{ "episodeId": "SLP704", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "kevin_loaec": { "name": "Kevin Loaec", "role": "guest", "tag": "KEVIN" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.08, "text": "This is really the risk is the complete unknown of what would happen if such a large custodian would have issues. Yeah. So I, I really think this is the threat. We need to fix it somehow. Regulation will have an impact on all of this. I really hope the regulators stop thinking like everything should be a bank. In Bitcoin, it really should be the, the control should never be completely held by one third party. There is no way. It's the entire recovery option thing, right? Like knowing that no matter what happens, if you have a- Correct setup, you will not lose your coin. So this is pretty much solved, with Liana in general." }, { "speaker": "kevin_loaec", "time": "00:37", "start": 37.02, "text": "Hi everyone and welcome back to Stephan Livera podcast. Today we're gonna be talking a bit about multisig, miniscript, self custody, as well as in the business context. Now rejoining me on the show is Kevin Loaec from Wizard Sardine. Now you may know them for their product known as Liana, or that's the name, it's called Liana. And I noticed you guys recently brought out, Liana Business. So I thought this would To chat, because this is kind of a known thing in the industry where, you know, it seems a lot of people aren't doing self custody right now. So maybe let's start there. So in your view, why aren't businesses doing self custody right now?" }, { "speaker": "stephan", "time": "01:13", "start": 73.11, "text": "Yeah, thanks for having me, first of all. yeah, why are businesses not doing self custody? I think so, of course, different businesses have different reason to not do self custody. some of them it's for regulatory reasons, and so these ones, you know, it's very difficult to, to, For example, in, in the US, if you're a publicly traded company, you might have to use a custodian, and so of course, like that just removes the, the option. But then it's not the case everywhere else. Different places have different regulations, and sometimes it's just, oh, we see the companies in the US are doing this, so we're going to do the same, like keeping our funds at Coinbase or something like that, when they don't necessarily have to. just sometimes looking at what the others are doing, and you might think I also think the other, reason and probably the main reason is actually that the tools aren't really great for businesses. so, you know, we started having multisig wallets, a couple of years back or a few years back, but still like for many, the multisig is still using multisig on one computer, maybe having different devices, but then just as one individual, not really as like a group or a team. so seeing things like coordinators are pretty new, how do we make sure, even like Transaction labeling and things like that are actually coordinated between users. So of course it's simpler, when it's a custodian and it's just a server somewhere that keep track of everything, but yeah, the game of course in Bitcoin is, trying to offer self custody, so trying to build the tools for that" }, { "speaker": "kevin_loaec", "time": "02:46", "start": 166.02, "text": "Yeah. I guess let's just kind of walk through-- I'm just gonna kind of loosely walk through a little bit of the history, at least as I recall it and understand it. You tell me, I mean, you're, you're closer to this than I am. But it's like, let's say Mike Belushi from Bitcoin, right? He had some interesting innovations back in the day on multisig, right? It's not that I don't think he, like, he invented multisig, but let's say he made it really practical to use. I think P2SH multisig," }, { "speaker": "kevin_loaec", "time": "03:16", "start": 195.68, "text": "Unless you were like a wizard, basically, unless you were like super technical. And then, you know, we've had this innovation of hardware wallets, we've had things like, you know, Electrum has been around for a while, and nowadays things like, you know, Sparrow and, you know, Nunchuk, and now your, your product, Liana, and Keeper, and various solutions are out there. But it still seems like you kind of have to be a bit techie to use it. it's, it's gotten better though, and I think that's, it Hardware wallets that form a, a multisig setup, let's say a two of three or a three of five, which would be like a typical thing. But I guess as you said, it's regulatory reasons for some people, and maybe it's just the tooling isn't quite there yet? How are you seeing that? Like, do, do you agree with that summary? Where, where do you think I'm missing pieces there?" }, { "speaker": "stephan", "time": "04:04", "start": 243.56, "text": "No, I think you're, you're, you're doing great. I really think Electrum was like the big thing, that really started the, the, the multisig on the business side of thing. a lot of people are actually still using Electrum, for that reason. Although right now, yeah, you hear a lot more about Sparrow, just like the, the feel of the software is much, much" }, { "speaker": "stephan", "time": "04:28", "start": 268.42, "text": "Make it even simpler. So if you used Sparrow and you move to Liana, of course you have a lot less, kind of bloating in the, in the interface, right? it's, it's not really built for the advanced user as, let's say, Sparrow would be. yeah, I completely agree with that. There is also another part though, which is the hardware wallet, as you mentioned, their UX also improved, drastically. It's still not, you know, the, the simplest thing, but at least now most hardware wallets support, you know, PSBTs. What, multisig in, in this sense, not just blind signing and having bad security. So i-it's also like a whole thing of the industry moving forward and, and making new standards. Miniscript is another one, output descriptors is another one. I'm using technical terms here, but it's like small steps we did, that actually make multisig now really usable, not just like a hacky thing like back in the days with Electrum." }, { "speaker": "kevin_loaec", "time": "05:22", "start": 321.59, "text": "Yeah, I see. And as an example, I think another example that relates to this is like registering the multisig quorum, right? So back in the day, like maybe that wasn't as much of a thing or the hardware devices didn't all support that as well, whereas nowadays that's seen as like, \"This is just a part of your normal multisig setup.\" So when people, you know, for listeners if you're not familiar, like the basic thing is like you might write down your 12 words for your, you know, that's your private key of your, your cold card" }, { "speaker": "kevin_loaec", "time": "05:51", "start": 351.25, "text": "Some kind of multisig setup, it's like that's how the cold card, in this case, knows the public keys of the other s-signing devices, and so then it knows how to generate those addresses in a way that's a bit safer than what was before, right?" }, { "speaker": "stephan", "time": "06:06", "start": 365.52, "text": "Yeah, and it's actually critical for security, not just for the receive address which is, you know, already something, but also for the change address. So as you know, and maybe the listener doesn't, but when you use Bitcoin, when you spend some coins, when you spend UTXO you're actually destroying the UTXO, so the coin you have, and you're creating new ones, some for the recipient and some back to yourself as the change. and the, the real thing here is that if your hardware wallet, isn't aware of how to generate addresses, but not just for deposits, also for the change, then one of the kind of attacks that was performed back in the days was actually that the software would lie about like the change, and it actually didn't go to you It would go to the attacker. So your transaction looks normal, the funds are actually going where you're trying to send them, but it's just that every leftover you had in your wallet would also go and to the attacker without displaying it to you. So this is why it's extremely important for your hardware wallet to be able to generate the change address, so to be aware of every other keys, because otherwise, like, your wallet could just be emptied without you noticing." }, { "speaker": "kevin_loaec", "time": "07:15", "start": 435.36, "text": "Right. And that's why the, the better hardware wallets nowadays, they do like a change check, right? They check that the change is Back to, to my address, so to speak, so to make sure it's not, you know, because that's a hacking vector, and, and in some cases, either literally just going straight to the hacker, or in the case where, in some circumstances, it was like a ransom attack where it would like, they would send it to like some really weird place that they, they, you know, the hacker could then leverage that against you to say, \"Hey, you better pay, pay up or otherwise you're not gonna see that coin again.