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Bitcoin the show, which talks about the Technologies, projects
and startups Drive And decentralization and the global
cryptocurrency Revolution. My name is Sebastian kouchuu and
I'm Grand Valley in Ukraine re here on absurd f53, we have a
Yuna. Simpson, Ariana is Works.
A big goal. I was introduced to her when I
was at NAU New York trip this summer and I wanted to meet up
with her although it didn't happen but we kind of stayed in
touch a bit so and now that she's at because I thought well
that would be a great time to do a podcast and talk about if they
are things, they focus on, which particularly is a multisig
soriana, it's good to have you on Hi.
Thanks for having me, excited to be here.
Thanks for coming on. Maybe we could start off by
introducing yourself. Sure.
So my name is Arianna Simpson, as you mentioned I grew up in
Italy, moved to the US afterwards and I actually
studied nothing to do with computer science or cryptography
or Bitcoin like most of us I think have studied International
politics in Spanish but decided to I kind of fell into Bitcoin.
In about let's see a year and a half ago now and as soon as I
read the white paper I was hooked so I really started to
delve into it and started writing about it a lot.
And this was while I was still working at Facebook, I was
basically working with some of the big managed accounts on the
advertising side, but Bitcoin became my sort of real interest.
And so I decided that ultimately I wanted to move into the
industry. Full time, which is how I ended
up at Big go. Cool.
And so, you've been working a bit ghosts since August, I
believe. So, it's been a few months.
How are you enjoying it so far? Yep.
That's right. Yeah, it's been a great few
months, really exciting. Obviously, we're still, we're
still young and it's an industry that's changing at the speed of
light. So, you know, never a dull
moment, but I think it's a really exciting time to be
working in Bitcoin, particularly, with a really
great. Game and I think even within an
industry that's fast-moving, our focus on security really makes
it all the more exciting in the sense that security might not
always seem like the most the most thrilling field to work in.
In the sense that a lot of what's happening is really
happening behind the scenes and so you're not necessarily always
adding a cool new feature, but you are building infrastructure
and architecture that's really really important.
And you can't, you can never kind of, let the security become
Legacy. You're constantly having to
update and make changes because the minute you start to say,
okay, I'm done. That's when you get, you start
to run into problems. So it's constantly evolving and
that makes it really exciting. Yeah.
And I guess we've seen a lot of things evolve and in terms of
usability of security, I mean I just like to pull out a few
examples here. I mean, before we start talking
about bit, go just under A year ago, we were having a discussion
about how to safely secure your Bitcoins.
And at the time, you know, this was one of the solutions and
these I believe B, 38 cards were another solution for those
listening. I'm holding up a Raspberry Pi
computer on which I installed Armory and print out paper
wallets in order to store my Bitcoins and then I think I gave
one of those backups to a friend on a On a USB stick.
And and I gave another backup to another friend, and then these
little bit, 38 cards came out. I got a couple of those and same
thing. I got three or four and I gave,
I gave them to a few of my friends and thinking, you know,
at the time that this was the way to seek your Bitcoins.
And and, and now a lot of companies, I'll be a few
companies like coin coin based and bit core coming up with
these really awesome and easy to use solution for first.
Your Bitcoins with multisig. And so I guess just goes to show
that in such a short amount of time.
We've gone leaps and bounds in terms of usability for securing
your Bitcoins. Yeah, I think that's really
important in the sense that, you know, in this kind of field
you're constantly working to you're working against a
trade-off in the sense that the most Secure Storage is not
necessarily the most usable actually, I would say that There
are in some sense, inversely proportional to one another.
So what we're really working on is making the security you know,
as robust as possible but also allowing companies institutions
and individuals to transact because ultimately if you know
everybody is holding their Bitcoin in some sort of storage,
that's not accessible, the will end up with no liquidity and
it's ultimately not A very viable system.
So building out the ability to actually transact and use the
money while still keeping it. Secure is really important.
