today we've got an excellent guest here
jameson lopp jameson i've known for i'd say five years six years and that's great to have you on
the show today jameson welcome thanks hopefully i don't have to call myself an old man even though
i've got the gray and the beard i don't feel old yet don't worry your beard game is pretty strong
there jameson so jameson could you just give a quick bio for for our audience yeah so computer science
background spent the first decade of my career building sort of web scale infrastructure for
online marketing company and just past the decade mark of working full-time on bitcoin self-custody
and security products so i've seen a lot of terrible things over the years but the nature of security is
you learn from preferably other people's mistakes you learn from your own mistakes and we keep putting
one foot in front of the other now you call yourself a cypher punk can you tell me what that is
yep it's basically the movement that was the origin of many different aspects of internet security and
privacy that we take for granted today i'm sure everyone who's watching this for example
is using ssl like https in your browser when you're going to websites that technology was developed by
cypherpunks a lot of the cryptography encryption things that are used at very low layers of the internet
to secure our daily activities were invented by cypherpunks because they realized that back in the 80s
and in early 90s the internet had no privacy or secure everything was out completely in the open could be
intercepted could be manipulated and so because of their paranoia and because of their understanding of how
you know the system had great potential for empowerment but also for abuse they wanted to make
it harder for authority figures or just malicious actors on the internet to abuse one of the many
cypherpunk projects that was tried over the years was this idea of cryptographically secured money there
were many different attempts at it and the cypherpunks had basically given up on it until some rando going
by satoshi came along and dropped a white paper and some code and here we are 16 years later spawned an
entire industry so what led you to bitcoin it was my nerdy background combined with my libertarian leanings
so bitcoin kept coming up on some of the nerdy new sites like slash dot that i was visiting back in the
day and of course i dismissed it the first few times as a project where everybody was going to get wrecked
and lose their money but it was persistent it kept coming back around and so eventually i read the white
paper and that really blew my mind from a computer science perspective because satoshi solved the double
spending problem in a way that was the exact opposite of how i or i think really any classically trained
computer scientists would try to do because it was untenably computationally expensive the the solution
that they came up with and so as computer scientists we are trained to use the most efficient data
structures and algorithms to get a particular problem solved and rather satoshi kind of turned this problem on
its head and said hey instead of having one database that we try to secure and create a lot of integrity
protections around we're just going to make everybody in the world have to run this database and then we're
going to make it really expensive to actually add or change any entries into the database i like to say
that the bitcoin blockchain is the least performant database i've ever come across in my entire career but
the result is that it has some very unique properties that are interesting to leverage in a variety of
ways and the most would you agree that it's the most secure that you've worked with
oh for sure because it gives you this we could say thermodynamically expensive level of assurance
that once you have paid the fee to get your update to that database in that it's it's not technically
impossible to undo but it's just impractical from any like economic standpoint yeah it neuters the economics
for you yeah and really there's many different things that make bitcoin fascinating and make it work so well but i think one of the biggest
the biggest pleasant surprises over the years is that satoshi somehow got all the game theory right
you know regardless of the code and the math and the cryptography and stuff it's like the game theory
around all of the different entities that are operating in the space and they're sufficiently mutually aligned
incentives that has allowed it to continue to prosper for 16 years and mutually assured self-destruction too
whenever anybody talks about a 50.1 attack i'm like yeah but what's the point you'd be the one that would take the
greatest percentage of the hit if you have 50.1 and nobody has trust in the network anymore you're the one that's the
largest largest percentage hit so it doesn't really like you said from a game theory standpoint it's actually genius
well a lot of guys talking right now about these uh supercomputers
how quantum computing is going to break into it now ali's view certainly is that
why would you break into bitcoin we could break into the fed
or bank of america or whatever uh what are your thoughts on this
uh yeah if someone had a sufficiently powerful quantum computer there's a lot of things that
could be done with it now i think that bitcoin is a tantalizing target because it's a bearer asset
the game theory here is tricky too right like ali was saying if you're going to 51 attack bitcoin
technically that's possible if you get enough pools to collude or whatever or if you have enough nation
states put and kick enough doors down it's always the question of what is the incentive
to do so are we talking about a nation state attacker that has more money than they know
