EP63 Bitcoin podcast with Zach Herbert the CEO of Foundation devices.

Bitcoin is close to becoming worthless.

Now, what's the Bitcoin? Bitcoin's like rat poison. Yeah! Oh. The greatest scam in history. Let's get it. Bitcoin will go to fucking zero.

Alright, you ungovernable misfits. I'm your host, Max. Everybody knows that Bitcoin is useless, worthless, and doomed to fail. But what if everyone's wrong? What if it's the system that is doomed to fail?

Join me as I speak to some of the brightest people in the space and similar to the deepest, darkest depths of the Bitcoin rabbit hole.

Welcome back, everyone. Today's guest is Zach Herbert, the CEO and co-founder of Foundation Devices. I've been looking forward to this conversation for a while now. I really like the look of their new product.

It's not available for sale yet. It will be soon, and as soon as it is out, I will be doing a review. So, look out for that. I had a great conversation. I really hope you enjoy listening.

Before we dive in, I just want to say thanks again to Coin4UK for continuing to sponsor the show. And if you haven't checked them out yet, click on the link in the show notes. You'll get a discount on your auto buys, stack those stats, and get them off exchange.

Enjoy.

Zach, can you hear me? Yeah. Hey, Max, can you hear me? Yeah, all good. I was just having some problems with my internet, so I was just checking that I was coming through, okay? No problem, I was too, so I just turned off my VPN and it seems to have fixed it.

Okay, great. Isn't it amazing? All this technical stuff, and we can't even get internet working. Exactly, and if you want to, then you have to turn off all those great privacy features. Exactly, right.

Well, thank you very much for coming on. Yeah, my pleasure. I've been at Mauring Foundation devices stuff from afar for a while now, and it seems like it's getting closer to a reality and closer to something that is orderable, so I thought, right, I need to reach out to you and learn some more, so yeah, appreciate you taking the time.

Yeah, absolutely, thank you for having me. Before we sort of dive in and get too technical with anything, it'd be really interesting for me to hear how this all came about and why you've decided to make this device, what sort of spurge you want to do it and how you entered the Bitcoin space and what you've

done before, so we have a bit of a background to the company and why you do what you do. Yeah, sure, what I can do is I can give like a higher level overview and then drill more into why we decided to start with Passport, our Bitcoin hardware wallet.

But yeah, so I've been into Bitcoin since end of 2013. I was really into Tesla and putting all my money into that, and then when I was in college, I found out from a friend about Bitcoin and I just went really down the rabbit hole and got pretty obsessed.

Initially, I was obsessed, I think, over the idea of just building a more efficient financial system about replacing the need for intermediaries, but over the last few years, I've become much more on the freedom, open source, libertarian type angle about how important Bitcoin is

to really replace this entire monetary system that just is not working properly today. And so, you know, I just listened to all the different Bitcoin podcasts, the fall of the barotails from the crypt and so on.

I think I really went down that rabbit hole. So I knew I wanted to work in the Bitcoin space, but you know, I study mechanical engineering in college and I had a job in, you know, like software product management afterwards and I did a little bit of dabbling.

I actually was buying and selling hardware wallets on, if you remember, open bazaar, which was just actually shut down permanently this year, which is kind of sad, even though it kind of gone downhill, I think, in terms of use.

But I had my hodl hardware shop and I was buying and selling treasures, ledgers, I think I had some key keys and then also open dimes because that was before a cold card came out. And so I was trying to, you know, just be involved in the space and, you know, just be

able to learn more about these products and just do a little bit as like a noob. And then I actually ended up taking a job at a local Boston based company called NebulaS, which was making some, you know, cryptocurrency, blockchain stuff.

So it was making SIA, which was a decentralized cloud storage network and then was also just launching obelisk to make ASIC miners for SIA coin and for another cryptocurrency called Decred. And so I joined up as one of their first employees and really spent, ended up

spending the majority of my time on the hardware side on managing this crazy crowdfunded project where we actually crowdfunded over $26 million of ASIC mining hardware, you know, a year before we even gave like an estimated ship date.

And so even though I had studied hardware in school, it was really a two year practical, you know, course on how to build hardware and, you know, did everything from working with the electrical engineering teams, the mechanical teams, building up the supply chain.

We actually did all the manufacturing in the US and the New England area and we ultimately shipped over 12,000 ASIC miners. And it was a really cool project. It was, it was kind of crazy.

But you know, I and a few of my team members, one, were itching to be founders because we were employees at the company, you know, we were not actually, you know, founders, we didn't have like founders equity or anything like that.

And then two, you know, I really want to be in Bitcoin. I thought, you know, all the altcoin stuff, it just felt like gambling and it didn't really feel like it had much meaning. And even though I was doing that for work, you know, I was spending all my time on Bitcoin Twitter and learning more about Bitcoin.

And so, you know, I had been using all these hardware wallets previously, I had been selling them previously, and I just didn't think that there was a product that could reach any kind of mass adoption.

And so, we just started talking, you know, for months about if we were to do a hardware wallet, what would we do? What would we do differently from the existing companies? And you know, how would we go about building it?

And you know, what would, if we were to start a company, what would that company stand for? So we ultimately decided in April of 2020 to launch Foundation Devices. And you know, our goal really is to build the open source hardware foundation for Bitcoin and a sovereign internet.

And so, things like open source, sovereignty, privacy, user freedom are incredibly important to us. And we decided to start with this first product, which is a Bitcoin hardware wallet called Passport, you know, it's AirGap that uses QR codes.

It's more premium than the existing offerings, and I know we can dive into that more on this recording. And I think the only other thing I would add is that I was always like crazy obsessed with Apple.

My first job out of high school was at the Apple Store. I remember working the iPhone 4 launch and had a lot of great memories working there. And I've just been so disappointed with the trajectory that Apple and Google and all of these kind of like, you know, big tech companies have taken in terms of censorship lately.

