BBW23 – Day 1 – Live Pod – Wholesome Crypto: “The Future of Crypto Wallets”

[Music] thank you very much Ian and thank you for having me again on Boston blockchain week I'm excited to be here so today's topic as we said was the future of wallets and I do want to get a consensus about what's going on here so how many people have actually used like anything in crypto coinbase hot wall if not everyone's raising their hands I'm not going to believe it all it's like a good 80% but we have the experts in wallets here today so definitely open for questions and we have Sheldon Tim and Justin so before we get into this um I want to definitely get a little brief intro of each of you so sheld you can give uh intro of what you do yeah for sure so can you guys hear me all good perfect yes I'm the founder and CEO of sugarcane a bit of background on myself I went to MIT so pretty close to this area so did computer science there been in the crypto space since 2016 and the big thing I've realized is that the big issue in crypto right now is around the user experience of it all and so we basically created sugarcane to simplify the accessing any defi protocol and so the kind of unwrapping process is that you download our mobile app and you sign up with your email and then we automatically deploy smart contract wallets so those of you who are familiar with account abstraction we kind of make it easy for you to get access to any kind of crypto product across any chain in a pretty simple process so excited talk more about it great uh glad to be here today thanks to you guys for coming um I'm with zel cor we we think of ourselves as a gateway to web3 uh we have a lot of different Technologies in there we're going to talk today about our wallet technology in particular and uh we really are focused on not picking winners and losers which is a lot of people do that in this space even though everybody talks about defi there's a lot of maximalist views in this world and so we try and overcome that uh we support over 70 blockchains multi uh multi asset multi product so mobile Desktop Android Apple Linux whatever you want we we'll give you the product there um and we're doing some cool stuff here in the next 30 days on bridging some stable coins to some underserved protocol so looking forward to that as well hi I'm Justin I'm the CEO of grid plus we're a hardware wallet manufacturer making me the odd man out here uh we set out to make a hardware wallet designed specifically for smart contract chains the majority of what people have been using are sort of Legacy Tech designed for when what we signed with crypto was very different just basically only value transfers but what we do today is much more complicated so our job is to basically provide the highest degree of St security available to complement software wallets and all the things you are already doing every day thank you yeah and that's the thing with like crypto wallets it's been a long journey I mean today we are in the future already like it's come a long way we used to have to download the entire blockchain on our computers just to interact with something I don't know if anyone remembers that but pre 2017 Prem metamask that was that was a life but it's getting getting really exciting next five years so um but before we get into that too like you were talking about exchanges um Tim so I kind of want to know what does that mean in terms of someone who's using coinbase as an exchange and maybe using zelor as an exchange and how does their money interact with those wallet types yeah well I think we're all kind of up here representing self- custody and non-custodial wallets um and I'm a huge believer in we're going to end up in a hybrid World um I I think anybody that thinks it's going to be all defi is that's too an extreme of a libertarian view um and I think that will always get in the way of us really moving the ball for it so there will always be those particularly in the United States right so um you know we try and make sure we can work with the defi products whether it's via stable coin Bridge or whether it's wallet connector or something and then we can work with the coin bases binance Etc of the world so that um you know we we've actually looked at some justtin time funding so I think a lot of people leave money on coinbase so they can be ready for or whatever whatever centralized exchange so they can be ready to buy or ready to sell no matter what the the the momentum of a a particular asset is um so we're looking at some technology so that we have relationships with them so that if there's a trusted relationship so you can fund it just when you need it and not worry about am I am I on Exchange so that I can make to buy yeah and with exchanges it's like it's safe it's easy to use it's some where I go to buy my crypto I can trust coin base and I don't have to think about you where are my private Keys did I share my private keys to somebody do I like what do I do with it in security is a big issue with crypto of course um but a top lesson or top saying is not your keys not your crypto and Justin I kind of want to go into you about what does that mean especially with someone who's building a hardware wallet um okay not your keys not your crypto specifically means that what we're dealing with here are fundamentally Bearer assets so you can use a custodian a lot of people that's where everyone starts you have an exchange that you use you buy something on coinbase but ultimately you're still just trusting a third party and the real value of crypto comes from dis intermediation and this is an entirely new type of Bearer asset prior the only way we could really uh have a in-person value transaction is with physical cash um but now we're able to do that in the digital realm which is previously uh not possible that said there's no bigger Honeypot for hackers out there than digital Bearer assets um you might have seen recently Mark cubin lost a lot of funds out of his metamask wallet we know the attack Vector um and that's why we manufacture Hardware wallets because there was always going to be a tremendous amount of people out there who are focused on how to get your your money and uh