And this is why I think that the citizens of third world countries that have experienced
hyperinflation, they don't need to be evangelized the benefits of something like Bitcoin because
they've lived through it.
On today's show, I'm talking to Jameson Lopp, the co-founder of CASA, the safe way to store
your Bitcoin.
And why does that matter right now?
Well, you've probably seen that Bitcoin is all over the media, but the hype this time
is different.
And we're going to explain why it's different and potentially why you need to pay a little
bit more attention.
This is Tech Talks, your twice weekly technology podcast with myself, David Savage, where we
talk to leaders from across the industry and bring you some news and opinion.
So today's guest, Jameson, we were just saying he obviously at the beginning of the
intro doesn't like to reveal exactly where he is in the U.S.
And you were saying that that seems to be quite a common feature.
Yeah, I don't know, it's just, I find it a bit odd, really, well, not odd, but like each
to their own.
I mean, you know, if you don't want to tell people where you are or give away your location,
that's fine.
But, you know, whereas like I said to you before we hit record, I'm like, yeah, if someone
asks for my address, I'll give it like, I don't really, you know, I'm not really fussed
by it.
So if you want to send me some stuff, send me some stuff, I don't care.
It has been pointed out to me that because I use Strava and it's very, very, very open,
I don't have any real security features on it.
I basically advertise what time I'm out of the house every single day and where I live
and roughly how long I'm going to be out for.
It probably isn't very sensible.
Yeah, also.
And I think, I think when you're, when your trading gets ramped up, you do like the little
photos as well.
So you can literally see where you are at each point.
So I mean, if you, I'm not saying you're, you're that way inclined, but if you did something
that you shouldn't be doing, then I think you could be tracked very, very easily, Dave.
To be honest.
Oh mate, yeah.
Like if I, if I try to get away with any serious crime, I've got paper trails everywhere.
Just catching pre eight o'clock next to the Thames, it will be, it will be the guy running
in some naughty, naughty running shoes.
I do totally respect Jameson's choice and I understand why some people are more wary
and want to protect their, their details.
But yeah, it does just make me think like, maybe I'm a little bit too liberal with sprinkling
data left, right and centre.
Yeah.
I mean, and we've had this chat before, right?
About like people, you know, not wanting to share their data and being quite cautious,
which is fine.
It's a personal choice, but I think me and you are quite similar in that aspect where
we're happy.
Yeah.
I think we'll happily put our emails into like these things that come up, you know,
where it says, Oh, if you want to view this webpage, put your email in.
We're like, yeah, no problem.
Put my email in, you know, put your age in whatever.
It doesn't matter.
I think people would refer to us as happy fools.
Just fools, I think.
I mean, I was having a chat for the end conversation with a video series with, with the latest
ones, with a guy called William Reeve and he was talking about the fact that, you know,
he's quite happy for Google to have, have a lot of information on him because he quite
likes it when he's, when he's like away from home and he wants to know the quickest route
home.
And it's like how get me home in two clicks and he doesn't know how to put an address
in, you know, stuff like that.
Yeah.
Yeah, exactly.
Very, very good.
And also with targeted ads, if I'm honest, like a lot, I know a lot of people complain
about them, but you know, if I'm getting stuff thrown in my face on things that I generally
like and will click on and probably will end up buying at some point, or at least contemplating
buying or buying, I don't mind, you know, you draw that then random stuff just appearing
on your phone.
Like, you know, I dunno, you, you're probably playing into the hands of algorithms and all
these.
I think that they're all bullshit anyway, because as soon as I buy a pair of trainers,
it throws a whole load of trainers at me.
It's like, no, I just bought trainers.
I don't need more trainers.
Yeah.
Actually, that's not true.
You always need more trainers.
But anyway, let's get into the interview.
Uh, it is with Jameson Lopp.
He is, I'm going to get this right, he is a Cypher, Cypher punk CTO, and he's the co-founder
of CASA.
Uh, so, um, we'll hand over to Jameson.
Uh, he is going to tell us why this hype cycle in Bitcoin is markedly different from previous
ones.
Today I'm joined by Jameson Lopp.
Uh, Jameson, thank you for taking some time to join me on the podcast.
My pleasure.
Thanks for having me.
I know you're somewhere in the United States, uh, exactly where we don't know, which is
a story in itself, but, uh, given that it's only 10 past two here in the UK, good morning.
I hope it's not too early.
No, not at all.
We're, we're good.
I usually wake up around five o'clock in the morning anyway.
Fair enough.