And I've been, you know, writing and speaking about what Apple's been doing for some time now with, you know, closing down the app store and restricting what users can do on their devices.

And I feel like it's just getting worse and worse every month. And we had a crazy week the last, you know, the last week, and so maybe we can talk about that too. But that's definitely one of the reasons why we wanted to start this company, because we think that, you know, hardware should be basically like a blank canvas that software

developers use in order to get their software to people. We don't want to be telling users what they can do on their hardware. And I think that's just unfortunately not, you know, not the paradigm today.

And we're hoping that we can slowly fix that. Yeah, it's interesting you say that actually, we're in regard to the Apple products. So I'm also, or was also a massive Apple fanboy. Like I got the first iPod, I've had every iPhone, my first computer I bought with my own money was a Mac and all my everything's been Mac.

And I'm also sick to death of them. I'm talking to you now through a Mac and I am looking to change and, you know, yeah. Because the reason is, you know, and I've said, I've said probably for the last year, maybe year and a half, I keep saying, ah, Jesus, I need to move away from Apple.

They're not what I'm preaching about. They're not. They do not fit with what we're talking about for Bitcoin and piss off of the way that they're treating their customers and this whole walled garden stuff is just is not correct.

But they make the nicest hardware by far, like there's no every time I look at something that isn't Apple, it feels less high quality. It looks less high quality. The design isn't as nice.

And it's so difficult to step away from that when you're used to it. Everything just feels plasticky and shit basically compared to it. So I've been saying for ages like why can't there be someone who just comes in, they build the hardware exactly like Apple do is good as you can quality and then you can run the

next on it or you can run your own stuff on it. And it's not there yet. So it sounds like that is the approach you are taking for foundation devices and the way that you're looking at your design is like, why not build something as nice and actually have it so that you can have something self-solving and you don't have this walled garden.

Exactly. And we're starting with the hardware wallet, but we're pretty aspirational as a company and we hope that we can work our way up to smartphones and computers and more down the line.

And I think the reason, maybe there's a lot of reasons, but I'd say one of the biggest reasons why we have not seen an Apple like entrant and for example, the Linux space is because if you think about it, the Linux targets a very specific user.

I feel like there's two kind of broad categories of users and let me know if you think differently. But I think like one category is developers and they're using Linux machines for software development, sometimes it's a second computer that's dedicated to that.

They may be running, you know, something like a Mac as their primary computer. Sometimes it's for work or sometimes they're dual booting. And it's because, you know, as they're building their software, they need a development environment that's stable.

And so maybe they're using, you know, like a new Buntu long-term release, right? And that's actually what we do for passport firmware. We all are running the same Ubuntu release because we all want to make sure that we're on the same exact environment.

Then I think there's the other category that's kind of like the more paranoid security conscious user, more of like the, you know, like the cypher punks. And they run, you know, all different types of Linux distros.

And I would argue that both of those user bases don't really have a need to have, you know, a higher quality, really beautifully designed hardware because they just need it for the functional purposes and they might not value that primarily.

They also probably don't need something that is beautifully integrated with the hardware and software, like what Apple does. Because it's not really meant for mass market consumption, you know, these devices are meant for, or these operating systems are meant for, you know, very specific user base.

I would argue that all of this changes with Bitcoin because, you know, with Bitcoin being open source and with Bitcoin transactions being immutable, the need for trusting your hardware, trusting your operating system becomes much more important to the point that I think,

you know, maybe five years from now, as, you know, Bitcoin goes through another, you know, another couple, uh, both cycles, um, I think that there's going to be just a natural need and demand for more trustable open hardware.

And then that gives a company like us an opening to actually make the hardware, you know, beautiful and integrated and try to copy those principles that, that Apple, uh, uses because now maybe people actually buy it.

And I would argue, you know, right now, you know, if we were to go make a beautiful Linux laptop or something that was just like MacBook in quality, I think we'd probably sell like a nice amount of them, but I feel like it would be in the thousands of units.

And unfortunately, that's not enough in terms of revenue to make that type of product. Yeah. And it's economies of scale and you need to have enough people buying these things, but, but I agree with you with, with Bitcoin doing what it's inevitably going to do.

You are going to have more and more people coming on board and actually thinking about their privacy because I do think it's almost like Bitcoin somehow works like a bit of a guide and a teacher and teaches you about all sorts of things that you otherwise wouldn't have known or, or at least it has been for me.

And so, you know, coming into the space like most people, it was like, yeah, I just want to make some money. And then it teaches you about, well, none of your data is secure. You should care about your privacy.

Here's why. And you start to learn these things and it's things that you otherwise wouldn't have thought about. So, as we have these waves and people do see their purchasing power increase and they start to learn about self sovereignty and learn about why open source is important.

I think more and more people will switch across because right now people outside of Bitcoin, if I said to them, oh, there's this other device and it's like Apple, but you can run Linux on it.

And they're like, well, I just buy an Apple then and you say, well, you know, it's not so good for your privacy and you can't do what you want. And they're just like, I don't care that they don't, they don't see the need for it yet.

But they will. So I very much hope that you do get to a stage where you can build these because I'll buy one for sure. I, yeah, I hope so too. And I think also people have a really hard time relating to an understanding this stuff when it does not directly apply to them.

But look what's happened in just the last week or so. I mean, we've seen, you know, all of the big tech companies, you know, banning the president of the United States from their platforms.

We've seen Apple and Google remove the parlor app from their app stores and look like politics aside, whether you're, you know, conservative, whether you're liberal, whether you're libertarian, whether you support Trump or not, you know, whether you, whether you think parlor is

awful or not, or the people on parlor, you know, are awful or not, like none of that matters in terms of the precedent that's being set right now. And so I think a lot of people, thousands, tens of thousands, maybe even hundreds of thousands or millions of people are seeing this and saying, oh, man, they just, they

just removed my, my app that I'm on every day with maybe, you know, a days notice. And as that happens more and more frequently, as apps are removed, as YouTube accounts are removed, as prominent accounts of people that you follow are deleted, I think people

start to kind of understand at a deeper level why this matters and, you know, the trajectory that we're on right now is kind of scary in terms of the censorship. And so I feel like Bitcoin almost could not have come at a better time and could not have been going more mainstream at a better time.

