22:00

pitch deck and you look at ledger today, it's

22:02

very similar. We

22:05

didn't really pivot like we did what we say

22:07

we would do, except that we didn't realize at

22:09

the time that the level of ambition had to

22:11

be 10x what it was

22:13

at the time. At the time, it was 2014, so

22:15

it was very hard to predict the

22:17

future like this. But the vision was

22:19

great from the beginning, and we

22:21

had to double down on

22:23

resilience and execution. Resilience because all the cycles

22:26

and going up and down, and sometimes the

22:28

market is in your favor, sometimes putting pressure

22:30

on your top line, and so it makes

22:32

it harder to invest into the business. But

22:35

to be resilient means that you need to

22:38

take that into consideration and perfect

22:40

execution means, what does

22:42

it mean to build like a

22:44

real hardware company? I think this

22:46

last phase and the fact that

22:48

we just came out with two

22:50

new products, Flex and Stacks, and

22:52

somewhat of a revolution for the

22:54

hardware wallet category, is because we've

22:56

been extremely focused on our execution

22:58

and building the right partnerships that

23:01

allows us now to be a

23:03

real industrial company versus a startup.

23:05

In consumer electronic, it's very difficult

23:07

to be a real industrial company.

23:09

Yeah, it is. It's physical supply

23:11

chains, right? Correct. Partners.

23:13

Right now, we have

23:15

a full documentary that is online to explain how

23:17

we did Stacks, and why because

23:19

we did Stacks, now we can do Flex, and

23:21

we can iterate so much faster on the future

23:23

of hardware, because in the world, we have the

23:26

best possible partners. When you work with Foxconn,

23:28

when you work with E-ink, and the kind

23:30

of companies that we work with that are

23:33

the royalty in this consumer electronic world and

23:35

hardware. It doesn't happen just

23:37

like that. It happens because you are

23:39

continuously building on your tools and on

23:41

your partnerships, and you increase volume over

23:43

time, and so finally, you become a

23:45

worthy partners for these guys. Foxconn

23:48

are the guys building the iPhone, and

23:50

so the fact that they pay any

23:52

kind of interest to Ledger is in

23:54

itself like fantastic news, not just for

23:56

Ledger, but for the industry to say

23:58

that secure hardware. and securing

24:00

crypto is becoming a real category. And

24:02

the fact that Tony Fadell, who is

24:04

the inventor of the iPod, people sometimes

24:06

look at this news as, oh,

24:09

sure, of course. But no, very difficult. Tony

24:11

doesn't work with many companies. And he's

24:13

one of the best when he comes to

24:15

designing consumer electronic products. And the fact that

24:18

he paid attention to ledger is something

24:20

also worse than anything. And all of these

24:22

things are going combined in the sense that

24:24

because Tony is here, then Foxconn is

24:26

even more interested to work with ledger. Foxconn

24:29

famously is the company that built and

24:31

still does a lot of building of

24:33

iPhones. Yeah, exactly. Speaking of which, the

24:35

ledger stacks is probably the coolest product

24:37

you have right now, just because I

24:39

have on my iPhone, I have my

24:42

magnetic wallet on the back. And the

24:44

stacks is designed, it's also magnetic, and

24:46

it's designed to go along with this

24:48

type of thing, because a lot of

24:50

people just carry one product together. Is

24:53

Apple, now that they're opening up

24:55

that NFC opportunity for non-Apple pay

24:58

stablecoins, do you think that now

25:01

people can be actually using their ledger

25:03

and NFC type of transactions at point

25:05

of sale places? Not now, but

25:07

it's definitely something that we are cooking for

25:09

the future. I mean, the idea right now

25:11

is ledger was built on the sort of

25:13

buy and hold type of use case, right?

25:16

And staying to your vision is very important. I understand

25:18

that, yeah. It was not the vision, it was just

25:20

like the use case. The vision

25:23

was always to connect your ledger to your everyday

25:25

life of crypto. That was the vision, except that

25:27

at the time in 2016, it

25:30

was Bitcoin only and buy and hold

25:32

only. That was the only use case.

