{ "episodeId": "SLP129", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "pascal_gauthier": { "name": "Pascal Gauthier", "role": "guest", "tag": "PASCAL" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.09, "text": "Hi and welcome to the Stephan Livera podcast focused on Bitcoin and Austrian economics. Today I've got an interview with the CEO of Ledger, Pascal Gauthier. But first, a shout out for the sponsors. So firstly, check out Kraken, one of the world's leading Bitcoin exchanges. They're renowned for having a comprehensive security approach with a world-class team. You can buy and sell Bitcoin in just a few clicks. 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So today my interview is with Pascal Gauth So for this interview, we talk about some of his background in Bitcoin, a bit of an overview on Ledger products, and a few other ideas such as privacy while using a Ledger hardware wallet, multi-signature, the question of Bitcoin only, and future directions with Ledger. So here is the interview. Pascal, welcome to the Stephan Livera podcast. Hey, thank you for having me. So, yeah, look, Pascal, I'm keen to talk with you about, what you're doing with Ledger and also just your story and how you got into all this with Bitcoin. Let's just start with a little bit about how you first got into all this." }, { "speaker": "pascal_gauthier", "time": "04:03", "start": 243.48, "text": "it's a lo- it's a long story. I got into all this, because, I did the first part of my career in online advertising, and it was great, but, I mean, one way to put it is, you're not really curing cancer, I mean, it's, it's online advertising. And, and I had a great success with company Cryptio that we listed at the Nasdaq, and To take my career and where to invest, and, I was, presented Bitcoin by Vences Césarès from, from Zapo, and I don't, I thought he was an amazing speaker, and I thought that everything he said makes, made sense, and so I decided, mid fourteen to invest time and money in the space, and I did several things, building my company called Kaiko that is run today by Armsouguirand, which is a market data company, invest in Ledger, I was actually the first investor in Ledger, to-- because security seemed important, and various other things that I did at the time, but this is, this is how I got in." }, { "speaker": "stephan", "time": "05:08", "start": 307.82, "text": "Awesome. And so then, what was it about Ledger that appealed to you and like the idea of investing in Ledger? Was it just a demand for hardware wallets, the security, the need for security in the space?" }, { "speaker": "pascal_gauthier", "time": "05:19", "start": 319.03, "text": "Oh no, because at the time, like, no, I mean, hardware wallet was, merely a concept, and, And people were surprised how quickly I invested into, into Ledger. Actually, I'm, the, the little story is that I'm the investor that sort of led the seed round, because I had like absolute faith into, what Eric and Nicola and the team presented at the time. But it was mainly because, of, you know, first of all, betting in the space, so that was my, that was my mission at the time, and so therefore I needed to find like a few companies, and security seemed the most important thing. I mean, Gox incident, and so, you know, security and data seemed to me like the two, missing pieces. The endpoint security seemed to be critically the missing piece of, of the ecosystem. And what Eric and Nicola presented is something that, what is what we do today, but it's, using the chip and pin technology to actually secure secrets, which is a French invention, and this is why chip and pin, that technology has been designed, like the hardware security has been designed, is to protect secrets. And so to me It seemed like it was just a really good idea to apply that technology to protecting, Bitcoin secrets and private keys. And so it was really a no-brainer, the team was great, the technology made sense. It was a French, technology, so, you know, when you invest in a company, you try, you try to figure out whether they have an unfair advantage, which seemed to be the case, and so all of this for me was a, was a no-brainer at the time. For a few years after, it was a," }, { "speaker": "pascal_gauthier", "time": "06:54", "start": 414.01, "text": "it was The market was just so low, and so there was always a question of like, is a hardware wallet going to become a thing? but really two thousand and seventeen, where everything picked up, I think, you know, we, we along Trezor and all the other guys in the space, we sort of created a new, consumer electronic category, if you like, and that's very rare, and that's probably here to stay, actually." }, { "speaker": "stephan", "time": "07:19", "start": 438.76, "text": "Yeah, totally agree. I think, the, this whole consumer category, if you will, of hardware wallets was very much started by companies such as Trezor and by Ledger, and b-because of that, I think most people when they think of Bitcoin hardware wallets, they're thinking Trezor and Ledger as the first names in their mind. can you give us just an indication of, the size of Ledger's customers? I mean, I-I presume you'd have a lot of retail level customers who've bought a Ledger device to, hold their private keys?" }, { "speaker": "pascal_gauthier", "time": "07:49", "start": 468.6, "text": "Sure. I mean, we-- there's one number that we share, and then the rest we, we, we keep to ourself and to our, to our users, but, we sold to date, above one point five million units of our products. so it's a big number, but more, more than that actually, the other number that is really incredible is we shipped our product in more than one hundred and sixty-five countries. and so that's a number that I like even more because, one point five million units of, of any consumer product, hardware consumer product is a big number, but a hundred and sixty-five countries, is incredible. I think that it's a testimony that the crypto phenomenon is global, because if you take any, any product, I mean, it's very rare that a company that young, on top of that company that young will ship, so many product into so many different countries. and so that's, that's amazing" }, { "speaker": "stephan", "time": "08:40", "start": 520.29, "text": "Yeah, that's a quite a achievement, I think, because it's one of those things where you're trying to change the mindset for people, where traditionally, if they're buying stocks, they've got, you know, it's, it-- they're not holding those stocks themselves, right? It's not like a bearer asset, whereas Bitcoin is a bearer asset. And so I think one of the challenges then is trying to articulate to- holders why they should take their own power, take that key into their own possession, and so I think that's, you know, hardware wallets are one way to really help achieve that. Has that been difficult for you to make that case to Bitcoin holders, or has that just, have you found that that's been part of the, the ethos of the industry or the way that people talk about Bitcoin?" }, { "speaker": "pascal_gauthier", "time": "09:30", "start": 570.15, "text": "Yeah, I think it's the latter. I mean, you know, the first phase of the development of the company is more- More like, you know, we're part of the ethos of, of Bitcoin and, and crypto communities and, and usually early adopters sort of understand, like, they, they, they go through a path where they, you know, you buy Bitcoin and then once you have Bitcoin, you're like, \"Shit, what I do with that?