And I really, really hope that people, you know, start to care more about free speech and decentralization and sovereignty and those kinds of principles because right now, you know, obviously the majority still don't.

But when we think about starting a company, we think about, you know, what, what's the decade long trend look like. And so that's kind of what we're betting on. And let me say betting on a trend long term, I think it's very reasonable to assume that more and more people will care and with all of what's going on, and you're right.

It's really fucking scary. It's proper 1984 stuff. It's deplatforming. It's stopping free speech. It's really not good. And then you sort of layer on top, stopping people actually having freedom of movement.

I'm in here in the UK with all this corona stuff going on. We're getting arrested for sitting on a park bench because someone's grassed them up because they're supposed to only go out once a day.

We weren't allowed to go and see our families for Christmas and all this. You know, I did it because I think of a fuck and I'm going to live how I want to live because I think it's disgusting that they even suggest that they're going to try and control people's movements.

But then I have to make sure that nobody knows who my real identity is because if I said that, someone will probably come and arrest me. So it's this weird, proper 1984 stuff that's happening all around us.

And I think that more and more people are starting to twig. They are starting to question, hang on a minute, how free really am I? And when you layer Bitcoin into that and they realize, oh, well, you know, in the future, maybe I don't actually need this bank account that they might ban if I don't wear a mask

or I don't need to be in this walled garden with Apple. I can actually use open source software and having it accessible through good hardware and good software, which is just getting better all the time.

And looking through your, you know, everyone says they want to produce hardware that looks like Apple, you know, who doesn't, but I'm looking through your website and it's really fucking nice.

Thank you. It doesn't look like any of the other hardware wallets that I've seen. I always thought that other than the fact that they're shit, the ledgers always to me were like the most simple, nice design that I'd seen, but they're still not very nice.

And if you compare it to what I'm seeing here, obviously I haven't had one in my hands, I haven't felt it, but it looks really nice. And I can see that this would fit in with someone's swanky apartment or, you know, whatever they want.

And if they have all the Apple devices and stuff, they're not going to hold this and go, oh, this looks a bit shitty and tacky, they're going to actually think, you know, this is a really nice, high quality product.

And I can see, obviously, the pricing is quite different to the other manufacturers that are out there. But, you know, there's a reason for that. So it's nice to see. Yeah, thank you. I think, you know, one of our company principles and values is that Bitcoin is already difficult

enough for a new user to learn about. So when you have to learn about Bitcoin, but then also learn how to use your hardware wallet, it's like that to me, it's not even like a double, it's like a exponential type effect.

It's like, oh, man, if I want to get started on Bitcoin, I have to, I have to learn how to use this, you know, ledger device and I have to learn how to enter my eight digit pin with two buttons, like those kinds of things are design decisions that just drive me crazy.

And so we want to make the device that was just like, look, it looks nice. It's premium. It feels right at home with your other premium electronic devices. It's a little bit bulkier because we make some interesting design decisions around the keypad and the screen and using, you know, AAA batteries, for example.

So it's a little bit larger than what you would necessarily expect. But you don't have to learn how to use it. You know, you pick it up, you know, which button turns it on, you know how to navigate through it.

You know, you know how to go through all the settings. It makes it really easy to create a new wallet or import your seed, you know, pair it with a software wallet and just get started. And so that's how we think about it.

It's like, we, you know, if we do our jobs correctly, then the device should just feel kind of boring because you shouldn't have to even think about it. Hmm. Yeah. It is a massive learning curve, you know, for non-technical people, myself included.

It's been, well, I quit my job and I've done nothing else for two years other than just learn about Bitcoin and be obsessed and be a complete loser because I genuinely believe this is going to change the world.

And I'm so confident on it that nothing else matters, nothing else on the planet matters to me because it's not as important. If this works and I think it will, it's going to bring freedom to the world and it would never happen without it.

We cannot do it without this. It all stems down to the money. And I feel that when I'm trying to express to people how not only how important it is, but like why they've got to sit and spend, you know, 10, 15, 20 hours to learn how to properly use their hardware wallet and then set up a node and do this and do that.

People just don't have the time, like, even if, even if they say, okay, I'm going to invest in it. I get your theories on why this is going to increase in value or, you know, I kind of think that it's important that I do have some privacy.

They get to a point. There's a barrier where they're like, no, I'm going to leave it on exchange. I'm not going to be messing around with this because it's too hard and like, I don't have the time and it's too fiddly and what if I lose my money and, and I try and teach them

maybe to use a cold card or to set up a node and they're just like, hmm, I'm scared of it. I'm not. It's too much. But for us to really get the average person involved, the user experience, and like, people get really pissed off with me for saying this, but I know why is this controversial?

Yeah, but it's true and like, I do it because I care enough, but not everyone else is going to and it is important that user experience is up there and close to or as easy to use as their smartphone or whatever other devices they're using because otherwise you're not going to onboard these people.

And people will say, oh, well, they don't fucking deserve, they don't deserve freedom money. Then it's like, no, they do. Everyone deserves to have freedom money. This is why it's been built.

This is why we're doing what we're doing is so that everyone can have freedom and be able to store their value and not be fucked by governments and not be fucked by banks. And to say, oh, just because they, you know, they're not technical enough.

Why? Because a mechanic and they spend all their time working as a mechanic and then they come home, why do they have to spend 10 hours a night for however many months just to be able to use a node and a hardware wallet, it's just it doesn't make sense.

Yeah, exactly. And I think when I think about like, what responsibility we have as a hardware producer in terms of, you know, good design, like I, I think of, of making choices on, on behalf of the user in order to guide them through what we think is the proper experience, especially from a security perspective.