Yeah, I mean I do think we will see and perhaps we have seen to
some extent that segregation as well, right.
Where on the one hand, you have some people who are like advance
in your Bitcoin knowledge and they're like extremely
enthusiastic, and they want to sort of do it on their own, and
then they will use something like, you know, what you said,
you know, raspberry, offline, Armory, and those kind of
things. And then at the same time that
obviously doesn't scale and it doesn't It doesn't it's not
going to work for the masses and it's really nice.
That thing we have this. This powerful thing we can do is
especially with, with multisig, where you can get, you can get
both disability and you can get security.
And that's it's fantastic. No, because it's sort of like a
built-in two-factor authentication or at least.
That's one way you can be used, and I think it's really powerful
in that way. Yeah.
And I mean things like to factor author all layers that we've
added on to actual like you know, basic multisig wallets.
And the sense that, you know, we think that each of those pieces
is very important, but it's not sufficient and so layering on
things like different levels of user permissions, corporate
treasury policies, spending limits again to factor off.
All of those are key pieces that we've built on top of the
Technology. Because, you know, this is this
is serious stuff. If you're if you're looking to
hold or manage many, millions of dollars you want to take the
appropriate precautions and so that's that's what we're
building. So, if you look at bit go, is it
correct to say that the main focus of big cow is to build
Enterprise tool, and build sort of the Bitcoin wallet that the
companies? I will use in the future whether
that is baby investment funds, holding Bitcoin or perhaps, also
Merchants that decide they don't want to convert all their income
through payment processor at to fiat currency directly, but they
want to keep holding Bitcoins between but you do need to have
some sort of new processes to make sure that happens in a
secure way. Yeah, I think that's exactly
right. So we do have a free consumer
wallet but we're definitely focused on the Enterprise side
of things. You know, multisig is important
for consumers as well, particularly if they're holding,
you know, a sizable amount. But in terms of the additional
policies and rules and structures that we've built,
they're definitely Enterprise focused.
You know, if you have a company that needs to For example, give
its Auditors access to access to its wallets and access to its
transactions, but without actually giving a handing over
the ability to spend, that's traditionally something that's
not been really possible or easy.
So you know, we've built in things like view, only access.
So if you have Auditors or accountants, who need to be able
to see into your balances and your transaction history, that's
something that you can do using one of our wallets.
We also, Have the ability to set spending limits.
So the essentially all of these permissions are set at the
wallet level. So companies can decide to set
up different wallets with different spending levels,
different levels of admin view, only and spend only axis.
And basically what this does is it enables companies to
construct their, you know, their storage and their financial
systems in the way that makes The most sense for them which is
really I think making it a lot easier for companies and
institutions to hold and transact while still maintaining
a really good. A really great security model.
I'm also kind of cues his, it seems to me what you guys are
building is very much something that for the future and I think
that's a good thing because if Beacon will be successful, I
totally believe that's going to be a huge.
Four days but it also seems that like it's something weird game
and right now is probably really limited.
So I'm curious right now is the demand that you are seeing
primarily from financial institutions holding Bitcoins or
are you also starting to see, maybe some larger Merchants,
that are actually keeping some of the Bitcoins that consumers
spend with them? Sure.
Well, I would say that this is definitely something that will,
you know, we obviously see it as a market that's expanding, but
even right now there's a lot of interest from you know, hedge
funds that are starting to hold a percentage of their total
assets in Bitcoin, who you know, hedge funds may be buying and
trading off of it. They may be buying and holding
companies, you know, we have, for example, the the Bitcoin
shop that Holds a percentage of their Assets in Bitcoin and they
use bit go to do so. And even institutions, for
example, the Bitcoin Foundation uses bit go and they use, they
use it not just for holding but also for their operational
needs. So yes, it's definitely a market
that we see as growing which is I would say always what you want
to look for when you're, you know, starting a company because
if the markets kind of cast out, Then that's not necessarily the
best Market to go after. But even now I think there is,
you know, there is substantial interest and we're constantly
onboarding new companies and new financial institutions, we just
announced our partnership with tear exchange.
