Hello, everybody, and welcome to another episode of the Bitcoin Journeys podcast, where we
explore the diverse paths that lead people to Bitcoin and the transformative impact
it has on their lives.
I'm your host, Stefan, and in each episode, we sit down with Bitcoiners from all walks
of life to discuss their unique journeys, perspectives, and insights into the world's
most revolutionary digital currency.
Today we have a very special guest on the show, Jameson Lopp, a highly respected figure
in the Bitcoin community and the co-founder of CASA, a company dedicated to providing
robust user-friendly solutions for securing Bitcoin through self-custody.
Jameson's journey into Bitcoin is both compelling and instructive.
Initially a bit skeptical of Bitcoin upon his first encounter with it, Jameson's curiosity
eventually led him to explore the technology further.
Once he read the Bitcoin White Paper in 2012, he was hooked by its novel approach to solving
the double-spending problem without a central authority.
Over time, Jameson became increasingly involved in the Bitcoin space, transitioning from a
cautious observer to a passionate advocate.
His deep technical knowledge combined with his commitment to personal freedom and privacy
has made him a key voice in the movement, particularly in the areas of security and self-custody.
In today's episode, we will explore Jameson's deep dive into the technical aspects of Bitcoin,
his early challenges navigating the underdeveloped ecosystem, and his emphasis on the critical
importance of security and self-custody.
We'll also delve a bit into his evolving perception of Bitcoin from a novel technological
experiment to a long-term investment and a cornerstone of financial autonomy.
Whether you're a seasoned Bitcoiner or just beginning to explore the world of Bitcoin,
this conversation with Jameson is filled with valuable insights and thought-provoking
discussions that you will not want to miss.
So sit back, relax, and join us as we embark on another exciting Bitcoin journey.
Let's dive in.
All right, today on the show, we have Jameson Lopp.
Thank you so much for coming on the show today, Jameson.
You bet.
Always happy to talk about Bitcoin.
Great.
So I'd love to start this podcast off by going to the beginning of your Bitcoin journey.
So I'd love if you could explain to my listeners how you discovered Bitcoin and what that initial
part of your Bitcoin journey looked like.
Yeah, I mean, I'll never remember the first time that I heard about Bitcoin because it
just kept popping up on various nerdy news sites like Slashdot that I would frequent
back in the early 2010s, and I just kept dismissing it, and it's like, oh, it's nerd money that
will end in years, and everybody's going to lose everything.
So it probably took six to nine months of it keep coming up three or four times.
And eventually I was like, oh, this thing is still around.
Maybe I should actually look into it because it seems like it hasn't blown up yet.
And so it was sometime around mid-2012 when I finally read the white paper, and that's
when the computer science side of me got really interested because, A, I never really thought
about money.
I mean, I think I had taken a sort of econ 101 class in university, but we didn't really
go into the mechanics of money itself.
And then when I started thinking about the problems of money, and especially internet
to money and the double spending problem, I realized that the way that Satoshi Nakamoto
solved this problem was it was both elegant and ass backwards from computer science perspective.
It was the exact inverse of any attempt that I would have ever made to try to solve the
double spending problem.
And the main reason or way that I can explain why I believe that's the case is that as a
computer scientist, we get trained to do things as efficiently as possible.
We get trained to build and identify and analyze data structures and algorithms in order to
optimize them to basically do more with less.
Get the most bang for your buck, or in this case, the most bang for your computational
resources because you're always limited somehow in your computational resources.
And basically by Satoshi creating this blockchain and global broadcast flood fill network where
everything goes to everyone, it's the least efficient way of going about creating a database.
So that's what kind of blew my mind was how inefficient it was, but how it actually
managed to solve a problem that it seemed like you couldn't actually solve efficiently
without having a lot of other trade offs.
And so that's just what initially piqued my interest on the tech side.
And then of course, I got very interested from a philosophical like libertarian leaning
side as well that overlapped with some of my ideologies and just started going down the
rabbit hole and learning more about money and finance because I had never really thought
about it much before then.
That makes sense.
And I think you touch a key point there with regards to how Satoshi solved the double spend
problem because of course Satoshi's attempt at or when Satoshi created Bitcoin, I wasn't
the first attempt at creating some form of digital cash or internet money for listeners
who maybe aren't super familiar with that.
Do you have a way of explaining how Satoshi solved the double spend problem or why it
was so significant towards taking that next step of actually having an internet money
that is usable, let's say?
Right.
So originally, the double spending problem was kind of a problem of proving a negative, right?
It is like, if you have some sort of token or entry somewhere and somebody spends it
with Alice, how do you know that they don't also go and spend that same token somewhere
with Bob and essentially spend it twice and kind of violate one of the fundamental properties
of money?
