
so that no one can just reach over the internet
and grab your private keys.
But while that protects you
against a lot of digital attack scenarios,
you still have this single point of failure
where if that device gets destroyed, stops working,
if your backups, which are additional complications
you have to worry about, if those become inaccessible,
then there's a question of like,
how do you recover from this emergency disaster scenario?
Because if we're thinking about keeping potentially
a large portion of your wealth in this setup,
you want there to be absolutely no way
that you can lose it all.
So, we take not one device, but multiple devices
and basically use them to constitute
an entire logical wallet.
So that now, instead of just having a single signature
from a single device, you have to go around
and basically collect signatures from multiple devices.
It also means if any of these single devices
stops working, gets lost, whatever, it's fine.
It's not a catastrophe.
You can just go buy a new device
and actually reconstitute your setup,
basically do a device rotation within our software.
So it's all about more resilience, more robustness.
Right, we're gonna be talking with Jameson
some more after the break.
If you're trying to find the company,
it's Casa Bitcoin in your search engine.
The website is keys.casa.
We're gonna be talking more about this
right after the break.
Welcome back to the Kaiser Report, Max and Stacey,
talking to Jameson Lopp from Casa.
If you're trying to find it in your search engine,
just use Casa, C-A-S-A, Bitcoin, Casa Bitcoin.
You'll find out all about this.
Or go to the website at keys.casa.
So, Jameson, of course, this is great service
for people with oodles of wealth.
And you've got billions already kind of
that you're securing for folks,
but actually this is open to everybody.
There's no minimum at Casa.
The model is a monthly subscription.
And I think you actually get some free months to sign up
and you can kick the tires and test it out.
Then there's various levels,
depending on how serious you wanna get.
But this is really for everybody, right?
There is no average user of this.
This really could be used by anybody, right?
It's all across the board.
Even more recently, we relaunched our free product,
which is just a single key wallet on your phone.
Just if people wanna get in
and check out the user interface.
Now, of course, if you want higher security,
you wanna get into a multi-sig setup
and we've got plans as low as $10 a month there.
So, if you can afford streaming video,
then surely you can afford
a similar amount to secure your wealth.
But that is just at the technological level.
We've got several higher tier solutions
that are basically a lot more hands-on.
If you wanna have a dedicated client advisor,
if you're looking for more
of like a private banking relationship,
then we've got you covered whatever level of security,
whatever level of service you're interested in.
By the way, our show does get dubbed into Spanish,
transmits all across the Latin American world.
Many Spanish speakers, so Casa, of course,
is house in Spanish.
It's a house for your keys.
They help you key manage for your Bitcoin holdings,
your hodlings.
So, is it open actually to everybody in the world,
including across Latin America?
Yeah, we have no geographic limitations.
There could be potential language limitations
depending on how well someone understands English
since we have not yet internationalized,
but that's certainly on the roadmap.
And we have customers all over the world.
And as I mentioned before,
we even have customers who are distributing their keys
all over the world if that's the threat model
that they're trying to solve.
There's a lot of memes in the Bitcoin space
and we live in a meme economy.
And I often joke that Tesla stock is mostly a meme.
The valuation is driven more by a meme
than it is by the actual production of cars.
We've seen some memes, famous memes in the Bitcoin space
like money printer go brr.
There's also a meme out there called,
oh, tragic boating accident, right?
Tragic boating accident meme tells us
the importance of privacy and security
in a monetary sovereign world,
which can be achieved with Bitcoin.
I take it Casa, can you just comment on this, Jameson?
This is really a gap in the marketplace,
this need to secure one's wealth
in a world of hackers and folks out there, bad guys,
black hat, hackers, et cetera.
There's a lot of hacking going on out there.
And in the Bitcoin community,
they're quite familiar with this.
And one of the strategies has been to just declare everything
got lost in a boating accident, right?
But I think we're kind of moving beyond that now
because Bitcoin's becoming very mainstream.
But you do have a possibility now for the first time
to separate money from state.
And I think that's very, it's the first time in history
this has ever happened.
And so Casa is a big part of that
because you're not sovereign to any state.
You don't even hold the customer's keys.
You're just providing a service
that allows for self sovereignty.
Can you comment?
Yeah, we were very consciously trying to avoid
becoming a regulated financial service.
And we do that by ensuring that we don't hold
a sufficient threshold of keys
that we could ever block anyone from creating a transaction
or create a transaction without someone's approval.
We do hold one emergency backup key for our multi-sig users.
And we have a whole authentication process around that
that is very difficult to actually get used.
It's really meant to happen
if they have screwed up their other keys
and they need some help reconstituting their setup.
But this whole meme of the boating accident,
I think it actually goes back to gold bugs
and firearm enthusiasts.
If the government might be coming for your gold
or your guns, then they can't prove you didn't lose it
in a tragic voting accident.
That's genius.
Now, again, the article I started off with,
15% of American adults, they say now,
own some form of cryptocurrency.
And I just really, really need to reiterate this.
And we've all been around for a long time in this space.
It is the complete opposite
of the traditional financing system
that we're used to, the banking system,
where you get bailed out from everything.
Everything is insured, everything is bailed out.
You don't have to think at all.
So your service kind of allows some of that.
Like, you plan on the human inevitability of being stupid,
of losing your keys or your seed phrase.
Like, people do that.
You just lose it, your computer blows up.