there's never really it's just a fundamental security um consideration that you can never have a general purpose device like a phone or a computer have the same uh properties and have secure signing like you would with a separate device so yeah everyone comes into crypto they're excited about nfts the application layer um but at the core of it it is uh a very risky thing to have to manage your own money um I always think about things in terms of explaining crypto to my dad which is like my my metric for whether the language I'm using is clear and concise enough and one of the first things he said was wait so like if I lose my seed phrase and my wallet it's just gone like I can't call anybody I was like it's just gone it's like throwing your physical cash in the trash can so um we want to bring that level of security uh to every user without having them to become experts you know people want to drive to work they don't want to know how internal combustion engine works uh and it's much the same with digital assets so between the software guys doing the ux making that easy and us uh helping people sleep at night um there's a lot of room to improve on what we have today sure Andy can I add on that I think it's the issue of custody right and there's there's two issues there one is the complexity of the whether it's the security or or the the asset ownership and what layer it's on and all that stuff I think the other issue is it's and an earlier panelist really got to this point in the United States there is no moral hazard if you lose your money you can sue someone and get your money back or the government will print more money and cover you I I Silicon Valley Bank right so people in in the US struggle with this concept of custody people in other parts of the world have been storing US dollars under their mattress um for hundreds of of years right so I I think this is where this is really going to take off because they understand that I'm on my own I don't I I can't look to somebody else I can't trust other people and I think that's where that's going to really get legs and then eventually the US will give up some control and like as you're were saying like it is it is scary having all your money under your mattress and having your private keys under your mattress or wherever it is hopefully it's not under your mattress but figuratively but there is new technology being built around having that custody without having to go through such extremes or just connection so I think I want to take this with you sheld then I mean I know you're using this new tech so how are you using that with shurik cane and how do you hold custody with of your assets with that yeah so one quick addition to what you're saying is that like the whole unlock for defi is this whole new world of like Financial Services right that there's no Central entity no organization that can debank you or take that from you and so the idea is that with sugarcane specifically we allow you to access those new types of financial services and products right and so with what we actually built out the actual consumer doesn't have to think about the Bridges the chains the gas about accessing any of the complexity of crypto but still be able to still maintain custody of their assets through a lot of the smart contract technology that we be built out so it's still Best of Both Worlds where we have the security of self- custody but also the actual usability of a web through experience like a Robin Hood or a chime where you don't have to actually think about the actual underlying network of what you're using that's kind of what we're building out with st and to expand a little bit more about uh what you guys were talking about before maybe losing your keys or having over your over your accounts there's new tech being developed over social recovery account recovery and I kind of want to go into a little bit more about that if you can go a little bit deeper on that then Justin and Tim I want to hear your opinions too yeah for sure so kind of what Ry was talking about was this whole concept of social recovery right so if you have a friend or a mom or a dad or somebody who's like has some type of um interest in you being like okay right um what you can end up doing is basically still have the same level of like security I control my assets but then in the event that let's say my keys get lost or I lose my phone or I lose access to my computer right this other person who has almost like a um update key on your account they can basically reestablish connection to your account so now you can have them still have uh somewhat of a control and like helping you get your account back without having to actually have them have complete control over your account so it's a way to recover your keys without having to have them control your completely so definitely new technology is coming out that makes it whole easier social recovery yeah Justin go into like if you're using a grid plus yeah how do you use social recovery so what we do it will be done through like when account abstraction is implemented on ethereum in particular um we're still just going to be the the signer for that regardless of how it's actually formatted with a contract I actually only recently came around on social recovery um because we talk to people every day uh who reach out to a security company only after something terrible has happened and so the main attack Vector is social engineering it's basically just tricking people in into giving away their keys signing something they shouldn't um so the idea of relying on other people to be your backups made me very uncomfortable but that said what I came to realize was that um it doesn't actually have to be just people you can also have you know one of those key shards uh or one of your Guardians in particular in this implementation be coinbase it can be another service that you rely on so you can set this up in all different ways and I think U that will help go a long way to aaging concerns about um that whole idea of oh if I lose my keys I'm done um so it it adds a little fail safe and I I think uh we'll see some really cool implementations that will help users