VAULT3D: Alex Zinder- Decrypting Crypto's Value Beyond Speculation, Embracing Security in Adoption, and Celebrating Community Resilience

Prepare to have your perspective on cryptocurrency transformed as Alex Zinder, CTO of Ledger, joins me for an enlightening discussion that transcends mere speculation and peels back the layers of genuine value creation in the crypto market. We tackle the integration of blockchain technology into daily life and the pivotal role education plays in that journey. Witness firsthand how Alex's traditional finance acumen intersects with the boundless potential of decentralized ecosystems to shape a future where cryptocurrency becomes as commonplace as your favorite smartphone apps.

Cryptocurrency isn't just for the individual enthusiast anymore; it's making headway into the corporate world, and with that comes a new set of challenges and solutions. In this episode, we scrutinize the strategies behind crafting a user-friendly yet secure gateway into cryptocurrency for both personal use and enterprise adoption. As we analyze Ledger's blueprint for mitigating risks, including sophisticated cyber-attacks, we uncover the evolving nature of crypto security and what it means for both small-scale enthusiasts and large corporations managing hefty digital assets.

We wrap up with a candid reflection on the rollercoaster ride of the crypto market—its ebullient highs, its sobering lows, and the community's unyielding spirit that powers through it all. Our conversation veers from the robust potential of NFTs and smart contracts to the surprising touches of joy and humor that keep the crypto world vibrant, even in a bear market. The essence of this episode lies in celebrating the resilience of the community and the continuous pursuit of knowledge, as we recognize the imperative of staying true to crypto-native values amidst the unpredictable tides of the market.

Alex Links:

LinkedIn: https://www.linkedin.com/in/alex-zinder/
X (Twitter): https://x.com/ALEXZINDER__

Ledger:

Website: https://www.ledger.com/
X (Twitter): https://twitter.com/ledger

SHILLR:

Website: https://www.shillr.xyz
Twitter: https://www.twitter.com/shillrxyz
Instagram: https://www.instagram.com/shillrxyz
Youtube: https://www.youtube.com/@shillrxyz

Music by 800DB

Twitter: https://twitter.com/800dbmusic

Transcript

Speaker 1: 0:00

GM, this is Boone and you're listening to Vaulted, a web 3 podcast series from the Shuler Archives. This episode was originally recorded on November 21, 2022 and features Alex Zender, cto of Ledger, which is one of the largest hardware wallet companies in the industry. In this episode, we explore the shift from speculation to value creation in the crypto market, the power of decentralized ecosystems, the challenges of adoption, the potential for crypto to become integrated with everyday devices and much more. As always, this podcast is for entertainment purposes only and should not be relied upon for financial advice. Boone and guest may own NFTs discussed. Now let's grab some coffee and dive into this conversation with Alex GM. Alex, how are you, man, doing? Well, how about yourself? It's good, you know, today, I think I tweeted out today my schedule is podcast, haircut, call duty and World Series baseball.

Speaker 2: 1:04

So it's a I am jealous, I'm jealous, I'm very jealous. My schedule today, I think, was customer calls. Early morning strategy session budget livecast.

Speaker 1: 1:16

Wow, okay, well, I'm glad to be ending it on a good note, right? Well, for those who just want to let you give a brief intro man, who, alex? Who are you? What do you do?

Speaker 2: 1:25

Yeah, yeah, absolutely so. As I mentioned, I'm a techie. I spend most of my career in software At Ledger, I'm responsible for Ledger Enterprise. So we have you know, at Ledger, we have two primarily focuses. We have Ledger for the retail audience, which are, we're, incredibly well known for.

Speaker 2: 1:43

The company's been in the business for about eight years. The Ledger Nano has been the most successful hardware wallets, the best known, and that's what the company is really fundamentally known for. We continue to drive that business, but we've also been evolving a lot of different capabilities in the enterprise space, in the V2B space, and what we do there is fundamentally very straightforward. We work with large organizations to help them serve retail audiences that are interested in crypto, which has been pretty rewarding for us because it helps the ecosystem overall. Right. Like you can't you can't continue to scale the retail audience if you don't bring them the services that they need and want, if you don't do that, you know, securely and predictably, and that's really our primary objective at Enterprise. So here I'm responsible for the business unit. I also do a bit on platforms, so kind of the wallet strategy across the organization. Prior to Ledger I've had a couple of different functions. I'm American, living in Paris, which has been quite interesting for me and the majority of my previous career.

Speaker 2: 2:48

I was in the capital markets, financial services. I was with NASDAQ for 12 years before that in New York, where I was responsible for primarily focused on emerging tech. That's how I really got into the crypto sector. So a lot of distributed systems, a lot of predictive analytics, distributed compute, cloud, and then Bitcoin started to come around. We were very much focused on DLT, distributed technology and then I spent close to five years pretty much banging my head against the wall and trying to gain adoption at the enterprise level, at the institutional level, which was fun, and then two years ago I think, I kind of made the final decision that I was done trying to get adoption going at large organizations. So it was time to try my hand at disruption and dive into a crypto native org Ledger came knocking.