\" And, you know, I have to make sure that I'm secure and so the next step. And you actually, you can actually see it online, like there's so many blogs and so many things that have been written where the, by default and so I think that's the first phase, and I think for us now the challenge is, you know, going forward, like how do we make sure that we remain, you know, important, and, and relevant for consumers? And so because now you, you will have like a broader adoption of cryptocurrencies, and/or other type of tokens, and so, And I, and I think these technologies basically will succeed only if they are really secure and if the endpoint security, is, is really secure. And so therefore, you know, we will do a lot of efforts in, in two thousand and twenty, you know, educational efforts, but, you know, promotional, et cetera, just to make sure that the broader audience understand the need for security and understand the need for decentralization, because we also believe that, you know, the first phase of the industry has been really centralized. On a few platforms, which is, which is okay, because, you know, you know, sometimes you need simplicity, and it's true that decentralized value propositions were probably not as simple as centralized value propositions, such as Coinbase, for example. but we believe that this isn't the promise of decentralization, and so therefore, we're working hard to offer, in twenty, in twenty-one, a decentralized product that will be as good as, if not better than centralized product, but with a decentralized way where users really own, their private keys. I mean, not your keys, not your crypto, no." }, { "speaker": "stephan", "time": "11:29", "start": 689.31, "text": "Right. And, one other aspect I was keen to ask about is hardware is difficult, right? So, and this is a very cyclical industry, right? Bitcoin, it, it tends to move in these big waves up and then big waves down. Has that represented a challenge? I mean, I'm sure it has, represented a challenge for many Bitcoin businesses. How, how did, Ledger deal with that very cyclical nature of the industry over the years?" }, { "speaker": "pascal_gauthier", "time": "11:56", "start": 715.91, "text": "It's a huge challenge because as well as this is happening, change is also happening. I was listening to, an interview of Arthur Hayes from, from BitMax, and he was asked the question like, what has been the challenge for you recently? And he says, \"Change, everything changes all the time, and so adapt to change in this industry is complicated.\" And it's true that this is also complicated with like ups and downs, because of course, the ups and downs represent your revenue. So when everything cha- keeps on changing, and you need to invest- Invest in the change while your revenue is, is going up and down. This is, this is the most difficult thing. So not, not only is difficult to adapt to, to, to a market that is going up and down, but it's even more difficult to adapt in that, for that up and down as the market is changing so much, and you have, you have the need or and or the obligation to invest so much into your products, so, but I mean, for a CEO and for a management team, it's a great, I mean, it You learn the most probably, so for us, it's been, it's been, it's been a fantastic ride to be honest. I think it's, it's very challenging intellectually, and so, you know, we thrive into, in difficulty. so I preferred actually that market to the bull market that we had in seventeen because it was just too crazy, I didn't really understand what was going on, and so, you know, for me, it was like, okay, well, you know, everything goes up and, you know, it seems to be crazy" }, { "speaker": "pascal_gauthier", "time": "13:26", "start": 806.43, "text": "at least I would say that at the end of nineteen for me and for the team here at Ledger, I think we had a great year because we better understand, our business, we better understand our company, we better understand where we're going and, and we think we have a plan for two thousand and twenty and, and, and beyond that is, that's gonna be really amazing." }, { "speaker": "stephan", "time": "13:46", "start": 826.3, "text": "Right, and, one other point I wanted to touch on there was around lead time when you're making a new product, right? Because you could get really awkward timing where, let's say, it's, it's like a crazy bull market, and then you're, you're-- at that time, there's, you know, you're coming up with a new product, did, did-- but it takes time for that new product to, to land, and you don't, obviously don't want that to land during the down cycle. Did you have any trouble dealing with that kind" }, { "speaker": "pascal_gauthier", "time": "14:16", "start": 856.32, "text": "Not, the short answer is not really, and the longer answer would be to say, you know, like the, the, the market moves quickly, but you have like, But, and, and, but you have periods of three to six months where you can sort of make your decision, so, you know, it's quick, but you still have, like, it's not, one week over the next. And so therefore, for hardware production, typically, which is something that has huge impact on, on the company, you know, you need sort of three to six months to, to make, to make decisions in order to, you know, six to twelve months to take a product to market. So I would say that, you know," }, { "speaker": "pascal_gauthier", "time": "14:56", "start": 896.41, "text": "That we always had time to plan and we, we planned everything carefully, and I think that everything we've done, in the bear market has been somewhat successful. I mean, the Nano X, our new product, has been received, very positively by the community. we sold a bunch, it's a great product. I mean, I'm using it every day, it's, it's really good. I mean, the Nano S was good, but Nano S, Nano X, I think, is the better version of the, of the So, so far, so good. We didn't break anything, everything went, it was difficult and it was, it was a storm, it is still a storm, but we didn't break anything and the ship is still sailing." }, { "speaker": "stephan", "time": "15:38", "start": 938.27, "text": "Right, well, speaking of breaking things, I'd love to talk a little, a little bit about the security aspects as well. So, listeners might know I recently interviewed Charles from, the Ledger Donjon, who's also working with Ledger. can you tell us a little bit from your perspective, what has it been like? Trying to maintain security standards on the product and, you know, dealing with things like hacks and attacks that come up here and