And we have a really interesting model there because basically
their clients are using bit go to hold collateral for their
swaps product. And so that's, you know, that's
Our cold channel of people who are interested in trading, based
off of Bitcoin using both Bitcoin and dollars.
And that's another thing we're involved in.
So it's, you know, the market isn't necessarily going to be
composed of just companies holding Bitcoin or just
institutions, or any one of those.
But we're really able to support a variety and so that I think
expands the market substantially cool.
That's very interesting. No, it's not that.
The use case that follow-up but of course, makes total sense.
Now can you also talk a little bit before we move on to multi
say about B Ko as a company? And how many guy, how many
people are you now? I know you also did raise a very
large round financing, which is Each type something we can we
can talk about briefly. Sure.
So right now we are 11 full-time.
We're growing a lot. So I was the third employee in
August and we're already at 11:00.
So that's, you know, quite a jump.
We're hiring a lot particularly on the engineering side.
Obviously, we're very technology Focus.
So that's kind of core to our business so it's obviously makes
We're hiring a lot of Engineers us and everybody else in the Bay
Area. But yeah, so the companies the
companies definitely growing which is really exciting as
well. So in terms of investment, we
just in the past couple months, closed a 12 million-dollar
series a and that brought in a number of investors.
It was led by red point. We have the former CEO of
Verisign Stratton sklavos a number of Bitcoin related angels
and funds. So it's yeah I mean it's
definitely a group of investors that has a lot of Eric on the
former CTO of Netscape. It's a lot of investors who have
a great deal of experience in the early, the Early internet
days as well as in the financial space, which I think is Really
core in a lot of ways, we see what we're doing is similar to
what verisign did for the internet.
You know, when the internet was just kind of growing up, I would
say. And so it makes a lot of sense
for us to have those people on board and I think it's really,
it's really great validation for what we're building as well.
Now just maybe could be for maybe before the we get a little
bit. More into the technical
background. I wanted to talk about one thing
that we've sort of come back to again, and again with pretty
much every company we talked about, which is the regulation
side. But I think in this case, it is
particularly interesting because multisig itself is a very
interesting from a regulatory perspective.
No. Because if you let's say have a
two out of three multi sick and three different parties, hold
one key. Then, can you actually say
anyone is holding the key? It is.
It's not. So Clear in what way you can
assign ownership there. And then of course, that may
affect whether you will be considered a money transmitter
or not. Whether you would have to get
certain licenses or not. So what stage is, maybe you're
thinking at or red. You see this going Yeah, so we
do not see ourselves as, you know, anyone's money manager or
anything like that. We are not holding your funds.
At any point, we are really a software provider in the sense
that we're building, the technology to allow individuals
companies Etc to hold and transact with their coins.
But we are never responsible for those coins were not holding And
so and that's I think, most clearly evidenced by the fact
that, you know, and this is available on GitHub if you want
to check it out, we have basically released a tool that
allows you to demonstrate that. You can actually retrieve your
funds completely independently of bit go.
So you know we don't have ownership or claim or the
ability to transact with your funds.
So really, we are We're really only providing the basically
infrastructure in which to manage that.
So if you go to GitHub right now, you can basically see that
if you use your key and your backup key.
So your two of the three keys, you don't even need bit goes key
in order to remove your funds. And I think that gives our car
customers a lot of confidence to because I mean this is a highly
highly unlikely scenario but let's say Go is frozen or we
ever, you know, fell off the face of the Earth, for whatever
reason, everyone could still retrieve their funds.
And I think that's really important and that kind of also
demonstrates the facts that the fact that we're not actually
holding anyone's funds. So in that regard because we're
really more of a software platform.