Speaker 2: 3:47

And it's been a trip ever since quite enjoyable.

Speaker 1: 3:50

That is, yeah, that's quite the experience, except for the five years of banging your head on the wall that's trying to yell into the void of people who just don't see it. It's challenging and I'll tell you as someone who I've been in the crypto, so just to give you a brief notice, not just like my experience here is that I came in here right around the Beeple sale back in March of 21.

Speaker 1: 4:12

So before that I wasn't really even crypto, or I wasn't even curious about it. I didn't really see a use case in my opinion. I know there were, but I just didn't see it before NFTs, a lot of the cultural artifacts and programmable smart contracts, and that's really what got me super excited about this and the fact that you could attach something emotional to something that was inherently non-emotional and that to me, was like this could be the cultural layer of crypto, and this is the part that I want to play in. But I'll tell you, when I first found out about it, I texted the only friend that I could have known what the hell I was talking about.

Speaker 1: 4:48

I didn't really understand how to articulate my thoughts in the beginning. I didn't understand how to drive a conversation around, asking questions around, really how onboarding is supposed to be done in my opinion. In the beginning, I just shouted at them and they left way more confused than when I first started talking to them, and so over time, I started to refine my approach and realize that onboarding can only really at least for me personally, because it's my belief that we're still so early is that it has to be done with only people that I know, because I know what their interests are. I can tailor an experience to them, I can tailor a very plausible what-if where it makes sense to them and they can get some buy-in.

Speaker 2: 5:27

But yeah, 100% and I agree with you 10-fold. So we're firm believers in education and we have a wide range of different education programs that we continue to deploy and evolve. But one of the biggest challenges, I think, for me, coming from the financial sector, is that you don't have a market segment to address. It's incredibly bespoke. Even the user base comes from all different blocks of life perspectives, different reasons.

Speaker 2: 6:02

So, it's a very interesting, super dynamic and an extremely complex ecosystem, and it really is more an art than a science as to how do you position yourself as a company, how do you create value, who's your audience and I think to your point, being able to take the right stance for crypto and how the ecosystem as a whole evolves, and how do you engage with the various communities in this space.

Speaker 2: 6:32

It's been super interesting for me. And then the next challenge is how do you work with other companies and organizations that have something of value? They know how to build, they know how to create value, but it's such a long bridge to get from the standard value creation mechanisms that we're accustomed to in Web 2 and existing systems to how do I create something that's going to be valuable to thousands of different communities that are evolving there, and none of those communities has the hundreds of millions of users. They're all a couple hundred thousand, a couple thousand, but in totality the ecosystem is huge, but it's super fragmented. It's an extremely interesting problem set and I think ledger, in my personal opinion and one of the reasons that I'm here, does that extremely well, because they've been early and the brand is associated with security, self sovereignty and kind of betting on yourself as an individual at the end of the day, and that seems to really resonate with the wider audience of crypto and not necessarily each individual community.

Speaker 1: 7:45

Dude, yeah, that was beautifully said. There's a lot that I want to touch on here and, coming from the retail side, I own two ledger NanoXs. So one because I knew it's what needed to happen, but number two, I got one of those crypto tag and this is not a sponsored podcast, by the way. I got one of those crypto tag thing where you just it's a steel plate to put in your seed phrase and I did the whole ritual of that where I, when I wrote it down, after I did it, I actually burned the card to where it was only in the crypto steel plate. But I'm like there's always this looming question did I do it right? Did I put it in right? Is this like what if I had to put in my seed phrase and then all of the valuable assets I put in my hardware wallet are gone, and so I actually bought another ledger just as a backup to make sure that I had it right, I'm like, okay, now I can breathe, I'm good.

Speaker 1: 8:41

But it's a whole different learning curve and something that I really would like to know a little bit more about is that because, on the personal level, there are a lot more resources today than there was back in 2021. But there's also a lot more disingenuous people in the space than there were in 2021. So I know how long it took for me to even get to the point where I felt comfortable just purchasing Ethereum on Coinbase and I got to imagine persuading companies who don't really have like trying to convince companies at that scale has got to be one of the biggest challenges. So one thing I wanted to ask is like what's been the biggest pushback or kind of how have you all approached strategy when it comes to these larger companies? Because the individual level is just, quite frankly, it's really fucking hard to do.

Speaker 2: 9:35

Now I love the question. First of all, thank you for being a customer and a user. We're always very, very thankful. And then I think you kind of phrased it extremely well and medically. So I want to capture that and I'll do a little bit of a sales.

Speaker 2: 9:52

It's just a small one, but I think I'll get it out of the way and then that'll be it. But you kind of framed it very well, right? You know, on the individual side, on the retail side, right, you go through this experience and you said you had like your own little ritual. Right, that you do to set yourself up. We call that a ceremony, so we also have a word for it. Right, but there is there is a threshold, there is a there's a tangible barrier to entry. Right, and frankly, there's two kind of two Dimensions to that. So ledgers primary role and responsibility as a company Right, is to make sure that that barrier to entry is as small as possible. Right, so we want the user experience. Right, and the individual experience to be as frictionless as possible. So we gain adoption into crypto. Right, that's the number one priority Hands down. Now there is a balance there. Right, because you don't want to also completely remove the ritual.