Look, you were introduced to me, um, by mutual contact as, as being a kind of a cyber security
Lord in the Bitcoin space, which I think is a wonderful way of introducing someone.
Um, but you, you do run a business.
You've just closed a funding round.
So do you want, do you want to just kind of take, uh, a minute to, to explain what your
role and what your business actually does?
Sure.
I've been full time in the Bitcoin space since early 2015.
So I guess that's about six years now.
Uh, first half of that period, I was working for an enterprise security company called
BitGo, uh, really helping exchanges and other large companies manage their Bitcoin wallets
to try to make it less likely that they get hacked.
Uh, it's a big problem, especially when you're running a service that is constantly transacting
in Bitcoin.
Uh, about three years ago, I transitioned to found CASA, which uses some similar technology
with Bitcoin, essentially this, uh, ability to create a multi-signature wallets that require
multiple different keys to be used in order to actually spend the Bitcoin, which of course
makes it a lot harder to lose or have someone steal it from you.
And the main difference of what I've been doing for the past three years is that instead
of focusing on enterprise security, I've been focusing on individual security, uh, specifically
at the high net worth individual level, uh, is where we started out, uh, offering much
more bespoke white glove type of services for people who had, you know, millions of
dollars worth of Bitcoin that they wanted to self custody.
And then over the years we've been, uh, creating other tiers of service that are more affordable,
more scalable, easier for common people to get into because quite honestly, uh, the,
the features of Bitcoin that make it so valuable, it's a double edged sword, which also means
that it's very unforgiving in the sense that if you make a mistake, there's no one you
can go to that can undo your mistake.
So you have to put in your due diligence upfront if you really want to fully capture the value
of this system.
So um, look, forgive me for my naivety.
I am not a Bitcoin expert.
We've had a few, um, Bitcoin commentators and people who work in the industry on the
show over the years, but yeah, I, I, I have an interest in it, but I'm fairly, fairly,
uh, naive.
Um, you say they're about protecting people, individual security against their Bitcoin
being stolen.
I always imagined that Bitcoin was one of those currencies that was already pretty secure
by its very nature.
Well, you know, security is a really complicated topic because there's so many different facets
to it.
Bitcoin as a system, as a whole, as, as a network, as this, uh, distributed set of tens
of thousands of machines that are running all around the world to come to a consensus
about what the Bitcoin ledger is.
That is a very secure system simply because it's so highly distributed.
There is no single point of failure.
It is often referred to as anti-fragile in the sense that it's constantly getting attacked,
but these attacks just expose tiny little flaws that people then react to and make themselves
even more secure.
So the system as it's as a whole over the past 10 years has been getting stronger and
stronger from a variety of different perspectives.
At the individual level, uh, at the wallet and private key management level, security
is a whole other problem set.
And it is quite easy for someone who doesn't know what they're doing to get into Bitcoin
and do something ignorant that places their private keys at risk.
And those keys can get either lost or stolen, but you know, either way, the result is the
same catastrophic loss of all of your money.
And that is what we're trying to make it harder for people to shoot themselves in the foot.
I think this is a necessary requirement in order for Bitcoin to go mainstream.
People need to be confident that they can navigate this system without losing all their
money.
Hello.
Bitcoin has been back in the news recently, though the price has been soaring.
We've obviously had bubbles before with, with 2017.
What do you think?
Do you think what we're going through now is different?
And if it is, then why is it different?
It is different because this is not a retail fueled hype cycle, at least not yet.
I think eventually it will.
That is sort of the nature of the tech adoption life cycle and more specifically the Bitcoin
adoption life cycle, which we've seen four or five cycles happen over the past decade.
And each time it's different, but also the same.
The differences are that there's always different small catalysts or different new sets of players
coming in that will spark the hype cycle, often a new wave that will then eventually
hit mainstream media and trickle down to the point that your cab driver is recommending
you to invest in Bitcoin and all of these other things.
But where we are right now, and I track a number of different metrics and of course
I just sort of have the gut feeling based on who is talking to me and whether or not
I'm getting random messages from people I haven't heard from in many years.
But where we are right now seems to be more of an institutional driven part of the cycle,
which we haven't really seen before.
It's big money, but fewer number of players and entities.
So that's why you're seeing the price go up a fair amount, but it's a small number of
entities that are making larger purchases and they're not being extremely loud about
it at least until after they've fully entered their position, at which point of course they'll
be happy to speak about why the Bitcoin investment that they made is going to 10X or whatever.
But I think that it is only a matter of time until that trickles down.