And traditionally, the way that we solve that problem is you just have a trusted third party
who is tracking everything on that ledger and they're the one who decides what came first,
what was the first attempt to spend the money and then if someone tries to do it again,
we basically block them and we call them out.
And in that works, if you're willing to trust one specific authority to always tell the
truth and never be corrupted and so on and so forth.
But if you want to do that in a way so that you're distributing trusts or preferably not
really trusting anyone, then the only way to really be sure of it is if you yourself know
everything that has happened, everyone who has tried to spend money with everyone else.
And so that's why you end up having to invert the whole problem on its head rather than having
all of the transaction data and the ledger be controlled and validated by one authority,
you basically have to make everybody the authority so that nobody is the authority.
And so while that's highly inefficient from a sort of data and computational perspective,
it gives you a completely different trust model, which is what I think blew my mind and blew a
lot of other people's minds that this was even a thing.
You're trading off one set of efficiencies for a whole new security model and in some ways,
other types of efficiencies, not so much on the computational side of things.
Yeah, and that's a really great explanation because it is a difficult thing to understand.
And I think as you've touched on as well, I think probably most computer scientists strive for
efficiency. So like you said, when you saw it, it was kind of blew your mind because it's a very
untraditional way of thinking. And it's also something that I know is a common critique
of Bitcoin in general, the efficiency of the blocks that blocks takes 10 minutes to verify
on average and that you can't pay for your Starbucks with a settlement layer that takes
10 minutes. But I do think that it's a feature, not a flaw. So I'd love from
your technical standpoint, if you could maybe elaborate a bit on why the inefficiency, let's
say, of Bitcoin is important to its longevity. Well, there's a number of things going on there.
One of the big points of contention is also it's related to that, but it's
what is the cost of operating a fully validating node in this system. And so
you could argue that if you want to sort of take the big blocker on chain scaling approach,
we could make blocks a lot bigger. There have been networks that have quote unquote high throughput
and are a lot cheaper to buy an on chain transaction. But the problem that you run into
is then more of the sovereignty and governance aspect of this thing, which it goes back to what
we were saying is, do you want to have one trusted third party who's validating everything?
Or do you want to have a handful of sort of enterprise or institutional great authorities
who are capable of validating everything? Or, and what Bitcoin has really been optimizing for
for the past 15 years is we want to push this out to the edge as far as possible and make it as
easy and affordable for as many people as possible to verify everything. Now, we understand that most
people aren't going to, but we would like for the option to be there. But of course, this creates
a conflict in and of itself because we have this thing, this blockchain, which has scarcity and
you know, how much data you're able to put into it. And I would say the it came into a culmination
around 2017 with scaling debates and block size wars, which you can eventually boil it all down to
I think one particular set of trade offs, which is do we optimize for a low cost of
transacting and buying blockchain space at the expense of high cost of validating the network
and the blockchain? Or do we do the inverse and we optimize for low cost of validating the
blockchain at the potential expense of high cost of transacting on chain and buying block space?
And so the crux of that was that, well, you can build other solutions on top of an expensive
and slow blockchain that have other trade offs and give you fast cheap payments. But
if you decide to optimize for fast cheap payments on the base layer, you've already given up a lot
of the security and safety assumptions that we think are fairly fundamental to the network. And
even if you end up building stuff on top of it, you've already kind of messed with the foundation
and made it weaker. Yeah, there's a few interesting threads we could pull on there.
But I think we'll kind of get back to that a bit later. But I wanted to go back a bit to also the
beginning of your Bitcoin journey, because I think you're one of the, as we call, OGs in the
space. And I think your experience in those beginning days in 2012, I mean, Bitcoin had been
operating for a few years, as you'd said, but it was still very different to what we know now with
in terms of like the infrastructure and all of the different resources that are around Bitcoin.
So what was your experience like in those early days after discovering it, reading the white
paper? How difficult was it to then or what did the process look like of then going, okay,
now I want to buy some Bitcoin or just take those next steps?
Yeah, I mean, there were very few exchanges and I actually ended up doing my first wire transfer
just in order to acquire Bitcoin. And so I had to walk into my bank and spend about half an hour
filling out a bunch of paperwork in order to send an international wire transfer to some little bank
in Japan. And of course, this bank was the bank that was used by M.T. Gox, the biggest exchange
at the time. And it was a weird experience that actually made me end up appreciating Bitcoin even
more because of how many hoops I had to jump through just to move my own money. And how incredulous
the people at the bank were or they were basically like, you realize once we send this money out,
you can't get it back. And you're basically buying fake money with your real money. You might not
even get your fake money. So seeing, and that probably took a week to actually go through
and get credited for once it actually happened. But like I said, if anything, it made me end up
appreciating Bitcoin even more after that because of course, withdrawing and actually
taking those coins into self custody was more like a 10 minute process. You're just clicking
a few buttons. But the space in general was very underdeveloped. There were a few web wallets
at the time that were somewhat user friendly. I think the blockchain.info
web wallet was probably the most popular. A bunch of the web wallets, though, actually ended up being
hacked, compromised. People lost everything with the custodial web wallets. And taking your coins
off the exchange was not really a thing, right? Andrea Santopoulos didn't even coin the phrase,
not your keys, not your coins until I want to say 2014, 2015, like after Mt. Gox collapsed.