And that's where you had all the backups.
Like, elaborate more on that,
like how you remove human stupidity
because you, the individual out there
who just bought Bitcoin for the first time, are stupid.
We all are, and you will lose that stuff.
So how do you protect from the stupidity?
This is the main problem that we're trying to solve
and fill in this gap in the market that Max mentioned,
which is that before now, if you wanted to self-custody,
you were generally on your own.
I mean, there's plenty of software out there to choose from,
but then you have to learn how to use it.
You have to figure out how to think adversarially
and think about every possible thing that could go wrong.
And quite frankly, most people,
they just, they don't live in that type of mindset.
And it's very easy to overlook edge cases
or just to assume, oh, that'll never happen to me.
And eventually, these things happen to somebody.
So we build in resiliency so that you can screw up.
You can lose a key.
You can make a mistake and it's okay
because it won't be your one and only key to your money.
You will have additional backups automatically out there
and distributed, and you can use those
to essentially repair whatever mistake you've had
in your setup.
There's also another huge advantage to this.
You've been tweeting about this.
I think you came up with this concept
of the Schrodinger's Bitcoin, which I'll get to in a second.
I just wanna remind folks also that you're on Twitter
and your handle on Twitter is LOP, L-O-P-P.
And it's also a fantastic resource for educational links.
And you cover really the whole history
with really quality links and you avoid
all the lesser folks out there
that are on the fringe of this industry
who don't do as good a job providing education.
And it's L-O-P-P on Twitter.
But Schrodinger's Bitcoin refers to the idea
that you own Bitcoin, you have Bitcoin,
but you're so freaked out about accessing that Bitcoin
that you never go there and use it or spend it
because you're afraid,
because you might mess it up and lose it.
And that's a real fear people have.
So with a setup like CASA, actually,
once you get the hang of it and you feel secure,
actually, you might actually spend some Bitcoin
every now and then.
Not that people are doing much of that these days,
but if you wanted to go out and buy a new car
and spend your Bitcoin,
you could do it, right?
So it kind of adds that also is another dimension
or a feature of this product, Jameson, what do you think?
There's this issue of until you spend your Bitcoin,
you can't be 100% sure that you can spend your Bitcoin.
We've heard stories of people with paper wallets,
with hardware wallets,
with all types of really older generational storage
that they have strewn all over the place
that they never touch, they never plug in,
they never upgrade because they're afraid
that any of those actions might either destroy the keys
or might result in them learning
that they actually lost access to the keys long ago.
And one of the really innovative things
about the CASA software that we've set up
is actually it has a feature we call health checks.
So you can actually go to any of your devices
and request to do a health check through our app,
you plug in your device and it actually creates
a cryptographic signature using your private keys
that is really validating that you have access to them
without even creating a transaction,
without doing anything public on the blockchain.
It's just a private verification
that that device is still functional.
If we're entering this new post-fiat, post-nanny state world
where there's always a printing press to bail everything out,
Jameson Lopp here, he's an amazing resource
whether or not you sign up for a CASA
because this is his living, this is what he does.
He examines every single possible threat vector
into your life and he writes this on his blog,
you can read about that.
So as we enter this sort of geopolitical,
geo-economic post-fiat world,
what are some of the biggest threat vectors that you see
in terms of not only just the fiat system collapsing,
but in general, what have you seen in your own observations
and studies of all these sort of issues?
I mean, the biggest problem in cybersecurity
is it's the trade-off to this amazing communication network
that we've created.
The internet has freed so many people,
it has freed up so much economic potential,
it has freed up so much information and education.
But as we've seen the flip side of that,
there's the misinformation, there's the hacking,
there's the attacking and there is the fact
that information wants to be free,
which is great when the information
is a positive thing that's educational,
but the flip side is that it works for information
that you want to keep private.
And so whenever you're putting
your own private information anywhere,
even if that's buying things with credit cards online,
if that's buying physical things
that are getting shipped to you,
that you're giving out your physical address to,
your information is getting strewn all over the internet
to hundreds, if not thousands,
of different trusted third parties.
And it's only a matter of time before it gets leaked,
whether on purpose or on accident.
And that is one of the greatest challenges
that I have been dealing with
and that I think humanity in general will be dealing with
is how do we ensure and maintain our privacy
in the information age?
Of course, Jameson was covered in the New York Times
quite featured there,
because you were, I guess what they call in America swatted
and that's part of our whole police state situation,
but you disappeared.
And I also myself, I was subject to that hack
of one of the credit rating agencies.
So my social security leaked online and yeah.
So that's, I mean, is there any service yet?
The equivalent of a cost of service
to protect your online identity?
I would really like for there to be
a single service like that,
but unfortunately it really comes down to setting up
a variety of different proxies.
If you read through my materials,
it's proxies for internet use,
proxies for physical mailbox use,
proxies for financial services.
Unfortunately, it creates a lot of complexity in your life
to sort of create legal shields, technological shields,
even human shields to make it harder
for people to find your actual information.
And I'm not particularly confident
that it's going to get that much easier anytime soon.
Jameson Lopp, thanks so much for being on Kaiser Report.
Thanks for having me.
All right, well, that's gonna do it
for this edition of Kaiser Report Summer Solutions
with Max and Stacey.
If you wanna catch us on Twitter, it's Kaiser Report.
Until next time, bye y'all.
See you next time.
See you next time.