Mainstream media has already started to pick up on it, but what I have not seen yet is
sort of the flood of masses that are talking about how they're going to get rich quick.
Like that's when you know the top of the bubble is in, it's probably going to correct and
then we'll be going through another market cycle.
But it might even be somewhat different this time around if we do get to that retail mania
phase and there is a big sell off.
The fact that now there's all of these billion dollar institutions in play may actually dampen
out that cycle because they may see that as a major buying opportunity.
Who knows, I try not to speculate too much on the exchange rate as I'm more of a technologist.
And those institutions that are getting involved, are they banking firms beginning to look at
this?
Is it just high net worth individuals with maybe asset management funds or people who
are these long term investments?
Because I would imagine if it's the kind of institutions who have not paid attention to
Bitcoin before, that could be a watershed moment in terms of it being taken more seriously
as a credible currency beyond the community it's existed into this point.
So I think that a number of institutions started paying attention during the last hype cycle
and they started doing basically several years of diligence into Bitcoin and now that diligence
has matured, it's starting to pay off to the point that there are people within these institutions
who no longer fear losing their reputation and credibility for mentioning, hey, maybe
we should think about having part of our portfolio or corporate treasury in Bitcoin.
And part of that is just due to the fact that Bitcoin has lasted so long.
But I think another major part that you can't leave out is just the macro economic environment
and the fact that we have seen levels of money printing that are just unheard of.
This is the type of thing that Bitcoiners like myself were warning people about many
years ago but were generally laughed off as, oh, that will never happen in the first world
countries type of thing.
But now it has happened and I think a lot of people in the finance space that worry
about stuff like that are trying to reevaluate their positions and think, well, what are
my options to hedge against the fact that the inflation seems to be out of control?
There's nothing I can do about it.
How do I protect my assets?
You talk there about the first world.
If we look at the everyday person on the street and I suppose if Bitcoin is going to get wider
adoption then it does come to people like me kind of going, all right, well, how could
I use this?
How could I use this on a practical day-to-day basis?
When we were prepping for this recording, you said that it's harder to convince first
world citizens and it's much easier to convince third world citizens because to them it's
not a theoretical.
Would you just explain that because I think it's a point worth making.
Right.
So, I've been kind of evangelizing the benefits of Bitcoin for many years and for the majority
of that time when I was talking to my own peer group, generally their eyes would glaze
over because you can talk all about Bitcoin and why it's cool but eventually you then
have to talk about money as a concept and most people don't even really think about
money as a concept.
It's just something that they are presented with and they use it and that's it.
They don't worry about the underlying fundamentals, the mechanics of how money works.
So, if you are in a first world country that has a strong financial system, if you are
well-banked, you have access to all types of different financial infrastructure, then
you probably don't really care about the fundamentals of money because it works pretty well for
you.
So, I think when it comes to technology in general, simply creating technology and then
trying to evangelize it is generally a lost cause.
You might get some early adopter and nerdy types but if you really want mass adoption
of a technology, it needs to be solving some fundamental pain point for people.
This is why I think that the citizens of third world countries that have experienced hyperinflation,
they don't need to be evangelized the benefits of something like Bitcoin because they've
lived through it.
I would say one of the biggest Bitcoin evangelists actually, Wences Cesaras, he talks about how
the reason that he got into Bitcoin was because his family lost their entire wealth three
times over the period that he was growing up in Argentina, I believe.
It wasn't a theoretical to him.
He didn't need to think about, oh, this edge case might happen.
It was rather, I know this is going to happen in certain situations, so I might as well
protect myself from that risk.
We are seeing, like we said, the first world major financial institutions and large players
get into the space right now.
There has been some adoption in third world countries, though I think it's tricky just
because they tend to lack a lot of the technical infrastructure that you may need in order
to use these technologies.
Of course, it's always a network effect type of issue.
There's footholds that have been set.
They're still pretty tiny in most of the non-first world countries, but I would not at all be
surprised if those footholds end up growing a lot faster than what we've seen in first
world countries.
What is likely to make those footholds grow faster in first world countries?
Where does it switch from being something where it's due to diligence and big players
quietly putting money in, and it actually being something that the everyday person on
the street is going to notice and it's going to play a part in their lives?
There's the value proposition question.
We've seen this massive money printing effort happen.
The question though becomes when does the man on the street start to feel the effects
of that?
It may be starting to happen now, but the problem is that the actual rate of money creation
is not immediately represented in things like the consumer price index.