So before then, there had been a few small companies and other things that went under,
but nothing that was so catastrophic that it had actually changed the ethos and the culture
around self custody. I was just somewhat lucky that I was a software engineer and I had already
spent nearly a decade building web applications. And I understood that Mt. Gox was just really
buggy and that I didn't trust them. And so because of that, I thankfully had enough paranoia to
figure out self custody. And there were no hardware wallets at the time either. Trezor,
I think, didn't come out until maybe late 2014, early 2015. And so the only real option at the time
was downloading Bitcoin Core. And you're running that full node and having the wallet there on the
node. And technically, that was a hot wallet. But unless you were willing to start using air
gapped computers, which very, very few people did, that was basically the top of the line for
self custody back then. Yeah, no, I think your computer science background really is interesting
with this as well. Because, well, yeah, I mean, in 2012, it's not like we have the infrastructure
that we have today. And I think probably there's a lot of people who, well, a lot of people who,
of course, were victim of the Mt. Gox hack and left their coins on there, but also just
probably people who didn't know properly what to do with those funds. But I'm curious for your
perspective, because I think today, I mean, Bitcoin is still not used widely as a medium of
exchange, let's say, but even much less in those days. And so I'm curious for your thought process
when you went to initially buy that Bitcoin, did you have any type of thesis behind it? Or was it
more just, this is interesting, let's see, I just want to get involved, buy a bit, start playing
around with it. What was kind of the mindset there? Yeah, it was mostly, I want to learn more
about it and how am I going to actually understand it if I don't have any to use. So the only real
thesis that I had was that I felt like it would be a good multi-decade hedge against inflation.
I was like, I don't know. I certainly didn't believe it was going to do like 100x or 1000x
or anything like that. I was like, I bet that it will at least do better than inflation. So
I bet it'll go up at least 5% per year type of thing and be a good hedge against that.
So yeah, I didn't really start thinking about Bitcoin as more of an investment until 2015 or
so. It was actually was like after the Mt. Gox collapse and after we had this epic bear market.
That was actually when I started looking at ways to invest more heavily in Bitcoin and actually
convert my retirement funds into Bitcoin. So I guess you could say that I went all in
in the sort of 2015, 2016 bear market period and actually lost most of my money during that time.
In a sense, unrealized loss. Basically, I was buying all the way down throughout that bear
market and I lost half of my fiat-denominated savings during that time because I just kept
buying and kept buying. Then of course, I think we had the epic bear whale battle at $230 or something.
So yeah, I mean, it was interesting times, but that was also when I went full time into Bitcoin.
So when I say I went all in, it wasn't just like I was buying Bitcoin. I pivoted my career into it.
I started living, breathing, tweeting about it, writing articles, going to conferences.
It really became the vast majority of my life dropped a bunch of my other hobbies too and
started spending a lot of my free time doing research or side projects, things that I felt
would help me understand it better, help other people understand it better,
help improve the infrastructure and the space and so on.
Yeah, and a super interesting story and I think it's a common thread amongst a lot of Bitcoiners is
that once you see it, it's hard to unsee and I know a lot of people then are also like, okay, well,
this is one of, if not the most important things we can work on. So we have to like,
I know a lot of people would then do, whether it's financially go all in or, you know, as you did
also with your career and everything as well. But for me, what's really interesting about your story
is you did that during a bear market and even if you went on the downtrend and that was in 2015.
So I think we're now nine years ahead where Bitcoin has become a lot more mainstream. So
you're taking a big gamble then still. But what was it for you that made you so confident at that
time that it was the right decision? Mostly how few other people got it. Even after explaining it
to them seeing how confused they were or in many cases how they felt like it wasn't actually solving
a problem. And, you know, this was because of course, living in the United States, pretty much
everyone in my peer groups had good access to financial infrastructure. They weren't feeling
pains of inflation. And me trying to explain to them the problem that Bitcoin solves was,
I don't know, it was like trying to sell air to a fish or something, right?
Or even trying to sell ice to Eskimos or something. I don't need what you're selling
type of thing. And so I came off as the sort of overly paranoid digital gold bug libertarian guy.