there." }, { "speaker": "pascal_gauthier", "time": "16:05", "start": 965.18, "text": "Sure. Well, so Shaghi Mehdi that you're referring to is our Chief Security Officer, and has been recently promoted to our Chief Technology Officer, is our CTO. Now he's our CTO and CISO, and Nikola Bakar, who's the founder and original CTO, is now our Chief Innovation Officer. So CIO." }, { "speaker": "pascal_gauthier", "time": "16:29", "start": 989.24, "text": "look, security is at the core of everything that we do, and, we again come from, All of our engineers here, and if you speak to Charles or if you speak to Nicolas, they have like, you know, security, in their background and they come from security companies themselves, and they've been working on that security issue for a long time. but again, we, we, we come from this Cheap and pin industry, so secure hardware industry, and so everything from the hardware perspective has to be secure. And as you know, probably Ledger has designed its own operating system that runs then into the secure hardware that either we design or that we buy off the shelf from, from vendors. So typically, what you see in the Ledger Nano S, I mean, it looks like a USB stick, but inside there is a, there is a secure element onto which we port our operating system, and that's what secure the private keys. and so for us, really, there's never a question about, you know, compromising on security or, you know, do we, do we lighten up security, for example, to make it, more usable, and of course, you know, when you work on security and you build, a product for consumers, there's always this question, usability versus security. But for us, there's, the, the, there's never, we never compromise on this. We, we believe that we have the but security is a cat and mouse problem in the sense that, you know, the bigger the industry becomes, the, the, the higher the fee the attackers are willing to pay in order to attack, and so therefore it's a never-ending problem where you always need to work on your security. So this is what we do, and as you know, so Ch-Charles, as chief security officer, is at the head of something that we call the dungeon here at, at Ledger. So we have a, we have a hacker team, internally that hacks our products Our partners' products, our competitors' products, and the aim of the dungeon is just to raise the security level of the industry overall, of ledger products, of course, but security of the industry overall. So when we break a competitor's product, it's always in the spirit of, you know, helping them do better, and so we have a responsible disclosure, scheme that we apply. So of course, we fix the problem first before we release anything, and it's really in the spirit of the- Just the industry doing better for, for, for the, for the consumers and for the enterprise and for everyone that's gonna, that's gonna have that, security endpoint, issue." }, { "speaker": "stephan", "time": "19:00", "start": 1140.18, "text": "Great. And, is-- Does Ledger make use of a bug bounty program also?" }, { "speaker": "pascal_gauthier", "time": "19:06", "start": 1145.95, "text": "Yeah, yeah, we do. actually, I think you can find it on our website, Ledger. I'm just, I'm just typing it as we speak, but, yeah, bounty program ledger. Ledger dot com slash bounty dash program. It's there. It's all explained. And we Outside of Ledger with the Ledger DUNGEON, to, to, to work on various security issues. Again, it's a never-ending problem. Like, you know, we, we think we're good right now and we think we probably have the best security in the market, but, but, but it doesn't stop there. So we continuously invest into security and the future security of our products." }, { "speaker": "stephan", "time": "19:44", "start": 1183.87, "text": "And, I guess the other question is just around the, the secure element question as well. So I think this is a point where, I think Up with, Charles as well, where we spoke a little bit about that and, and, Charles was making the point that essentially there are some, components within, within the secure element which are closed source, but this is again, just a difficult problem at this point. do you have any views on, where that is at this point and, where we would see that, in going in the future?" }, { "speaker": "pascal_gauthier", "time": "20:21", "start": 1220.73, "text": "Sure. I mean, We have to understand that, I will tell you the way I, I learned this through my experience at Ledger, because of course, as you understand from the beginning of this chat, like my background isn't in security, it's in advertising. So in advertising, we didn't really care about hardware security. And so I had to learn, sometimes the hardware of like, you know, the implications of security and why, et cetera, et cetera. most of security companies before Ledger, do actually something that is called security by obscurity, so meaning they don't tell you anything, they don't open source anything, because obviously as soon as you tr-try to open source, it's a much more difficult problem that you're trying to solve because then you're, you're showing what's inside, and because you're showing what's inside, attackers can potentially So, this is why, again, most security companies do s-security by obscurity. Ledger is very new, we are very new in our approach because we use the same kind of, secure hardware, but we try to open it and, but, but we only open it partially, but we try to open it as much as we can in order for third-party companies and third-party developers to be able to work on the operating system and develop new features on top of our operating system. So it's a very, it's a very new approach. and, and typically with the dungeon, again, it's, it's also, part of that approach where the dungeon is publishing a lot of the results. usually attack labs don't publish much, but we've attracted probably some of the best, hackers that we have here, and some of the best researchers that we have here because of that open approach, because it's a very, frustrating world where, you know, you're finding great things, but you can't talk about it, and, Here at Ledger, our approach is to actually, you know, find things, solve the problems, and then talk about what we found just to share the knowledge with the community. So our approach with security is very open. However, there are certain things that we can't open, not so much because of Ledger and what we do, because we would prefer to work in a fully open manner, but there are some constraints that we have with our vendors, because they are part of the-- part of things that actually are irrelevant to Ledger, but they would be part of the code that could be open that then has to do with our vendor product, and so for, for reasons like this, we don't open all the way, because we have some constraints with, with, with, with vendors, which is, which is okay and normal, and that's how the market works as well. So we're trying to push the limits of security and, but within boundaries that are sometimes, that we have to, that we have to obey