\" And so that's obviously something for people" }, { "speaker": "kevin_loaec", "time": "07:51", "start": 471.49, "text": "It seems that there's been a lot of, at least for now, there's a fair amount of centralization into some of the big name custodians, right? Like the big ones, Coinbase Custody, BitGo, Fidelity Digital Assets, Anchorage, and maybe, maybe a couple others, but there's kind of this bracket of, let's say, tier one kind of well-known custodians that almost all the big players go to. Is that a centralization vector? What do you think?" }, { "speaker": "stephan", "time": "08:16", "start": 495.69, "text": "Yes, centralization, not necessarily in the sense of, like governance, right? I, I don't really think these people have a lot of power over the network. we kind of saw that as well with the, with the big blockers versus small blockers, where, you know, you had companies like Coinbase, potentially supporting the other side, and still, you know, they didn't really have, bargaining power in this sense. but there is a risk though of centralization, which Is actually for the hacking risk or for the, for the threat of a motivated attacker, because of course, if you know you can break into Coinbase, you will get billions, if not, you know, trillions at some point of dollars, that's actually terrible, right? And this is what we're doing right now by really centralizing a lot of money into this custodian is that we are like increasing the, incentive to break into them by a lot. And so of course, now with ETFs and- Things like that, like also doing custody at Coinbase, for Coinbase it becomes a huge risk, of course. Like, how are you going to, if I, if I was Coinbase, you know, how am I going to enforce a level of security that could be resilient to multi-billion dollar, motivated attacker, right? And this is extremely hard. So of course there are, you know, nation, nation state level attackers, trying to break into Coinbase and, and equivalent. So yeah, that's your centralization risk here is that the- Yeah, the, the, the cost to defend such an amount of money is just insane and does it even exist? You always need, you know, people at some point to be able to access these coins, and, how much do we need to break these people somehow?" }, { "speaker": "kevin_loaec", "time": "09:55", "start": 594.74, "text": "And even, to be fair, it-- I don't know, I haven't looked into detail, but it could be that some of them are using more like omnibus style, you know, custody, and others may be like, no, it's segregated per large customer, right? And so maybe it's a For whatever this large company's coins versus some other large company or some other exchange that they're doing the custody for, this kind of thing. So it mitigates it a little bit, but it's still, yeah, maybe that is something there. so let's talk a little bit ab-- about Liana Business. I know you recently launched this, so give us an overview on that as well as what's the pricing?" }, { "speaker": "stephan", "time": "10:32", "start": 631.56, "text": "Yeah, so Liana Business is basically a complete offering around the Liana wallet. so as you know, the Liana wallet is just an open source software. You can go to our website or go to GitHub, download it, run it by yourself, you do your own setup, you use it yourself. Support is kind of just offered on a, on a, you know, best effort basis. You can contact us on Telegram, email, or whatever, but of course, you can't expect us to just spend hours on, on fixing your problem if you're not That's, that's quite enough. for Liana businesses, so we were basically, we know we had a, we have quite a lot of business users using the open source version of Liana, or at least the free version, 'cause Liana business is also open source. and so, yeah, the, the main like needs they have are around, figuring out their policy, so how to set up, the wallet and what kind of conditions to use. So Liana isn't like your typical Meritasek where most- Most of the vendors are using like a two of three or a three of five, in Liyanet really custom and, and we encourage you to pick exactly what's, what fits your actual governance in your structure. And so of course, not everyone is a security expert, so part of the, of the onboarding, sessions of the ANA business is really to help you figure that out. So we are going to map out your normal, business operation. So how do you usually do a payment? Do you need to have like two, three people authorizing Is it just one? how do you deal with like issues if someone leaves the company, if someone is on holidays, whatever, things like that? So it's really about helping you map the highest level of security you can without disrupting your operations. and with Lianna here, we can also have, of course, all of these recovery, layers so you can have recovery layers internally or externally as what we call the safety net. so yeah, quite, quite a lot of things we can help with on the design of things. Then on the technical side, Lianna So, now brings the notifications. So we-- you will get notifications, if there is, let's say, a specific deposit to your wallet, if somebody is crafting a transaction and is waiting for co-signature, you will get a notification. If some of your UTXOs, so some of your coins need to be what we call refreshed, so they haven't moved in a long time, and it would trigger the recovery situation, you will actually get a, a bunch of email before just to let you know, hey, you should actually access your wallet to prevent the Happen. So this is part also of, of the business and then a bunch of other things like, safekeeping your encrypted descriptor on physical media and things like this." }, { "speaker": "kevin_loaec", "time": "13:10", "start": 789.83, "text": "So let's just walk through like a typical, like, I don't know, obviously as you said, it's custom. And actually, sorry, one other question while we're on the custom multisig, I know a while back people used to say like, stay to the well-known multisig things like two of three or three of five. If you go to the large ones, you might like, if people start Fifteen of fifteen or twenty of twenty or some, you know, whatever, some fifteen of twenty, that can be difficult or you might risk not paying enough fees or things like that. Has that been resolved or is that kind of dealt with inside your app for the, for the user?" }, { "speaker": "stephan", "time": "13:42", "start": 822.17, "text": "It, it's pretty much resolved at the, even at, at the Bitcoin layer, right? So with RBF being basically on by default for everyone now, you could re-sign transactions. It's still very annoying if you have a fifteen out of fifteen because RBF means you need, again, fifteen people Things like CPFP that works as well, so the recipient could just increase the fees and things like that. so I, I believe from that perspective it's solved, it's solved. on the other side, there is also the way that wallets were, kind of dealing with multisig back in the days. So when you didn't have, output descriptors, you would actually kind of- Use a hardcoded script, so you would know that every two of three would use this specific script, and you would order the xPub in this specific order, et cetera, et cetera. So all of this was kind of like a very hacky way of making things work, because there is a lot of ways to do a multisig on Bitcoin script, and just, you know, doing the same script for everyone isn't optimized in terms of fees, in terms of, yeah, a lot of things like, script execution and things like that. And then output descriptors are also fixing the problem of, you know, having to standardize everything for everyone. So this is pretty much solved. not every wallet is still implementing miniscript, as you know, even output descriptors, still not everyone does it, but pretty much, like now it's becoming a standard, right? I, I believe every wallet that is used today would still tell you, hey, you should save your, output descriptor. It's not going to assume it can rebuild the script with your xPub and things like that." }, { "speaker": "kevin_loaec", "time": "15:21", "start": 920.59, "text": "Yeah, yeah, it's