Speaker 1: 10:48

Right, because there is a special value. It's yeah right Like there's a certain value associated with.

Speaker 2: 10:54

You know it's a common bias, called a continuity bias, right, like, once you do an investment, right, then you start to justify that investment you use. So it's a common human trait. And it's not. You know, it's not. Manipulation is just how we behave as humans, but at the same time, that that barrier to entry is associated and is there because of the security element, right? So, if you want self-sovereignty, if you want self-custody, if you want control of your own digital identity and digital assets, yeah, there is a price to pay. Right like, there is a certain thing that you have to do that you didn't have to do when you didn't care about those things and you were delegating that to Coinbase or to somebody else to do it for you. Yeah, but just like you do today with a bank, right? Yeah, so, and it's an important thing to capture, right, because it's now, it is a different model and I also appreciate, like, the level of awareness that you had that, right, if you had to back it up, you have to think about it now, you know, and and it's challenging, right, yeah, you know it's, it's, it's rewarding, but it's challenging.

Speaker 2: 11:54

And then what would you? What? The way we think about it on the on the enterprise side is you take that problem set From an individual perspective and you look at it from a team's perspective, right? So now, what if there's five people right that are required to manage processes related to you know, and I'm not sure how, how crypto wealthy you are? But think about, you know, there's 500 million on the account right, or a couple billion on the account right, and you have a team of operators that are actually, you know, managing processes Related to moving these assets on a daily basis. Hmm, right, and the thing that people.

Speaker 2: 12:31

Yeah, the thing that people don't always realize about crypto which is an important distinction is you know we, you know ledger does hardware wallets and we do hardware. But but and that's associated with cold storage, which is important you need to protect your keys, right, so nobody can take your keys. But most of the attacks that we see and most of the compromises that we see in the ecosystem today have nothing to do with somebody stealing your keys. Majority of them have to do with man in the middle, attacks, social engineering, fishing attacks where you're signing something with your own keys, but what it is that you're signing isn't actually what you think you're signing. That's right. So it's manipulation of the actual payload itself.

Speaker 2: 13:10

So ledger is important in that regard, because we see that we have a Secure device and a secure screen that you can validate exactly what you're signing. We take that same model and we'll apply it to organizations where we have full what you see is what you sign capabilities for secure governance. So every time an operator approves the transaction or, you know, validates as in any way she perform, we give them full, secure view on the display using our own hardware, which is the differentiator, and that's the, that's the premise. We kind of take that single pain point, that individual experience, and we allow companies to scale that out. So we, we wrap, we wrap a SAS base platform around that. So you got, you know, seamless user interfaces, full dashboarding, full reporting capabilities, all your governance is taken care of. And then on top of that we build a flexible workflow with the hardware device To be able to then enable an operating team, as scale, to manage crypto assets.

Speaker 1: 14:10

Got you so that, no, that's, that's super in-depth. Thank you for that explanation. The the question I have also from that is like what come when I, when I was looking at the website of like ledger Enterprise, what companies are you typically targeting? What companies have an interest for this? Like that was the big question. I'm like is it just a bunch of people building an NFT project? Because I saw that you had that. I'm like that's cool, but surely this is much bigger than that. You know, I'd like to like broaden my scope a little bit here, just to understand that.

Speaker 2: 14:38

No, totally, and I think it's a great question. I would say, you know I will. I'll go back to my previous statement. As you know, it's a diverse ecosystem, right? So it is very difficult to find the right market segment and be like, alright, like this is our box, like this is what we optimize for. So what we really have to do is we have to partner and we have to build.

Speaker 2: 14:57

So I think of ledger enterprise as a toolkit okay, toolkit and a Capability and a knowledge base to do solution engineering with our partners, right. So there's there's probably you know three things that we do fundamentally better than anybody else in the space security, yeah, that can your keys. Secure governance, giving you that secure workflow capability on top of your key management, right, and then just general crypto savvy ability to Interest back the blockchain, gather the data presented in the proper way, understand market movements, advise, build solutions. So we use those capabilities to build Point solutions for specific use cases with our clients as it evolves and you know there's really been a pretty interesting Movement in the ecosystem which we were very much exposed to.

Speaker 2: 15:50

So ledger enterprise We've been around for about four years. We laugh that we're kind of the best kept secret of ledger because the brand is so strong with retail and the wallet. I'm enterprise, you know, hasn't hasn't been spoken about that that much, primarily because we work with very large clients and very large asset allocations, right. So you know, over the four years we've had assets on the platform in tens of billions In crypto. We do, you know, hundreds of billions in annual turnover, yeah, on the platform and we're growing quite rapidly. So it really started with crypto native players. So mostly custodians and exchanges you know we have, I think you know we talk about two customers in general, as a crypto comm is a very large early stage client of ours. We've been working with them for many years. They've grown up with our platform underneath their exchange for custody, kamaynu, which is a well-known regulated custodian in London. There's another long-term client and actually a joint venture between us, numerah and coin shares and and they've been with us for a long time and also build a solution on top of our platform and that's how we we learn and evolve the technology and build the different tool sets, and we've seen a tremendous amount of adoption over that time in crypto native financial institutions. We have neobanks using the platform, we have other custodians, other exchanges, but mostly focused on securing your assets. Right, that was the primary value proposition.