and happy to obey to those boundaries sometimes." }, { "speaker": "stephan", "time": "23:02", "start": 1381.66, "text": "I appreciate that, yeah, sure. and look, let's We've got the Ledger Nano S, which is the original Ledger device, and more recently we've got the Ledger Nano X, which is the, Bluetooth-enabled newer device by Ledger. And then the, as I see it, the main software is Ledger Live, which is the computer software to interact with the hardware wallet, and there's also a mobile phone version of Ledger Live. So could you just give us a bit of an overview, on those different products? What are the main differences between" }, { "speaker": "pascal_gauthier", "time": "23:37", "start": 1417.41, "text": "Yeah, so that's the, that's the consumer products that you just described, and so, well, the main difference between the Nano S and the Nano X, is really, you know, Bluetooth connectivity, like you just said, but capacity. I think, memory capacity. I think the market has evolved between like two thousand and fourteen or early fifteen, where it was Bitcoin only to, to today and even the future where We went from one coin to potentially like hundreds of coins or thousands of coins, et cetera. And so, the Nano S was actually designed in already 2015, was released in 2016, and so it was designed with the needs of the time, and so with the Nano S at any given time, depending on the, Depending on the, firmware update that you're on, et cetera, but let's say that you can have between like three and seven apps to run at one time on your Nano S, which means that you can use on Ledger Live between, like, let's say, three and seven, coins without having to install, on, install the apps. because the Nano S or the Nano X, they work a little bit like a phone, so you have a, you have a capacity and you can, and one coin is one app, so you can put" }, { "speaker": "pascal_gauthier", "time": "24:49", "start": 1489.49, "text": "So it's three to seven. Gotcha." }, { "speaker": "stephan", "time": "24:51", "start": 1491.49, "text": "Yeah." }, { "speaker": "pascal_gauthier", "time": "24:52", "start": 1492.23, "text": "And, and so, and so people were asking for more capacity, so this is one of the reasons why we designed the Nano X is because now with the Nano X, you can have hundred apps to, to run on your Nano Nano X at any time, so which is much, much bigger, like it's, it's, it's a huge capacity. And so Nano S costs fifty nine and Nano X costs to a hundred and nineteen, so for, for less than double the, well, for double the price," }, { "speaker": "pascal_gauthier", "time": "25:19", "start": 1519.43, "text": "The capacity or fifteen x the capacity, so it's, it's, it's a really nice upgrade and it's something that I've been asked for a long time." }, { "speaker": "stephan", "time": "25:27", "start": 1526.64, "text": "I see, yeah." }, { "speaker": "pascal_gauthier", "time": "25:28", "start": 1528.06, "text": "So, so that, that's the main difference between the two." }, { "speaker": "stephan", "time": "25:31", "start": 1531.0, "text": "Right, I see, yeah. And, look, from, I guess for me and my show, it's mostly, it's basically Bitcoin only, and my listeners are mainly interested in the Bitcoin only component of it, but I suppose there might be, another security aspect of it where perhaps from a," }, { "speaker": "stephan", "time": "25:49", "start": 1549.39, "text": "interested to, have a Bitcoin only, device. Is that something you would, explore?" }, { "speaker": "pascal_gauthier", "time": "25:57", "start": 1557.38, "text": "well, it's already the case. So I think there is a misconception about like how we do things, and also because sometimes we're being compared to the competition that has a different approach, actually, different technological approach, which makes the Bitcoin only thing a thing, where for us, it's already part of the DNA, it's already part of what we do. So this App system that I just described is actually, the fact that all apps are segregated, segregated from each other because of the hardware security, okay? And so therefore, if you only download the Bitcoin app, voila, your OS is Bitcoin only. You don't have to download an other app, and we don't need to design an OS that is specific to, to, to Bitcoin because the job is already done. the problem with other vendors, and, and some of competitors is that, you know, apps potentially could cont- Interminate them, each other, et cetera, which isn't the case for us, and so therefore there is a need on the one side to develop like a specific OS for Bitcoin when for us, it's already part of the value proposition that if you want to be Bitcoin only, that's fine, it works, and so we don't need to develop a specific, operating system for that because it's already been designed for that." }, { "speaker": "stephan", "time": "27:09", "start": 1628.78, "text": "Great, yeah. Look, I think there, there was a some discussion I saw," }, { "speaker": "stephan", "time": "27:17", "start": 1636.71, "text": "this was a Time, but, I'm also interested to discuss just any of your thoughts around, Bitcoin privacy as well. So right now, if you set up using Ledger Live, obviously as part of the way the software works, you have to basically give your extended public key, to the Ledger server to feed you what your addresses and your balances are. And I suppose, do you have any thoughts around ways that users can, maintain more of their privacy? Is that something that you would try to, build into a future product or s-software?" }, { "speaker": "pascal_gauthier", "time": "27:49", "start": 1669.45, "text": "Yeah, I think it's, it's something that's clearly on our roadmap for, for two thousand and twenty, you know, the difficulty with, for, for, for Ledger is that, you know, there are some features that you're describing that are super advanced and are very important for like a, a subset of the, the, the broader, crypto community, and then there is the mass market, and so therefore for us, it's always a difficulty to, you know, understand, you know, what's the most important to do next because you have features that are Are equally important, let's say, philosophically speaking, but therefore like a, a smaller market. but it doesn't really matter to us whether the market is big or small. I mean, there are certain things that play into the philosophy of this industry, and so typically privacy being one, you know, this is top of, top of mind for us, and it's definitely in the roadmap for, for two thousand and twenty. I can't give you any dates, but I can tell you that it's been, it's an ongoing debate internally And how to do this, the best possible way. And, and there is a broad, broad," }, { "speaker": "stephan", "time": "28:55", "start": 1734.56, "text": "yeah. No, I appreciate that. So it's" }, { "speaker": "pascal_gauthier", "time": "28:56", "start": 1736.0, "text": "something that is definitely top of mind for us and live in two thousand and" }, { "speaker": "stephan", "time": "29:00", "start": 1739.9, "text": "twenty. Gotcha. Yeah. and I appreciate again, it is, there