interesting to see how that's evolved. So, yeah, let's walk us through just an example, just so people can get an idea. Like, let's say it's a small business, with, you know, a few founders or key employees, what would that look like in Lyanna business?" }, { "speaker": "stephan", "time": "15:34", "start": 933.86, "text": "Yeah, great question. So it, it really depends as well on the size of the business or what they do with the funds. So that's, that's a great example. we might actually go down to some kind of recommended, templates" }, { "speaker": "stephan", "time": "15:50", "start": 950.13, "text": "or what I prefer, which is a two of two that then extends to a two of three with a third key. So again, depending on the business, right? So for what we're using at Wizard Charlie, in my company, it's a two of two, requiring me plus, another employee in a different country that then rotates to another two of two, which is me again plus a different employee, and that then keep rotating, including, me being removed from the set in case something happens to me. So we have ways to do this in a kind of pretty simple way to explain on paper, but it's just that you need to think about it. So it's not going to be just two of three with one, one recovery key, although we could, it's usually kind of better depending on who are your typical, people that need to co-sign. to clarify this maybe. So let's say if you go to something like Unchain, right? they might give you a two of three where your business has two keys and Unchain has one key. The normal way of signing is that the two people that have a key If one of them is unavailable, you could ask Unchained for a, signature on their side, right? So i-in this matter, it means that for you, you s-you should have always these two people available. It's okay there is a recovery if they aren't, but you have these two people that are required. on Liana we can do the same with this two of two, and then you can have a third party or a third person that's there only in a recovery option. and I think that's strictly better than just a two of three, where, you know, any two of these three could be signing, so it's a little bit more difficult to, Like, modelize your, your, your threat model, around that." }, { "speaker": "kevin_loaec", "time": "17:26", "start": 1045.96, "text": "Okay. Yeah. And so, let's just talk about typical examples then. So, how, how can it work in a scenario where maybe you've got employees, managers, and maybe a board? Like, should the keys be distributed across those different kinds of people, or how, how, can you walk us through the, the different roles that might apply in setting up a Leana multisig? Yeah. Yeah," }, { "speaker": "stephan", "time": "17:49", "start": 1069.43, "text": "yeah, absolutely. And absolutely. I, I really think, this question Question is on point as well. again, it depends how your business works, but in a typical business, the people who actually do the transactions aren't always, you know, the C-level. you might have actual people that are in the, I don't know, a-a-accounting or, or, or payment, teams that are going to be controlling the keys or some of the keys, could be multiple wallets as well, right? Like kind of a spending wallet and a holding wallet. so yeah, you need to define these different roles. typically" }, { "speaker": "stephan", "time": "18:21", "start": 1101.46, "text": "Day-to-day business you go, the lower it will be in the recovery scheme. So as you were saying, what about the board? I typically believe the board has a very important role to play here, which is to have one or multiple of the recovery keys, because they are ultimately the people who don't want the funds to be locked, if something happen, right? So you want them as a backstop that, if the CEO leaves the company and there is a board on top of him, if the employees are leaving, if there is a disaster in the through a disaster recovery thing. But the board shouldn't probably not be there, controlling the wallet on a day-to-day basis. You don't necessarily want them to have access to the funds. They are just here as an oversight, and as a backstop, right? So it, it really depends again, but I would say in this setup that you would have the employees, that are dealing with the payments day-to-day on the normal path, like the path that's always active. Maybe you want someone from the management or someone from finance to be co-signing that, The management should be enough by themselves to be recovering and then adding the board, if something is really wrong, potentially as well like, a, a management conflict, that could be, you know, a small startup where you have two founders, what if the two founders are disagreeing and you need both to sign and they just don't agree, so they don't want to sign? It's good to have the board or the investors maybe having a, kind of a backstop there as well." }, { "speaker": "kevin_loaec", "time": "19:45", "start": 1185.38, "text": "Interesting. And so as I'm reading you then, it's more like, it's moving away from just kind of a s-- a simple threat like two of three or three of five, and it's more like have different spending paths encoded using Miniscript, using, you know, the Miniscript compiler to Create these different conditions and spending pathways, let's say." }, { "speaker": "stephan", "time": "20:07", "start": 1207.34, "text": "Yeah, absolutely. And it's also easier from a, a kind of an audit perspective to know exactly who can sign when instead of having quorums, because like two of three, we can say, you know, there is three groups of people that could sign, if you go three of five, it's a lot more combination, et cetera, et cetera. So if you have, insurance for your business, it doesn't have to be insurance on your Bitcoin, but just generally business insurance want to be able to map out things, if you have to deal with the regulator, they really want to know who is in control of what. So you have a lot of different things that can be affected by just having a clear who can spend at which time." }, { "speaker": "kevin_loaec", "time": "20:46", "start": 1246.2, "text": "I see. And so to be clear, these Bitcoin protocol level spending pathways, they at least currently can't like rate limit, right? So it's not the amount, what we're talking about here is just who can sign, in a partic-- in a given Setup. So I guess just for people to understand the difference, because there are certain things that Bitcoin's protocol L1 can't enforce, and so what we're talking about here is just only the things that are possible to enforce that way." }, { "speaker": "stephan", "time": "21:16", "start": 1276.48, "text": "Yes. at least in, in Lianna right now. There, there are ways to do weird, like rate limiting in Bitcoin, but that's outside of the scope of Liana, so typically Revolt was able to do that. but the easiest way to do actual rate, rate limiting today is to do a co-signer. So that could be a specific, you know, machine, an HSM or a company that will just sign or co-sign if you are within the, the limits. and you might also have seen that Coldcard now has a, kind of a co-signing mode on their- Every device that is now compatible with Miniscript, so you could actually have your signing device itself refuse to sign if you go over a specific limit, which is quite interesting, right? It's not on-chain, but we are pretty close to something, you can't bypass normally." }, { "speaker": "kevin_loaec", "time": "22:05", "start": 1325.15, "text": "Interesting, because I can imagine a lot of listeners like if they're kind of coming from, you know, maybe not as deep technical world, they're just kind of used to, I don't know, a bank or some kind of You know, interface that has its own rate limiting, but these policies aren't enforced by the custodian or by the bank, i-it not, you know, something done in, you know, on chain in Bitcoin per se" }, { "speaker": "stephan", "time": "22:29", "start": 1349.33, "text": "Yeah, absolutely. it's just something that Bitcoin doesn't have. we would need something like covenants and maybe some specific type of covenants to be able to, to enforce limits. It's not something simple. one of the reason as well is because the way Bitcoin works, we are spending UTXOs, we are spending coins, kind of like the coins in your pocket. Right. They aren't related to each other. They just happen to be in the same bucket, right? And this is what a Bitcoin wallet is. It's a lot They just happen to have the same spending conditions, that's how we define a wallet. But from the