what to do with because they can basically print as much as they want that could cause some of the
sort of game theory or financial assumptions to get thrown out the window but thankfully it seems like
even to this day have bigger problems to deal with they're not like worried about an existential threat
from bitcoin um the quantum threat i gave a talk on this last year and you know if i
had a sufficiently powerful quantum computer then i would just look at the rich list and basically
like binance and bitfenix really the biggest exchanges that are keeping 100 000 plus bitcoin
in one address that has already had the public keys exposed which means that it's not quantum safe and
hit that take take that money but then you have to ask yourself what would happen obviously
the market would react i think it would be very difficult to be able to liquidate a substantial
portion of those proceeds without the market just completely tanking and a lot of people would lose
confidence in bitcoin at least for the short or medium term if we didn't already have some sort of
quantum resistant proposal in place there's a lot of variables at play here really the closest like
crisis situation that we can even refer to would be like the 2013 unintentional blockchain fork where
there was a it was like a database locking issue between two different versions of the bitcoin node
software that that caused a consensus failure and i think that was maybe like six hours of consensus
failure before we managed to get it fixed and got everybody back on the right track and there was a bit of market
freak out during that time i feel like some of the exchanges may have actually frozen
all trading activity because they didn't know exactly how it was all going to play out it would be
trickier if we had basically massive amounts of coins that were changing ownership because then you're
going to have these massive companies be like we need our money back can we roll back to blockchain what
are we going to do about this and there would be this overhanging existential threat for all bitcoin holders of like how do i make sure
that uh this doesn't happen to me it'll be like i mean classic like when they rolled it back with that when they get when their dow got hacked
yeah it's just it's tougher with the quantum stuff because the only way to really fix it requires everybody to migrate their bitcoin into a new quantum
resistant scheme and this is one of the things i talked about uh last year in my presentation was like doing some rough calculations you know based upon how much block space we have
and how many utxos are out there like it's going to take several years to get everybody to migrate
to a new scheme whatever scheme that may be and right now we don't even have a proposal that's anywhere near
the activation or implementation stage thankfully i think we have many years to work on it but we should not be dragging our feet
early folks in bitcoin like yourself have very much taken a security route there's lots of things you
can take with bitcoin lots of routes you can take but security and i think that you're certainly a
proponent of personal security and also obviously your bitcoin security what made you focus on these areas
basically because it's fundamental to everything else so i'll give you an example of like how casa came to be
before casa was a multi-sig bitcoin vault cold storage service it was actually called bedkin and it was a
decentralized airbnb app running on the original block stack protocol and this was before i joined
when i joined we pivoted but basically after six months of working on that the team very quickly
realized nobody is going to use this decentralized airbnb app if they're losing their keys we need to
solve key management and so that's how bedkin got thrown out and it trans transformed into casa which
is an homage to that original idea but also to the fact that we're trying to build a safe home for
people's bitcoin for their keys for their assets and ultimately probably for many other things can you
explain multi-key yeah the best way to think of it is that it's the digital version of a bank safety deposit
box if you go in your safety deposit box there's not just one key on it there's multiple keys that
need to be turned most likely one owned by you one owned or controlled by an authorized employee at that
vault and so the reason for that is that it gives you a better security model right theoretically the bank
employee can't just go in there and open your stuff up because they don't have your key also you can't just go in and open stuff
up or someone can't just steal your key and go in and open up your box because they need to get an
authorized employee to sign off on it and of course they're gonna vet you and validate whoever has that
key that they're an authorized user the reason why we like multi-key setups is because this is how you architect
a security model that eliminates single points of failure and this is one of the biggest problems with
custody in general whether it's third-party custody or self-custody a lot of the terrible catastrophes
that have happened in this space whether to organizations or to individuals have been because
they basically had all of the keys to the kingdom were basically one key and so you had to protect that
key at all costs and if anything happens to it then it's game over and there's nobody who can get your money
back and so that's that's true both of if a malicious adversary gets that key and steals the money or if
you just screw up you make a mistake and you lose your key then it's effectively the same thing we understood
that bitcoin self-custody has to be built with the understanding that it's going to be operated by humans and