Speaker 2: 17:24

In the last two years, we've seen a very strong shift from securing your assets to a wide explosion of different use cases. Yeah, which has been, which has been incredible. Incredible for us because it really makes you take a step back and think, okay, like, well, what do we do right, where do we focus? Where do we invest? You know we always have engineering resources that are there, are constraints, right, and the.

Speaker 2: 17:53

The shift for me has really been from, you know, let's make sure we protect the Ethereum and the Bitcoin as you, as you manage it, to what do we do with our assets? How do we interact with these distributed ecosystems in a wide range of different ways. So the explosion in DeFi has been super interesting. Yeah, we have a, you know we have a smart contract interaction framework that we've put in place for the same, governance controls that allow our customers to be able to interact with any smart contract in the ecosystem, be able to see what that smart contract does. You can whitelist your smart contract addresses so you can really Protect and manage the risk as you do that because, as you know, a lot of these smart contracts also to get compromised. It has been quite a few challenges in that regard. We are working actively on NFTs cases. We have launched ledger enterprise creates. Early last year saw that yeah.

Speaker 2: 18:46

And that's gotten a lot of traction. Actually, and fundamentally, the principle doesn't change its security, its governance. For the NFTs use cases, we do treasury management, which is very important because to run NFTs, you need crypto, you need to be able to manage a treasury, and then, on the On the tail of that, we also support all NFTs use cases, so we allow you to create and manage your NFTs smart contracts securely. We allow you to mince, we have full API supports to automate some of these capabilities, right. And then we generally build with our, with our customers and with our partners in that regard, because, as you can imagine, the variability and then, if you use cases today is huge and you know. And then many of our clients come to us, say we want to do something with NFTs, and when you ask, okay, well, what do you want to do, I'm like, well, we're not sure we were gonna figure it out together and, okay, sign us up, why not?

Speaker 1: 19:44

Yeah, yeah, and that's the biggest part. You know that it's it's, it's For me. It's hard to onboard people where we get them excited about this, but them to not, but also to for me to help people understand that there is a big paradigm shift that needs to happen before you really start doing something. It's really hard to get people to take off the rose-colored glasses for just a second, put the glasses on to bring them in, but then take them off to like okay, now let's think about what we actually do with this, Because the one thing that I always get turned off by whether it's a company, whether it's a project, whatever the case may be is that it's Web 2 values wrapped in Web 3 technology For the people who are doing something that are truly innovative, to see okay, how can we use smart contracts to get back to the original community?

Speaker 1: 20:34

How can we use some of these tools and protocols to actually enrich the experience in a way that's never been done before, or a different way that it solves a problem that we've been looking to solve for 10, 20, 30, 40 years, right?

Speaker 1: 20:47

So that's a lot of the use cases that I see that are super interesting. Now, one thing that you've touched on that I wanted to just expand on is that the way it's really cool, the way you guys are looking at it as more of like a partnership versus like we're going to sell you a product. Because I see that also that same approach being taken with Polygon, with Foyz being at the helm and one of my favorite people here and the way he's approaching that, is like game studios aren't just going to like full on, adopt this technology and they don't know who to hire, they don't know, like, what's legitimate, what's not, and there's no strategy behind that. So I think it's a really cool thing to see a larger company is kind of taking more of like a hey, we have the resources, we're not going to like we're going to keep these guys here, but we're going to partner with you to build something cool, versus you just kind of siphoning off our talent.

Speaker 2: 21:44

Yeah, you know what I mean 100%. And then for me, like that's hugely rewarding just as an individual, and this is the type of engagement that I want to be able to have. So we now we support Polygon on the platform, we support them to use cases around Polygon. And I think you know kind of to expand on my previous kind of trends over the last four years, frankly, I think this recent market contraction is actually doing good things for you know, for the entire ecosystem. I mean, it's not, it's not super pleasant, right, I think it hurts everybody to a certain extent, but there's good things, there's a silver lining, and the way my party line recently has been that the observation is that we're moving from speculation.

Speaker 2: 22:25

There's been a lot of speculatory activities, right, and a lot of growth and movement in those speculatory activities which, by the way I come from you know capital markets background. Speculation is good, like there's nothing wrong with speculation. It helps create efficient, efficient markets, right, you know you need speculation, right, it's an important part, but you shouldn't lead with speculation. And that's where the crypto ecosystem has been a little bit different from the traditional kind of finance, right, traditional finance first there were railroads right, then there was, you know hotels then. So there was huge projects that required funding. That then created the genesis for the markets and the capital markets that we see today. But first there was the value creation In crypto. We were a little bit twisted right. First there was speculation, speculatory activities, there was a boom and defy and now we're seeing that slow shift from speculation to value creation and to me that is hugely exciting because that's exactly where we want to be and that's exactly where ledger has positioned itself to be most effective and that's why we want to. You know, we want to work with our partners. Right For speculation, you give them a tool.

