Welcome to the founders of Web3 Series by Outlier Ventures and me your host Jamie Burke.
Together we're going to meet the entrepreneurs, their backers and the leading policy makers
that are shaping Web3.
Together we're going to try to define what is Web3, explore its nuances and understand
the mission and purpose that drive its founders.
If you enjoy what you hear, please do subscribe, rate and share your feedback to help us reach
as many people as possible with the important mission that is Web3.
So today I'm really excited to welcome co-founder and CTO of CASA, helping people improve their
self-sovereignty and allow for the self-custody of Bitcoin, welcome Jameson.
Great to be here.
So you describe yourself as a Bitcoin philosopher, laureate, professional cypherpunk and advocate
for Bitcoin and you describe the kind of work that you're doing as building technology that
powers individuals, individuals being this kind of operative word.
What I would describe as for a more citizen user centric internet and importantly you're
working both at CASA and beyond around the evolution of Bitcoin.
You've contributed loads of stuff to Bitcoin and open source from Statoshi, Physical Attack
Log, Bitcoin Savings Club, Bitcoin Savings Plan and even the US Marshals Bitcoin Auction
Tracker.
It's great to have you on the show.
One of the reasons why I wanted to bring you on is at least from the outside you're the
archetypal Bitcoiner.
So I want to explore the kind of cypherpunk ethos and origins of crypto and what I've
seen you refer to as the Bitcoin Decade, you did an interesting talk called Bitcoin Decade
Falling Forward.
As a Bitcoiner and startup founder I think you also represent a founder type that is
quite unique to crypto and certainly Bitcoin who is somebody that is primarily creating
a business to further the cause of a protocol not necessarily although I guess hopefully
just to get rich as a startup founder.
So you're kind of not you're not starting from the point of being neutral to your technology
stack which would be perhaps conventional in a normal startup world.
You're also kind of hardcore security guy but at CASA working at this intersection of
physical hardware and software I know you've kind of moved more towards the software piece
now so kind of making this this digital world physical and I think you're you know somebody
really championing the importance of Bitcoin and of course exploring the potential its
potential through the Lightning Network.
So normally at this stage I would kind of summarize somebody's history and background
and the kind of origin story leading up to their time in blockchain and crypto but as
a I guess cypherpunk as you might expect you have no LinkedIn profile so I couldn't find
out much more about your background prior to BitGo and I guess this is tied to a famous
article now in a Wall Street Journal about you called Living Off The Grid how to vanish
in 15 not so easy steps.
So it would be great to understand you know why you've gone dark or you're you're off
the grid and if there is anything that you can share about your background to give us
context your journey as a founder.
Sure yeah there's a lot to unpack there I would agree I'm probably not the archetypal
entrepreneur in the sense that you know I didn't go out looking for a business to build
it was rather when I decided to pivot my career into the Bitcoin space and more broadly into
the personal sovereignty and security space that was more of an ideological transition
for me and I see you know the companies that I've worked for the companies that I'm building
as a means to an end that you know as much as you spoke about the amazing aspects of
open source software and I am a big proponent of that I think there are some types of things
and services that simply can't be built as free open source software.
So that is where the companies come into play and there's another type of self organization
that I think allows us to incentivize people in ways that are hard to do in the open source
software space.
So my background I'm a computer scientist by trade I spent the first decade of my career
actually doing pretty much the exact opposite of what I advocate for now I was actually
a back end infrastructure engineer at a large online marketing company and I was doing cloud
scale analysis of raw tracking data in marketing databases to essentially help marketers better
target their customers you know better increase their return on their investment with our
marketing analytics software and this was not a particularly interesting idea to me
it wasn't something I was ideologically committed to it just happened to provide some interesting
technical you know scaling challenges and once I got interested in Bitcoin you know
I started doing some open source side projects and about a year and a half after starting
those projects and slowly drifting away of what I was thinking about every day and every
night I realized that you know enough venture capital had come into the space that I could
just get paid to do that full time and that's when I made that transition to start working
at BitGo and really began my career in the security space.