25:35

And payments with crypto was not there

25:37

yet completely. And so now we are

25:39

building ledger and ledgers as a hardware

25:41

product as first a platform on top

25:43

of which you can build so different

25:46

from before, like now sort of anyone

25:48

can build an app that runs on

25:50

ledger and ledger live and connects to

25:52

ledger. And so therefore what we're trying

25:54

to do is to enhance every use

25:56

cases on top of ledger because we

25:59

are moving. Moving into the time where

26:02

being built on top of blockchains are this

26:04

applicative layer where now you need your private

26:06

keys to interact with DeFi

26:09

here, ArtNFT there, and various

26:11

cases, but payment is definitely

26:13

one of them. Adding

26:15

NFC into a product is opening the

26:18

door to the fact that you can

26:20

hopefully soon do peer-to-peer payments

26:22

with your ledger because that is

26:24

the... Ah, that's the

26:26

holy grail. Well, it's not now.

26:28

For me at least, transacting with people without

26:31

having to use a phone right there, there's

26:33

no other way other than cash. Like I

26:35

talked about with a ledger, you could potentially

26:37

just go from ledger to ledger. Yeah,

26:39

that's the idea. So look, it's the vision

26:42

and it's definitely in the roadmap, but it's

26:44

not what your stacks and flicks can do

26:46

today just to be clear. Of

26:48

course. There are many things that

26:50

we can do with the NFC in a

26:52

touch where typically you can use PES keys

26:54

now, you can protect your PES keys with

26:57

your ledger, which is also a move that

26:59

ledger is doing outside the realm of pure

27:01

cryptocurrencies and meaning that... You've replaced the YubiKey.

27:03

Correct. And ledger is a real

27:05

security device and we're here to secure your

27:08

online secrets. If they're cryptocurrency, of course, this

27:10

is where we come from, but everything else.

27:12

And we start with PES key and we

27:14

have many announcements going in the near future

27:16

actually. In the next few weeks, we'll announce

27:18

a few things along those lines.

27:21

Designing this new hardware platform also allows

27:23

us to cater for new use cases

27:25

in the future and payment is one

27:27

of them. With

27:29

a physical hardware wallet device, you probably

27:32

have a lot of hackers

27:34

and people that are trying every single day.

27:36

But I know you guys almost maintain this

27:38

whole bug bounty program that's very public and

27:40

transparent. How did you run that? How does

27:43

that make you feel that this is kind

27:45

of like a big part of your business?