Speaker 2: 23:38

It's quick time to market because you have, you know about a six months to 12 months window before the network either stabilizes or disappears. Right, so your monetization window is relatively low. You want to quickly go to the market. You do, you know you do your thing and then you move on to the next one. Right With value creation, you make an investment, you build it's for longer periods of time.

Speaker 2: 24:00

That's why we're super bullish on Ethereum. The merge was huge for us, very happy that everything went well and that we're progressing nicely on proof of stake, and EVM is basically kind of for us has been a big focus. We've fully committed and deployed staking solutions on Polkadot, solana, polygon and Ethereum others coming quickly and we're doubling down on NFT use cases. And the most beautiful thing like this is, this is the perfect synthesis of the two, and this is what I tell myself is why the strategy is working. We were working with a partner, a company I don't know if you know them in the US, they're actually been getting quite a bit of publicity a company called one of.

Speaker 1: 24:47

I've heard the name, but I'll be frank with you, I don't have. I'd be lying if I said I had a clue of what they did. No worries.

Speaker 2: 24:53

Check them out.

Speaker 2: 24:54

Super, super exciting company focused on NFTs really interesting, strong backers and we're working with them to develop their NFT use cases to give them a secure model for operating their drops and, at the same time, they're going to be getting Ethereum in that process right.

Speaker 2: 25:11

So they're going to need to or actually their own Polygon and Ethereum both they're going to get the crypto to, you know, to fund the operations and you guess they need funding. And then, secondarily, they're going to be receiving payments for their NFTs and crypto, so they're going to be having a treasury. And then, the same time as they're building their NFT portfolio and NFTs capabilities they're talking to us about well, what do we do? Because we want to participate in the network, we want to stake right, and we want to do it properly. And how do we develop that capability? So to me, it's like that's the perfect example, right? One client creating value through NFTs, building real things for real communities, for real audience, and then taking the proceeds from that and properly investing that into proof of stake, which is then also supporting the network itself, and let's generate and return on investment. Why not?

Speaker 1: 26:01

I know. Yeah, I mean that's a, it's part of it. No, I love that man. That's really one thing I took from this whole blurb is the interesting part. So I didn't.

Speaker 1: 26:13

I always learned something when from people who have done this longer than me, like yourself, and like it's really interesting to hear around the around how capital markets are built, I had no idea that that was like the foundation of what that was built on it was railroads and hotels, which is what essentially created the need for a capital market, and here it's all speculation and then it's so. It's interesting how it's backwards, but it's interesting, really interesting how it still works. You know what I mean. Like it doesn't really need to follow one specific model in order to work here. Now I'm going to change directions here a little bit.

Speaker 1: 26:44

So the one interesting part, what made me really bullish on Ledger was hearing Ian Rodgers' interview with Kevin Rose and one of the questions that Kevin asked. And this is just the inner nerd in me that I just have to ask if this is something that y'all took away from this. So Kevin was talking about you know a lot of the hardware technology that's in these devices. It's incredibly secure. Do you guys see a moment or a time where this gets integrated into like, into smartphones, like. Is this a point where like this becomes part of, like our mobile devices, and it becomes a part of some regular devices that we all use today?

Speaker 2: 27:24

I mean, I think, like you know, there's no conjecture there. That's a natural progression, right? And the interesting piece of this is, you know, ledger as a company came from one hypothesis, and the hypothesis was that when the first Nano was being designed here in Paris, it's. The hypothesis was that the current states of the devices that we use for Web2, right, our laptop or browser or cell phone are not sufficiently secure to support the movement of value that we're going to see in Web3. Right, right. So that was the very simple hypothesis.

Speaker 2: 28:04

It was proven to be true, right, we sold over 5 million of those devices from that point on, and currently 50 to 20% of all crypto sits on a Ledger wallet, which is, you know, which is a pretty significant percentage from an allocation perspective. So, you know, that was the right hypothesis. We can now firmly say that, obviously, you know, there'll be more growth. That's great. But as there's more demand, right, as adoption continues to increase, there is going to be a trajectory from, you know, towards ease of use, right. And now, when we say, you know what is the mission for Ledger, like, what is our North Star? It's security, right, with the best possible user experience.

Speaker 1: 28:50

Right.

Speaker 2: 28:51

And to the extent that we can continue to deliver the security right at the same level, the same threshold, and continue to improve the user experience incrementally, as the you know, the surrounding technology ecosystem allows us to do right. Yeah, that's the, you know, that's the art, that's how you thread the needle right. What is the current state of tech today and how do you balance security with ease of use for any given point in time? Because, honestly, on the adoption curve, crypto, we have 10, 20 years to go right as it continues to scale exponentially. And in 10 to 20 years, these days, the cycles of technology, the cycles of hardware, the cycles of, you know, the capabilities on the chips and the types of displays, on the types of devices that we're going to have in our hands, nobody knows right, like, how do you hypothesize around that?