And so, you know, after a few years of me going around evangelizing, eventually I realized,
you know, I'm kind of wasting my time because I'm evangelizing to the wrong crowd. And I just
focused more on building and taking the approach that if you build it, they will come. They being,
you know, perhaps not my peer group, but other people in the world who actually see the need
for this thing. And then of course, as we've seen over the past decade or so, you know, the world
does change. And some people end up waking up and realizing that actually, you know, there are
problems that perhaps could use this as a solution. Yeah. And I think people are more and more, I think,
well, I have that as well. And I think it's, you notice it more and more, I think, in people
maybe who are in either who people who come to Bitcoin out of necessity, let's say, I think,
really see the value versus I think some people who maybe come out of come at it more from like an
academic slash curiosity standpoint, where it's more like, okay, I don't need it at this point,
but I'm more interested to to learn about it. So I think, but I think sooner or later,
probably most people will come to it out of necessity. And well, we'll almost be not forced,
but we'll have to learn about Bitcoin. But it's interesting nowadays, because I think even now
in, you know, 2024, I feel like we're still very early. And there's still a lot of people who,
especially in parts of like Europe and the US and developed countries where people still don't
quite understand why Bitcoin is important. So how do you explain if you have someone come up to
you on the street, or a friend, I'm sure you get messages from friends and family all the time,
who know that you're very well versed in Bitcoin, and have been in the space for some time, how do
you explain to them, if you do, the value proposition behind Bitcoin or why they should invest?
Yeah, so the first thing is, I don't tell people that they should invest in or otherwise acquire
Bitcoin. One of the most common questions that I get is like, it's now a good time for me to buy.
And my, my simple answer to that is if you have to ask, then the answer is no. Basically,
that's an indication that you don't understand it well enough, and that you need to go spend your
time researching and studying. And basically, you're creating your own thesis for why you should
perhaps have some savings in this asset class. If in my experience, you go out and you just buy it
because someone tells you to, you probably don't have conviction. And if you don't have conviction,
you're much more likely to screw something up either out of ignorance, negligence, whatever.
And what do I mean by that? Well, it could be a lot of things. If you're taking self-custody
and you haven't put much time into that, you can screw it up and shoot yourself in the foot and
lose your keys and no one can help you. If you're just buying on an exchange and leaving it there,
you can screw up and have your account get hacked and have the funds drained or even have the third
party basically refuse to give you the funds for any of a million reasons. Or you might just panic.
You know, you might be watching the price charts and you see the price go down too much. You're
like, oh, I have to sell everything. And so that's how you end up buying the top and selling the
bottom and ending up worse off than you started off with. So this is basically why I think you
have to spend a lot of time educating yourself to build up the understanding of where a lot of
the pitfalls are to avoid. Because if you want to do well in this space, it requires you taking
on responsibility. And I think that's one of the biggest points of friction, where people in general
are used to outsourcing a lot of important aspects of their lives to specialists. And so
they're used to just being able to ask for help from someone to have a third party fix their
problems for them. But if you want to do well in this space, those third parties are likely to
screw up or screw you over. And so it's much better if you can help yourself and you take on
a lot of the responsibility for navigating the space. So I just tell people to go to
my website at bitcoin.page and keep reading and keep reading until they know the answer to that
question. And basically, they need to feel like they can't live without bitcoin because they need
it so badly. Yeah, very, very good points. And it's actually a common thread that I've noticed
in my interview so far with all bitcoiners. It always comes down to education and responsibility
because, yeah, like you said, I think people who are just typically message you to ask,
should I buy bitcoin? When should I buy bitcoin? If you don't have the conviction and you don't
know what it is that you're holding, it's very difficult to go through those bear market cycles
or to go through those price ups and downs because even not in a bear market, bitcoin is a volatile
asset. So I really agree with your advice there. And it's a common thread that I've seen across
the spaces. And I think it's also a theme in bitcoin in general, right? The bitcoiners who are
in the space are ones who typically are centered around this responsibility of like, I'm responsible
for my own, well, life, of course, but then I think taking that next step and also being responsible
for your own money, which is a foreign concept because with traditional fiat currencies, that's
not something that you typically are used to, right? And so the next step, well, so you mentioned
that you started, you also went full all in on bitcoin in 2015 with your career. If I'm not
mistaking, in 2018 is when you co-founded CASA, right? Correct. So what was the motivation behind
co-founding CASA and what did you, what need did you see in the market that was,
but that you looked to solve by founding CASA? So from 2015 to 2018, I was building infrastructure
at BitGo, which was the first enterprise multi-sig wallet. Basically, we were helping exchanges
and payment processors and businesses that needed to be regularly making and receiving payments
to have better security for their hot wallets. These are wallets that have to somehow be connected
to the internet because they need some automation around them. And at the time, these were the
juicy targets. These were the exchanges that were getting hacked for tins, if not hundreds of
millions of dollars and causing a lot of people to lose catastrophically whatever savings they
had built up. So we learned a lot over the time that I was there, made various improvements,
had some setbacks, but the main thing that made me pivot, it was really that I felt like we had
done a lot for enterprise security, but that there was still a gap in the market to apply a lot of
those lessons and best practices at the individual level. I still felt like the bar for getting into
a really robust self-custody setup was far too high. I was even looking at my own setup that was
this really convoluted thing. I wrote a whole article about a number of years ago using
Shamir's secret sharing and encrypted disk partitions for backing up seed phrases and setting
up this janky inheritance that probably wouldn't have even worked. I never even did a full dry run
of seeing if my executors would be able to follow my instructions. Basically, it was this feeling
that we had the technology, we had the best practices, but nobody had really put it all
together in a consumer-friendly solution. The short version of what we do at CASA is we try to
offer the most user-friendly but also robust self-custody setup that it's secure not only
against things like hackers and even physical wrench attacks, but it's designed with the
understanding that it's being operated by a human and humans are fallible, like our clients are not
all Uber nerds. They need to be able to make mistakes without having catastrophic loss.