is this question of how do you get people to firstly hold their own keys? So it is at least an improvement on them leaving their coins, with a custodian, where at least if they are self-custodying, even if with reduced privacy," }, { "speaker": "stephan", "time": "29:19", "start": 1759.47, "text": "So I appreciate that. so, yeah, and obviously appreciate that, there is a question here around mass market versus what the, what we might say the more advanced or hardcore Bitcoiner user might desire in the product. Another one as well, and maybe this will be a similar answer as well, is this question of multi-signature. So right now, I would love to be able to do multi-signature in a way with, where I could use different hardware wallet providers all as part of a multi-signature setup. So, for example, For example, I could have, you know, a cold card and a Trezor and a Ledger, all as part of multi-signature setup. But right now, that's a little bit more difficult to achieve with the, with the Ledger devices. as I understand, what one example might be, if you try to, perform a multi-signature transaction with Ledger today with some of the devices, it won't be easy to verify exactly, on the device, which address am I spending to, which, how much am I spending, et ceter Clear. I think it will show the amount you're spending, but it won't necessarily be clear about, the address component of it. So it makes it a little bit more difficult that we have to now trust our, the hot computer, which could be obviously have malware, and we obviously wanna trust the hardware first. So do you have any views around, multi-signature support?" }, { "speaker": "pascal_gauthier", "time": "30:38", "start": 1837.87, "text": "Yeah, I mean, you, you said it in your introduction, you probably have the same answer than the one before. Multi-signature is also part of the, two thousand and twenty roadmap Let's say it isn't something that we've overlooked in nineteen, but, but nineteen has been a challenging year. We're very busy working on, on, on so many things, and also we've scaled our engineering team a lot. I've got, right now forty engineers that I'm recruiting as we speak, and so this is the need of like new features and new coins, and, so I know, like, you know, you guys are probably Bitcoin only, but, but there are many other projects in the world right now that Where we, we need to pay attention because we, we don't want to, to, to become obsolete because we don't support the latest tech. So the need for tech support is so huge that sometimes it's, it's very difficult to, to, to know, you know, from which angle and, and which problem to, to, to take first. and we've achieved a lot in, in nineteen. I mean, Ledger Live didn't really exist, at the beginning of, of nineteen. We didn't have the Nano X" }, { "speaker": "pascal_gauthier", "time": "31:47", "start": 1907.16, "text": "Some of the things were, not done. So typically multisig is, is one, but, but Erind and, and, and Nicola, they're working on this right now, and again, that's, that's, we will do better at that in, in two thousand and twenty, for sure." }, { "speaker": "stephan", "time": "32:02", "start": 1921.99, "text": "Right. Yeah. And look, I think there is potentially a good, benefit there for a lot of the, hardware wallet manufacturers because then if they're supporting multisig, it becomes easier for there to now be a need for users who were single hardware wallets, well, now they can use multi-signature, and then, you know, they might-- they will need obviously multiple devices to help achieve that. So there's potentially, an angle there." }, { "speaker": "pascal_gauthier", "time": "32:27", "start": 1946.62, "text": "There, there is that, but, you know, to be honest, like, of course, we're here to do business and, and, and sell stuff, but, you know, I think multi-sig for me and having a better multi-sig approach, I think it's important because, you know, security is one thing, but governance is another thing that we bring" }, { "speaker": "pascal_gauthier", "time": "32:47", "start": 1967.14, "text": "Signature enforced on the hardware is actually something that we do, but more for the enterprise today. and so the need for governance for, for, for, for the consumer is actually really big, and so it's, it's something that is really-- that's why it's also top of mind for us in 2020. Because users, you know, it's great to have your private keys, it's great to have them on ledger, but you become the single point of failure, meaning that, you know, to, to seal your coins, the only thing I have to do is You type your PIN, you do one transaction, and I wipe out, your crypto. and so this is a serious threat, and, and so, you know, when we think about security, we think about security overall, not just the hardware security. And then, you know, the personal security of the user is none of our concern, actually it is. this is why when we design the enterprise product, we design it, specifically, within mine physical threats to the user, because if you design an enterprise product, but the only thing that you can do to" }, { "speaker": "pascal_gauthier", "time": "33:48", "start": 2027.68, "text": "Then your security product isn't great, and so, so, so we know how to do that, and we've done it from the enterprise world first, and we're bringing it to, to consumers. But it, it is a problem, and this is why we're thinking about that, it's more because of security, rather than, you know, selling more hardware. And of course, if the consequence is that we sell more hardware, we'll take that too. But, security is at the core of everything we do, and that's a security" }, { "speaker": "stephan", "time": "34:12", "start": 2051.53, "text": "issue. Yeah As well is, the discussion where individuals who would like to secure their Bitcoin in more secure ways try to find ways to air gap their, keys away from the hot computer. And one, some of the ways that people talk about this is using, say, micro SD cards or potentially a QR codes as a way to, trans-- sort of move that or shuttle the transaction back and forth between the computer and the hardware device where the private keys are living. Do you have any thoughts around the use of- Some of those airgapping methods and potentially also any thoughts around PSBT, partially signed Bitcoin transactions." }, { "speaker": "pascal_gauthier", "time": "34:54", "start": 2094.38, "text": "Well, these are advanced questions. So, and I'm, you know, Charles and Nicolas would be better, better people on your show to discuss, to discuss these issues. The, look, we've designed the product so we don't really need-- you don't really need to airgape it, I think, you know, when it comes to security, there is always," }, { "speaker": "pascal_gauthier", "time": "35:18", "start": 2117.62, "text": "The question of trust, and, you know, do you trust your security vendor and do you trust what Ledger says or not? But, our product, actually, our product is the only certified product in the market. So with security, you can say what you, what you