Speaker 1: 29:41

Yeah, yeah, it's one of those questions that I had to ask because it raised the eyebrow. It raised my eyebrows a little bit when he pitched that idea. I said that sounds pretty neat because you know, I still get very nervous, like when I'm not even with MetaMask and everything in with Ledger Live on my phone. It's still like a question at Loomz, you know, it's still like. You know what I mean.

Speaker 2: 30:04

Yeah, I get it and, to be honest with you, I'm just as much of a fanboy in that regard as you are. Like, ian is incredible. Kevin was a longtime favorite of mine when I was spending a ton of time out in California, and the interesting concept for me is this is one of the reasons why I joined Ledger and I was super excited to do so. I'm a software guy, right Like I've been in this building. I came up in the web bubble, right. So I kind of saw the evolution of the web space as my first job, and when I joined Ledger, I was looking at the technology stack. I was trying to look at the company and see how it would be working in this context, and I became very quickly aware that, honestly, this is the only experience, the only company that I've ever engaged with that does three things extremely well.

Speaker 2: 30:56

Hardware yeah, so every single hardware wallet that we've distributed so far as manufactured and put together in France in a very secure facility, it's usually efficient, like it's incredible when you visit what they're able to do there.

Speaker 2: 31:13

So the hardware aspect is locked up, and then we also do firmware, which is also critically important and very important to the point that you're making, because firmware can run on any hardware and that's where the security really comes in right.

Speaker 2: 31:26

So the firmware aspect of it so being able to write operating systems at the low level for the designate your hardware on the chipset with very secure practices that's really the differentiator, because you can take that firmware and you can put it on a chipset inside a phone, you can put it on a chipset inside an IoT device, you can put it on a chipset inside a laptop right, as long as it's compatible. And that capability, the ability to write your own operating system, so you have the end to end stack fully secured, that's unique. I have not personally encountered that anywhere else. And then we do software right, and when you build software on your own firmware, the security constraints and the security concerns kind of float away and you're able to be really free in the tool sets that you're building and the user experience that you're bringing to user base, because the security constraint is already solved for with the firmware piece Got it.

Speaker 1: 32:20

That makes a lot. Thank you for breaking that down. That was something that, as someone who loves the shiny new object I'm a shiny new object syndrome guy, you know so it's nice to hear some of the inner workings of how the stacks on top of each other. You open up a new perspective. Now, one thing that I know that, based on some of our previous interaction, or what I know from you, is that you know we're both trying to onboard our parents. So I actually had you'll probably enjoy this so for the longest time when I was podcasting, my parents really didn't understand anything of what was going on.

Speaker 1: 32:57

They thought I was, you know, playing with magical internet money that didn't really exist and that these weird you know JPEG like tokens that point to JPEG things were. They just didn't understand. Specifically, aren't crypto punks Like? I still can't convince my mom of why crypto punks are valuable. It's just, it's something that's completely lost on her and I've given up on trying to explain it.

Speaker 1: 33:19

But the point I'm making is that when I finally, you know, made my first major flip where I was able to, you know, knock out a good size of debt that I had, that was when I started paying attention, and the last time I had a conversation with my mother was you know, okay, what's this wallet thing?

Speaker 1: 33:39

Right, like she, we, we, we finally started to have the wallet conversation and you know, custodial versus non-custodial, and you know hot wallet versus cold storage wallet and all of these things, and one of her takes was that she's like I still don't understand any of this. All right, like, but what I'm trying to do now is ensure that, if this does become an investment that our financial advisor says, hey, in, in five to 10 years, you need to put some assets here. I don't want to feel like I've just completely missed everything. So, when it comes to have to have a significant risk, when it comes to I've talked to a new Having devices where our parents can access these crypto assets, how far of a like, what kind of time horizon Are you thinking for when it comes to that? That's a great question.

Speaker 2: 34:23

I, I guess Like it's, it's a hard, it's a hard one to answer because I think it has to do with and to me it really does have to do with the demand aspect of it, right? So the the new adopter threshold that has to be overcome is different for every, every single person, right? So we have early adopters. Right, you have late adopters, and that's a personality trait. Frankly, in my experience, you know, some of it has to do with age, right, because as we, as we fill our heads over time with certain preconceptions, it gets harder to turn them over. But I've seen, you know, I've seen people, you know, irrelevant of age, being able to pick up new things like that, just because that's their mental states and that's how they, you know, that's how they deal with the world. So everybody has their own adoption cycle. But for me, what it really has to do is there needs to be a balance of value versus, you know, versus barrier to entry. Mmm, right, so it's a curve, it's no, it's a. It's a curve, right. So as we increase the amount of value that can we can bring to a wider range of users through crypto, right, that resonates with them.

Speaker 2: 35:36

So, for your mom, potentially right, it's inflation, right. So how do I protect my life savings from the inflationary Situation that we currently have in the traditional financial system. Right, that might be the driver, right, yeah. But what we need to make sure and do and this is really kind of how I try to synthesize my job to myself right, is my job is to work with value, creating organizations and teams to make sure that we make it as easy as possible For somebody to create that right point of value for your mom to say, oh shit, I need a nano. Yeah, right, and that's a game of numbers, right, like, the more we do on one side for value creation, right, the more diversity we can bring there, the easier we make that capability, the more value gets funneled into the ecosystem, the more people we're going to unlock.