The idea is to architect a system that basically has some flexibility and redundancy in there so
that it's fine if something goes wrong, you can still recover from it and move forward.
We do that in a variety of different ways with a really user-friendly mobile app with using
hardware devices to secure keys from different vendors. CASA itself is not
holding a bunch of your keys or even having control over the hardware or software that is
storing them and offering a really high level of support that is pretty hard to find in this space.
You go to your average self-custody while it's set up and it's generally
figure it out for yourself, like read the documentation, maybe you get some community
support, maybe get some email support from whatever organization has put the software out there,
but it's very hard to find places where you can actually get on a call to talk to an actual human
in real time and discuss edge case issues that come up. We like to think of CASA as offering a
number of different support plans, but we do offer basically concierge-level support for people who
are storing the majority of their wealth in Bitcoin and they only want the best.
Yeah, and I speak from experience because I've been a CASA customer for quite a few years and
for me, when I first found out about CASA, it was also a bit of a light bulb moment for me because
when I originally started in the space, you have your normal progression when you first
learn about Bitcoin, even just the concepts of like, okay, what are software hardware wallets,
what do you mean I own this and I control this and then I think once you start getting more and more
wealth put into Bitcoin and then also you have it on a single signature wallet,
it is very scary because it goes back to kind of what we were talking about earlier with the
whole responsibility thing. When you move your Bitcoin to your own wallet, like a single signature
wallet, if you mess up something, there's nobody that you can call, there's nobody that your funds
are gone, so it's this element of responsibility is important, but with great power comes great
responsibility. Yeah, so I think one good example there, we've heard from a lot of clients that
spending Bitcoin can be incredibly scary. I think one example of this is what you see a lot,
if someone is moving a large amount of value is they'll send a test transaction first, send
like 10 or 20 bucks. This annoys me to no end, mainly due to the whole block space issue of
like, block space is a very scarce resource, so I find it inefficient to be making two transactions
when you only want to send money one time. But the reason why people do this is just because
they're not 100% sure that the money is going to go where they expect. And one of the cool things
that I think is underappreciated about a multi-signature setup where you have to sign with multiple
keys is that you're actually validating all of the details of that transaction multiple times
before it goes out. So it gives you, I think, a much higher level of confidence that the money
is going to where you expect. And as a result, you don't necessarily need to jump through the
hoops of making a test transaction because you're already checking it multiple times.
Yeah, I agree. I think that's another great point of multi-signature custody. And for me, it was also,
it was like I said, it was a solution that I really desired because,
yeah, when even though like, you know, because of traditional hardware wallets,
it's backed up with a seed phrase. But if you then think about it, like,
I know, like, it's just this piece of paper or a plate or something where,
yeah, okay, you can maybe hide it in a very good place or, you know, you can,
but still it's a single point of failure where it's still in the back of your mind. You're like,
okay, well, if someone does somehow get ahold of this or, God forbid, your house burns down or
something happens, it's all gone. And then for me, the multi-signature, especially collaborative
custody approach was really this light bulb where like, you can reintroduce a third party
without necessarily reintroducing the third party risk. They're more there to be the helper,
which is what you want from a third party, rather than like the sole facilitator or the sole controller
of your funds, right? And that's what for me, when I, when I learned about cost, I'm not only the
solution, but also I think the usability of it because, and I'm not, I'm not just vouching this
because you're on the podcast, but I've recommended people who are, who are new to Bitcoin and who
have significant amounts of holding to use Casa because of this user friendliness of Casa and
of the app and of, you know, especially if you use your phone as a, as a signing device as well.
So as like, what has your experience been since leading Casa and just working with customers
and kind of hearing their feedback on things as well?