do, you can actually give means for the users to verify that what you do, what you say, and what you do is true, which is the case for Ledger, and then you can go one step, beyond that and, and, and have a security, have product security reviewed by an attack lab, which, and, and, and that will give you a certification to, and the certification is a stamp to say, hey, you know, the Ledger product actually does, what it's supposed to do or what it says that it does. and actually, if you take the Nano S and the Nano X, these are the, to my knowledge, the only two, hardware wallet products that got a certification to date. I'm not talking about certification of the, of the secure element, because Of course, the secure element is certified, but that's by a vendor. I'm actually talking about the product itself, the Nano S and the Nano X. The entire product has been certified by the ANSSI, which is, which is a French attack lab, it's a French public attack lab, it's, it's very well known, it has an amazing reputation, and, and, and both of our products are certified. And so therefore, the products do what they say they do, meaning like you can, you can conne-- you can connect them to your computer So now the air gap discussion for me, it's a bit, dogmatic discussion, the way I understand it, it's like, you know, maybe I don't really trust, I never want it to be connected, so I want it to be offline, but actually I don't think there's a need for that. But I'm gonna stop here because that's probably a longer discussion that you should have with Nicola and Charles, at Ledger, because it's-- then it becomes an expert discussion, and, you know, I'm a CEO of a security" }, { "speaker": "pascal_gauthier", "time": "37:17", "start": 2237.22, "text": "I would say, and PBST, it's, it's something that, that we support. You know, at Ledger, we, the market is moving fast and the market has, many needs for, for features. And so the problem that we have is either we do everything ourselves and then it becomes slow, and already you've asked me like several questions on, on, on several things and it's like, you know, what do you do here? What do you do there? Etcetera. And we will deliver in ' Approach, it's, it's to keep the system open, and as you know, you can use, with the Nano S or Nano X, you can use Ledger Live, but you can also use Electrum, or, you know, other, third-party software, and sometimes those third-party software of, offer features that Ledger, doesn't, doesn't offer. so typically multisig, you can use Electrum to do multisig with your, with your, with your Nano, and PBST is the same, actually," }, { "speaker": "pascal_gauthier", "time": "38:18", "start": 2297.97, "text": "we have a proxies through, hwi. actually there is a, there is a GitHub, github dot com slash bitcoin dash core slash hwi, And so we support PSBT through, a third party, and, we can do better in two thousand and twenty, but this integration fu-functions and, you know, for, for, for someone who would want that feature enabled." }, { "speaker": "stephan", "time": "38:48", "start": 2327.71, "text": "Yeah, great. And, yeah, thank you for that, for giving us a, a comprehensive response on those. And, yeah, look, for some further in depth discussion, maybe I, I, you know, I can get Nicola on and talk to him about some of those other points. Also your thoughts around vendors and, sort of retailing of the product. So is this, as I see it, maybe correct me if I, if my understanding isn't right, but I think the Ledger approach is that it's, it's sort of like the-- because the device is certified, you're more comfortable that it is resold by other, suppliers in other countries around the world, and perhaps that has also contributed to how Ledger, the devices are now used, or sold in a hundred and sixty-five countries. Is that, part of the thinking there with Ledger and the, let's call it the supply chain or the distribution model?" }, { "speaker": "pascal_gauthier", "time": "39:39", "start": 2378.95, "text": "Yeah, completely. I mean, you just said it, so I'm just going to paraphrase what you, what you said, but, but it's, it is, it is like that. we can basically, Send our device to any vendor in the world, and they can resell the device without the risk of, you know, putting like a malware on, on the device or doing anything that could, in the end harm the user because you have the genuine check when you, because you have multiple things that you have to do with your ledger in order to, to, to, to, to make it work, and there are multiple ways of verifying that your ledger is genuine, and so there are some attacks that are possible with other vendors that aren't possible with ledger because of the nature of The secure element. and so therefore it allows us to have, a broad, distribution policy, but also it allows us-- it allowed us, in, in 2017, to have, manufacturers manufacture our products, without being able to, inject anything, in, in the product that could harm the user. Now, now that being said, there are very simple attacks. That are always possible. So typically, if I get my hands on a ledger, I take the, you know, I preset the ledger, I write down the twenty-four words, and then I repack everything and I send it to a user that isn't, that doesn't really understand how it works and that doesn't read everything that we say, because normally when you set up your ledger, et cetera, we always say, you know, you, you-- only you can write down your twenty-four words, like never show them to anyone, but, You know, people that don't really pay attention to, to, to what we write or, can be influenced to, to either, use a product that has already been set up with twenty-four words that are being sent to them, and or, you know, sometimes get a, like a phishing attack where there is a website that's gonna say, \"Hey, we are Ledger, and, you know, give us your twenty-four words because, we want to reset your device,\" or, you know, their, their scam attacks like this that," }, { "speaker": "pascal_gauthier", "time": "41:47", "start": 2506.58, "text": "Need to pay a lot of attention. I think what's very difficult in this market and what users, need to understand is they need to pay attention. So Ledger is secure, but, the process of setting up your Ledger is, very important. So you need to take the time, you need to be in a quiet room, you need to, you know, you're not, you don't do that in, in a Starbucks coffee with like, twenty thousand people around you, like you need to be at home, you need to be, in a" }, { "speaker": "pascal_gauthier", "time": "42:17", "start": 2537.2, "text": "Of your own money is an important thing, so you should treat it as such, and I think this is the shift that needs to happen because we come from a world where you have your Revolut app, and so you have just a pin code and you do everything, and, you know, and, and it's, it's all easy, but your money isn't yours, it's with Revolut. So this is the old world. In the new world where your keys are yours and your money is yours, I think it's a fantastic power, but, you