blockchain perspective, they aren't linked to each other. Right. There's no" }, { "speaker": "kevin_loaec", "time": "23:06", "start": 1386.5, "text": "account, it's, it's UTXO model. Yeah, we can't, we" }, { "speaker": "stephan", "time": "23:08", "start": 1388.46, "text": "can't really count, they don't know each other exists, so it's really hard to make sure there is a, a rate limiting there, at, at the scale of a wallet where it's different things not related to each other." }, { "speaker": "kevin_loaec", "time": "23:18", "start": 1398.17, "text": "So I guess following on from that, the natural way a lot of You know, their life savings in the deep cold multisig that they rarely ever touch, maybe a warm setup for like s- somewhat big but not like really big amounts, and then like a phone wallet just for like day to day buying a coffee level of transaction. So, do you see a similar thing applying at the business level then that they, where they will have? Because they can't have rate limiting in the sense that we were talking about, they naturally just do this thing where they keep, like, again, a deep cold multi storage for the, for the really, you know, long term stuff and warmer setups." }, { "speaker": "stephan", "time": "24:04", "start": 1443.5, "text": "It depends. currently we don't see that actually often. so either they use Lianna as their cold storage and then they have like a spending wallet that could be an exchange or something, because what they need is actually to sell Bitcoin to get fiat, more than payments. or you have businesses that actually use their Bitcoin and they don't necessarily segregate. So in this case, it's still good to have multiple people because the people are also acting as these cosigners. Right? So if I know, and my employee know, we're not supposed to spend, I don't know, one BTC, per month or something, we are both going to check the condition of the transactions we're signing. So we do act as a backstop to each other. so yeah, we don't necessarily need to segregate everything, you know, at the protocol level in different wallets, we just can be humans and check actually the conditions we're signing, which is the point of co-signing, it's actually to check each other, right?" }, { "speaker": "kevin_loaec", "time": "25:01", "start": 1501.38, "text": "Yeah, gotcha. And so when it comes to recovery then, let's talk a little bit about the recovery side of things. How do you set this up in a way where it's You know, secure and, you know, also not leaking early, this kind of thing." }, { "speaker": "stephan", "time": "25:18", "start": 1517.54, "text": "Yeah. so the way recovery works in Lianna is, if there is no automatic movement of funds, right? on chain, like, anything on chain is, is not happening automatically. It's just like you still need people to actually sign transactions to trigger something. So the way Lianna works is that you have these multiple paths. You have the normal one that can spend at any time, and then if- If the funds aren't moving for a specific amount of time, the recovery path or the recovery keys are able to spend, but it doesn't mean the fund are going to a different wallet automatically or things like that, that's not the case, right? So even in the case where a business wouldn't move their funds for a specific amount of time for some reason, they forgot or they didn't have access to the keys or something, the recovery method is just becoming active, but it doesn't mean they have to spend, right? So, As long as the, the primary one, still recover their keys, they can still do a transaction and everything is just reset the normal way. So there is no-- I mean, I'm not sure what you, you meant by leak, but at least there is no leak in this, in this way where the funds could go away by themselves. now, I guess what I was" }, { "speaker": "kevin_loaec", "time": "26:28", "start": 1587.53, "text": "referring to is more just that the recovery pathways aren't used early, right? And that's, again, enforced on chain by Bitcoin's protocol." }, { "speaker": "stephan", "time": "26:37", "start": 1596.75, "text": "Yeah, so yeah, we do use, something called Well, I'm simplifying a little bit, but it's every time you do a transaction that would push this delay again. So, in a, in a typical disaster recovery situation, we might have a long time lock of like a year or something, and so we would expect the business to do more transactions than just once a year, simplifying a little bit, but this is how it works. So you don't have to think too much about specific days or specific dates. It's more like a regular use means that, there is no problem, so the recovery is still moving" }, { "speaker": "stephan", "time": "27:11", "start": 1631.3, "text": "That's quite interesting here, actually, is that let's say it's, it's a third party key or it's a key that's less secure maybe, and that recovery key or keys are somewhat leaked, that could happen, right? Like, a key is breached, or an employee didn't secure their key properly, and that just happened to be the recovery key. That's pretty good because it means, well, it's, it's not bad because it means that, in a normal case, these keys aren't valid. So as The company notice, we can still migrate the funds to a" }, { "speaker": "kevin_loaec", "time": "27:44", "start": 1664.36, "text": "different" }, { "speaker": "stephan", "time": "27:51", "start": 1671.44, "text": "wallet with the, with" }, { "speaker": "stephan", "time": "28:11", "start": 1691.3, "text": "Imagine that now these custodians just become a recovery key, on their user's setup. And so even in case of a breach of the custodian, typically their users shouldn't be in a situation where the time lock expired. So if the user is actually normally using their wallet, a breach of their recovery provider doesn't mean anything too catastrophic for them. They would just receive a notification saying, \"Hey, there was a problem. You should rotate your funds elsewhere, you know, in a different wallet.\" And, And yeah, that's, that's much better. And that goes back to your first question about the centralization of risks. it would also lower a lot the incentive to attack such providers, because, you know, getting access to their keys doesn't mean you get access to any funds. So that's, you know, that's helping a lot of people. They wouldn't have the recovery key" }, { "speaker": "kevin_loaec", "time": "29:01", "start": 1740.65, "text": "for like a year from now or whatever. And while we're on the whole recovery thing, now we've been talking a little bit about relative time locks, and, I can't remember Limited is like a year and a half or a year and three months, something like that. And now, are there discussions about longer recovery, paths that are maybe encoded in an absolute way because we can't do relative time locks for that long? What's the thinking on that?" }, { "speaker": "stephan", "time": "29:31", "start": 1770.66, "text": "Yeah, for Liana business we are able to do this. we're still not doing it on the normal free open source version of Liana. the reason for this is that we believe It will, well, users will make mistakes if we let them do this kind of thing. They could" }, { "speaker": "kevin_loaec", "time": "29:47", "start": 1787.43, "text": "like footgun themselves and lock their coins for twenty years or something or a hundred years or multiple reasons," }, { "speaker": "stephan", "time": "29:52", "start": 1792.35, "text": "yes. So one of them is that the maximum time lock you can do in an absolute time lock is nine thousand five hundred years, so that's quite a long time." }, { "speaker": "kevin_loaec", "time": "30:01", "start": 1800.73, "text": "Only Brian Johnson will be around for that." }, { "speaker": "stephan", "time": "30:03", "start": 1803.19, "text": "Maybe. And, and the other one is that it's also absolute in the script, which means that you can't push it in the future. You have to create a new wallet technically. So that means new backups of your descriptor, new registration of your descriptor, all of that. And from a UX perspective, it's not great. we also know that a lot of users and businesses are reusing addresses. They shouldn't, but they do. And so what happened, you know, if you actually- Secondly, send funds to your previous wallet which has the time lock, the absolute time lock expired, and you rotate it to a new one, and maybe you didn't keep a backup of the old one. And so this is where it's becoming tricky to manage such wallets. It's not impossible, some wallets are doing it, you know, kind of correctly, like