Yeah. I mean, it's a constant improvement process, right? You know, whenever we get feedback from
people on things that they find confusing or potential rough edges, edge cases that cause
problems, then that's something for us to take note of. And I think you can actually see
over the years how that drives some of our product decisions. So, you know, we've had a
couple of big releases this year. The most recent one just a month or so ago was actually our
announcement that we're the first company to ever figure out how to use Yuba keys to secure
private keys for Bitcoin. And, you know, this is a new, well, new old hardware device, you know,
it's not a Bitcoin specific hardware device has been around for over a decade for enterprise
security, mostly two factor authentication uses. But we think that Yuba key actually,
it fits into a new niche, a new part of the convenience and security spectrum.
What we've really found is that when it comes to many of the different decisions
at play for self custody, you're always making trade offs between convenience and security.
You know, the ultimate level of security tends to be highly inconvenient if you ever want to
actually use or access your funds. The flip side of that, if you want the ultimate convenience,
you know, something like a web wallet or just a hot wallet on your phone,
not so secure because you probably have single points of failure.
And so, you know, we rolled out this Yuba key support because we think it just it cuts down
the friction of using, say, your average hardware device by an order of magnitude.
And of course, there's trade offs there, you know, it's apples and oranges. But once again,
because we're doing this in a multi signature, multi key context, we think it's fine if you have
different keys that have different level of security and different level of convenience.
And it's kind of like what you mentioned with this idea of having a third party collaborator.
So like where Casa only has one key, we don't have the ability to be malicious and spend money
without your explicit request and sign off. But we can be helpful. And so, you know, this is really
how I think banks should work. I think there's a good reason for why we have banks. It's because
people figured out that keeping all of their cash under the mattress or in a safe at home
wasn't the best idea. But you know, in order to have more convenience and peace of mind around
that, they had to give up a lot of security by just giving everything to a trusted third party.
So having a bank like solution where you can get support, you can be put into an architecture
that has had countless man hours of like engineering and security thinking around it.
I think there's a lot of value there. Because otherwise, before we had these type of options,
if you were doing self custody, you were kind of on an island off to yourself. You were probably
having to figure out the entire space of self custody. And this is what I saw myself is like,
I went through that journey and I realized that I'm human. I make mistakes. I have blind spots.
It's actually, I think, similar to the motto that we see a lot in this space,
virus innumerous, strength and numbers. And it's basically the more people you have working on a
system, the more eyes you have on a system, the more diversity of perspectives and likelihood that
any weaknesses in the system are going to get discovered so that you can then fix them and
continue improving the security of that system. So that's Casa in a nutshell of providing security,
consulting and basically giving people an app where the way that we see our software is it's
basically like guide rails. There's a million different ways and a million different decisions
that you can make when you're doing self custody. And if you kind of look at it as a decision tree,
a vast majority of the leaves of those decision tree are fraught with peril and foot guns and
potential catastrophe. So basically, we build the app and we greatly limit the sort of decisions you
can make in that tree. And we give people a few paths that they can go down that we consider to be
like highly vetted and safe. Yeah. And I mean, I completely agree with that. And again, as a customer
of Casa, that's the experience that I have. It's the third party that you want there to help you
and provide, like you said, a bit the guidelines and the guardrails to proper Bitcoin custody in
a way where you still retain the power and control over your own funds, which is what the ethos of
Bitcoin, of course, is. And so my question, well, a question for you also is like, how do you see
this developing as Bitcoin grows in adoption? How do you see the space around self custody,
whether it be multi sake or just in general, how do you see the way that people interact with
Bitcoin on a daily basis? How do you see that developing as we go towards in the future?
Well, it's going to be a constant struggle. Once again, it's the convenience versus security
issue. That's what I consider to be our primary competition. While there are other multi-sig
providers in the space, and some people would say, that's Casa's competition,
I actually see it as no, actually, we are all competing against the custodians,
because the custodians have a massive advantage against us, which is that they can hide pretty
much all of the complexity of key management and custody under the hood behind a slick web
or mobile interface. And the problem is that humans tend to prioritize convenience over
almost everything else and at the expense of almost everything else. And so
Casa's goal is to try to get our level of convenience and reduce the level of friction
to as close to what the experience is like when you're just using a trusted third party.
I don't think we'll ever get exactly all the way there, but we keep pushing closer little by
little. And so hopefully that makes the decision to make the leap into self-custody less onerous.
I think a lot of people, once again, it comes down to that responsibility, like, A,
do they even know that self-custody is a thing? And do they understand what the trade-offs are?
Even if they do, what we found is that a lot of people are just too hesitant to make that leap
because of the responsibility and understanding that they're not experts and this fear that
maybe they miss something, make a mistake, lose everything. But it's also somewhat of a viral
network effect thing, right? We also, we want our own clients who hopefully have very good
experiences with us to then go out and tell their friends and family, I've had a really
good experience with this. I sleep better at night. I have more peace of mind. I think that's
one of the primary things that we offer is peace of mind because you don't have to worry about
getting mugged by a third party. And then you should also no longer have to worry about your
own blind spots or yourself having missed something because you have experts advice at your tips.