So you know, a great example of that is if we know that an air gap hardware wallet is more secure than plugging into USB or using Bluetooth, which I think, you know, definitely yes, then we should not put USB or Bluetooth on the device.

You know, things like that, because, you know, we want to constrain what the user can do with the hardware so that we know if the user is, you know, using our hardware, they are already making what we think are, you know, good security decisions, you know, we, we

are okay taking the Apple-like philosophy of removing features or removing elements. You know, for example, passport actually does not have a duress pin or a brick me pin, which is popular on cold card and some other wallets, because we look at it and we say, look, if

you want that buy a cold card, you know, I personally use cold cards, they're fantastic for power users. But if a normal user gets confused between their brick me pin and their normal pin and then enters it in by mistake, they've just, you know, wiped their device and completely bricked it.

And so those are just a couple examples of things where, you know, we're much more interested in thinking about, you know, how do we design an experience that gives the security of the best products in the space, but removes a lot of the, honestly, the choice for a user so

that you can feel comfortable recommending this to, you know, someone who's newer to Bitcoin and where they won't be scared to use the device and, you know, using QR codes as well is just so much faster and so much, I think, less scary and just less intimidating

than passing around an SD card, because you actually, it takes seconds, you see what's happening, you know, you line up the camera with the viewfinder on the screen, which is something that people are already used to doing.

And so I think it's really important, like, giving newer Bitcoiners more familiarity and comfort with the experience, as opposed to having to make them learn, you know, tons of new terms, whole new interfaces, new ways of interacting with the device itself, because as I mentioned before, it's like, there's so much you have to learn.

So why would we throw all these, all these choices at newer users? And I know, like, the harder core response that is often, you know, as you alluded to before, you know, UX doesn't matter, you just have to educate them.

And I don't think that is what's going to happen. I think we have a kind of a binary path ahead of us. It's either we're making the user experience much more friendly and making the smart decisions on behalf of the users so that they can really quickly get themselves up with a hardware wallet

and node and other types of products like that, you know, multi-sig storage and so on. Or they're all going to go on Coinbase. And I think that, like, to me, that's how I see it, like, those are the two options.

We either have this top 0.1% of Bitcoiners holding their own coins and everyone else on custodians, or you figure out over the next, really honestly, in this bull cycle. Like, in this having cycle, you figure out how do we make the experience accessible to the noobs?

Otherwise, I'm not sure we're going to be able to, you know, pull them into this more sovereign experience down the line as companies like Coinbase continue to grow and grow and get even more entrenched.

Yeah, and it's a big problem. We very much want people to be taking control of their own funds and we want to be able to make sure that people don't have Coinbase or don't have these sort of exchanges holding their coins.

And there is this sort of middle ground. There is this big gap where, so, like, from personal experience, the people I've managed to get involved, I would say the majority still will hold it on exchange, no matter how much I badger them, no matter how much I tell them that it's important to take it off because

they just find it too confusing. And then the few that actually have taken their coins off exchange, one is using a cold card, and I've had to spend a lot of time with them messing around and just making them comfortable and sending them guides and even then they still get a little bit worried at times.

And then the others are using Ledger and their horrible Ledger Live software without their own node and all that sort of stuff. And, like, to me, it is better, but it's not that much better because you're still leaking loads of privacy.

They've had all these leaks and hacks and all this bullshit that's gone on. And I'm like, "Ah, I don't really want to be sending them to Ledger, but I know they're going to struggle with the cold card."

So, to have something in between would be very nice. Yeah, exactly. And I actually, I don't know, maybe this is a minority view. I guess like the team at Casas shares this view around the seed phrases and the problems with seed phrases, because you think about a new user, you say, "Okay, here's this hardware wallet.

This hardware wallet is your personal security device. You keep this device safe, this device stores your Bitcoin private key, and then when you're ready to spend your Bitcoin, you have to somehow connect to this hardware wallet or pass information to this hardware wallet, and then it can sign the transaction.

I use the term "approved the transaction" because a lot of the times people don't understand what signing means. So I say, "This device, you enter a few keys, it approves the transaction for you, then you can send the transaction from your software wallet of choice."

So I kind of describe it as almost like a little, like a bank vault that you get to hold on to and you can use it to approve things with. But then at the same time, you're saying, "Okay, the first thing you do when you get this device is you write down these 24 words and keep these words safe."

And if someone finds these words, then they're going to have full access to your Bitcoin. So I think there's a huge misunderstanding for a sizable number of users. I would argue it's probably a majority, but if you actually look at how these ledger phishing attacks have been successful, and I've had some fun cooking through the URLs

and going through the whole process, just to see how they're trying to trick users, it all comes down to tricking them to enter in their 24-word seed on a computer. And I just feel like we're so early if that's what's happening right now.

Like, when you pair a new iPhone to your iCloud account, it's obviously generating a bunch of keys on the device and using that to pair up with iCloud. You're not having to write those keys down.

Can you imagine if you said, "Okay, you write these keys down on paper when you have your new iPhone?" Like, I just feel like we're so early in this, and I think that just the entire UX flow is just so challenging for a new user, because on one hand, you're telling

them this device that's pin-protected is storing your funds or storing your keys. And then on the other hand, you're telling them, write these words down on paper and put them in a drawer somewhere.

Like I can see why that would be so confusing to someone who's new to Bitcoin. It is, and I remember the feeling when I was doing it, because I've only been involved for three years or so.

I remember doing that and shitting myself, writing them down, like genuinely the fear, because I just went all in. I was just like, "Yeah, I love this, I'm it." And I was so scared, because I was saying to the person who was teaching me, I was like, "What if one of these is wrong?"

He's like, "You lose everything." I'm like, "What if I lose this, you lose everything? What if I then send this to this long string of numbers and letters and it's one's role? You lose everything."

And I'm like, "Oh, okay." And so it's interesting when you're talking about CASA, because I had Nick on, I don't know, it's probably about a month ago. We're talking you through a similar thing.