27:47

Other companies have compliance and this is what

27:49

you have to deal with. It's

27:51

the name of the game, right? If you run a security

27:53

company, you have to invest in

27:55

security. And this is something

27:58

that sometimes is misunderstood by... people

28:00

and by some of our customers. So

28:03

we have discussions sometimes in terms of like, you know,

28:05

what is ledger? Is it a, it did the nano

28:07

S that we designed in 2016, and

28:09

the nano S supposed to last forever. And some

28:11

customers have this in mind. They say, no, no,

28:13

but you design a product, it's buy and hold,

28:15

and it's supposed to work forever, which is a

28:17

misconception in terms of what consumer electronic is. You

28:20

can't have a product that works forever. That's

28:22

not possible. And also you cannot

28:24

have a product that is

28:26

hardware operating system and software that

28:28

you don't upgrade forever. Like, you

28:31

know, that's, that's also in terms

28:33

of security. Like you have to

28:35

upgrade from time to time because,

28:37

you know, security doesn't stand still

28:39

and attackers keep on attacking, we

28:41

keep on defending. And so you

28:43

upgrade the firmware or the operating

28:45

system from time to time

28:47

in order to, you know, make the product

28:49

ever more secure and ever more

28:52

resilient to foreign attacks. This

28:54

is why we invest so much money and, you know, sometimes

28:57

misconception comes from our enterprise customers. You know,

28:59

people say, well, you know, because we also

29:01

have an enterprise branch of our business. And

29:03

so people say, you know, why do I

29:06

need to, you know, pay ledger much? Like,

29:08

you know, what you've developed now is good

29:10

for now and is good for tomorrow. And

29:13

actually, again, it's a misconception. Like, you know, the

29:15

reason why ledger is so secure is because we

29:17

keep on investing in our security. And

29:19

so if I was to sell my products for

29:22

$1, for example, we

29:24

wouldn't be able to be a security company

29:26

because being a security company comes with a

29:28

big investment, mostly in people, actually.

29:30

The reason, you know, that bounty program goes through

29:33

a team at Ledger that is a hacker's

29:35

team called the Dungeon. And it is a

29:37

team. That's so cool. Yeah. On our YouTube

29:39

channel, you can see what this team is

29:41

doing. Right? The Dungeon is a... So

29:44

make a movie about that. No, we did. Like you

29:46

go on YouTube. Oh yeah. Ledger channel.

29:49

And you go right now. There are a few episodes about

29:51

the Dungeon and how we add that. You guys have a

29:53

lot of subscribers. We do? Okay,

29:56

good. Yeah. You have

29:58

like 80,000 subscribers on your... on

30:00

your YouTube to monetize that. That's worth something in

30:02

and of itself. Cool. So

30:05

it's called Enter the Dungeon, okay? Oh,

30:07

this is so cool. Enter the Dungeon. All my

30:09

listeners are gonna check this out. I'm

30:11

gonna watch this later. You have some really cool videos. Production

30:14

quality is nice. Production quality is

30:16

cool. And we do a lot of things in

30:18

terms of, this is part of the education that

30:21

we do for our customers so they understand what's

30:23

going on, what is security, why does the ledger

30:25

cost, what

30:28

it costs? Why not, again, $10? Or

30:30

why is it more expensive than a UB key and

30:33

those kind of things? And so we try

30:35

to explain and educate because I think users

30:37

are going through a shift where they were

30:39

using their phone and they were in the

30:41

yes, yes, yes world where everything is controlled

30:43

by Apple or Google. And basically you delegate

30:45

your security to Apple and Google, where

30:48

suddenly you're in charge of your security and you use

30:50

tools that you control. And this is what's happening with

30:52

ledger. And so there is a lot

30:54

of education that needs to happen for users

30:56

to... It's important. It's

30:59

important what you're saying because on one side, people

31:02

are open source, blah, blah, blah, the

31:04

whole world. But we need brand integrity

31:07

and brand identity in the

31:09

consumer product world because your brand integrity

31:11

and identity and your customers that rely

31:13

on that will make sure that your

31:16

ship is steered in a way that

31:18

you... It's like Bitcoin. If someone could

31:20

double spend Bitcoin, the whole integrity of

31:23

Bitcoin, it fails. If a miner

31:25

comes out and just starts doing 51% to attack

31:28

because he got more of the hashing power then

31:30

the integrity of Bitcoin at that

31:32

point as an experiment would be

31:34

a failure. And so you guys

31:37

have to maintain that forward growth at the

31:39

same time. I still have in my drawer

31:41

here, one of your first ledger

31:43

wallets. I just keep a collection of my own.

31:46

When it's my friend's birthday or holidays or

31:48

whatever, we give hardware wallets to our

31:50

friends as gifts. And we sometimes load

31:52

it up with a little bit of

31:54

crypto. The hardware wallet itself, people

31:57

need to physically touch and

31:59

feel crypto. to know it's real.