But beyond that, there's more long-term planning stuff as well. That's also why we rolled out the
inheritance feature. And that was not even our first stab at inheritance. We had a very manual
inheritance feature that was only for our private client tier because it was so hands-on and took
a lot of manual hours of work to get set up. And we were doing that for several years and
basically learning once again from a lot of the limitations and friction points involved in that,
especially involved in trying to work within the legal system because there are just so many
different jurisdictions out there because they're really complex. And so then we basically fell back
away from that. And we said, how do we actually just build a technical solution to this that is
not going to be limited by which jurisdiction you live in? And how do we make it so that once again,
it is as easy for people to set up as possible? And I'd say it's pretty crazy how well we
simplified it. If you're a current CASA client and you're in, say, a two-of-three setup,
you can actually onboard your inheritance recipients in five to 10 minutes. And they don't
need any special hardware or anything. It's literally just scanning some QR codes back and
forth. Yeah, it's really cool to see the developments with CASA. And I think
that's also the beauty about Bitcoin and where we are currently is that there's so much more
things that can be built on top of Bitcoin and whether it be products, companies,
what you made. And I know I'm sure that you, since joining the space in 2012, have seen
a lot of that development firsthand. Are there any developments and, well, of course,
don't have to leak any CASA upcoming features or anything like that. But just in general,
are there any developments in the space that most excite you or where you are currently
just thinking about or looking towards?
Mostly right now, what I'm focused on is the protocol improvements and potential second
layer developments. It seems like there has been a lot more work this year on various
protocol level changes and especially things that could enable more permissionless
second layers to be developed. I think that that's one of our big bottlenecks right now from a
scalability perspective is that you could argue that the only true permissionless second layer
that we have is Lightning Network. And that's been around for six years now. And it was originally,
I think the white paper was like nine years ago. And it's frustrating to me that we haven't realized
kind of the promise of a ecosystem with many different second layers out there.
And I think part of that is because we also have some parts of the ecosystem that are now
like very anti-making changes to the base protocol, which, look, I mean, we should always be
conservative about protocol changes, but it kind of gets us stuck between a rock and a hard place
because you can't just say, oh, we'll solve everything with second layers when we don't
have some of the basic tooling to be able to launch permissionless second layers very easily.
So we end up having a lot of people launch second layers that are basically glorified
like multi-signature federations, which I mean, it's better than a single point of failure, but
it's not really the optimal solution of what I think is possible. And also, you just look at
Lightning Network, and we actually made three protocol changes to Bitcoin base layer in order
to enable Lightning Network. So I think there's precedent for this to happen of like if you
can make a small change to the base layer that has like order of magnitude improvements and opens
up the possibilities for what people can develop, especially on other layers, then I think that
that is always something that is worth discussing. Yeah, I agree. I think it's an interesting topic,
definitely a sensitive topic also on Bitcoin because you have a lot of different opinions in
terms of what should and shouldn't be changed on the base layer, but I agree with you. I think
yeah, innovation is necessary, but obviously careful innovation to where you don't disrupt any
of the fundamental value propositions of Bitcoin. So with your work there right now, how does that
look? Because that's the interesting thing I think about Bitcoin is because it's decentralized,
there's not an executive board or a CEO that decides on something, right? So how do you
work to maybe get some of those things into action and potentially implement it into Bitcoin?
Yeah, I mean a lot of it is just discussion and it's tough too because we've gotten ourselves
into a position where protocol developers are still happy to continue doing research and development
on improvements, but there is now a lot of hesitation to actually champion a proposal
to be activated. So we have people putting proposals out there, but then not actually
proposing to activate it. So it's a really weird type of situation where we've got all these great
ideas, but it's such a slog to actually take an idea from initial draft proposal
all the way through activating on the network that it's a Herculean task that almost nobody
wants to go through. Yeah, well I think we need people like you who definitely push the industry
so well thank you for those efforts. So I know that we're running out of time here and I think
there's a lot of different threads that we could have pulled on especially given how long you've
been in the space and all of your expertise so I appreciate all the time, but is there anything
else that you would like to talk about that we missed or just anything else that you would
like my listeners to know about today? Just sort of stepping back. Bitcoin is a very multifaceted
space and it's an open collaborative project. So I just think that the most important thing for
Bitcoin is that anyone who cares about it spends time learning about it and talking about it and
if we want this to be the optimal form of money then the only way to really
continue striving towards the optimal form of money for everyone is to get more and more people
and basically get everyone providing their input as to what money should be.
Yeah, agreed. Great closing thoughts and I'll be sure to also link your website which I think for
especially a lot of beginners has a lot of great resources in terms of different articles,
how to get started, wallets, all that stuff so I'll link that in the in the show notes as well.