So he's awesome, and I really, really like what CASA are doing, again, because it's that middle ground, because I think multi-sig is the future, although I haven't sorted out my own self-sovereign one, I've done the CASA one, and I followed their guide to make

sure that I did it as anonymously as I could, and did it the best way I could, and it's a great service, and it's easy, because you don't have to write down those 24 words. And I've onboarded a friend of mine onto it recently, who's fairly techy, but not that techy?

I flew straight through it. There was no problems. You don't have to write anything down, and you save, what is it, the derivation paths or whatever it is. Yeah, the self-sovereign recovery info, you can print it out or something.

Yeah, that's it. And so it is a more simple and more slick system. And then, because otherwise, you have these 24 words, and like you say, the stupid thing to do is just write them down on the post-it note and leave it somewhere, the best thing you can do is to stamp it into steel and either split it and have a recovery word and have

it in different locations or backups and stuff. But not everyone can do that, or not everyone can be bothered to do that. And it doesn't feel, it's not exactly slick. It's like getting a lump of metal and a lump hammer and stamping it in and putting it in different locations.

They're really going to the stone ages. Yeah, exactly. So, can you tell me with the foundation devices, if someone was to use that in a multi-sig setup, are you doing this in a similar way?

And if it's in a single-sig setup, where are you storing this information? Is it going on an SD card or how are you going about doing that? Yeah, so we have a couple of different options at setup, and we're still working on perfecting the UI flows there because it's kind of challenging to get right.

So option one is you just write down the words, because we always have to offer that as an option to users, especially Bitcoiners that know what they're doing. Option two is that you're backing it up to a micro SD card.

What it's actually doing is it's storing the seed and some other information on the micro SD card, but then you do have to record down the encryption key for that SD card, like a password.

So you still have to write something down, but you could be much more, I guess much less careful about how you're storing the password to the SD card. You could store it, for example, on the cloud, you could store it still on paper, you could store it in a password manager, because if someone finds that password, they still need

the physical SD card as well. And so I would argue that that's more secure than paper, though there's obvious concerns with what happens if the SD card is damaged, or it's just the flash storage to grades over time.

So we do bundle in two industrial grade micro SD cards with passport so that you can use them for backup. They're rated to be much longer lasting and much more durable than existing cards.

But I think that's what we're going to push users to for like who are totally new users. And then there's also the option, if you're using it with multi-sig, to not write it down. And as of right now, we're kind of prefacing that option in the UX flow.

We're saying like, are you sure, please confirm that you're using it with multi-sig? I think hopefully we can work with CASA and others down the line where depending on the software wallet or service that you're pairing with passport, it can automatically take you to that flow.

So for example, if we were to work with CASA and you told passport as you're setting it up, that you're using it with CASA, it can automatically make that decision for you and then not require you to backup the 24 words.

So that's how we're approaching it right now, pushing new users to do the micro SD backup, leaving the 24 words as an option for people who know what they're doing, and then also allowing you to skip it.

Because I've set up CASA before and most hardware wallets, I think maybe all hardware wallets require that you write the words down because there's a verification step afterwards. So the most, I think, honestly, more terrifying than writing down your seed is writing down

your seed and then immediately destroying it because you're like, how do I destroy it? Do I burn it? Do I shred it? Do I put it into boiling water with the cleaning solution in it and let the ink dissolve?

I'm not even kidding. I did that. So then do I take that paper and throw it down the garbage disposal? That's what CASA users have to deal with now. And so we want to make sure that, look, if you're using a service like CASA that's helping walk you through it, if you're using a two of three or three of five, then you shouldn't

have to write the words down and then destroy them afterwards. That's just really, really bad UX. And honestly, opens you up, potentially, to more attack vectors than it would to just keeping the seed on the device.

Yeah, it makes sense. And I like having these microstees. I like having them encrypted and having the password because, like you say, you have to have not only the physical chip, but you also need to have the password.

And that's what I've done with my cold card and just had multiple backups just in case there's something goes wrong with them, with industrial grade and all of that sort of stuff. And it works really nicely.

It is cleaner. And also, you can hide that much easier than you can hide a stamped metal plate. You know, it is easier. And presumably you have a similar setup where you say you have the two.

So you do it, it would encrypt one, and then you just press, you know, copy, like a second copy or something, and you can do as many as you feel comfortable doing. Yes, you can create new backups.

It's just the same way cold card does it, though we may use a smaller number of words. You know, we may do like, like six instead of 12, for example, we're just, we're working on trying to figure out, you know, the best balance between sufficient security and UX.

But yeah, the also the nice thing about that SD card backup is that it can save your settings on the device, and it can also save your multi-sig quorums that you may have imported. And that's really helpful because, yeah, I mean, if you're just using it to back up the seat and you put them away, that's totally fine.

That's great. Not a huge deal to restore those settings later on. But yes, you can also update or create a new backup at any time. And you know, we have the SD card right on, micro SD card slot right on top of the device.

Really easy to just, you know, plug an SD card in there and load it up with whatever data you need on it. And so, you know, we also just thought it was important to bundle in the cards. So we, you know, we, as I mentioned, we bundle two, and then we also give you a nice little

jewel case for each card so that it's not like freestanding, you know, like a little plastic case for it. Because once again, we want to make the best decisions on behalf of our users. So rather than telling our user, oh, go buy an SD card, if you want to use this feature, we're saying this is a useful feature.

Here's two industrial grade cards that come from a reputable manufacturer that we've tested and we formatted for you. You can obviously bring your own, but it's, you know, it's, it's important.

I think that if we're asking users to, to employ such a feature that we're then also giving them the tools that they need to do it. Hmm. Yeah, it all sounds good. It sounds like the way I think we need to be moving towards and, you know, it's great to have these different options.

And like I said before, although I'm not, I haven't done, I want to set up Spectre, Multisig, you know, I haven't got to that stage yet, but I do see this is the way it's going to go and to have multiple devices that are all pushing forward and having different

options and they all have different trade offs is important because the more devices we have, then the more of an attack, or less of an attack vector we have because if, say, there's a vulnerability in one, but you're in a three of five, then at least it's only one and you're safe with the others.