Nunchuck or Keeper. But it's still something that I don't feel a normal user should have access to. So that's why we're going to limit it to business users for now. I don't want the, the average user that doesn't have our support to be able to do these kind of things." }, { "speaker": "kevin_loaec", "time": "31:04", "start": 1863.99, "text": "This episode is brought to you by CoinKite, the makers of my favorite Bitcoin hardware wallet, the Coldcard Q. Now, some people think self-custody is too hard, but it's really about taking responsibility for your Bitcoin wealth and understanding that self-custody gives you a true feeling of liberty. The Cold Allowing you to go fully air-gapped using QR codes from seed generation to transaction signing. You can power the device using three triple-A batteries, so you don't even have to plug it into the wall for power. You can easily use it with Sparrow Wallet for PC or Nunchok on mobile, and you can dial it into the right level of security and complexity that you choose. If you want a simple setup, just use twelve words and single signature. If you want passphrases, easy. If you want to add multi-sig or co-signing features, you've got those too. So or other devices and level up your self custody today. Right, and I could easily make a mistake or, yeah. so what would that look like in practice? So let's say, Leanne, some business wants to sign up with you, they do their normal setup, you know, the normal stuff we've spoken about But they want to have some kind of deep recovery key for five years out or ten years out. Who would actually be the keyholder in that scenario? Is it, are they going to like, you know, a big custodian to be that keyholder for the ten years out case or how does that work? Or are you gonna be the keyholder for that?" }, { "speaker": "stephan", "time": "32:24", "start": 1944.49, "text": "It's not going to be us, because for now we're still based in Europe and we can't do anything with keys. we might at some point open a subsidiary somewhere else and be able to offer this kind of services," }, { "speaker": "stephan", "time": "32:39", "start": 1959.04, "text": "For now, it's going to be third parties. the process though in the business is a little bit different and the business isn't going to do their setup themselves on their side. we will have a discussion with them, we prepare their kind of, call it a template, but it's just for them, right? So it's a unique template. And then when they use their Lyana business software, they will actually have a different onboarding flow that just asks them for their specific key. So each of the participant in the wallet is going to be registered with their email and name and things like that. So on each of their computer, it will only ask for their specific key. So it will ask them to plug in their hardware wallet, right? when I say key, it's not your mnemonic, never enter that on the computer. And so the, the setup is really kind of like foolproof, they don't have to change anything They don't have to set up time locks, everything is going to be prepared for them, and they will just ask, you know, to put their keys in the right place and then to confirm everything is, is correct. And so we are going to do these things even with the absolute time lock when needed on our side. So on the, on their side, on the software side, they aren't going to be modifying any of these settings, so they know it's going to be what we discussed with them. For the recovery keys itself, it could be them again, so they can choose to Maybe held with the board as we were discussing before, or held in, I don't know, like a safe deposit box in a bank where they actually have a kind of a old school multisig where two of the founders need to go to be accessing this safe, things like that. so yeah, it really depends, and if they need a third party, they can bring in their own third party, so that could be a custodian they deal with already, or we could kind of recommend them some that we know of, but yeah, at, at this stage, we Has to be third parties." }, { "speaker": "kevin_loaec", "time": "34:27", "start": 2067.04, "text": "I see. Do you see that becoming a, a common practice though, like having, let's say, miniscript and like, you know, your, your normal stuff, but then also one deep recovery pathway for five years out or ten years out just in case, and that is held with maybe some big custodian or some, you know, professional who, whose role is it is to do that?" }, { "speaker": "stephan", "time": "34:48", "start": 2087.82, "text": "Yeah, possibly. I still personally prefer my, relative time lock stuff, so I always prefer to be able to push it further, but I don't have a problem with very large or very long recovery path, with a third party. the problem is more like, you know, if you lock your, your key for like ten years, is your custodian still going to be there in ten years? It's starting to be a long time, right? Even for a trusted party. So these kind of things are a bit difficult to gauge and to figure out But you know, how long is too long and, yeah, yeah, and how long is enough? Yeah. I do think it's going to be very common to have proper self-custody where only you can spend at any time. There is no cosigner, there's nothing else, there is no authorization to ask anyone else. It's just you and maybe your team, right? When I say you, it's like the organization. but you would have a recovery option in case something go wrong. And I really think that should be the nearly the default for, for normal users of" }, { "speaker": "stephan", "time": "35:47", "start": 2147.38, "text": "And it's not fun when it happens. So yeah, that's a, a good way of doing it and something we haven't covered yet, and I don't know if you wanted to cover it, but it's insurance. So of course, when we start talking about third party, What we were describing until now were basically a technical insurance. It's not an insurance from a regulatory perspective, but you kind of know a third party can access your coins, if something happens. But now we can talk about the actual insurance, where an insurance company in this specific setup can just insure the recovery, party. So if it's, I don't know, a trusted custodian that's here only as a recovery option, if they are covered with the insurance company actually saying, you know, if their key is lost, we will cover the user's funds, that's starting to be interesting as well, because for the insurance company, the risk is really low, the amounts aren't like crazy as if it was all of the- Funds of Coinbase, right? It's only affecting this one user if something went wrong with that key, and for the user it's like nice because they know that no matter what happens, even if their third party disappear or lose their keys, there is an insurance coverage against loss, of course, right?" }, { "speaker": "kevin_loaec", "time": "36:58", "start": 2218.4, "text": "Interesting. Okay. yeah, so we covered a couple of things. So one other area, I guess we were touching on this lightly, but just to kind of spell it out, so let's say in a scenario where there's an organization where keys are lost or revoked, maybe it's employee turnover. How do you maintain that recovery pathway without introducing a custodial risk? Is it just about having like another spending pathway that opens up to account for that fact that, let's say, there was some turnover?" }, { "speaker": "stephan", "time": "37:25", "start": 2245.02, "text": "Yeah, so yeah, I forgot to mention that, but yeah, of course. You, you don't have to have just one recovery path, you don't have to have just one recovery option. So you can actually use them and abuse them, as you would in a normal, multisig. So when we were talking about, you know, the two of three a two of three is three different, groups that can sign, right? A or B or B or C or A or C, right? And so depending on who is supposed to sign when, on who is the normal signer and who is there kind of as a backup, because it's always something like this, when you have a two of three, it's always like one of the keys kind of thought of as a backup. you can actually do that in your setup. So that could be key A and B as the primary, and then, you could say, I And would still let you recover the funds fast enough, especially in a, in a business environment, it would move to maybe A and C, and in case there is a problem with A after like six months, it goes to B and C, right? So you can, you can easily do this kind of stuff. It doesn't have to be the same. T, you could also, also say something