For those that aren't aware BitGo was a multi seek enterprise wallet so very related to
the work you're doing now at CASA so you co-founded CASA in 2018 with Jeremy Welch who also studied
philosophy so I think there's an interesting link there between you describing yourself
as a philosopher laureate and co-founding a company with somebody that I guess majored
in in philosophy so you were backed by Boost VC Adam Draper's Boost VC and then Fabric
Ventures here in the UK.
Yes we had a few you know early seed investors I think also Lara Hippo and Compound got in
there pretty early and have you know helped us get through that that pre-product stage
and you know once we got out in to the real world and started getting real customers in
you know that's when things started taking off and our brand recognition has really shot
up a lot over the past year a lot of that was due to the hardware Bitcoin Lightning
Node product that we put out but all along our focus has been on this key management
issue and in fact it's kind of weird being in this niche cutting edge space because I'm
watching all these different teams that are going out there and building very you know
envelope pushing type of software you know creating completely new types of user interactions
that they can perform in this system but the entire time that I've been in this space I've
been working on very boring simple private key management you know it's I think it's
one of the most basic aspects of these systems but the reason that I keep focusing on it
is because I think that we've still got a long way to go and that if we want the rest
of the things that are being built on top of these systems to actually be usable and
get to a mainstream level of adoption then we need to get the basics right.
Yeah and I know you feel very strongly that this kind of technology is fundamental to
fully realizing the benefits of Bitcoin beyond kind of just speculation.
So what is this kind of theme around philosophy or I guess within the founding team of CASA
and is it kind of tied to this idea that you know Bitcoin is a belief system as much as
a technology?
Yeah so there is a wide variety of memes that are perpetuated in this space I actually I
just wrote a blog post I think a week or two ago about all of the memes that we use to
sort of self-reinforce some of the ideological points of the system but you know the fundamental
ones are things like you know don't trust verify or this idea of trustlessness.
It's really the idea that you can be sovereign unto yourself into how you're interacting
with the system and by not relying on a third party you are then able to essentially do
whatever you want without asking permission is that is the permissionless nature the censorship
resistance aspect of no one can stop you because you're not reliant upon anyone therefore there's
no gatekeepers but in reality there's always going to be some levels of trust because what
we run into is that no one has the time or the skills to verify everything from a security
perspective you know all the way from software that where most people are not programmers
they can't read the code even if it is available to them all the way down to the hardware level
where you know almost nobody can verify hardware even if it's open hardware which is also pretty
rare in and of itself so the question that it really comes down to in my mind is how
do we build systems where we can help people improve their security posture and minimize
trust as much as possible while admitting that we can ever fully eliminate it but doing
this in a way where then the user has control of the most important things which are you
know this sensitive data these private keys and then we build the rest of the software
the rest of the layers of abstraction on top of it just to make it easy for the user so
you know one meme that we've kind of started propagating ourselves at CASA is you know
we're not here to hold your keys we're here to hold your hand so how do we help people
without becoming a potential point of failure ourselves that's really I think one of the
trickiest aspects yeah I mean I think it's really interesting the art or the power of
memetics in the crypto space I don't want to go too much into the politics of within
and around the community of Bitcoin so I know you get asked about that all the time but
as a founder I think it's interesting to understand you know the challenges of innovating within
this kind of within a belief system in a way I know you and your family were famously swatted
by other elements of the community as a founder in Bitcoin and trying to innovate in Bitcoin
what are the challenges there it is fascinating in the sense that you know you can come into
conflict potentially with people in your own organization with other organizations in the
space even outside of just Bitcoin ideology there's also the cyber security in general
space where you often have different security experts and organizations that are kind of
sniping at each other on a regular basis you know it's an adversarial environment from
a variety of different perspectives and the you know the incident that happened to me
as far as I'm aware it was not due to ideology it was more a result of the volatility of
the space and you know these hype cycles and the fact that I went from having very few
people paying attention to me to having hundreds of thousands of people paying attention to
me and it's just sort of a law of numbers type of game where eventually if you have
enough people paying attention to you there's going to be a few of them in there they're
going to be a little unhinged or going to be willing to do things that you would not
expect the average person would be willing to do and I think that that is actually helped
me transform my life you know I basically burned down my entire like legal existence