know, as Spiderman say" }, { "speaker": "stephan", "time": "42:47", "start": 2566.66, "text": "Definitely, that's the big mindset shift that, has to be driven as people come into Bitcoin and learn to, well, there's no, there's no bailouts in Bitcoin, you have to take your, your full, personal responsibility when you do this. Pascal, let's talk a little bit about Ledger Vault. So for those, listeners who might be interested to understand more, can you just give an overview on that product?" }, { "speaker": "pascal_gauthier", "time": "43:08", "start": 2588.23, "text": "Sure, I mean, Ledger Vault is, is a product that we've designed because people were using the, the, People were actually not people, they were like hedge funds or, you know, companies, and they were like, okay, but we have governance needs, and, you know, we, we need multisig, we need different features that, you know, the ledger, Nano and Ledger Live experience isn't, isn't offering, and, you know, and, and, and we have enterprise needs, so can you, can you help? And so this is, this is what we've designed for them. So the Ledger Vault is a result of that, and it's basically a product that To secure the private keys and put governance on top of those private keys. So if you have, a hundred million dollars in Bitcoin, like the question is who's got access, who can do what, and so there, there is a complex set of, business features that has been developed on top of the interface where you can sort of divide administrators of the funds from operators of the funds. It's a, it's a complex governance system that's been designed for complex, environments. for the financial institutions." }, { "speaker": "stephan", "time": "44:19", "start": 2658.7, "text": "Right. And so the way that a user would interact with Ledger Vault, then, is there-- I presume you can set certain policies on which users can authorize transactions up to this amount or how many users. Is that, is that basically the model there with Ledger Vault?" }, { "speaker": "pascal_gauthier", "time": "44:35", "start": 2674.99, "text": "Yeah, completely. So you say, you know, for certain, for this account and/or certain type of transactions, like, you know, if you want to send more than five million dollars to an address that isn't, to, to an address, then you need three out of four approval or two out of four approval, you know, imagine every business rule that you could have in a, in a, in a, in a financial institution, basically those business rules have been implemented into, into Ledger Vault, and you can sort of hard code them into, into the hardware. And so what's interesting there is the hardware not only signs the transaction, the secure hardware signs the transaction, but also enforces the business rules, because sometimes, You, you would have vendors that say, \"Hardware sign the transaction,\" but actually business rules happen outside of the secure, secure, security. And so therefore, the HSMs, the hardware security modules, which is why you, we use here for hardware security, as being given an instruction from sort of outside the security scheme, and so they say, \"They've been given an instruction to sign something,\" so they sign it, they sign it securely, but they don't know that what they received was actually wrong or fraudulent, et cetera. So with us, it's as It's been designed so everything run within the hardware, and the secure hardware, and every rule is enforced by the secure hardware," }, { "speaker": "stephan", "time": "45:54", "start": 2754.23, "text": "right? And in that model, is the-- is, is it like a self-hosted by each business or is it something that's more hosted by Ledger? If that makes sense." }, { "speaker": "pascal_gauthier", "time": "46:04", "start": 2764.2, "text": "No, no, makes complete sense. So right now, it's, it's a SaaS product, so software as a service. So, HSMs are hosted, by Ledger, and, what the, user have is, is an interface, the Ledger Vault interface, that is somewhat similar to, to Ledger Live, and they have also, authenticators, so they have a hardware wallet product in their hands to actually, validate transactions. but HSMs are hosted by Ledger." }, { "speaker": "stephan", "time": "46:30", "start": 2790.26, "text": "It sounds Pole product, if you will, like companies came to Ledger and saying, \"Hey, we want this.\" I, I was, curious just to think because, there, there might also be that barrier of trying to- You know, tell or have businesses think about, oh, this is like a new world for us, like we don't understand this. How, how do we, get across the line in terms of actually holding, some of these, holding Bitcoin as well? was that a difficult sort of conversation or were those difficult conversations for you to have?" }, { "speaker": "pascal_gauthier", "time": "47:04", "start": 2824.29, "text": "But, you know, it's, you know, the enterprise side is funny because it's a bit like the consumer side. So the consumer newbie that doesn't really get it goes on Coinbase, you know, that's It doesn't really fulfill the promise of Bitcoin, but hey, I just wanna buy one Bitcoin and, I go on Coinbase and it's easy and, and voila, it's done. and so I would say that, you know, same, some financial institutions just want-- they don't want the hassle of holding the coin, they don't want all the private keys, they don't want all that, they just want exposure to an asset class, and so therefore, they're happy to go with a custodian, so they buy the coin, but they trust a custodian Our custodians. So, you know, so if we talk to someone and they say, \"No, but I don't want to hold my private keys, I just want to give my money to someone,\" then we refer them to some of our partners that are custodians and have been designed for, and have a product and have a service that is designed for this. yeah, I have to say also that in the financial institution world, a custodian don't just hold the money, actually, custodian gives you also many other services that sometimes you need as a hedge fund, etceter Technology of course saw some of, the issues about like security, et cetera, but like we don't, we're not a custodian ourselves, we're only a technology player, so there are certain services that if you want to have them, you, you have to use a third party anyways. But some of the players actually are holding their keys. I mean, if you think about the, the, the big players in the industry, they have a security infrastructure, they're holding their keys, they, they do a lot of things right now. But, but this financial institution world is Whether exchanges typically will still be allowed to keep the coins with them in the future and act as a de facto custodian, that's, that's a big question right now. it's probably not gonna, going to be the case. It's not the case in the regular financial world, so it probably won't be the case, in, in, in the, Bitcoin and, and, and cryptocurrency world, but, but all this is forming. Whatever happens, we, we are a technology backbone. We're a technology player, and we only provide" }, { "speaker": "pascal_gauthier", "time": "49:16", "start": 