It's really not until people start to realize that the value of their money is no longer
purchasing the same amount of goods and services that they'll start to feel the pain and the
value proposition will no longer be theoretical.
Outside of that, it's also just a sort of network of reputation effect.
For many years, it was just the crazy libertarian technologists like myself who were espousing
the values of Bitcoin and most people easily brushed us off because we were nobodies.
There was no reason to believe that these farcical edge case ideas might ever come true.
Now, you have not one, not two, but many well-respected billionaires who are starting to tout the
value of Bitcoin.
I guess the biggest one, just in the past week or two, Elon Musk starts talking about
how much he likes Bitcoin.
When the quote unquote richest man in the world says that he wants Bitcoin, there's
no way around that.
People have to pay attention to that.
Look, I think it's an interesting, it sounds like we're at a tipping point, probably a
brilliant time for you to have been raising money and closing or closing a financial round.
I hope that goes well and fuels the business over the next year or so at least, depending
on how quickly you go through that and how quickly you grow.
Thanks for taking some time and talking through some of these issues and have a lovely afternoon.
Thanks for having me.
Right.
One of my favourite lines in the interview is a catastrophic loss of all your money.
Definitely want to avoid that.
It's not one of the most insightful moments.
He makes some really, really good points the whole way through, but it did make me kind
of listening back to it go, yeah, that is something we definitely want to avoid.
People being a little bit naive and suffering a catastrophic loss of all your money.
A lot of loss of your money, right?
Is that what he said?
Yeah.
Yeah.
Well, I mean, you just don't want to lose all of it, do you?
No.
Because you've been naive, but yeah, it was interesting that that is something that they
still need to educate people around where this is concerned.
Now look, getting into the serious stuff, Bitcoin's been all over the press.
Elon Musk has gone and bought a billion.
There's plenty of stories of serious investments being made, but Jameson describes why it's
different.
It's different because it's not retail-fuelled.
It's at an institutional level.
Institutions are driving it.
It's big money, but fewer entities.
They're not necessarily being loud about it until they've made that investment anyway.
There is this element that I think is really interesting that people in those large legacy
institutions or established institutions are no longer scared to talk about it for fear
of loss of reputation.
Yeah.
I think because maybe it's becoming a bit more normalized and then you're not following
some sort of cult.
I think whereas 10 years ago, 12 years ago, who was a big Elon Musk individual 10, 12
years ago?
Bill Gates?
Steve Jobs?
Yeah, Steve Jobs.
If someone like him came out and said, oh, all the revenue that I've generated from selling
you these iPhones and iPods, I'm going to now pump a load of money and invest in cryptocurrency
and Bitcoin in particular.
Everyone would have gone, oh, this guy's nuts, but having said that, I think it's a bit more
normalized now and when people like Elon Musk say things, not only does it get the press
coverage and it will get the positive press coverage, don't get me wrong, you know.
Well, sometimes.
Yeah.
I mean, yeah, it depends.
It's a bit of a divisive guarantee at times.
Compare that to him and a very famous YouTuber.
All these kind of YouTuber type people have said how much they've got invested in Bitcoin
and kind of the money they've made and all these sorts of things.
But if someone like him says it, it kind of normalizes it and the average person then
starts to, someone like me, starts to then read into it and go, actually, do you know
why?
He's probably got a point here.
But then again, it opens it up to a lot more security issues and I guess threats from people
because suddenly there's this huge surge of, you know, your average person that maybe doesn't
really know is naive, like me, and you know, you could just open yourself up to a whole
range of security threats, which Jameson could, you know.
Picking up on your point, though, Jameson really, I think, eloquently articulates why
we don't need evangelizing this time around, perhaps.
You know, he talks about the fact that in the third world, countries where hyperinflation
is part of the norm, you know, that skepticism about jumping onto a new platform like this
isn't there because they've experienced, you know, real catastrophe around monetary systems.
It's not theoretical for them.
They don't need Elon Musk to evangelize and tell everyone that it's wonderful and you
should put your money there because, you know, in the same way that those institutions are
reevaluating their positions to protect their assets, the macroeconomic climate now means
that countries are printing lots of money and the West is beginning to come into line
with the economic south of the world and maybe we are going, Christ, what happens if there's
a run on an economy, you know?
What happens if the assets that we traditionally hold off of our finances suddenly destabilize?
Exactly.
And then it gives everyone a bit of a safety net, doesn't it really?