We don't like the money transmitter licenses, that type
of stuff that apply to companies like coinbase do.
Don't apply to us because we're not actually falling under the
same sphere, if that makes sense.
No, I agree that it makes sense. I think to the regulator, it
might not make so much sense, however, it's difficult to
consider me, I can definitely see how that's possible, but I
think it's difficult to consider a website as a software provider
because traditionally software is something that you install on
your, on your computer that runs as a standalone, that doesn't
run in a browser. You need to access the internet
to get access to. So I mean, and we'll get back to
this in a minute, but I think that there might be some
interesting questions that will arise in terms of Bitcoin
regulation with regards to companies like bit go that
essentially offer a software that runs in your browser which
decrypts that which science transactions locally, and that
doesn't. And those companies don't have
access to your keys. And so I think it might be some,
some interesting questions to be raised with regards to like,
what are these companies, are they software providers?
Are they with regards to regulation, like the bit license
or other regulation that may come?
Where do they fall into that? So maybe this is a good time to
get into like multisig in a general sense.
Can you just sort of just briefly introduce multi
signature architecture and perhaps just talk about the
history and multisig? Or so.
I think the the best way to think about multisig is that
it's really solving a fundamental problem in by
eliminating a single point of failure, in kind of the storage
and the management of Bitcoin. So a traditional Bitcoin address
has one private key. And if that private key is lost
or compromised, the funds are basically lost.
And there's no, you know, if you accidentally Throw away your
hard drive. Oops, unfortunately.
Nothing we can do about it. So that's that's kind of
obviously problematic, especially if you're holding
large sums of Bitcoin. And what multisig does is it
eliminates that problem by basically allowing for the
creation of multiple keys. So, the protocol itself allows
for the creation of up to 15 keys.
And you can, you can basically create up to 15 keys and then
require a smaller subset of those keys in order to sign,
transactions and move your your funds around.
So our Enterprise product uses a two of three multisig scheme.
So essentially there's a total of 33 keys and two of those are
needed in order to transact. So we multisig has been around
since Since 2012. And we have been working on R&D
in this field led by Mike Bell, she who's our CTO since early
2013, and we've actually had to do a lot of work on, not just
big goes client, but actually, patching, a lot of the core
libraries and things like that that are, you know, necessary in
order to have a robust infrastructure upon, which to
build. So, that's kind of SD the origin
of multi-sig. Obviously, as I mentioned on top
of that, we've built things like HD wallets, which we can go into
in a little bit and then the series of corporate treasury
policies and rules that, that I mentioned earlier.
So the for those who've you who might be interested, so that
multisig was introduced in a Bitcoin improving protocol a
proposal which H b, 16 13 startled, the pay to script hash
you can get find that on on GitHub.
It's it covers more than just multisig right?
I mean it covers other things like being able to split keys I
believe and other things that were introduced.
There are some other things that than just multisig that were
introduced with this. Pick one and improvements a
proposal right here. Yeah, I think I think multisig
is kind of the most I would say it's the most important aspect
in the sense that it's the one that has the most, I would say
revolutionary impact on storage. In the sense that It has a
tangible effect on reducing the probability of hacking or you
know user error and obviously that's that's core to making
Bitcoin more usable. And I think if we want to get
Mass adoption of Bitcoin, people need to be secure in the fact
that their funds are not just going to evaporate.
And multisig. I think goes a long way in terms
of doing that. Which is why we've, you know,
multiple times is You'd calls for the industry to adopt,
multisig and the amount of Bitcoin that's being held in P2,
sh addresses, is I think just under 1 & a half percent at this
point, which is still a very small alarmingly small, frankly
percentage but it is growing quite rapidly.
So there's a website. Actually, I believe it's called
p2s H dot info. I was going to mention that.
Yeah, it it's really interesting to see how It's evolved over
time and how it's really exploded in the last few weeks
and months. Yeah.