humans make mistakes uh humans tend not to be security experts so you can't have really any assumptions
about uh how they're going to manage things you know exactly what they're going to do and so the idea
is that when you onboard into a casa setup whether that's two out of three keys or three out of five
keys you are you're distributing your risk around you're distributing risk think of it as strength
as a key as a key and as a key as a key as a key as a key as a key as a key and so it also allows you to
have a diversity of software and hardware which protects you against things like supply chain attacks
basically you have to consider like all of the million different things that could go wrong with a key
and then have all of your keys set up differently so that whenever x goes wrong it only affects one key
it doesn't wipe out all of your keys it doesn't wipe out a threshold that will prevent you from being
able to spend your money or allow someone else to spend it it's yeah it's generally security through of
risk so if i have three keys you have two keys of mine and i lose one of my keys i can still have
access because i just so casa casa always has one key as a sort of offline recovery mechanism and then
depending on which setup you're in there are different types of authentication protocols that you can
build around how a signature will get requested from that for our entry level plans it's basically you
set up a series of questions and answers and then there's a seven-day waiting period between you
authenticating and us actually signing it uh once again because time is a great security like yeah it's
generally if you're able to slow down attackers then it's a great demotivator and disincentive for
attackers and then for our higher level plans you're getting more bespoke service like with dedicated advisors
who will do video calls with you and you can set up things like duress words or emergency contacts
people that we reach out to and and in in those cases you can have a lower waiting period but it's
always multiple days that's why you've got tiered pricing plan based on how much bitcoin you have
you may be looking for other services it's almost like having a family office that starts to add up
different services for you for personal protection or whatever yeah and we even have products specifically
for family offices are really good for sort of team-based management of assets whether that's a
a corporate treasury or a family office or a small investment fund or whatever you're doing it's i think
it's important for organizations to eliminate single points of failure obviously you don't want your chief
financial officer to be able to take 10 million dollars with a few clicks of a button and basically
go off to some non-extradition country right you want there to be good governance good checks and balances
in your treasury management so on that note i do want to talk about the enterprise side but the first thing that
jumps into my mind are scenarios of inheritance right when someone passes what are the solutions that you've brought to
market around inheritance because obviously that's a a big problem i think the first time i ever heard
of it i was at bitcoin miami and a gentleman was damn near in tears and he just came to the conference
just to look for solutions because his father had passed and he knew he had a whole bunch of
bitcoin and ethereum and had had no idea how to get to it yeah you need to set up the solution before
you pass that's the the most important thing yeah we've actually done a couple of different inheritance
protocols and the first one that i think we rolled out in 2021 or so it was very hands-on to say the
least it basically involved onboarding lawyers estate and trust attorneys and making sure that you had
everything spelled out in your instructions of exactly like who the beneficiaries and key holders and so
on and so forth were and in that case there was more of a kyc element of using legal identity and using the
legal system to enforce these things and it took so much man hours to get someone onboarded into that and we
always had questions around will the attorney actually be a good key holder a lot of them
didn't even want to be key holders for obvious reasons you know liability and such um and then
also on the legal side it meant that we could only really offer this to like i think united states and
mexican citizens it was very limiting and then whenever we had a client somewhere else who wanted to do
it it was always this really high legal cost of trying to navigate through whatever the particular
jurisdictions inheritance laws were what we rolled out basically a year ago is a much more streamlined
version of this that is purely technical it doesn't require any sort of legal system setup or kyc
or you know identity or anything like that we still do offer the other version to our private client
level if that's what you want but with the technological solution it's actually incredibly easy for example the
two of three setup you can onboard a beneficiary to your inheritance in a few minutes and the way
that we do that is basically you just put in their email address into your app they get an invite to
set up their a beneficiary wallet and then what you're doing is basically you're doing a
encrypted key share with them of your mobile key from your setup and so they're receiving this
encrypted version of one of the keys they can't actually decrypt it they can't use it they can't do
anything with it and the only thing they can actually do in their app as an inheritance beneficiary is they
can hit a button that says i want to kick off the inheritance claims process i want to claim that