keep their money safe is uh zore using anything with social recovery as a tool now or is that we're not I mean we're looking at a lot of things like abstraction Etc um we have a pretty aggressive user base around this topic um and whenever we try and do something that that leans in that direction we get a hard push back of this is you know this is how we want to handle it and we want to live with it the way that it is today um I I think the the space is figuring out a lot of different issues we people talk earlier today about zero knowledge proofs and those kind of things all of this is going tool because I think in order for Mass adoption we're going to have to have ways for people to feel comfortable with this for account recovery social recovery Etc um and and account extraction in particular right I think all of those technologies will come we just got to figure out the right customer base on the right timing around that yeah and you hit on mass adoption I wanted to ask that question too is what do we need for Mass adoption it's getting someone on coinbase is a challenge enough and telling someone how to use your wallet and how to move ethereum to something like a grid Plus or Ledger I get a mini panic attack moving my money around in ethereum I don't know why I know the transactions happening I see it I count the seconds I'm still nervous I don't know why but I am but for Mass adoption to happen what is what is something that needs to happen I feel really strongly about this right I think we can start we can all start with we need to use different words I mean I just think about the technology we've used in the time we've been up here for 10 minutes right um we talked about abstraction we talked about sharding we talked about um recovery all these different things and I I think it really is daunting for people who can't get their head around cryp the the concept of crypto right I also think that I say this very often if if you're the manager and this is a N9 ining game you would never send Finance up as the first pattern yeah never right because there's too many there's there's too many people up and and blockchain is all about the back end right but think about all the people in in in particularly the US that feel they have a in infinitesimal ownership of the patents for the backend the JP Morgans of the world Etc right and anybody in this room could walk out of here and in the weekend build a backend money solution here I mean that's a huge threat to that right um I'm sorry I got off topic there a little bit right but but I just mean for for Mass adoption we need to use different words and then the wallets are where it all comes together right it it is the rubber meets the road and it's a really hard challenge that we have when we have all of these different protocols that have you really need to be down in the Deep there um I mean Sheldon talked about earlier that's what his his firms really focus on is abstracting away all of those particulars when we get there um and and we're not talking about the particulars we're just talking about the the uses themselves that's when we'll start to have mass adoption yeah and just try to make it as easy as possible I know you're working on that how is suar sugarcane working on making Mass job TR possible yeah so like one thing I just wanted to kind of quantify right so like if you look at the total number of mobile users across the world it's about 3 billion people right if you look look at the number of users that coinbase has which is the most widely used I guess in the states um crypto exchange there's about 100 million people right so already huge drop off there and if you look at the current number of people who are using metamask which is also one of the most popular like wallets that are self custodial in the crypto space there's about 5 million people there right so the reason why I think there's a huge drop off from like the large number of like Mobile Banking users down to coinbase down from coinbase down to metam Mass is like the current user experience is completely terrible right like if you're have if you're actually interacting with anything on chain you have to think about gas which is like something that is completely foreign from like regular interaction but like it's actually paying for the transaction to occur right or if you're thinking about um picking the chain that you're on right that's kind of like what I kind of describe it as is like if you have to use like Safari to interact with a game or you have to use fire um Firefox to interact with your fire um Facebook account or you have to switch over to Google Edge I mean Microsoft or um in Explorer Edge just to interact with another webs site that's kind of the experienc in crypto right now you have to switch these all these different like technical things when in reality that's not what it's supposed to be so with sugarcan again we actually abstract again all all the complexity of like the chains the bridges the gas like all these deeply technical subjects that again I'm a nerd I like to nerd out about it but like the general consumer is not going to care about it like my brother he's also in his like 30s he also does not have anything to do with crypto just because like to use anything in defi again it's really technical right um but for someone like my brother or even my parents right they have to be completely simple abstracted away very similar to like Robin Hood very similar to like a chime very similar to like a cash app very simar to venmo where none of this stuff is actually present in your face so that's that's kind of my our take on it so that's how we've been doing it yeah and for Hardware wallets that's like the gold standard of security for your crypto and also probably the most challenging thing to explain to someone to use so Justin how are you handling Mass adoption with that aspect couple things on that I do think uh Tim hit on an excellent point which is that the language that we use is just way too opaque for the average person and we need more people in the space who have the ability like a technical writer to convert from engineer to uh plain English and that's something