32:01

And I think like hardware wallets over

32:03

the last decade, especially Ledger, you guys

32:05

did a very important job of being

32:07

like that physical manifestation of crypto that

32:09

people, in the early part of Bitcoin,

32:11

that people really needed to have. Yeah,

32:14

I think that's true. But also, Ledger is

32:16

the only way that you can actually really

32:18

secure your crypto if you own your private

32:20

keys. I mean, it's not just a gimmick

32:22

where suddenly you have something in your hands

32:24

and that there's a physical manifestation of your

32:27

Bitcoin or crypto like you just described, but

32:29

it's also if you have your private keys,

32:31

that's the only way to

32:33

secure them because to leave them on your

32:35

phone or your computer is a terrible idea.

32:37

Like these devices have been designed for

32:40

the security of cryptographic private keys or

32:43

security of any secrets for that matter.

32:45

So you know that when you use,

32:47

for example, like an encrypted chat app,

32:49

it could be encrypted. And depending on

32:51

which app you use, most

32:54

of the time it's actually not really or badly. But

32:58

what users don't know most of the time is

33:00

if I put a bug on your phone, everything

33:02

you type I can see in clear. And

33:05

sometimes if you're a really important

33:07

person, if I got your phone number, and

33:09

if I spend like a decent amount of money, I can

33:11

sort of hack into your phone and see everything that you

33:14

do. So the public needs to understand

33:16

that if you're a person of interest, you're

33:18

being hacked for sure. And even if you're

33:20

not a person of interest, it's very easy

33:22

and it will be even easier for hackers

33:24

just to drop malware on your phones or

33:26

your computer and wash out everything that is

33:28

on your phone and computer that is of

33:30

interest to them. And of

33:32

course your cryptocurrency private keys will

33:35

be number one. It's actually happening right now.

33:37

There've been a few attacks published last week.

33:39

And I think the week before where there

33:41

are malwares that are being put into your

33:43

Chrome that just extract private keys from your,

33:45

from every software wallet that you're gonna run

33:47

on your computer. So, you know, if you

33:49

own, if you have private keys and

33:51

you want to own them, you have no other

33:53

way than to have some form of secure hardware

33:55

to secure them. And the best way to do

33:58

it is with Ledger. the

36:00

link and we show how easy it is to

36:02

extract from a software, what had the seed, if

36:04

it runs on your computer or on your phone.

36:08

Are you following all the advancements in AI also?

36:10

Cause I was just thinking about this too, that

36:12

one of the biggest problems that I bring it

36:14

up on a lot of shows, cause I'm trying

36:16

to personally solve it myself is like proof of

36:18

human. You know, we're talking right

36:20

now at some point down the road, like

36:23

AI is going to get so good that

36:25

how do I verify that I'm even talking

36:27

to you? The ledger CEO, it could be

36:29

like a video live stream AI created. So

36:31

like maybe ledger devices could be somehow people

36:34

prove that they're actually who they say they

36:36

are. Yeah, no, exactly. So

36:38

one of the big initiatives that's currently cooking

36:40

at ledger is, you know, proof of humanity

36:42

or proof of something, right? Like, you know,

36:44

with cryptography and with cryptocurrency, you can actually

36:47

prove that you own something that is actually

36:49

sort of what Bitcoin is. You have a

36:51

private key, you don't have the Bitcoin, you

36:53

have a private key that where you can

36:55

prove pretty graphically that you own like a

36:57

Bitcoin that is on the public blockchain and

36:59

you can move it from your address to

37:02

another address, right? And so to prove something

37:04

is, you know, what you can do with

37:06

your ledger. And so, you know, you, you

37:08

can think sort of identity on your ledger

37:10

and identity being like a big umbrella with

37:12

like a various things that are under that.

37:15

I'm not just talking about like your passport,

37:17

but I'm talking about like various forms of

37:19

proving your identity. Like you can prove that

37:21

you own your Twitter account or, you know,

37:23

those type of things. Yeah. And

37:25

so that's one of the big developments and big push that we're going

37:27

to do in 25 to have

37:29

proof of something, proof of humanity, proof

37:32

of identity, proof of all these things

37:34

to prove that you're a human being.