the account owner has passed and what happens if they do that is that we start emailing notifying reaching
out to the account owner basically saying hey your beneficiary has said that you passed if this is not true
you need to go into the app and kick them out because they're trying to defraud you or they've been compromised
or something has gone wrong and we just we keep doing that regularly for six months and if that six
month period goes by uncontested by the account holder then the inheritance recipient can decrypt the key
and can initiate a transaction to partially sign the that's the time security component you were talking
about six months they don't have to show you a death certificate nope so if you have this service
you got to make sure you keep your email up and you answer your phone that and he's giving you a
valid shard so basically you're telling the estate or the account holder hey one of your beneficiaries
is showing up with a valid shard saying that you passed and then jameson saying that extra six months
of time frame is what allows you to really verify all that i'm guessing at some point in there you would
never need you would never need a death certificate jameson correct this is a purely technical solution
it exists outside of the whole probate process and all of that if that period passes this is in the
terms and conditions of casa as a company and the service that you're opting into if you decide to set up
inheritance you don't have to if you don't want to you can do your own thing but yeah if that period passes
then they can also then a signature from the casa recovery key and once we then sign that then it's
fully signed and the funds can move six months isn't that long because probate can last for years
yeah this is a positive thing when you're when your parents pass away you get money today as opposed to
in two years time and to your point though it is of course important to maintain these systems and one
of the unique things casa was the first to ever do this we were the first to ever introduce this idea of
health checks and we have health checks for a variety of different things in your setup but it's
generally the keys is what we're worried about and if you well if you have a casa setup then any given
key if you haven't used it in six months we're gonna send you a notification that says hey you need to
do a health check just make sure the key is still working it hasn't been compromised it's still where you
you think it is and then that same thing happens actually with the inheritance uh recipients keys so
they're getting you know health checks on a regular basis and so if they are not being a good custodian
of your encrypted inheritance key you'll find out or maybe change right if someone if maybe your uh
person that's going to act as your maybe they passed or maybe you've got divorced and they were your
person is it pretty easy to change who that person would be yeah you can remove and add new people
at a whim well what happens if someone stops paying for the service yeah this is self-custody right so we
don't have the ability to move anybody's money it basically just stays frozen where it is what happens in
the app if you have not paid your annual service fee is that the app transitions to a
withdraw only sweep full wallet balance mode we're not going to stop you from being able to exit we just
don't want you to have like all of the cool conveniences that come along with operating our
multi-sig service when you said casa earlier you said always has an offline key and the recovery douglas
said so i could have three out of five six and you said casa will always have an offline key
does that mean in the event of failure of everything else casa would always be able to retrieve the account
not as it stands today because we only ever have one out of three or one out of the five and for the
three key setup you have to have two signatures for the five key setup you have to have three so it is
possible with self-custody if you throw all of your keys away and there's not much we can do about it
now this does open up an interesting other conversation for there are future potential
improvements around this with more complex bitcoin scripting where you can have other conditional
spins where you can have basically this um other time lock spending condition that says if a year has
passed then allow you know some other key or set of keys to be able to spend these coins and that's
something that uh we're talking about regularly of like how we would implement that and whether we
would want that to be some fully regulated custodian that would have unilateral spending power whether
it would be some sort of multi institution key sharing thing you're only really limited by your creativity here
so on that note you brought up a enterprise solution and some government solutions how do those solutions
for from maybe the personal use type basis that's really more team-based management and accounting and
permissions granularity stuff because with organizations of course you have to worry more about onboarding
and uh general communication on an ongoing management of that key set so it's think of it as like fancier
dashboards and more granular management of the individual key holders and what actions they can take you can
onboard a view only auditor for example who isn't even a key holder but can get all of the details of the
transactions and balances there there's a lot of talk right now about obviously states getting involved
and countries getting involved in this is this something that you're seeing are you seeing a lot more
corporate states governments coming to you saying what can we do here or is that something that's out of your