and started over again from scratch and it was a project for me it was a journey I was
trying to take things to the extreme just so that I could better understand like what
really is the state of privacy in this space or in the real world what can you do if you
want to protect yourself from these type of elements and the the internet in general is
an adversarial environment and that's one of the things that I realized is I've been
advocating for Bitcoin for a long time because it creates the opportunity for asymmetric
defense basically cryptography in general allows normal humans to create a level of
defensive capability for their data that has never really been possible before this modern
era and now as we start to digitize other things we can potentially also protect those
things as assets with this asymmetric capability but the flip side of that is that we've also
created these fairly anonymous systems where when someone is able to for example place
a phone call completely anonymously to your local law enforcement department and say the
magic words that get them to send out the SWAT team what you have there is an asymmetric
attack where someone is essentially only spending probably a few dollars worth of resources
to then get potentially hundreds of thousands of dollars of taxpayer resources deployed
as an attack against a specific target so you know this is kind of the craziness that
the technology and you know exponential change is causing in the world is that some of these
existing systems are having trouble basically catching up and that's where unfortunately
a lot of the onus comes down onto each and every one of us to keep up with all of these
changes otherwise we potentially become vulnerable to them and you know that's I think one of
the big value propositions of CASA is that you know we are specifically staying on top
of all of the changes in bitcoin and cyber security in general and our customers can
rely on us to build things and to inform them of the important changes so that they don't
have to you know be focused on that they can go about their lives.
Yeah I mean I think it's really interesting to think that you know what happened to you
and more generally what might be going on in the crypto space is perhaps a precursor
to what might become more prevalent across the internet and of course as you say it's
not specific to the bitcoin space you know people get swatted all the time for various
reasons so hopefully that story doesn't put people off entering the space but it is interesting
depending at what level you're operating in this industry if you can call it that that
this is an aspect that you kind of have to deal with with a certain level of fame.
So you could be working on any number of things why is it that making bitcoin accessible or
I don't know if you would call this kind of the productization of bitcoin why is that
so important to you?
Well you know it's actually a great environment for us to be talking about this because what
we're really talking about is power dynamics and the reason why I originally got interested
in bitcoin there were several of them you know there was of course the computer science
aspect of oh this is a really cool technology and it's solving some problems I haven't
thought about before but at a more philosophical level as I started thinking about money as
just an abstract concept and the idea that our money is essentially defined by a tiny
elite group of people who convene behind closed doors and make decisions without our input
I felt like applying open source collaborative principles to the idea of money seemed like
a logical thing where you know maybe it would result in the quote unquote ideal money at
the very least I believe what we've seen over the past decade is that when you apply this
type of principle you could call it a governance model or lack of governance model to building
out a monetary system it seems to me that at the very least it results in the least
amount of harm or the least amount of harmful changes being made to the system so you no
longer have a small group of people that can make changes to the system that perhaps benefit
them or their friends or other cronies while causing harm and you know being at the detriment
of the greater community and ecosystem as a whole so you know as we try to build out
this ecosystem I just want more and more people to be able to take advantage of it and you
know that will grow the network effect that will make the entire network stronger this
is a numbers game and if we really want to compete against your first world order currencies
then we need to be able to you know make that value proposition available to people at least
in the very early days I was evangelizing Bitcoin to friends family and co-workers it
was a really hard sell and quite frankly that's because those of us in first world countries
have pretty decent financial infrastructure access so it's kind of ironically easier to
quote unquote sell the idea of Bitcoin to someone who lives in a country with terrible
financial infrastructure someone who has experienced hyperinflation they just get it it's not hard
to explain why Bitcoin is preferable than an existing central bank controlled currency
but on the first world side you have to get more abstract and theoretical and pose you
know scenarios that some people may find ludicrous because they've never experienced them but
you know now we're starting to experience some interesting scenarios here in the United
States so I think you know reality is is coming around yeah I think I think that whole whole
thing is that the whole paradigm is certainly mainstreaming right now so you mentioned open
source again and you know I think on the one hand you've clearly contributed a lot of open
source for the public good on the other hand you know you are now obviously building a