like, \"Oh, we have these two people, A and B, that can sign now, and in case something go wrong, we have a different group or a different business unit that's like," }, { "speaker": "kevin_loaec", "time": "38:42", "start": 2321.99, "text": "Yeah, gotcha." }, { "speaker": "stephan", "time": "38:43", "start": 2322.73, "text": "Yeah. Okay. So we can have as many layers as you want, yeah, yeah." }, { "speaker": "kevin_loaec", "time": "38:46", "start": 2326.42, "text": "So zooming out a little bit, what-- Are there any threat vectors in Bitcoin custody that you think the ecosystem is undervaluing right-- undervaluing right now?" }, { "speaker": "stephan", "time": "38:56", "start": 2335.95, "text": "Oh, absolutely. I, I really think it's, it's what we were talking about before, it's the amount of money in very large custodials, or large exchanges, you know, namely Coinbase right now, because Coinbase is also dealing with most of the ETFs, and it's just an insane amount of money. I don't know how many millions of Bitcoin they are, custodying right now, but it's an insane amount. So what's the risk there? I don't even know. what happens if, something breached there? Like, is it the entire amount? is it segregated somehow in like smaller groups of keys? I don't know. how do you get access to this? Do you threaten people? Do you have, you know, do you have like bad actors that are already working there and trying to get access, as employees, you know? It, it's very difficult. And so what would happen? Would the attacker actually dump the coins? That seems kind of unlikely, but it's possible. would there be some kind of government, influence, like- What would happen? Because we know the ETFs are mainly, pension funds at this stage, so it would make sense that if all of this money is gone or locked or whatever, it could just be locked, right? Or burnt. it, it would kind of make sense that, let's say, the US government actually start putting pressure to unlock these funds somehow, maybe to the miners, maybe things like that. So we have no clue How deep this could go, because of the amount of money. It, it's just Coinbase is kind of like too big to fail, but Bitcoin isn't designed for too big to fail. And so, yeah, I think this is really the risk is the complete unknown of what would happen if such a large, custodian would have issues, yeah. So I, I really think this is the, this is the threat," }, { "speaker": "stephan", "time": "40:47", "start": 2447.06, "text": "We need to fix it somehow, that could be through, something that actually is being worked on in the US, which is to have, multiple custodians. So let's say a two or three of different custodians, instead of just all your money in one custodian. So things like that might be helping, but it's still, it's still a very scary risk to me." }, { "speaker": "kevin_loaec", "time": "41:05", "start": 2464.88, "text": "I see. in terms of Hardware key reuse. Now, this is something you were talking about. I saw your, a bit of your talk in Bitcoin Japan, the Dev Day, you were talking a little bit about, I guess, the, the, this concept of Using, you know, the same hardware key but across different setups, and I guess you were saying actually people should be able to do that, that you could have, as an example, let's say I have a cold card that's used in one of my personal setups, but it's also used in like a family setup, and it's also used in some kind of business setup, but the question and the challenge is across the ecosystem, how is this coordinated in a way that is secure, redundant? Ideally private, but maybe not, I don't know. and let's say compatible across different kinds of setups. So do you want to just discuss a little bit on that because I think that's probably gonna be interesting for listeners too?" }, { "speaker": "stephan", "time": "41:58", "start": 2518.5, "text": "Yeah, yeah. I think so one thing we, we know is that most users, most Bitcoiners have or had multiple wallets over time. They change software, they change, you know, they go from, pay-to-script hash to pay-to-W script hash, like to witness script hash, with, with SegWit. They might move to Taproot. It's, it's a lot of different things, maybe wallets as well in term of software, maybe single sig, multi-sig, and so the traditional way of dealing with that Was to kind of just generate new keys and generate new backup, generate new mnemonics, and you end up with like a list of mnemonics, I don't know how many, but you might have a bunch, and that was just not practical, it's also bad in term of, yeah, you, you, you don't know which is which, you don't want to re-import all of them, et cetera, et cetera. So there are, there have been a, a lot of progress to be able to reuse," }, { "speaker": "stephan", "time": "42:53", "start": 2573.45, "text": "the same In the past, you can, like, choose a different account number. It's just not user friendly, but anyway, it works. you also, also have things like, BIP eighty-five. So BIP eighty-five is that you keep one mnemonic, but from there you can generate different mnemonics. So all you need to keep is just one master backup, and from there you can create all of your other mnemonics that you had. So these kind of stuff are very useful. But, my discussion in Japan was really about how do we make this in a way" }, { "speaker": "stephan", "time": "43:28", "start": 2608.1, "text": "doesn't have to think about it and cannot make a mistake. So the main risk isn't really security on the, you know, it's not really a problem, security-wise to reuse the same exact xPub across different wallets, but it's terrible, from a privacy perspective, because you are going to reuse also what we call public keys, and so every time you spend, you will reveal, oh, these two wallets were connected, and that's just not great. So yeah, we need to make sure users use different account numbers, but we- We don't want to ask them every time they create a wallet, \"Oh, which account number do you want to use?\" Because they don't know what it is, they don't know how many they used in the past, et cetera. And so, yeah, the whole discussion is that we're trying to find a way to make it, transparent for the user, in a way that they just can't reuse an xPub, but they would still use the same mnemonic if they want to. I'm not saying, and I, I think it's a, it's an Everything, I think they should be able to, but of course, like I do still segregate my, personal keys and my business keys, but I want to be able to use, the same one in multiple wallets if I need to. So for the business, for example, we have different wallets and I'm using the same key, for the different ones. And if you look at the, at the blockchain, you will never know, it's the same business or it's the same key." }, { "speaker": "kevin_loaec", "time": "44:53", "start": 2692.83, "text": "Yeah, and actually there was an interesting point you made, which people might not be familiar with it nowadays, which is that, especially in earlier years, or maybe even now, there's this element of people could be reusing a key on a shitcoin, and then that key could then come back and dox you on the Bitcoin chain if things hadn't been coded correctly. So can you just explain a bit of that dynamic for people, because that could be a bit surprising or- Not counterin-- it's kind of counterintuitive for people." }, { "speaker": "stephan", "time": "45:22", "start": 2722.11, "text": "Yeah, yeah, yeah. So now we have this thing called, you know, derivation path, so HD wallets, et cetera. But anyways, technical terms. But you are using one secret, which is like a master private key equivalent to your mnemonic, you enter it in your hardware wallet, in your signing device. This key is actually going to already be derived. You're not using the, the master one. You are going to derive it to do some derivation. And so some depth, to generate what is going to be used by your wallet. So in Bitcoin, we use a specific derivation path. There is also a, a coin type, field which is like a different number depending on which shitcoin you're using. But again, that is just something implemented on the software perspective by the hardware wallet or by the software. But if you don't do it, it will work. You can, use your Bitcoin key, to create a whatever wallet. And Of course, if you do that, when you sign a transaction, it could be also reused on the Bitcoin network. The thing is that it would need to have the same kind of format, so the same UTXOs, et cetera. So the risk is only really there when it's about a fork of Bitcoin, much more than a