purview right now that's really mostly corporations but that makes sense they can move faster there's
obviously many companies already in the crypto space that have bitcoin treasuries that they are managing
and some of it's all over the place some of them go full self-custody some of them go like a split
between self-custody and you know regulated custodian trying to diversify risk profiles even more in terms of number
of companies adding the treasury strategy to their balance sheets like are you able to disclose that
with us have you seen like a growth of 50 percent 100 5 percent it's hard to say in general i would
expect that almost all of the companies in the industry have some level of treasury management but for people
outside of working in the crypto industry it's pretty minuscule uh some interesting patterns that we are
seeing though are more white collar professional groups so think of various physicians that like
doctors who have their own practice essentially doctors who are also entrepreneurs they are running
their own corporations we do see a fair amount of like white collar professionals more just the the
entrepreneurs that have their own company with its own balance sheet and they want to diversify into
bitcoin so how would you say your customer base has developed i'm guessing first it was true bitcoiners
maximalists so then it moved on to a little bit more retail and then family offices is it developing and
now you're talking about small corporates
yeah to be clear we've always been focused on call it the whales the individuals or organizations that have the
have the most to lose and this is supposedly the the time of institutional adoption and this is i think
it's crunch time for us to be able to make the case to the larger institutions that they shouldn't simply
trust regulated providers with all of their money and basically throw out some of the most fundamental
aspects of this asset by letting someone else hold their keys for them now is this only for bitcoin
or can folks do this with ethereum or what all is included or what all can you service
yeah we added ethereum support a couple years ago mainly really for stable coins that was the big ask
but of course we support erc20 we don't add every erc20 you know token automatically into that but if
there's sufficient demand for it and it seems legit then we're open to considering it so my trump coin
i can't really stick in there just yet and that's on solana isn't it yeah we're definitely not
supporting solana stuff and have not really had much demand for it it's a different ecosystem
our bread and butter is like super high security cold storage and i would venture to say that most
people in the solana ecosystem are more looking for move fast do quick things not just buy and hold for
many years good now founding a company isn't for the faint of heart right so when you joined did
you originally join as you're going to come on as the ceo or because you talked about how the company
had pivoted well how did you come about joining and it was it as the leader or did that did you evolve
into the ceo there had been a few different evolutions over the years when i joined there were only
four or five of us and that time it was a different ceo his name was jeremy and um he got us through the
first few years which were pretty tough and we had a few missteps and came close to losing everything but
we pulled through that first bear market and he decided to step back and that was when nick newman stepped up
into a ceo role and i stepped into a chief security officer role but these well for me it was mostly
just a title change i've been pretty much doing the same thing uh the entire time now with the leadership
change with trump coming in that has to be an exciting thing for our crypto industry because it's more
welcomed what has been the difference have you seen more interest has that brought in more clients has it
brought in more initial meetings of discovery meetings to be educated it basically follows the uh exchange
rate right when more people become wealthier we have more people who have a lot to lose and end up coming
to us and trying to understand our offering um i don't know i feel like the main difference from trump
becoming more accepting of the space is that my highly skeptical southern conservative
family members now all of a sudden are a lot less skeptical they're like oh if trump says it's okay
then i guess it is okay hey got it are there any other trends in the security sector that you're
you're seeing that you're tracking or maybe things that you're thinking about even pivoting into as well
and additional services
yeah so there's a few trends one of them is that because we have continued to improve the the best
practices for custody in general that we're seeing at least in bitcoin we're seeing fewer large-scale hacks
generally the trend of amount of hacked bitcoin go has been going down for many years now for almost
a decade most of the hacks seem to be occurring in more like solana ethereum more complex smart contract
protocols basically where people are writing new smart contracts and there's often bugs in them and that's
what's getting exploited um and so the result of that is that we're seeing a new class of attackers uh come
out and and that's the social engineers and so basically you know because the actual mechanisms around key
storage have gotten so much better it's generally not worth the average attacker's time to try to actually
steal your keys to try to get through whatever your layers of security are because if you've got them
on an offline dedicated device the hacker is not getting to that they would they have to like compromise
so many other things it's not even worth the trouble so instead what they're realizing is the weak point is