business how do you balance the debate internally within a startup around what should be proprietary
and what should be open source yeah I mean it's tricky because we have people from time
to time push back on us of like why don't you open source this or that and you know
we have open sourced all the stuff around our Bitcoin lightning node product we did
that you know well before we stopped actually selling and shipping them and once we did
stop selling and shipping them we then completely opened up the like how to build your own from
scratch just to make it more available to people on the the key management side it becomes
tricky because well there's multiple ways that you can look at open source projects
not everyone open sources code for the same reasons for us because we're a security company
it would be more from the security perspective than for example the like community building
or open governance perspective obviously we're a company and the the final say is going to
come down to me and other you know c-level people at the company about what direction
we're taking things but from a security perspective our app for example is on ios and android
and those platforms actually don't provide ways for you to verify the code that is running
on them so you know we've had this discussion a number of times of should we open source
our mobile app and ultimately it comes down to what we could and it might make some people
feel better but it's just going to be a feel-good thing because they're not going to be able
to take our code and and build it and compare it to the code that is deployed out to those
app stores and running on their phones so instead we took a slightly different perspective
and said well while you can't verify the code that is running on your phone what you can
do is follow these instructions that we actually send to every user when they set up their
wallet of how do you set up a sort of mirror watch only wallet using completely open source
software that you can then use to verify that it is you know creating the exact same deposit
addresses and basically you know following the rules of the protocol that you would expect
that you know casa is not malicious and trying to trick you into you know sending your money
to a third party so as a security guy I mean do you think that tokenization allows for
more secure open source systems could you think of bitcoin as like a massive bug bounty
right if normally a hack would mean you would get access to some data but hacking in this
context means you can access money that you can then anonymous money or pseudo anonymous
money that you can very quickly move out do you think tokenization is a benefit to open
source generally and open source systems so this you know comes down to I think adversarial
environments if we're talking about open source from a security perspective you know the whole
idea is that by really laying your cards on the table you allow anyone to more easily
attack whatever you've built and find weaknesses in it when you are doing this in the context
of money or assets or some sort of digital bearer value where an attacker would be able
to essentially abscond with that value if they find the right bug then you have created
an extremely strong incentive where you know the system is providing its own bug bounty
and that seems to work pretty well but there are of course examples otherwise where some
of these systems may be so tiny and no one's paying attention to them then they could go
along and operate for a period of time before someone bothers to actually look at them closely
enough and in some cases that means you know millions or tens of millions of dollars being
put into the system before it gets taken as a bug bounty so it's it's some interesting
trade-offs to see you know throughout the history of these systems of how that works
and the result of course is they're all learning experiences and then hopefully people will
be more careful about how they deploy and scale up these types of systems in the future
so you mentioned earlier when you first launched you were kind of doing both the hardware and
the software piece and trying to innovate with the lightning network nodes and I know
you had a lot of learnings from that can you kind of talk us through that journey because
you were obviously one of the first startups out there that were trying to do this at scale
yes so the very high level mission at CASA is to help people improve their personal sovereignty
so the the first obvious way for us to do that was to help people self-custody help
them manage their private keys this is very sensitive data where you need to make sure
no one can get those private keys that is not supposed to have them and even more importantly
we found you know you need to protect the user from their own ignorance or their own
mistakes you have to realize that users are human they will occasionally do stupid things
and we need to build these systems in a resilient and robust way so that a single mistake is
not going to be catastrophic but on the hardware side that was what we kind of saw as the second
step forward so first you secure your keys next step is that you actually validate the
transactions that you're receiving to make sure that no one's defrauding you you know
this gives you that next level of trustlessness that you're receiving actual bitcoin and not
some fake transaction that somebody made up and you know just had appear in your software
wallet so this was supposed to be the logical continuation of that since lightning was also
coming out at the same time we thought that was a great add-on because it also you know
speaks towards the scalability of bitcoin through second layer protocols and essentially
you know we we went from doing like I was saying this basic key management stuff to
now doing the more cutting edge lightning network stuff and lightning network is just