we need so many more people involved with um but Hardware wallets in particular so I think wallets because the foundation of all of this is public key cryptography that signing is what makes all of web 3 possible uh the biggest hurdle for Mass adoption is going to be wallets key recovery um everyone who's used a wallet has probably had the experience of backing up a 24w seed phrase yeah which is absolutely terrible in another way that most people lose their money um just through mishandling it or trying to be too clever and doing something that leads to the loss of that basically access to your life savings um so wallets are going to be where the biggest uh UI gains are made uh but I don't think there's going to be one solution for everybody uh there's always going to be different needs for different purposes you mentioned that you know abstracting it away in many cases is what's going to bring a larger audience for us we're focused on the most secure applications we want people to well the two things you get out of a hardware wallet are you get your keys in a secure environment um your phone or your computer will never be a sufficiently secure environment uh for your keys and the other thing is you get signing on a secure screen um that's really important because we see these things like Mark cubin with his hot wallet um where you might have malware on your computer what you think you're signing is something else so having that signature cryptographically verified on a screen so what gives you that level of security but I digress a little bit um because I don't think Hardware wallets necessarily have to be a mass um I don't think everyone has to be using them for Mass adoption of crypto I think you know the level of security that we're um engineering for is used by governments Enterprises power users prop trading funds um so we really want a device that uh if someone from a three-letter agency has it in their physical possession they're not getting your private keys not everybody needs that you don't need that to trade a couple nfts um so we're we're focused on that really that end of the solution and I think that's really important because as much as I love the home hacker hobbyist mindset of crypto sometimes we take we're way too glib about these things because this is globally systemically important technology um our legislators are talking about it regularly we don't need hobbyist level tools any longer so for me I'm not going to try and reach every consumer but I'm going to try and reach all the people that need those security guarantees yeah and that's the thing too with Hardware wallets or any of your wallets like the goal is to layer on different wallets so you can use a metamask or maybe a sugarcan or silic cor and add grid Plus on top of it as your layers of security just to strengthen it and it's not one or none just kind of nice thing about crypto it's interoperable you can work with whatever you want if they allow it they should that's how the majority of our users will use our our Hardware wallet is through metamask it connects you see a signing request in your software wallet and then you have a second to keep yourself safe in case you're doing something that you didn't mean to by verifying that transaction against what you see on your Hardware screen so if those two match it's what you intend to do you're interacting with the accounts you've labeled then you can rest easy and and press that button without your palm sing now as entrepreneurs um what has been your most difficult challenge in this wild wild west industry of crypto shall not start with you I think I'll speak for everyone here that the big elephant in room is regulation just cuz like given the fact that we're all in a fairly nent space um the regulation isn't uh written out especially in the states it hasn't been very clear and so as we're all building the space that's that's definitely something that we think pretty deeply about so I think that's my kind of quick answer yeah you know I I I talked a little bit ago the challenges of being in the space and being in the wallet where it all comes together right so that you kind of expect that right you're you're you're you've got competitors and you've got partners that you need to um when you've got the government and other things working against you um I I I I was in traditional Finance for 30 plus years and there was always a lot of negative news and for my first 18 months of I've been in crypto for about 3 plus years my first 18 months every day was it was a great day you know and and and for the last 18 months it's been more about hey the bank just called they're they're shutting down our relationship what are you going to do so we we are fortunately we already had a backup plan right but there's been more of that stuff that doesn't help you move the product forward but it slows you down you know yeah absolutely um I would actually say the biggest issue that is on the mind of entrepreneurs in this space regulation and all these are big ones um it's the cyclical nature of the markets and being able to manage your cash reserves appropriately so that your company is going to be around for the long run um you know we see the valuations where absolutely terrible ideas in a bull market can generate tens of millions of dollars of funding U and Beyond um and then the absolute best builders in the space in a bare Market uh can struggle to scrape together Angel checks so that is really important spending to grow uh while at the same time being a little prudent conservative to accommodate that cyclical nature that impacts your user base it impacts your funding options and really every aspect of what you're doing and thank you and we have about five minutes left is there any questions in the audience you have the great is it start with you I think you raise your hand first lik's coming we're the best crypto people with wallets over here so definitely ask your questions if you want to know something okay I'm so I'm brand new to crypto so I'm one of those people that needs it in layman's terms parts of of what you guys were were saying reminded me a little bit of the issue with financial illiteracy