the humans who are operating these keys and so this is essentially where we are today is that you're much more likely
essentially to get your brain hacked than you are to get your actual wallet hacked and and what that really
means is people emailing callings using some method some communication channel to try to trigger you with the right
combination of words fear urgency so on and so forth trying to trigger you into making a mistake and into
you voluntarily jumping through all of your authentication and security protocols to then
voluntarily send your assets to the attacker because you think that you're currently in danger and this
is how you know you uh get yourself out of danger that's a lot like the fake celsius emails that everyone
was getting or everyone gets every couple of months let's say hey look give us your wallet address give
give us all your information so we can transfer you the bitcoin that you're still owed by celsius
or the yeah there's so many different methods like we've seen there's a lot of fake airdrops that's still a thing
trying to play on people's greed and getting them to hook up their wallet and click on some malicious smart contract
there to basically grant it permission to drain all of their money out of their wallet um then there's yeah using any of the data leaks from any of the
the bankruptcies to basically once again prey upon people who have already lost so much and they're
like okay i can finally get my money back nope we're actually taking everything else that you had and
a lot of it uh these days is targeting coinbase and other major exchange users and they're just taking
all of the data leak list of any crypto service that's ever had a data leak and then assuming that there's
probably a good chance that you have a coinbase or a kraken or binance account or whatever and then they say oh your
account is compromised or you've had unauthorized activity on it we need you to click here to reset your
password and of course that's where they get you i i have a few of those phone calls today already but
yeah and that's the other thing is that now give me the password douglas there's they're literally
calling people on the phone and walking them through step by step of basically having the person send all
of their money and it's it's pretty outrageous when you actually hear uh some of these calls that have been
recorded and talking to the attackers but really the profile of those attackers they're mostly teenagers
right they're mostly kids and so i think they don't like fully understand the damage that they're doing
it's just a game to them and also i know personally from my own incident a number of years ago that a lot
of these kids effectively operate with impunity because at the federal level there's almost no
like juvenile justice system if you get caught and you're under 18 you're often going to get off
with a slap on the wrist or with anything at all that's something that happened when i i caught the guy
who swatted me many years ago is that the federal district attorney actually declined to even prosecute
because apparently it wasn't worth their time to go after a minor and the only saving grace was that
the state level district attorney was willing to prosecute what was getting swatted like what was
that experience like it was pretty surreal but it was fortunate in my circumstance because i wasn't
actually home when it happened i was actually at the gym and i was driving back into my neighborhood
when i ran into the police blockade and then it took us like 20 or 30 minutes to figure out that i was
the the armed hostage guy uh who they were looking for and i was like yeah you can see i am neither
armed nor have any hostages uh thankfully it ended without any incident but it could have ended much worse
what caused it jameson was it that the person ordering the swatting is it because they disagreed with
you on a bitcoin improvement protocol on a bip or something like that it was related um so it happened
at the height of the fork wars and the scaling debates in uh it was like october 2017 i think and um yeah
and but the thing is according to the guy because i ended up meeting him when i went to court he said
he actually didn't even know who i was rather it was some of his friends his accomplices in the you know
cyber crime space who they were the ones who got pissed off by something that i said and they egged him
on and said hey you should swat him and extort him and so on and so forth because this guy has bitcoin and
and you can probably get a bunch of money and my investigation into that attacker led me to believe
that like he this was not the first time that he did this like he was known as being the guy who could swap
people and get away with it i was somewhat pleased that i was able to actually get a resolution on that and
get him on the radar of the justice system because i think all the other victims failed to get any justice
so it was only because he was 15. wow i'm i'm actually gonna save this quote from you and we're
gonna attribute it to you james thing it's one of the best ones i've ever heard you're much more likely
to get your brain hacked than your wallet hacked i love that yeah i remember when remember mount gox and
mark karpelis and everything i'm looking at this guy and i remember hearing about it i'm thinking
what the hell does mount gox what does that even stand for and magic the gathering online
online exchange and so i went to go look at it and i'm looking at this french guy that likes japanese
whiskey and japanese prostitutes and these kids just handed him 700 million dollars and he has access
to it all i'm thinking that's not the code getting hacked that's this guy embezzling and that's i love