progressing so quickly the pace of development is so fast new things are coming down the
line on basically a monthly basis it was very challenging for us from a number of different
perspectives we knew that it would be challenging to have a hardware device that would be operating
inside of a network that we had no insight into no control over so obviously people plugging
into their networks and we found all kinds of fun crazy edge cases that would cause the
networking stuff to not work for one reason or another so there was a much higher you
know support load on that because of the much higher level of variables and unforeseen situations
also like I said the development pace was so high you know there was a lot more load
on our own developers just to keep up with what was coming down the line and then eventually
what we realized is that while we had been trying to build two different products that
were meant to eventually merge into this you know greater idea of personal sovereignty
our actual customer base ended up being different we ended up really having more of a divergent
customer base where the folks who were interested in that private key management were one segment
and then the folks that were interested in the bitcoin lightning node stuff or another
and this latter segment was more of the hobbyist enthusiast tinker technical type and they
really wanted to get under the hood of this node and you know do stuff on the command
line etc etc whereas casa's ethos is to make things as simple as possible and to you know
abstract away these complexities so there ended up being a fair amount of friction there
due to just kind of different requirements and expectations between these different customer
segments and eventually we decided that you know we were looking at the business and the
private key management was just doing a lot better from a business perspective the main
reason for that is because we're just talking about much more value this is people potentially
needing to secure their life savings whereas on the lightning node side of things we're
talking about playing around with maybe a few hundred or a few thousand dollars at most
because this is meant to be a more retail payment application type of thing so there
was just so much more value and need for security for your life savings versus making retail
payments that after a year and a half or so it just became pretty obvious that we needed
to focus on the former and we can always come back to the latter as the technology continues
to mature
so as a co-founder i.e. you know an entrepreneur working with other entrepreneurs when you
hit an inflection point like this with such a mission-driven business how do you and I
follow the rationale for the argument for the pathway that you took because clearly
that's where the kind of growth customer segment is how do you work through something like
that as a team and I don't know you know to what extent there was a divergence of opinion
within that team against those segments
you know I don't think that there was too much contention around our kind of analysis
of what we were seeing from our users you know obviously the the engineers that we had
working on the lightning stuff were disappointed that we didn't want to continue it for the
foreseeable future is one of those moments where you know you have to make a business
decision kind of despite I guess your ideology and you know as much as I would love to keep
putting more and more resources into the lightning side at this point at least from a business
standpoint I think it makes more sense to wait for the rest of the ecosystem to catch
up rather than for us to try to push that particular piece of the ecosystem forward
there's still so much to do on the private key management side that I wouldn't really
feel comfortable dumping a lot of resources into the cutting-edge stuff until I felt like
you know we had done everything that there was to be done on a simple private key management
yeah and I guess you know coming back to that idea that you know you're representative of
a founder a type of founder and a type of startup that is quite unique to this space you know
one that is really committed to furthering the protocol I guess this is a tension that's
going to be quite common across startups in this space and quite unusual to a typical
kind of founder dilemma so you were talking around you know this idea that you're kind
of doubling down on a solution that allowed somebody to secure a significant portion of
their their wealth and I know you developed an inheritance solution which is always something
that's kind of bugged me is as increasing amounts of wealth becomes digital if you follow
the logic that increasingly more people will want to self-custody then you know how how
does that wealth pass through generations how do you see and understand digital wealth
you know more generally than bitcoin obviously the it can kind of extend to areas like nfts
and gaming skins how do you see that growth and I guess you that's your market right so
how do you kind of size that market right I mean bitcoin is the beginning I do believe
that bitcoin will continue to be kind of the king of digital money for the foreseeable
future but our thesis is ultimately that like I said cryptography provides us with an asymmetric
level of defense and that we should desire to be able to leverage this technology to
secure as many valuable aspects of our lives as possible whether that is just around your
personal information whether that is around your identity management whether it is you
know authentication and access to various online and even real world properties and
then finally you know digital assets themselves bitcoin and tokenized whatever you can imagine
it seems obvious to me that as this entire ecosystem continues to progress that we will
see more and more of these things ownership authentication identity access really control