Where I think in the past, you know, the perception has always been, oh, this is a bit of a punt
and, you know, you kind of put your money in there and over X amount of years, you know,
you put, for example, you know, put in a few thousand and in X amount of years, you might
have a few hundred thousand or whatever or tens of thousands, right?
But I think now it's actually becoming, I think it has, to be fair, not becoming, but
I think it has come to a level where people are now believing this as a real financial
product and saying, right, you know, this is for real, this is serious, you know, not
only can this generate a sizable amount of revenue for the average person, should they
choose to invest in it or if they have invested in it, but also this is a real good way to
preserve your own kind of funds, right?
It's funny, isn't it?
Because I don't really want to contribute to the hype cycle, but I was having a conversation
with a colleague last night who was saying, this is still pretty early doors, like Bitcoin
year on year has produced like 20-fold return on investment.
Not necessarily, you can't say that it's definitely going to do that, but that's what it's done
to date.
And you kind of sit there and go, hmm, would it be sensible not to put all of my savings
into Bitcoin, but would it be sensible to go, right, here's a thousand pounds, just
going to put a thousand aside a year maybe and just forget about it and have it there
as a rainy day.
And if everything else suddenly screws up, you've got at least a bit in the same way
that the large institutions are beginning to reevaluate their position, should an individual
go, maybe I don't want all of my money in a FICO kind of, in my Barclays bank account.
I just want to put a little bit there just in case, not so much that it's like there's
all of my life savings if it's suddenly, there's a soft point in the market and you lose all
your money, but something that you could, a few hundred or a thousand or whatever you
can afford, but a chunk that you can just go, well, there we go, there is for a rainy
day and let's just have it as a safety net.
Yeah, and I think that's the best way for people to then also gain a bit of confidence,
I guess, in using it.
You know, obviously we can't sit here and give any kind of financial advice, but we
need to put that in a little disclaimer, but-
Oh, absolutely not.
No, I am shits with money.
We both are.
I think we've touched upon our kind of financial decisions of the past, but I think now it's
a lot about kind of, I 100% agree with you, where it's put a little bit away, see what
you can read the rewards.
It's not going to be for everyone and will it become uniform one day?
Am I part of those people?
I don't think so.
I don't think we will ever be a 100% kind of crypto society, at least not in my lifetime,
right?
Who knows what's to kind of happen in the future, but I think there is a lot of stuff
around, you know, kind of the ease, the accessibility, but then obviously there's a huge clout on
security and aspect and who's buying it and kind of, you know, what you're buying and
what you can use it for and these sorts of things and yeah, I don't know.
I think-
Yeah, when it comes to security, just on that note, I mean, the safest way to store your
Bitcoin, Kassa, you know, it's good to be able to talk up our guest, but you know, Kassa
has been featured in the New York Times, Forbes, TechCrunch, Microsoft, so what Jameson is
building is something that is a necessary solution because how you keep this stuff secure
is quite difficult.
It's massive.
And also there's a million in one of these people, I don't know if you've ever seen it
on like social media where, you know, this is Bitcoin traders and they say, oh, you know,
put some in my wallet and do this and all this sort of stuff, right?
And I've replied back to a few of those people just to kind of find out what their kind of
situation is.
And it's like, oh yeah, you know, we're a Bitcoin trader and we can do this.
It makes you think of an email saying, I'm a Prince in Africa and-
Yeah, yeah, yeah, I need $500 or something to get me out of, you know, my kidnapped situation
or whatever, but you know, there are so many people out there because it's not regulated,
you know, as kind of proper investments are and that sort of thing.
I think it's, you know, I think we're way off for it to be absolute kind of, you know,
a household thing and kind of, you know, the average normal Joe blogs on the street to
endorse it.
But I think we're getting there because it's definitely-
We're moving in a different direction.
I think it's definitely moved away from a cult weird thing because I remember when I
was at university, it was about 12 years ago, there was a guy in my first year that, you
know, bought loads of Bitcoin and he's been kind of, you know, and I remember him telling
us, we were like, this guy's a weirdo.
He's like, you know, he's got no mates or whatever and you don't know what he does in
Bitcoin.
And lo and behold, he's more well off than I am at the moment.
I'll give him that, but yeah, you know, should I have listened back back in the day probably,
but you know, you learn.
Hindsight is a wonderful thing, mate.
It is, man.
It is.
But yeah, it's moving in the right direction and we need people like Jameson to kind of
come help to spread the good message, but also show the quality and, you know, the vulnerability.
Someone who's clued up, who can, to be fair, clued up, but can put this in layman's terms
that you or I can understand.
Absolutely.