completely different shitcoin. and so yeah, the risks are there when we're talking about, you know, like a Bitcoin Cash, for example. it was kind of scary at the beginning when the discussions were there about like, \"Oh, it But we really need to make sure, users aren't going to, you know, move some funds on B-Cash and then someone there could just broadcast the same transaction. And that's what I'm talking about replay, replay" }, { "speaker": "kevin_loaec", "time": "46:58", "start": 2818.35, "text": "protection." }, { "speaker": "stephan", "time": "47:00", "start": 2819.61, "text": "Absolutely. And, so typically, yeah, the attacks were kind of weird, but you could be, an attacker like a merchant or a peer-to-peer, exchange where you would get someone to sell you their B-Cash because it was worthless, so they send their B-Cash or their Bitcoin from the other chain to you but then you replay this transaction and you also get their actual Bitcoin. And so this is where the risk really was. So i-it's, it's something important we need to do when there is a, you know, a fork or any kind of split, we need to make sure users can't lose their, their coins like this. So sometimes it's, it's not something the user can do anything about, it's really on the developer side of thing to think about this, fork risk. But yeah." }, { "speaker": "kevin_loaec", "time": "47:41", "start": 2861.48, "text": "Right. Yeah. And so I guess maybe that could be, especially Really know some of these nuances and they just try to one-shot, you know, vibe code an app and it doesn't really pay attention to some of these nuances, especially if, if, you know, it would be one thing if it's like just kind of spending wallet, whatever, smaller amounts, but it's like another thing altogether when it's like, no, this is for like your hardware wallet, like serious security, serious money, kind of stuff. So I guess just things that people have to sort of understand, and that's why the security focus and the review and the, you know" }, { "speaker": "kevin_loaec", "time": "48:21", "start": 2900.53, "text": "discussions and products." }, { "speaker": "stephan", "time": "48:23", "start": 2902.99, "text": "Yeah, yeah, and another thing I, I would like to add on this, so all of these discussions about wallets isn't just for individuals, right? It's also because we're talking about businesses. And so I don't want to have to change my key, my mnemonic every time I have one of the employee that's part of my, of my multisig setup that move out of the business or that lost their key or things like that. I want to be able to keep my backup, my secure backup that's somewhere in a place That I don't want to a-hack, to access right now, things like this, right? We, we really want to make it as seamless as possible to rotate keys in a wallet when one of the key, maybe not even mine, is swept out and we need a new one, it's important that my xPub also change, but I don't necessarily want to have to create a new mnemonic for that, right? So this is really where the discussion is, and, and there are actually two wallets we mentioned already in this call, that actually use The, well, we don't have a proposal yet, but already have this issue, and that's Nunchuck and Keeper, because they do use the absolute time locks. So they al-already, rotate wallets in the background for users when they reach the time lock limit. And so by rotating this, they need to change the xPub, and of course, they aren't going to tell their users to generate a new mnemonic, et cetera. So they have to do it in the background. And, yeah, that's a real question, like, could I import" }, { "speaker": "stephan", "time": "49:48", "start": 2988.28, "text": "Because you don't really have the same coordination or the, the same generation of xPub, rotation, because we don't have a standard for it." }, { "speaker": "kevin_loaec", "time": "49:56", "start": 2996.43, "text": "Right. And I guess, yeah, it's not this, it's not enough to just say, \"Oh, but you have your output descriptor,\" because what we're talking about is the xPub that goes in that output descriptor, that's the thing that's changed. And as you said, so let me summarize as I've understood it, just make sure I've got it right, and then maybe also for the listeners. So Just in Bitcoin in general, what we're protecting really is like this massive, massive, massive number. That's your master private key that can be represented with twelve or twenty-four words, right? The typical BIP thirty-nine. But then what we're talking about is That going from master private key to master public key, that can shift be based on account numbers and this derivation path that we're talking about. And so what we're talking about here is if the software has been coded in a different way where they're, maybe they're incrementing the account number in that derivation path, it's gonna result in a different xPub, and then that xPub, you know, because the idea is we would like to keep the same, let's say, hardware wallet with the same twelve words. With the same master private key, but the xPub might have shifted for good, and it could be for good reasons. So it's just like there's this technical and maybe social and economic coordination that has to happen there. And Yeah, maybe. I mean, I don't know. I, I don't, I, like, I think what I got from you is that there's not really a solution here, at least yet. Maybe in the future, maybe there'll be some kind of bip to help coordinate this, but even that is a challenge across like, okay, so are people just gonna do like Google Cloud and Apple iCloud backup, but then lose the privacy, but at least make sure they haven't screwed up from a redundancy point of view? Or is it more like, no, it needs to be even better than that Open question, right? Absolutely, open" }, { "speaker": "stephan", "time": "51:43", "start": 3103.26, "text": "question, right? And, yeah, loss of coins is always the, you know, the, the bigger problem. but privacy is also pretty high. And so keeping it like it is today is just not good enough for privacy, so we need to do better without Increasing the risk of loss. And this is really the, the tricky thing. Like we know there is a problem privacy-wise today, because all of the BIPs for, let's say, multi-sig, if I already use my key in a multi-sig and I use it in a completely different multi-sig, it will by default use the exact same xPub. And this is a problem. We don't want that. And, yeah, it's happening today. So how do we make sure this doesn't happen in a way that the user isn't going to I use or things like that. We, we really don't want that." }, { "speaker": "kevin_loaec", "time": "52:30", "start": 3150.16, "text": "And so then in practice, like, even if you're an advanced user, it's a pain because you're having to keep track of, oh, which account number, like, I've got the same master private key and the same twelve words, but actually which account number and which derivation paths have already been used for other setups so that they don't cross-contaminate with other new setups that you might do on that same hardware wallet and same twelve word seed or twenty-four word seed, whatever." }, { "speaker": "stephan", "time": "52:54", "start": 3174.19, "text": "Exactly. Yeah. And you might So one participant leaking their xPub on one side could actually, you know, kind of compromise the wallet from, from a privacy perspective. And so, yeah, you really want to make sure every user's did their thing right and chose the right account number, et cetera, et cetera, and you might not really have control over their keys, over their setup. So that's why the, the idea here of the whole discussion we had in Japan, and I'm going to have it at, BTC++ in two weeks as well, in Taipei, is like how do we This is kind of automatic, completely foolproof, and there is no way, the user can fuck this up, yeah?" }, { "speaker": "kevin_loaec", "time": "53:35", "start": 3215.24, "text": "Yeah, I don't know if there's any easy way, but, well, yeah, let's see. So I guess zooming out a little bit, back to just kind of self-custody generally, Well, talk about Liyana business. So why do you think Liyana business succeeds where other efforts have not at getting businesses to self-custody? Like, what is the USP, the unique selling point here with Liyana business that you see?" }, { "speaker": "stephan", "time": "53:58", "start": 3237.9, "text": "Yeah, it's the, it's the entire recovery option thing, right? Like having, knowing that no matter what happens, if you have a correct setup, you will not lose