2955.72, "text": "You know, custodians that then, take the deposit of the coins for third parties or that we provide technology to, any hedge fund, bank, et cetera, that want to have their own coins and, and their own private keys, we, we, we will provide the tech." }, { "speaker": "stephan", "time": "49:30", "start": 2970.29, "text": "Gotcha. Yeah, that's really fascinating to think about where the, where it all goes in terms of the structure as Bitcoin grows up, so to speak. Do you have any, thoughts on what you think happens as Bitcoin grows up?" }, { "speaker": "pascal_gauthier", "time": "49:41", "start": 2981.25, "text": "I think Bitcoin is growing" }, { "speaker": "pascal_gauthier", "time": "49:45", "start": 2985.26, "text": "be-because people look at the price and the market cap, and I've seen so many tweets recently to say, \"Oh, you know, give me faith that Bitcoin is going to work,\" because right now with the price dipping, I feel it's a problem. Actually, I don't feel it's a problem, for people that are sort of losing hope of faith because of price evolution. I would say there's so much that's being built in nineteen, and so much that is being built right now in, in, in two, two thousand twenty, especially in the, I mean, big financial institutions are moving into the game, but we have to be realistic, the infrastructure that is needed for an asset class to emerge isn't completely there yet. I mean, in terms of security, it's not completely there, in terms of features, it's not completely there, et cetera, et cetera. But two thousand and twenty will be, I think, a big year because there will be many announcements now that will come, from very large financial institutions that are moving into Bitcoin. They're not moving into, because they're moving into, you know, other form of tokenization of asset like STOs, et cetera, et cetera, and that's, and that's all good, and that's another wave, but, and that's an, a wave that will be beneficial for-- to the industry. But I'm talking about-- But I'm really talking about Bitcoin, you know, financial institutions are moving into, into Bitcoin. nineteen was an infrastructure play. I mean, you know, we know, we know the names like Fidelity and, They're all doing something in nineteen and they announced they'll do bigger in twenty, so, you know, the price right now isn't relevant, the market cap right now isn't relevant because, at some point it will shoot through the roof and, you know, those Those pieces that were installed in nineteen will thrive in twenty twenty-one and, this is, this is the beginning of, of a big asset class, I think." }, { "speaker": "stephan", "time": "51:36", "start": 3095.51, "text": "Yeah, that's fantastic. Pascal, do you have any, parting thoughts or advice for the listeners out there in terms of securing their bitcoins or, anything you think they should think about?" }, { "speaker": "pascal_gauthier", "time": "51:47", "start": 3106.7, "text": "Well, number one, I would like to say that in terms of R&D for us in, in '20, we have a big focus on, on Bitcoin, and so, you know, if you wanna talk about this with, with Nicolas Baccar, our Chief Innovation Officer, I think it will be a, a next logical step of the discussion with, with Ledger, because, you know, Bitcoin is, is the dominant coin, is the biggest community, and so therefore, you know, for us, our plans in two We touch, we touch base on, on several topics here already with you, but, but I think, you know, Nicola will actually do the job, so, but, but, but, but yeah, that's that. And, I think we- You know, the message for us, and what we're gonna do is we're gonna ke-we're gonna keep on building, and, I think it's very important that, that companies keep on building great products, that we keep on interacting with our users, so we probably will want to interact more with users in, in, in two thousand and twenty, whether they're advanced or newbie, et cetera, just to better understand how to design our products, and, and, you know, and, and what's good for the market, and the general message" }, { "speaker": "pascal_gauthier", "time": "52:57", "start": 3177.21, "text": "is Be very mindful when you do your security and, you know, Ledger is, is here to help as a, as a target for the company in two thousand twenty, the number one target is love our customers. So we'll try to do better than what we've done in nineteen, always try to, to improve. We have a great customer success team, we, we have a great innovation team, so we'll just try to, improve our game, do better and, and serve our communities better." }, { "speaker": "stephan", "time": "53:27", "start": 3207.45, "text": "Yeah, look, thank you very much, Pascal. And I grilled you a bit on some of these points, but I do believe Ledger is a leading company. I, I hold, you know, I have some Ledger products, I use Ledger products as well, so, thanks for that and for, a lot of the work that you, you and your team, very, very sharp and, very security-focused minded team, so I think, there's, there's a good work being done there. but yeah, certainly as we mentioned, there's always, room for improvement, but we'll be in depth conversation with them. but, for now, I think we'll leave it with that. but look, just before we let you go, can you just, let the listeners know where to find you and where they can find Ledger?" }, { "speaker": "pascal_gauthier", "time": "54:10", "start": 3250.44, "text": "Oh, me, they can find me, my email is pascal at ledger dot com or f r. anyone can send me an email, happy, you know, happy to reply if it's, if it's, if it's relevant, and if I don't have time or not relevant" }, { "speaker": "pascal_gauthier", "time": "54:30", "start": 3270.26, "text": "Anything. Pascal at ledger dot fr. I'm usually based in Paris, actually the, R&D team, engineering team is based in Paris, but, I travel often to the US, New York or San Francisco, and to Hong Kong, where we're based, Hong Kong and Singapore, for, for, for Asia. So, hit me up and, happy to meet with, with, with people." }, { "speaker": "stephan", "time": "54:52", "start": 3292.07, "text": "Fantastic. Well, thank you very much for joining me." }, { "speaker": "pascal_gauthier", "time": "54:54", "start": 3294.17, "text": "Pleasure. Thank you for having me." }, { "speaker": "stephan", "time": "54:56", "start": 3295.91, "text": "I hope you got some value out Team members from Ledger on in future to go a little bit further into detail on some of those technical components we touched on in the interview. So remember, if you enjoy the show, make sure you leave me a review. You can support me by leaving a review on Apple iTunes, you can share it on social media, forums, chat groups, and I've also got a Patreon group for those people who want to be part of a private SLP supporters chat group. If you want to advertise on the show, you can email me stephanelivera at PM dot me. Don't forget there's show notes As always, the website is stephanlivera dot com. Thanks for listening, and I'll see you in the citadels." } ] }