Speaker 2: 36:31

Right, and it's, you know, it's a standard network effects model and if done correctly, right, it will have multiplier effects as it starts to attract more and more right. So there's a gravitational pull to this whole thing and that's what really gets me, you know, super excited to get up in the morning and come to work and have my early Asian client calls To be able to say, alright, like, what are we doing today to make it as easy as possible not to only consume the value but to actually create it and bring it to these networks. And that's not only companies on an organization. That could be individual creators that we work with, that could be small teams right, but it needs to be able to scale right because majority of the audience that's there. You know 95% of the retail audience needs scalable solutions because there's billions of them right and that's the. You know, that's the kind of that's the game that we play every day.

Speaker 1: 37:26

Man, that sounds like a fun game to play. Man, I'm loving every day it's, and it sounds like something that's pretty, pretty endless, at least right now when we still have so much legwork to do. You know that. That's because, like with me, that's why excited me about the space is that the current model of web 2 was Very the opportunity felt dried up. You know what I mean. And it just you know all of the things that were like value, like that, were value ads, like five to ten years ago. They're just, they're just a common out, like a common part of what we're doing, you know. And so that's what I think excited me so much is that there is actually so much work to do here and there is so much opportunity of people would literally just step in and say I want to do this and watch the opportunity just surround them right yeah, absolutely well, and that's kind of the thing.

Speaker 2: 38:12

Right, and the, the diversity of use cases is really, you know, almost limitless. In this case, like we want, I want my mom never to stand a DMV line again. Right, because she can go on her, on her, on her phone, on her device and securely, through a website, be able to renew her driver license. Right, because there's assurance between the two parts that she is who she is and and there's a secure interaction that's being enabled. Right, I don't want to stand in a passport line anymore. Right, like I want to come in, I want to, you know, touch my secure device To the, you know, to the border system and walk right through.

Speaker 2: 38:47

Right, and these are just, you know, some of the more future Looking use cases around identity that that people are working on, but this is all within our grasp. And then something as simple as, like, if you're a coin collector or Stamp collector, right, because fundamentally right, these are this is what NFTs really are. It's, it's a digitization of the, of the, you know, collection, the ecosystem which has been around for, you know, for hundreds of years, but, you know, but now there's open markets, it's, it's an easier way of Collecting. That's much more social.

Speaker 1: 39:20

It's a lot more fun too. I mean, I think I think it's what. I think it's the biggest element of what people like when I, when I first came in here, I didn't realize how much fun I was actually gonna have. You know that it just the amount of people, the amount of brain level, the amount of brain activity that goes on here, and the amount of Humor that's also combined with all of the, all of the good things that are happening here. That's, I think, what really made me the most excited. And like to wrap things up, though, to your point, like, I think Because I'll just some full context I hadn't really experienced any financial markets on my own For the past, you know, because the last time we were in a downturn of a market I was still in high school and that burden was on my parents and I.

Speaker 1: 40:00

You know they worked really hard to make it to where I didn't really feel any of the effects of it. I noticed a change in their mood. I noticed I noticed a lot of other things happening, but I was relatively unaffected. So this is actually my first time in a down market on my own completely, and so it's been a very interesting learning curve, because I've only known on my own up, only just in general, not even crypto, just it's. It's been a healthy market startups making, you know, raising a lot of capital, doing good thing, you know all of this stuff. And then, but then you throw in the madness and the insanity of 2021, of, you know, nft summer I.

Speaker 1: 40:36

It got to a point where I didn't really know what was going on, but there was something telling me that, like I'm just exhausted, this isn't sustainable, like this is not. This has got to end. And I just said, man, there's so many grifters and there's so many just you know disingenuous opportunities that are coming into the space right now. I cannot wait for a bear market. So I'm just like man, give me some equilibrium, give me some balance. Like when the markets went to shit, there was this massive amount of pain and cope and and all this stuff and I'm like, okay, when is this going to be over? But I feel like in the past two weeks to a month, crypto's kind of warped my time time perspective. But it feels like we're at that stage where a lot of the people have exited, a lot of the, a lot of the pain has left, even though it's still painful, but there's a lot more good ideas. It's almost like people are like regrouping, if that makes sense.

Speaker 2: 41:26

Yeah, no, I love that, I love that observation. So I generally take a have a, you know, take a technical outlook to some of these things. Like as an architect, you always think about systems and whenever, whenever you build a system at scale, you always have unintended consequences. You know any self regulating system is going to come with its own set of issues that you never anticipated or imagined.

Speaker 2: 41:47

So, to your point, all the hacks you're saying, all the you know, all the manipulation that's out there, these are unintended consequences. So, when you test the system, you have to put it in a you know, you have to put it in a situation of stress. You have to stress the system to test it and, generally speaking, if you design your system well, it'll start to revert to its intended state under conditions of stress, which is which is kind of, I think, what we're seeing now. Right, so we have this system and these are, these are all connected things. Right? So you know, and kind of to map my own journey around this, and I think we have very relatively similar journeys is, you know, with web two, it was all about information. Right, so you can discover new things, you can learn, like you don't have to go to, you know, bars and noble to buy a book anymore. Right, you can do it online on your own time. And that increased proliferation information where people had access. That was great.