It's it's kind of nerdy. Yeah right now yeah I just
checked and it looks like it's just over one point five
percent. Yeah it is fascinating.
I think at the beginning of the year it was like 1,000 Bitcoins
or something like that and even a month ago I mean I presume
also the coinbase multisig V has contributed to a lot of the
explosion over Last month, but it's going up like crazy.
It's like more than doubled in the last four weeks, I wanted to
ask another brief question regarding big go and especially
the use of multisig there. So, you mentioned use, two out
of three multisig. Do you also offer other
possibilities for example, you know, two out of four or two out
of two, or one thing, that is a perhaps Particularly interesting
we talked about this with on the podcast.
We did on reality keys because he uses something like that
although apparently there's a non-standard at the moment but
that you'd have a multi seek address where it's not like two
out of three but for example one address always has to be used
and then it's any one of the other two or its A 2 out of 4
address but specific pairs can go together.
I don't know if that's something you use because that would, of
course, be then one way, for example, to manage it, if you
had, let's say you have one a treasurer of the company has
assigned every transaction, but then anyone else can do it but
not to other. People are there things like
that that you also building or perhaps thinking of building for
the future. Yeah, so as of right now, we
support two of three, we will definitely be expanding the
flexibility in terms of what that looks like.
So more complex rules around number of keys who needs to sign
Etc. Basically what you just
described. That's not available yet but
there's a reason we're hiring. All these Engineers so stay
tuned for a lot more developments coming.
Now, I'd like To go into some of the meat.
Just the usability aspect of this is probably the topic that
I'm most interested in. So I just before the show, I
mean, I had created a bit, go account a little while back, but
I had never actually just tried to use it and see how it worked.
So I opened up my account, I logged in.
So there is a two-factor authentication.
So I had to get an SMS or use authy to log, actually log into
the account. So that's like one I guess,
level of security, which Which protects you even further than
just having a password and obviously the best practice,
everybody should use that. And then I so I created a secure
wallet. So secure holding, so you I
guess you can create just as many as you want, right?
Yeah, that's exactly right. So you can create any number of
wallets and as I mentioned before each, each rule, that you
set is specific to the wallet rather than the account and
that's intentional in the sense that it gives you greater
flexibility. So let's say you have a wallet
that you want to hold as that has like 90% of your Holdings
and you really never want to transact out of it, except on
very rare occasions for that one.
You were an Enterprise user, you could set a spending limit of
zero, which means that any transaction would require an
approval. If instead, you decided to have
a wallet that you use to transact more frequently and
therefore, you don't need security to be quite as tight,
you could set the spending limit to say 5 Bitcoins.
So any transaction under that limit doesn't require any other
approval, but if you do, go over that threshold then Then you
would want an approval on it. Okay?
And so when you create one of these secure wallets
essentially, you're creating, it's not really a wallet, right?
You're creating an HD wallet, it's not just like 11 address,
you can then create, it's a, you're starting from a seed and
you can create as many addresses as you want within that secure
wallet. That's exactly right?
So if you don't know, if you want to go back to the screen
share, you were doing. But if you go ahead and click
into the wallet, there's actually a Called addresses and
that will show you basically all the addresses that you have
generated. Yeah.
So go ahead and click into the wallet.
Okay? So just for those of you
listening, I'm actually showing the bit go interface so I
created a wallet here. I called the safe well yeah,
I'll explain these transactions later.
So yeah, so I created a few addresses here.
Yep. So I've got three at four
addresses, actually, that I created.
I actually move some Bitcoin at this.
I want to try it out and I I donated a few million Bitcoins
to Wikipedia because it's been a lonely being funded for for the
last few weeks every time I go on Wikipedia.
So I said, what the hell? Yeah.
So here are the addresses I've created and I can create as many
as I want, right? Exactly.
Yes. And those as you can see, you'll
see the balance of each of those.