So the more I think about it, it does make sense to go that way going forward. And my, my dream set up actually is, and, and the way I think we're going to move in the future, or at least we at foundation devices are going to try to move the industry in terms of our product roadmap is to turn every device into a hardware wallet.

You know, I, I think, um, you know, when you, when we say hardware wallet now, I don't know if that's the best term for it because it can mean a lot of different things. It can mean, uh, and, and also confuses new users because they think it's actually like storing their, you know, Bitcoin and they're like using it to transact.

Yeah. It's my Bitcoin in there. I can't see it. Exactly. So I think something like a, a signing device or something like that is probably a better term, but there's a whole spectrum. You can go with, you know, something like cold card where you can use it completely airgapped.

You could go for a ledger Nano X where you can use it with Bluetooth, you can go for that new block stream Jade product where it even has wifi on it. It's like, how do you call all these things hardware wallets, right?

They, they all have completely different, um, security models and you interact with them in different ways. But if you were to put, you know, a hardware wallet into a Bitcoin full node. So it's, it's now internet connected, right?

Um, and it's able to communicate with the, the node software and you can use it to, you know, store your, your, uh, seed for Bitcoin or lightning transactions, you need more securely. So it's not an air gapped or an, or a cold storage hardware wallet, but you could also

kind of like isolate it from the main electronics, um, to give it a little bit more security. So is that more like, you know, warm storage? Is that cold storage? You see what I'm saying. There's a, there's a whole spectrum of what you can do.

So the way that we look at it is we think that all your devices are going to be storing keys, uh, whether it's a phone, a node, a computer, an air gapped, you know, offline hardware wallet, so on.

And we think that multi-stake is going to be prevalent. And we think that for new users, um, it's just going to require them going to different devices to quickly approve the transaction.

And that's very similar, I think in UX to what, you know, Apple users are used to, you know, if you, for example, set up that new iPhone and you add it to your iCloud account, you get a push notification on all your Apple devices saying, do you want to, you know, authorize this, this new iPhone at this location?

Now, obviously we, I don't know if we can ever do anything that slick without using some kind of, you know, centralized provider because, um, you know, you really need to use, uh, you know, when you're cycling a device into a new multi-sig setup, you have to like update the configuration on each device.

So it's, it's not going to be as smooth, but I just think the general idea of being able to approve a new device from your existing device or go to another device for like a second factor, you know, authentication approval is something that people are already used to.

So if we can build out a UX and try to make it as easy as possible, you know, where you want to send a Bitcoin transaction, you, you know, fingerprint or face ID on your phone, you, uh, you know, scan a QR code from your hardware while it's done, or you can, you

know, up to a, you know, a three of five multi-sig and maybe you also scan a QR code on your node that's sitting on your desk. So there's those kinds of things that you can do. And I think, um, I think people get that more intuitively that you're just approving it from

your different devices and that even if you lose a couple of your devices, uh, it doesn't impact you at all. Yeah. Yeah. I completely agree. Um, and I very much look forward to seeing multi-sig become easier and easier and you know, it is very easy with someone like Casa, um, and I hear that spectres doing some great

things and blue water. Yeah. Spectres really good too. Yeah. Spectres awesome. Um, I had better bet on here recently. He's an absolute dude. He's just like, he's, he's one, he's one of the guys who's, uh, on Twitter, always putting out some memes and fucking around, but then also get stuff done.

He's done a good job on Twitter with the memes lately. He's, he's on fire that bloke is very funny. So yeah, I do, I do see that this is the way forward and, um, it is exciting because I think for a lot of people and certainly for me, my big fear very early was like, oh, well,

if I take, take custody of all this stuff, what if someone comes to my house and puts a gun to my head, what am I going to do? And you know, there is that $5 wrench attack concern. And once you learn to do things properly, you can, you can get around that, but, um,

it is a big concern for people and multi-sig really helps solve that, um, really helps take away that worry, which is, is a big one and it should be. So especially with these ledger leaks and all this kind of stuff, like it is a real serious concern.

Um, and, and if you have things set up properly with multi-sig, I think that really gets around it. So that's going to help onboard more people, devices that are easy to use and slick to use are going to help onboard more people.

So it'd be interesting to hear from you like, if, and it seems like we are going to get there, what do you think the world's going to look like in the next five to 10 years when you're planning out what foundation devices are going to do?

And how do you see Bitcoin changing things? Yeah. So I think as I mentioned, Bitcoin really fixes the incentives around open hardware. But what we really hope to accomplish over the next five to 10 years is to offer a real alternative to the existing kind of mobile and desktop do-oppoles that we have, um, you

know, offer an alternative to the Apple and Google do-opley on mobile. You know, we really, really want to be able to introduce our own smartphone, um, and also offer an alternative to really, it's like an Apple, you know, Microsoft do-opley on desktop.

I know there are people who use Linux, um, and I know obviously how popular it is, uh, but for the vast majority of consumers, it's just not an option right now. And so that's really what we're, what we're aiming for, um, in this decade.

And so what that means is it means changing up a lot of the models that are used to, to do things like store data or to authenticate users. You know, for example, we, we want to see users storing their own data.

We don't ever want to have to run like an equivalent of iCloud. We think that's crazy. You know, we don't want to store user data. We think we need to give users the tools to store their data themselves.

We don't want to be collecting information about our customers. We want to be able to purge the information as soon as we have it. We don't want to have credit card numbers or other things like that.

We ideally don't even want to have an email address except unfortunately, you know, we use that now to communicate, you know, company updates and important security updates. Um, you know, we want to see, uh, private keys, hopefully through something Bitcoin or lightning related, replace emails and passwords, you know, for authentication.

And I think like there's, there's so many amazing applications that can be developed that are Bitcoin centric and I've radically different business models as soon as consumers are no longer stuck in like the Apple Google world.