like most of us at least know many or some person that was way too late on investing just to give you a comparison I recently went to a conference um and the speaker was saying how if you're 20 and you want to be a millionaire if you invest $500 a month you can be a millionaire by the time you're like retired but if you're 30 you have to invest 1100 if you're 40 you have to invest double 5 500 or 1100 when you're 40 so when I'm listening to you guys I'm thinking okay are we at the point where this potentially could Ral in a near future financial literacy and how can we make this more accessible to people like myself and like the local families so it doesn't end up being a dangerous situation but then I also hear the parts of your conversation where I'm not sure what your name is sah but Bruce um where you're saying even you yourself are frightened to like switch the currencies and I'm thinking okay it's a little way too early for people who are totally not knowledgeable to enter the space um and I'm a writer So eventually hopefully I'll write something for the local people who can you know understand it but I'm still figuring it out so thank you so yeah I guess I can jump up yeah so um kind of the three to give you a bit of context so kind of the three big pillars for sugarcane one is around simplicity so making a clean simple experience and we've pretty much focused a lot on technology to do that um secure so a lot of the actual way which you secure assets also very very secure as well and the third thing is educational right so what I mean by that is just because U people who are coming into crypto there's a lot of uncertainty both for the technology and also from the actual Financial nature of it and so for that perspective we actually launched a podcast where we actually talk a lot about like what is a transaction or how do I think about money or how do I think about like crypto like just the really like simple questions that you never really get answered you don't really have a friend who's like who knows enough about it to explain to you in a simple way so we launched a podcast called the sugarcane podcast we talk a lot we answer a lot of these questions and second thing is that within the actual application itself it helps people understand what they're doing and educate them on like why you're doing the thing you're doing because like um people again who are using crypto they may not necessarily know what it is the actual product is doing so we educate people as they're going along in the actual application itself so definitely like we're thinking a lot about that especially like with new people coming to this place you know maybe what I would add is uh look the mass adoption question is I I there needs to be another use case that takes off gaming or something else that people are comfortable with that feels low lower risk think think iPod iPhone with calls and music not not all the mobile uses we think about today right we're we we've gone so past that right so we need a use case like that I think the other thing I would say to this financial literacy issue look the crypto markets are incredibly inefficient for a lot of the reasons we talked about it today I I I tell my own kids get smart on this because there's an opportunity for you I mean a lot of people feel like they've missed the opportunity that their they can be more wealthy than their parents right I think crypto is the opportunity to do that um but it's not going to be for everybody it's going to be really hard uh to get over um and it blockchain will win the day it's the technology blockchain that win the day um crypto will just be a means to lubricate it yeah yeah you want to add yeah I want to add just a little bit because you mentioned the nastiness on Twitter and how that's a turnoff um unfollow all the people who are just influencers or Traders follow people who are building things um but there is this really nasty insular streak in online crypto communities um and with that it makes getting a tow hold on the technology that much harder um so I think you know you guys have touched on it bridging that Gap isn't just about user education when something bad happens to someone they lose their assets there's always you know people on Twitter who are like oh they should have known better but it's our responsibility as an industry to do better for everyone to make it easier to do these things and not just push it onto user education yeah AB absolutely it's good and you think you had a question too you have a mic yeah mic's coming all right so I'm familiar with hot wallets and I use metamask and all that sort of stuff so I'm not I've never used a a hardware wallet right um so I guess what happens if I have a hardware wall connected to my metamask and I break that device that device gets wet or destroyed in some fashion am I now locked out of my wallet or what are the fail saves for that ah so it's all about backups any secure account whether it's a hot wallet a cold wallet you should have multiple secure backups without talking up our solution too much what we do we have our device is a little unusual it's a it's a desktop device and we have cards you put in to make backups they are exactly like a credit card same sort of physically unclonable chip you would have in your debit or credit cards so make a bunch of copies on that there's more opportunities there to split it up and do other things but no matter how you're using it you won't lose that crypto if you lose the device uh and much the same way if you're just using metamask on your laptop if you have an appropriate backup you won't lose it so um but that's really the what we do the experience is we just supplement metamask and all the other tools we work with um you plug in you select connect Hardware wallet and you sign in both spots and that prevents you from being impacted by malware and so many other attack vectors but yeah backups for everything no matter how you're doing it thank you um we're out of time now but please come to us for more questions I know there's more hands up but thank you again Sheldon Tim and Justin please find us around thank you thank [Applause] [Music] you