that you're much more likely to get your brain hacked mark got in way over
his head he also thought that he was smarter than he was like he one of the big problems
was that he refused to delegate he was doing everything himself and also i think that like
when he took over that service like when he bought it from jed mccaleb i think it had already been hacked
at least once at that point and i think that he didn't even know it i think the accounting was so bad
that they didn't even know they already had a huge hole in their balance sheet at that time and then it
just took a number of years before it got so bad that they finally realized they ran out of money
yeah
so what advice would you give jameson to a bitcoiner is there a certain amount of money that they should
start getting worried about and that's when they should start thinking about security or should they
just start as soon as they buy yeah i usually i would say i have three or four different thresholds of
like how to think about security so first there's pocket money if it's like the amount of money that
you would carry around in your wallet then losing it's probably not a big deal not going to be a life
altering catastrophe for pocket money you don't really need a whole lot of security it's fine for
it to be like a hot wallet or just sitting on an exchange or whatever because why invest a lot of
time and resources into protecting something that's not worth very much then beyond that
it's like when you start getting into investment territory i don't know everybody's going to be
different thousands of dollars tens of thousands of dollars whenever it becomes a non-trivial amount
of your net worth your investment portfolio at that point i think you should at least invest a hundred
dollars into a hardware wallet get those funds off the exchange get them into cold storage so that it's
essentially hack proof but realize that there are still potential single points of failure there and you
want to have decent multiple redundant backups and and even then you're still securing all your funds with
only one key so if that key falls into the wrong hands it could be game over then beyond that it's more
of the life-changing or generational wealth whatever you want to call it where the vast majority of your
net worth may be in bitcoin uh this is where it starts to make sense to invest into security
so that you eliminate single points of failure because at this point if you lose your money it's
probably going to have life altering catastrophic consequences and you're going to regret it forever
why not essentially buy some insurance on that up front by improving your security and improving your
resilience and your robustness and that's when i think casa starts to make sense lately i've basically
been saying if you're a whole coiner you should definitely be thinking about casa will casa always
stick to custody or do you see do you guys envision uh a time in the future where casa might actually
lend again bitcoin that it's storing for its as a third-party custodian or multi-sit custodian is
it do you guys yeah i mean there's a there's a number of ways it could go i would say like in general we
do our best to avoid being a regulated financial institution we want to be a consulting service
and a software service provider but lending is definitely one of the biggest asks that we've
had from our clients and we are exploring a few different options of doing that and without going
into too many details we're looking into options that don't require us actually taking full custody and
maybe some sort of hybrid multi-institution uh custody setup it's it's still early there are
things like discrete log contracts lava is one example of a lending service that is using that
fairly niche bitcoin technology to be able to do more trustless lending but there's a variety of
ways that it could go and i i do think especially as more banks and financial institutions start to
get into this space we are going to see a plethora of lending options now we've got buddies that say
that they're bitcoiners and then when you press them they say my own ibit um what's your argument to
that if someone owns ibit are they a bitcoiner do they own bitcoin
they have financial exposure to bitcoin the asset i think that unless you're actually using the bitcoin
protocol it's harder to say that you're a bitcoiner you can go down the hallway moral and philosophical
ethos of i promote eating steak and lifting weights and sunning my balls and all these other things
but that does not have bitcoin or make right i think one interesting analogy i like to bring this up a lot
a lot of people to be able to do that because i spent my first decade working on email related software
is would any of you say that you're an email user
absolutely unfortunately you're all wrong
so here's the thing like none of you are actually using the email protocol
the email protocol smtp has been so horribly centralized and become such a monstrosity
of these layers of meta protocols of reputation based protocols basically all the anti-spam stuff
that have been built up over the decades is that none of us are actually using the email protocol none
of us are actually interacting with an smtp server think of it as a an email node rather we're all
using these lightweight clients that connect to one of a handful of you know highly centralized monolith
email services something like 90 percent of all email users are captured by 10 companies at this point
ali and i did use smtp at carnegie mellon if you're at a university those organizations are large enough
that they might still be operating their own email servers though i know a lot of them have off off