your coins. this is really the main thing. If you ask people about why they don't use self-custody, it's usually because they're afraid they did something wrong. It's not really about the, the physical threat or things like that. Of course, we need to mitigate that as well, but the main fear is that they don't want one day to just be like, \"Oops, I did something So this is pretty much solved, with Lyanna in general. Now Lyanna business makes you know that you don't have to think about how to do this properly, we can help you think, we can help it design, design it the best for your use case and make sure there is really no mistake. sometimes it's just about also having the convenience of knowing, you know, if you have any technical question, if you need any support, we are here for that. it's about knowing that you can have an encrypted backup with us, You have very high SLAs, that, you know, your wallet will always be able to spend no matter what, no matter if, I don't know, Cloudflare goes offline or something like that. it's, it's a lot of things that we can help with, and so USP for me is that it's really built for businesses, with businesses in mind. But the actual USP of Liana in general is like this entire thinking of recovery. So no matter what happened, you won't lose your coins." }, { "speaker": "kevin_loaec", "time": "55:23", "start": 3322.71, "text": "Yeah. Okay. Gotcha. Around the future of corporate Bitcoin custody, what does that look like, and where do you see Lianna Business fitting into that?" }, { "speaker": "stephan", "time": "55:35", "start": 3334.92, "text": "Regulation will have an impact on all of this. I really hope the regulators stop thinking like everything should be a bank, because I think in Bitcoin that's not the case. it should be the opposite. It should be like nothing should be in a bank. in Bitcoin, it really should be the, the, the control should never be, com-completely held by one third Party, there is no way. So I believe this will change and we will at least force the custodial deployments to be multisig of different entities, and we need to make sure they're not the same people controlling these entities. self custody is great, and having recovery with custodians, is also a very good idea. So I don't think it's about destroying the, the value proposition of a, of a trusted third party, it's just about making sure they can't steal the coins, if things are going right. And also something that is- Maybe less discussed, is the role of banks for this. So I was talking about banks in the principle of like, nobody should be controlling all your coins and keeping them just for you, but traditional banks are also a thing and they want to have exposure to Bitcoin now, Bitcoin is becoming, you know, really a topic with, you know, Trump and ETFs and all of that. So their clients are coming to them and they are asking for Bitcoin products. so what does a Bitcoin product looks like for a bank? right now, kind of the easy way is just letting people trade some kind of exposure on Bitcoin. So ETFs is a great way to do that, so the bank doesn't have to custody anything, it's just a ticker, you know, you can buy and sell it, and that's some exposure to Bitcoin for their clients. But what about, you know, imagining again how we could position Lianna for this? What about the bank, letting you have your own self custody wallet, maybe within their app, so you are in control, you have all of the keys, but, if you lose your keys or if anything happens to you, the bank has a recovery key after a time lock. So that also fix kind of the inheritance problem from the traditional side of things, where if you disappear, your family would get access to your Bitcoin through the bank, but after this time lock expires And I really believe that's a very good way for a bank to do Bitcoin the right way, so the bank wouldn't be a custodian, but they would still be there to assist their users if the user, lost their keys basically." }, { "speaker": "kevin_loaec", "time": "57:54", "start": 3474.14, "text": "Interesting, yeah. So it could be sort of like maybe in the future, apps can actually be self-custody, but the user doesn't necessarily have to even know as much about that, but actually the keys are there. But I guess there'll, there'll still be concerns around that, like as an example, let's say we're dealing with, like, if it's a high net worth customer, is he gonna be comfortable having the keys to, let's say, millions of dollars worth of Bitcoin, right? At today's prices, let's say ten or more BTC? On a phone. He might not be, right?" }, { "speaker": "stephan", "time": "58:23", "start": 3502.61, "text": "Correct. we still have this discussion around, you know, how do we deal also with physical threat? we need to make sure the user isn't going to feel like they can fuck up really hard. Yeah. and so, yeah, maybe multisig is part of that, maybe co-signing is part of that." }, { "speaker": "kevin_loaec", "time": "58:38", "start": 3518.26, "text": "Yeah. And or maybe it's like a threshold thing, like the user is self-custodying, but actually above a certain threshold, the, the app like pings you and says, \"Hey, You know, but, I guess bottom line though, it is gonna be a kind of a battle there between convenience, right? Because convenience and security are almost, they're at ends with each other. And so people, there'll be users who want easy ability to trade Bitcoin or borrow against Bitcoin or maybe even the fiat interaction side of it. Now, of course We're all Maxi's, we want Bitcoin to be, you know, we want the hyperbitcoinized future, but, you know, we live in the fiat world today at least, and it's gonna be a while to get there. So there'll be a lot of users who, who want this, you know, swapping functionality. Now maybe that can be built in, like maybe it's Liquid or Ark or whatever something that it can be sort of built in in a programmatic way that is a little more You know, Bitcoin and cyberpunk-ish, even if it's not perfect, but, I guess that's, that's the trade-off, right? This convenience and security balance." }, { "speaker": "stephan", "time": "59:37", "start": 3576.89, "text": "It's extremely hard. I, it's really, really hard, from technical, from the technical perspective as well, because we don't want to take this kind of compromise for people. We don't want to reduce security, but at the same time, if we don't do it, or if at least we don't simplify things, we know they are just going to give up For a custodial app or a custodian or leave their funds on, I don't know, Revolut or whatever. And this is kind of the things where the, the, the fight we're fighting, right? It's like when-- Well, it's not really us to decide to, for us to decide what the users will use. we can just build tools and hopefully they will pick the correct ones, the ones that kind of made the right decisions for them. but it's extremely hard. And it's the same in every industry, right? Sometimes you just have to What the customer want and hopefully, yeah, what you've built is, is still good enough. I don't want to take shortcuts, some shortcuts for now. For example, I don't believe in blind signers. I really want users to verify on a signing device that has a screen and buttons, their transaction, but of course, the user prefer to just have a hotkey on their mobile phone. and it doesn't mean a mobile phone is bad. Maybe multi-sig of two mobile phones, is better than one signing device where They don't read what's on the screen and they just press next, next, next. But it's a really hard, yeah, thread to, to, to, to, to go through. It's just like, yeah, it's really hard. Yeah. So we're trying to find the solutions, and, at some point we will crack it. But yeah, we need to make sure they aren't all going to ETFs and things like this where it's just they don't have any control," }, { "speaker": "kevin_loaec", "time": "01:01:19", "start": 3679.78, "text": "yeah. Yeah, it'll be interesting to see where things go, but, interesting, and, you know, I, I wish you well with what you're building, and hope more users, do try to use self custody for at least-- Like, even if they do use custodial stuff, to at least have most of their stuff in, like, the self-custodial side and only put, you know, a smaller amount into the custodial platforms, that's at least a healthier balance, maybe. but, yeah, listeners check it out, it's li Inside, Kevin, thanks for joining me, and, yeah, all the best." }, { "speaker": "stephan", "time": "01:01:55", "start": 3715.11, "text": "Thanks for having me. Bye." } ] }