But James and I want to thank you so much for your time and your insights. They're really,
really valued and again I appreciate your time today. Thanks for having me.
All right guys, thank you so much for taking the time to listen to another episode of the
Bitcoin Journeys podcast. I hope you enjoyed that as much as I did and were able to walk away
with some new insights, some new learnings about Bitcoin. Now as a team with each episode I do want
to recap quickly some of the key takeaways that I got from this episode which I think would be
useful to share with you guys because I think it's very important to yeah just kind of summarize
the learnings and walk away with what are some of the key insights from this episode.
And after listening to this episode again and re-editing it the first insight that I got which
was really important was going back a bit to the beginning of the conversation where I was talking
with Jameson about you know the double spend problem and how Bitcoin was able to solve that
and we were just talking about essentially a bit of Bitcoin's inefficiencies and the ability that
offers for people all over the world to run a note and verify the Bitcoin blockchain itself
and that that is in essence a feature and not a bug. And the reason why I think that's one of the
reasons why that's important is because it kind of goes back to understanding fundamentally how
the technology works. I think if you really want to build conviction in Bitcoin and really understand
what it is that you're holding then you do have to really start to review these key concepts of
what makes Bitcoin valuable and why it has been able to sustain its longevity for so long. And one
of the reasons why Bitcoin has been able to survive for the years that it has is through its
decentralization and this decentralization comes from that design that Satoshi had early on where
he limited the amount of space per block which allows everybody to be able to run a note,
verify the blockchain and keeps Bitcoin decentralized. And so the reason why I say this
is a key takeaway is because I again really recommend everybody to just study the key concepts and key
terminologies and technological concepts within Bitcoin. I do actually have another podcast called
the Bitcoin Blueprint Podcast where I actually dive into this in more detail which I will link in
the show notes but you can see there all of the different fundamental concepts that you need to know
in Bitcoin and also as James mentioned he has a really good website with a lot of good resources
and insights there as well as many many more that you can find online. Now the second key takeaway
that I got from this episode was the role of personal responsibility in Bitcoin. There's a
theme that we talked quite a bit about with Jameson and it kind of goes back to this ethos in
Bitcoin of you are responsible for your life, your money, your health, essentially everything and
that's a big theme in Bitcoin too because within Bitcoin you do have the ability to
delegate everything to you know third parties and leave things on exchanges and all that but
even then it still comes down to the responsibility of understanding what Bitcoin is, understanding
its value proposition and just realizing that you are responsible for that not only for understanding
what Bitcoin is but then also ensuring that you keep custody of it in a way that allows for longevity
because a lot of people as Jameson mentioned sacrifice convenience for security and
Bitcoin's history that has hurt a lot of people and which is why going through my third takeaway
is just the importance of security and self-custody. You know Jameson of course is a co-founder of
CASA which focuses on providing easy-to-use user-friendly collaborative self-custody
and it's a product I use but it's more so important just to understand also how that works,
why it's important to take self-custody, why you shouldn't leave your Bitcoin on exchanges,
how you should take self-custody and what are the best ways to do that. There's a million
different rabbit holes that you could jump down here but my suggestion to you is to start small
and to scale over time as you feel more comfortable because I recognize that not a lot of people
especially if you have a lot of money in Bitcoin immediately would transfer all of that money to
a hardware wallet that they control themselves because as I talked about with Jameson with great
power comes great responsibility once you take self-custody of your Bitcoin especially in a
solution like a single signature hardware wallet you are the only person that is responsible
for that. If something happens to your funds there's no party or company that you can go to
to reconcile that and so it's important to take it slow to understand thoroughly how it is that
you're doing it to kind of also maybe map out the different security models that you would like
and then take steps to make those holdings more and more secure. Again I'm saying this because
I'm a happy customer but CASA is something that I use and really enjoy because it allows you to use
essentially the highest security possible for individuals which is multi-signature collaborative
custody in a way that introduces the third party again but without the added risk of them having
full control of your funds. So I really highly recommend you check out CASA and just learn more
about multi-sig collaborative custody. There's also other vendors out there so you know do your
research understand the drawbacks and the benefits of each and again the Bitcoin Blueprint
podcast that I have also goes into more detail about what multi-sig collaborative custody is what
even self-custody of hardware wallets is so I highly recommend you check that out as well.
Now there's a lot more key takeaways that I got from this episode but I want to leave it with these
three because I think these three were for myself the most important that I got from this episode
and so I highly also recommend that you take time maybe to re-listen to this podcast to understand
the fundamental concepts that were mentioned here and if you have any questions you can always reach
out to me but once again I thank you so much for listening taking the time out of your day to do so
if you could leave a review that would be highly highly appreciated and share it with any friends
who also may be interested in getting into the Bitcoin space. With that being said thank you
guys so much for your time today and I will see you on the next episode.