37:36

And basically we think that crypto and

37:39

by crypto, I mean, cryptography, not necessarily

37:41

cryptocurrency is probably the yin to the

37:43

yang that is AI. So AI is

37:46

abundance, digital abundance and crypto is digital

37:48

scarcity. And I think if you want

37:50

a world where you can decipher like,

37:52

you know, who is who and who's

37:55

AI versus who is your German, crypto

37:57

graph is going to be very important.

38:00

your ledger is going to be very important to prove who you are.

38:03

Do you agree with me that it's like a real issue,

38:05

kind of what I'm thinking of down the road? I'm

38:08

super in agreement. And I'm saying, not only I'm in

38:10

agreement, but we're already thinking about the counts of measures

38:12

and where you're going to be able to do that.

38:14

If we think about it from a practical point of

38:16

view, how do you still solve it? Because at the

38:19

end of the day, there's still going to be software

38:21

middlemen, right? And

38:23

I'm just thinking this through. If ledger, if

38:25

I'm using my ledger device on one side

38:27

to sign a transaction, it's very hard for

38:30

AI to mimic that. And then it's getting

38:32

publicly stamped to a blockchain. Again, I don't

38:34

think AI can mimic that on the person

38:36

on the other side. You don't really need any

38:38

software to verify that because it's getting sent to

38:40

all these nodes. So it'd be very

38:42

hard for AI. Is my thinking accurate

38:45

there? Is that possible? Yeah, no,

38:47

your thinking is accurate. First of all, if

38:49

you validate a transaction or a

38:51

proof of something with a ledger, you need

38:53

to have a ledger. So first of all,

38:55

that removes spam right away, or almost all

38:57

spam, because suddenly, to spam, you

39:00

need to have it like sort of n

39:02

ledgers with n seeds. And so spamming becomes

39:04

extremely expensive. Spam happens today

39:07

because it's inexpensive. If

39:09

you need to spend $89 to create

39:11

a new seed and to start spamming

39:13

with sort of one seed and one

39:16

address, and you need like a million

39:18

sort of boats that are going to spam, that's

39:20

a million times 89. The

39:22

spamming starts to be too expensive. So

39:24

I think spam is removed if you

39:26

can prove something with a ledger. Now,

39:29

the question is, can one AI control a

39:31

ledger potentially? But if you add

39:33

things like proof of identity on a

39:35

ledger and you bring your identity as

39:38

a token, the token is a way

39:40

to sort of decrypt your identity online,

39:42

then it becomes much harder for an

39:44

AI to, an AI wouldn't

39:46

be able to prove an identity, basically. I

39:48

really think that this is a big part of the future. And

39:50

at the same time, if they're using the

39:53

hardware wallet, and we talk about that, it's

39:55

not like a long term solution. How does

39:57

someone and what are the best practices that

39:59

you you would say to back

40:01

up your keys if like you did, if your

40:03

ledger did get stolen or like you moved houses

40:05

and you forgot to pack it or something like

40:07

that. Well, also we have

40:09

this service that we launched last year that's

40:11

called Ledger Recovery, which at the time created

40:13

some kind of, well, the

40:17

naysayers and people that thought that it was not the

40:19

right way of doing it. But

40:22

actually I'm happy to report that it works really well. Ah,

40:25

this is so cool. Yeah, yes, I remember

40:27

you launched this. And so

40:29

Ledger Recovery, there was a lot of thought

40:31

around like, oh my God, this creates another

40:33

vector of attack in the device, people will

40:35

be able to steal the money, et cetera,

40:38

so I'm happy to report that it's

40:40

been six months since we launched or maybe

40:42

more. There's no hack to

40:45

be reported. Like it does exactly what it's

40:47

supposed to do. The code of Ledger Recovery

40:49

is completely open source now. People can check

40:52

sort of what's going on and that is

40:54

doing what it's supposed to do and nothing

40:56

else. And it's something that you said about

40:58

security. Like at some point you have a

41:00

brand equity, right? Like if you take products