Speaker 2: 42:37

And then we had, you know, we had crypto. Crypto did the same thing to value, right, like you no longer had to, you know, sign into your each rate account or go to your bank, right, you could. You know you could go to Coinbase, you could go to cryptocom. You know you can go to Binance and do it quickly and easily and in real time, right, so that also, for better or worse, increase people's exposure to that model. And now you can take, you know, if you were, if you were successful in that in that world, or, you know, just figure it out your own way. Now you can go and you know you can spend 10 Ethereum on an NFT, right, and where else, like, in what point in time could somebody in our position be able to say, look, I'm going to blow, you know, 50k on a, you know, on a piece of art that I feel is important to me because of the community that I'm a part of, right, and the interactions I can have as a result, and use it as an avatar, right, like it's a completely ridiculous concept. And then what's next after that, which is super, you know, super cool and exciting times and, to your point, like we stress, the system over the last six months. But I think it's, you know.

Speaker 2: 43:42

For me, the takeaway is that that stress is actually letting it show its true colors and the core intent. And now the evolution of NFTs, the build that of the communities and also the appetite for education, which is something that we're seeing go up quite a bit. People want to educate themselves. We have major players in the ecosystem saying hey guys, look, systems that stress we don't know what done, and then the consequences are going to be protect yourself, go the self, cost that you're out. Right, because then the only person you blame is yourself. Right, like when you, when you have coin base publicly saying you know, get an annual, put your assets on there, because we don't know what might happen to us tomorrow. Right, right, and that's the right. That's what the system, that's what you know, distributed ecosystems, that's what crypto was designed for. Right is you take your own destiny into your own hands because you don't know what could happen to these systems that were designed by other people for other purposes.

Speaker 1: 44:42

That's a great point, and I just want to lastly touch on I know this is a podcast about ledger, but I really I enjoy how Coinbase is still sticking to a lot of the values that, like a lot of the crypto native values, even though they are a publicly traded company. They are, like you know, so like they're doing what they have to do, but they're also still fighting really big battles, like with the whole tornado cash sanctions they're. They're deploying a lot of efforts towards supporting that. I mean, or I mean, I guess, to provide, you know, resources for the defense of that, which is a very big overstep, in my opinion, of the government on that one.

Speaker 1: 45:17

But it's cool to I just I say all that where it's like, even though they're in this position, they're like, hey, you still need to do this because, not, you know, not your keys, not your crypto, like it's, you need to do this just in case, because, at the end of the day I mean, I learned this from one of my great mentors is that, like, a lot of this is still an experiment. You know, this is it, although, even though there's just massive amounts of value being transferred on a daily basis here, even in a, even in a downturn, it's still an experiment, right. We still don't fully know it's going to work out, right?

Speaker 2: 45:51

So 100% belt and suspenders, right, but you see, you're never going to know and we're big fans of theirs, right frankly, and we partner up on multiple initiatives together. So we do, we do have a common belief system in a lot of ways. So it's and it's great to see, you know, players be that successful and still keep to the, you know, to the general attendance and principles, which is just hugely important.

Speaker 1: 46:18

Well, cool, alex, this has been, this has been a treatment. Thanks for thanks for hopping on and thanks for accommodating the time zone and yeah, this has been great man. So, lastly, is there any any place that if people wanted to follow your journey or get in touch with you where people should go, or, like any, give a shout out to anywhere?

Speaker 2: 46:36

Yeah, no, absolutely, you know. Go go to ledgercom, right Very simple access point. Check us out. There's a ton of educational material out there. Please, please, go get yourself educated. Watch our YouTube videos. If you're a company and you're listening to this, go to ledgerinterprisecom, right. That's as simple as that. Check us out, drop us a note. We're always open to talk and build together. That's the primary objective. Thank you so much for having me on. This has been a blast, really good way to finish off the week, and I'm going to go and enjoy a glass of wine in Paris.

Speaker 1: 47:10

Do it man. That sounds like a treat man, but yeah, man, this has been, this has been phenomenal. It's a great is a great chat.

Speaker 2: 47:16

Awesome. Thank you so much for having me. We'll definitely. I would love to do this again. This is a lot of fun.

Speaker 1: 47:21

Absolutely. Thank you for listening to the Schiller Vaulted podcast. We hope you enjoyed the conversation. As we close out today's episode, don't forget to subscribe to our podcast on your favorite audio platform and leave a five star review to ensure you never miss an episode and to help others discover the Vaulted podcast as well. To stay updated on upcoming episodes, as well as our weekly Twitter space schedule, be sure to follow us on X, formerly known as Twitter, at Schiller XYZ. Once again, thank you for tuning in and remember, if you're looking for it art is everywhere and it's up to us to appreciate and explore the emotions it brings to our lives. Until next time, this is Boone signing off.