to be digitized and secured via private keys and so that is why we are building a key management
platform for normal humans and I think that's one of the the greatest downfalls to sort
of the the open source development of this space in general is that it's a lot of nerds
that are building for themselves you know for other nerds that in many cases the user
experience the interfaces have not been very accessible for people who haven't climbed
up this great steep learning curve to actually understand all the things that are happening
under the hood of whatever the technology is that they're trying to use so you know
potential market size is enormous you know much like how you could potentially size the
market of bitcoin to be practically the entire you know global money space any of these other
things anything that is owned whether it is a you know publicly registered ownership of
an asset like you know land vehicles real estate etc putting those things into publicly
verifiable ledgers make a lot of sense and then any other asset that you would find valuable
to be able to prove ownership or transfer ownership directly between two people without
a third party I mean that is the the fundamental value proposition I think of you know blockchain
systems public ledger decentralized network systems but of course there's a million different
variables that go into you know attributes of all those networks that that resulted in
you know a lot of the the strife and drama that you are so interested in avoiding and
we don't have time to go into exactly yeah so I know you did a presentation recently
on DeFi and I'd be interested to understand why you think a lot of that innovation to
date has happened on ethereum and not bitcoin and not necessarily from a technological perspective
but is there something different about those two communities as to why that innovation
has happened on ethereum and do you do you think they're fundamentally at odds in any
way
I mean the the interesting thing about these networks is that you know they create their
own communities you know it comes down to mimetics is is that you know each of these
networks has some fundamental attributes and beliefs usually that and a lot of this goes
actually back in history of you know Vitalik Buterin who was one of the founders of Ethereum
you know he was originally doing bitcoin stuff and he just wanted to do things that he found
to be too challenging or he felt like the bitcoin ethos would not accept to you know
make changes to the bitcoin protocol to do those things so you know ultimately these
are all voluntary systems you have two choices when you're operating in any of these systems
one of them is your voice to say hey I propose that we do these things make these changes
support x y or z and if voice fails then your only other option is exit and of course we
have seen many different people and entities end up choosing the exit option from not only
bitcoin but from other networks and you know ending up with forks of forks of forks of
forks it really is a fascinating evolution to watch this happen you know there are many
parallels with things like religion for example you know in various sects branching off from
different religions over history but you know one of the differences I think between like
Ethereum and Bitcoin is that Ethereum wants to be as many things as possible it wants
to be a more general platform you know I sometimes refer to it as a kitchen sink protocol you
know that they want for you to be able to build anything that you can imagine essentially
and you know there are there are pros and cons to that from a security perspective I
think it becomes a nightmare and you know Bitcoin I think is more conservative and security
consciousness or security conscious and will prefer to say no you can't do all of those
things or if you want to do them you have to put a lot more effort into figuring out
how to do them so for example with Ethereum it has much more complex smart contracting
and scripting functionality where essentially you can write these complex operations that
then everyone on the network will run those operations and will verify that they performed
and create the output as expected on Bitcoin the ethos is more that you should use the
blockchain as little as possible and if you're performing complex computations you don't
need to have everybody else on the network perform those computations instead all you
need to do is perform the computation yourself and then post a proof onto the blockchain
that is easily verifiable now that ends up being a lot more complicated at least up to
today but I think that you know we're seeing more tools being built to make it more developer
friendly for people to build more complex stuff off chain but you know these are kind
of fundamental design principle differences and there are many different trade-offs that
we also don't have time to go into but it is one of those things where it's just gonna
it's fascinating to see how it's gonna continue to evolve over time yeah well look it's been
great having on the podcast today and you know I think that the work you're doing is
incredibly important not just to Bitcoin but to the wider crypto space as you say and more
importantly than that what it represents around self-sovereignty and self-custody and I definitely
subscribe to the idea that we're starting with this kind of high value asset you know
money but increasingly we're going to be looking at all this infrastructure can be leveraged
for self custody of data and all the anything else that's associated to that so it's been
great having you on and thanks for all your work in the space thanks for having me if
you enjoyed today's podcast please make sure you subscribe rate and share your feedback
to help us reach as many people as possible with the important mission of web3