41:03

to the market and the next day you're

41:05

being hacked, then of course you're not doing

41:07

a very good job, but Ledger and Ledger

41:09

Live have not been hacked since the inception

41:11

of Ledger. So apparently we're doing a good

41:13

job at security. And similarly what

41:15

we say with Ledger Recovery in terms of

41:18

it's secure, don't worry about it, et cetera,

41:21

all of this also is working sort of

41:23

as planned and you have thousands of customers

41:25

now that are using Ledger Recovery. I'm

41:28

using Ledger Recovery and it's a great way to

41:30

make sure that your seed is secure because

41:33

one of the big problems when you're onboard

41:35

crypto and especially for newcomers, I'm not really

41:37

talking about like the guys that have been

41:39

here from the beginning. And even there, like

41:41

you hear from time to time original gangsters

41:43

that are running on their own sort of

41:45

security scheme that are getting hacked like sort

41:47

of every day and lose fortune. Dude, it's

41:49

people that have been around a long time

41:51

that we get the most complacent. We're the

41:54

easiest to hack sometimes. Yeah, exactly.

41:56

I mean, you read those stories the same

41:58

way that I do. So I would even.

42:00

to these people, think again and what you

42:02

think you know probably is, think again. Security

42:05

is an always moving target

42:07

and so you can probably do better

42:09

than what you have now. But anyways,

42:11

for the newcomers, they're not as savvy

42:13

and people that are going

42:15

to join crypto in the next few years are

42:18

people that are using the iPhone and just want

42:20

ease of use. And so we needed to solve

42:23

two problems going forward for new users, which

42:25

is how do you onboard your self-cosody and Stux

42:27

and Flex are an attempt to make that much

42:29

easier. And what do you do with the 24

42:31

words and you know, to put it on a

42:34

piece of paper on a plate of metal

42:36

and then you know put it somewhere is not

42:39

very elegant for the future. And we think

42:41

ledger recovery is a good way of doing

42:43

this. We have many things that are coming

42:45

to make that even easier and more user-friendly in

42:47

25. So you know, we

42:50

will double down on all these things, always making

42:52

it easier to use and you know solve that

42:55

recovery seed issue for a

42:58

larger number. So these are really the two things

43:00

that are important to us. Thank

43:02

you so much. Thank you so much for coming on the show today.

43:04

I really appreciate it. Thank you. It was

43:06

great. I love the Olympic discussion to start with. So

43:08

thank you for that. It's genuinely curious.

43:10

The best part about doing this show is I

43:12

get to talk to people every day who are

43:14

in some of the coolest places in the world.

43:16

I had someone on the show the other day

43:18

who was building his father's lighthouse in like northern

43:20

Canada. And then I talked to you and I

43:22

get to talk to some of those brilliant people

43:24

and then record it and the listeners and the

43:26

listeners just love it. I meet people every single

43:29

day. If I do nothing else successful in my

43:31

life but this show, I'm happy. That's

43:33

great. And how is the show doing by the way? Like do you see with

43:37

the market, like do you see stats evolving? Like

43:39

what are the big takes that you

43:42

have? Yeah, the show has been growing since

43:44

we started day one and we've always kind

43:46

of been on same thing like Ledger. It's

43:48

been kind of on our own path, own

43:50

vision. Listeners and the followers become kind of

43:52

like loyal fans and really love everyone. I

43:54

meet a lot of them in person at

43:56

Bitcoin and crypto meetups all the time. I've

43:59

just been full. I'm writing my book right

44:01

now as I'm consulting. Hopefully within the next year,

44:03

we'll have something great for people to read. OK,

44:05

well, I'm looking forward to it. Please let me

44:07

know when it's ready so I can buy one.

44:09

I'm sending you a signed copy. I'll

44:11

see you later. Thank you so much, my friend. Thanks,

44:13

Shadi. Ciao. The

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