So for example, I'm, I'm sure you've probably, you're probably familiar with Sphinx is doing, you know, with like the tipping for podcasts. Yeah. I'm trying to get Paul on actually. I spoke to him the other day and what he's building is just like, I'm so excited about what the possibilities are there.

Yeah. So I am. Yeah. Yeah. Very excited. Based on my understanding of the rules, that's not an application that's going to be allowed to be distributed on the app, on the Apple, you know, iOS app store, because you're not using Apple for the payments.

Um, so obviously, you know, I have it on my phone and beta on, on the test flight service, but this is a perfect example of all these like crazy smart developers that are putting together these, these, it's early, but they're, they're laying the, the building blocks for

this whole Bitcoin centric economy that operates in a very different way than how our traditional app business models or podcast business models or media business models operate. The idea that you can be streaming payments to someone is, is unbelievable.

And so that's, that's, that's just not going to be allowed to be successful on the existing mobile platforms. And so we're really hoping that we can have an impact here that we can put out a suite of products that are going to provide, you know, UX's that are on par with what Apple

and Android can do, but that are actually open source, sovereign, provide total freedom and privacy to our users. And so that's, that's really the goal for the, for the decade. It's two different worlds, isn't it?

I don't know how else to, to put it then you've got Bitcoin world and you've got things like Sphinx and, you know, you've got all these amazing things happening and you got lightning and the ability to stream money and you've got self sovereignty and you've got this cypherpunk ethos and, you know, taking back control.

And then you've got the old world, which is fucked. It's on fire. It's not something like any of us really want to be involved in, but we still kind of have to be involved with it to some extent still now.

But to have dedicated hardware, which allows us to use those products, you know, all this software is moving really, really fast, would be amazing. Like, like you said, to be able to interact with these things that are inevitably going to be banned by Apple and everybody else, because it's too good, like it's, it competes

with them and, and they know they're not going to keep up in the end. So it's too much freedom and it's in this weird space now where you're right, like you have to use generally Google or iPhone, you have to use Windows or Mac and they're, yes, you can use Linux and PopOS and these other things, but most people won't.

So just being able to have that whole ecosystem workable for somebody where they don't actually have to step back into the other world would be really nice. You're talking about open bizarre and, you know, the ability to trade on there and all these things where we're pretty much there, it feels it's just not quite usable for most people.

And yeah, it is exciting to see what's going to happen and whether this is going to be possible and how quickly. I don't know if it's amusing or kind of funny is that I feel like we, we shouldn't, we as a company should not have to do this.

We unfortunately are having to take a step back significantly in terms of technology, in terms of hardware in order to deliver this kind of open, more trustable, privacy preserving sovereign hardware.

You know, every, like the entire hardware world, one, like all the building blocks are so opaque, you have no idea what's going on inside of any chip that's in your device. It's just a complete black box.

And there's so many documented issues with Intel, for example, of having these, all these hidden features in the chip that are nonactive that end up being discovered by security researchers or hackers than being exploited.

Most people don't realize the security chip in every modern Mac before these new series of Macs that have the Apple Silicon processor, but the T2 co-processor that's been in the not, you know, Macs for the last few years, they're all completely owned that you can

plug in with a, with a Thunderbolt cable and you can immediately gain root access to that device and bypass the encryption. And it's just like we're building this entire hardware ecosystem or I guess we, not we as a company, but the whole hardware industry for the last couple of decades has been building

on layers and layers of proprietary tech to the point where you, you really cannot trust what's going on in any device that you're using. So that's why it's like really exciting to see things like it's that like a bunnies project precursor had been floating around the Bitcoin space recently, where he's trying to design

like a completely trustable and open hardware device from the ground up. And I think that's going to take a few years to get to the point where it can be, you know, usable by normal people, but you know, it's why like, it's why our device has a physical

keypad instead of a touchscreen, because touch screens have embedded chips in them running unknown firmware. It's why we use this, this black and white display that from sharp because the display actually is one of the only displays you can buy on the market that does not have a chip inside of it running unknown firmware.

And it's, it's more tamper evident, the circuit, the circuitry is etched into glass. We probably should have used lithium ion batteries, even though most of them also have chips in them. We decided to do triple A, you know, for a couple of different reasons, we will probably do lithium ion on the next, on the next version of the device.

But like the fact that your battery now has, has chips in it. It's kind of insane. And, and then the fact that too, that, you know, Apple went from, well, maybe, I guess almost 40 years ago now, running the 1984 famous commercial, about how, you know, essentially

buy a Macintosh in 1984, you know, the actual year 1984 won't be like the book 1984, that it's going to match. That was their famous, that was their most famous ad ever. That's actually my favorite advertisement in the 1984 ad.

Yeah, as they, that was when they were Macintosh, yes, it's a, it's a fantastic ad. And the fact that now 40 years later, we're at the point where, you know, your, your Mac is actually communicating to a central server owned by Apple, you're late, you're not allowed to downgrade the operating system on the new Macs.

You can't even downgrade to a previous version of the operating system because they blacklist each version every time they release a new update. You know, they actually bypass the most VPN clients.

So Apple services on your computer do not have to go through VPN. There's been so much stuff that's been coming out just the, just this year alone. And it's like, you don't have to do that.

Like if someone at Apple wanted to make this type of hardware, they could. And the crazy thing is, is that we're having to take like a large step back in terms of tech in order to provide this more open trustable hardware because these companies refuse to do it for whatever reason.

You know, Apple wants that ultra control and Google obviously wants to surveil their users. And so from a pure, like a pure technology perspective, there's no reason why these companies can't release this stuff as open and why they can't provide this great, you know, sovereign hardware to users.

Just every fiber in their being refuses to do so. And so it's kind of like a shame. I would almost be right. Like part of me wants to be working on next gen technology type things like AR, VR, you know, like nuclear reactors, you know, like like hard tech that has not been solved yet.