loaded to microsoft or google workspace or whatever but that's basically the problem is like the cost of
operating as a sovereign email user over the past 20 years has gone up so high that you essentially have
to have a whole team of it managers to be able to run that infrastructure and basically this is all to
ensure the deliverability of your emails which is like one of the things that i was working on for many
years back in the day and all of that to say this is one of my greatest worries about the sort of long-term
future of bitcoin especially in relation to things like the etfs is that it's not difficult for me to
imagine simply because of human nature of preferring to choose convenience at the expense of almost all
else a lot of people are going to go into those etfs and they're not even going to have the option for
self-custody to withdraw so i i do worry about too much adoption happening that centralizes too much of
essentially the economic power and ultimately that could have a negative effect on the governance
of the bitcoin protocol if all of the money is in the hands of a few institutions and if you actually
read the etf prospectus for pretty much any of the etfs they reserve the right to decide in the event of a
protocol change which is the real bitcoin yeah i guess folks watching this they're interested in
bitcoin they're interesting just crypto in general but bitcoin specifically everyone's sitting there
saying look all this demand everyone's getting excited in fact we talked about this before this call
there's so much demand seems to be building but the price is coming off and the question is this whale
is this whale selling or are we just looking at a lot of noise what's your view why is price not doing
as samson says where's the omega candle yeah that has been surprising i think there was some rumbling
about binance potentially selling a lot of their treasury and then they were trying to hand wave it away
but their explanation didn't make any sense to me i don't know go do it clearly somebody's been selling
a lot to sailor right if you go do an overlay in december of 2017 right around january of 2018
the derivatives the options futures contracts came out and i have uh i have friends that are in uh the
energy trading space on this and as soon as it came out he made a directional price bet with me and he said
they're going to slam it and i said okay i'll bet you we made a bet that it would be above ten thousand
dollars and if you recall i think at the time it had gotten up to 19 19 and change and if you just
overlay from the time that the option they introduced the futures contracts they slammed it all the way
back down to 3600 and it's actually it'll be interesting i would suspect for you because for me there's
21 million underlying of which 4 million are irrecoverably lost 20 million are currently issued in that
standing and you have 1 million left to go but as far as the derivatives contracts there's
an unlimited number of them i mean at what point is there going to be a hey
i want to see the physical delivery and i who is everybody what are all these things
that you're writing these options driven who's selling yeah it's so it's problematic especially
when you have the cash settled uh futures there i think i had a whole article about this a few years
ago this is actually one of the many other risks of these trad fi bitcoin products is that they have the
potential to essentially create paper bitcoin there's a number of different ways that you can create the
paper bitcoin whether it's basically through time delays of when like the actual settlement has to
occur or if it's because you're literally just creating paper contracts that aren't even backed
by spot bitcoin and i think that people should be more worried about that because what is the point
of 21 million if we're allowing trad fi folks to basically print paper bitcoin absolutely it's no
different than when we got off the gold standard with the dollar now it's just a piece of paper and
you've got a printer back here and you're just putting it up and it has no ties to any type of
logic and value jameson this has been a fantastic interview we really appreciate you coming on are there
any closing thoughts that you'd like to share with the audience any recommendations or just what are the
calls to action to come to learn more about casa and where can they find you online
yes i generally tell people that the most important thing you can do is to educate yourself if you're
asking the question should i buy bitcoin then the answer is no because it means you have not sufficiently
investigated this thing to convince yourself that actually you have to have bitcoin like once you go far
enough down the rabbit hole it's not even a question it's just something that you have to do to hedge
against a number of different risks in this world and to empower yourself against shenanigans manipulations
by a lot of these trusted third parties you can check out bitcoin.page that's my resource website got
thousands of educational links on there and you can go down any number of rabbit holes because there are
a variety of different perspectives and aspects of this system that you can learn more deeply about
if you want to learn more about casa if you decide to make a sizable investment that you want to protect
you can check us out at casa.io wonderful and they can find you on social is x your preferred social
platform i prefer nostr but i recognize that's very niche so you can find me on x my handle is just
l-o-p-p awesome awesome again thank you so much for being on the show i'm phil larman
i'm ali i'm douglas borthwick and you've been listening to old men new money
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