Instead, we're having to essentially rebuild, you know, this consumer hardware from scratch because the existing companies won't do it. It's kind of, it's kind of amusing and it's also kind of sad.

Yeah. And I guess it's kind of similar to Bitcoin in that way, like in terms of, oh, that's true. We've had to start from absolute scratch, scrap everything, start something completely new, something logical, something that works.

And then we layer on top of it once everything is secure and move slowly because you can't afford to fuck it up. You have one shot. You fuck this up. We're done. That, I guess, is maybe going to just take it a little bit longer with the hardware as well.

And like you're saying, you're going to have to be very thoughtful about what chips and and how even down to the batteries like you're saying and all this stuff. But I guess if we can keep things open source and that is one thing that I'm really appreciating

about the way that you guys are doing things, keeping things open source, allowing people to see how you build the hardware and all this kind of thing, the more people can build on top of it.

And I kind of see all of this maybe playing out in a similar way to Bitcoin in terms of you have these different stacks, you have lightning on top of Bitcoin, you have maybe other things on top of lightning and you know, it maybe it's going to be the same with this hardware.

And once we get over that initial stage, things can actually move very, very fast, but it's just going to take a few years to get that base layer, that foundation in and from there, things can explode.

Yeah, and it's amazing, I think, how far the industry has come in recognizing the importance of open source. You know, like we were able to raise some pre-seed money from angel investors and some small funds, not with them knowing that we're everything that we make is just being open sourced.

Like if you tried to do that 10 years ago, it'd be like, wait, so we're giving you money and then you're going to take the money, you're going to make stuff and then you're going to open and source it, like what are you talking about, right?

And so we've come a long way, I think, as an industry. And yeah, like everything we do as a company is open source. The software side, the firmware running on the device, and then also the hardware side.

And hopefully we'll be successful with Passport, you know, our first product, and hopefully we'll have the opportunity to release more devices, and as we release more devices, they're going to become more and more complex.

They're going to be more expensive to make, they're going to have more capabilities, and we're going to continue open sourcing all of that. And then, you know, my co-founder Matt, for example, he's an analog chip designer.

He was at Intel for a few years working on their next-gen PCI Express technology. As soon as we have the opportunity to make chips, we're going to also open source that as best as we can, because it can be difficult working with some of these foundries.

And so we're basically saying, you know, buy our hardware, we'll try to give you really, really great hardware, it's going to be open source, and then everything we do is going to be open source, so that if you as another individual or as a company want to take any

of our work and build on top of it, you are more than welcome to do so, and you do not need our permission. And, you know, on the software side, we're predominantly relying on the GPL license, which is like a viral copy left license, meaning that anyone's welcome to use our stuff, but

they also have to open source their stuff, and we're doing the same thing on the hardware side. So we're actually using a license by CERN, like the, like the research, the science organization in Switzerland, the one that makes like the particle colliders, so they have this great

open hardware license, and we're using that, so, you know, sure, you're totally welcome to use our, our hardware designs, you just also have to open source your hardware designs. And that's how you really progress in industry rapidly, because if everyone is building on

top of each other's work, and everyone is grabbing the best things from their respective projects, then you can build really fast, and maybe, you know, maybe we can, we can get there faster than, than by the end of this decade, I don't know, but I think this is definitely going to be an awesome decade.

I agree. Well, listen, it's, it's been amazing learning a little bit more about the device. I can't wait to have one in my hands. I know that it's not quite there yet. Could you tell me when you're expecting to have these on the market, when someone can

actually purchase one of these, and I think I saw that the first lot will only be limited to a thousand. Is that right? Exactly. Okay. So we've had pre-orders for a little bit now for our first batch of a thousand founders edition passport devices, and you know, they're, they're totally cancelable.

So if you, you know, if you make a pre-order and decide you, you, you change your mind for whatever reason, you know, we refund you before we ship, but we're getting really close to manufacturing and shipping.

So we're actually manufacturing this month. That's really exciting as all the components are arriving, you know, every day as we speak at our manufacturer that we're working with in the New England area in the US.

And I want to, I want to ship by end of this month, but I think we're most likely going to be shipping early in February. So we're getting pretty close. Our, our promised estimated like guaranteed chip date has always been March 31.

So we've always been aiming to beat that date. The hardware design is done. We passed the regulatory testing a couple of weeks ago, which is exciting. And we are just working on firmware refinements right now.

And we're going to be working on that, you know, for the next few weeks. So it's going to be us timing it based on, you know, as we're assembling the devices later this month. And as we're perfecting and finalizing the firmware, we'll obviously load the firmware onto the device and then, and then start shipping.

And we have sent out a few preview units. So Bitvolt did a video with a preview unit a week ago. Bitcoin magazine had the first unboxing video with the preview device. When we did Stefan Lavera's podcast a few weeks back, he did have his hands on a device beforehand before, before we recorded with him.

And our goal is going to, is going to be to get a lot more preview devices out later this month and early next month, so that, you know, before you buy, you can really see how it works and get a thumbs up from other Bitcoiners that are trying it out.

So so that's where we are right now. And then, um, passport sells for, uh, 299 US dollars and, uh, is on our website at foundation devices.com. Cool. Well, yeah, I very much look forward to getting one in my hands and seeing all of these videos.

And, uh, yeah, it's exciting to hear that the way that you're looking to take this company and go for hardware, not just for signing devices, but also for, uh, for maybe eventually, uh, laptops and phones.

And I really look forward to seeing how this progresses and we'd love to have you on again when, uh, when you have some more products on or after it's launched. But for now, is there anything that we haven't covered that you wanted to?

No, no, this has been really great. Um, thank you so much for having me. And I'll definitely be down to come back on as we have more products and more announcements in the future. Brilliant.

All right. Well, yeah. Thanks so much for coming on. Um, if you ever find yourself in London, give me a shower. I'd love to bring you out for a beer or something. And, uh, yeah, really excited to see what happens.

So thanks again and we'll speak soon.