And for example, one use case in which, that might be,
particularly helpful is, let's say, you're expecting payment
from five different people you can generate.
Different address for each of those people.
And that way you'll be able to clearly tell who has paid you
and who hasn't just by keeping track of which address you send
to whom. Yeah.
And I mean that's best practice. We recommend it to generate a
new address every time you receive a payment from someone
anyway, right. Okay.
And so other things that we can do, here we can manage the wall.
So like you said, there are some spending limits that we can
determine so we can set a daily spending limit.
Yeah, and a per transaction spending limits, that's kind of
interesting. And like, maybe I'll go into.
We can go into some detail about how this works.
And second, there's also a user access tab, so this is, I think
an Enterprise feature. Yep, that's an Enterprise
feature. There's also an address
whitelist, so if you're really Restricting.
The addresses that you're sending your Bitcoins to, I
guess you can create a white list of addresses that that you
can send your Bitcoins to. Oh, that's interesting.
Yeah, that's not so much for restrictions so much as for
safety and kind of peace of mind.
And what I mean by that is obviously Bitcoin transactions
are not reversible, so you want to make sure that you're
actually sending your coins to the address that you intended to
send them to. And So What by adding let you
know, let's say you're a company who regularly pays out a certain
amount to a specific vendor, every two weeks you can add
their address to that to that white list and therefore, you
won't need to, you know, spend a lot of time double-checking that
you've got the right one every single time you need to
transact. Okay now one question that that
I had before and I think I may have a pretty good what the
answer is, but it's not really obvious, maybe to everyone, but
these spending limits These spending limits are enforced by
B Ko. They're not enforced by the
protocol so correct. So those yeah that's a layer
that we build on top. Yes that's a lot of that you
built on top. So what that means is however
that it all this is really good idea to set these spending
limits. If By some chance, someone were
to get a hold of your key and your back up.
Those spending limits would not be taken to account if they were
trying to do it to a tree three transaction with your backup and
your your personal private key. So in order to like bypass that
limit, somebody would have to get a hold of your.
Well, there's quite a lot, they'd have to get ahold of,
they'd have to get a hold of your phone, your wallet
passcode. Your Login credentials.
So the probability of that happening is I would say rather
slim particularly if you're falling, if you're following
what we recommend in terms of, you know, best practices for
passwords and that kind of management.
So if somebody was using trying to basically spent the money not
to B go but to the backup tool that would be used.
Let's also say, if because he disappeared It Go disappeared
and then this wouldn't apply right.
Well in that case. So basically the way our backup
key card works is that it has an encrypted copy of the keys so
and all of those are encrypted with the passcode that you have
set for that particular wallet. So what that means is that you
can literally like take your, I wouldn't recommend it by any
means, but if you were so inclined, you could take your
key card and like, You know, wave it around for the public to
see and unless they could somehow, you know, get a hold of
your passcode. They wouldn't actually be able
to do anything with your coins. So it's again it's very
challenging even if somebody has your key card to.
Yeah, even using the recovery tool actually spend those coins
if you're not the rightful owner because whoever does that also
needs to know your passcode. So which means, which means that
every time you change, if Change your password on a wallet.
You need to regenerate a backup key card.
No, you don't. But you what you can do is you
can essentially just send the funds to a new wallet if that
makes you feel more comfortable. Okay, so just to be clear.
So, the key card is is a document.
A PDF document that bit go sense to you or allows you to download
when you create your wallet and is essentially your backup, your
I guess. Your backup key.
If anything happens that you lose your, your password, it
will allow that key card would allow a bit.
Go to retrieve your funds. Well, it would allow it would
allow us to retrieve your font. I mean, it would allow you we
don't ever retrieve your funds. So it would allow you to
retrieve your father. I mean, it would allow you to
either. So, for example, if you forget
your wallet, Would using your key card you can retrieve.
Your funds, basically move them into another wallet.
Or if you lose your key card, you can still using the other
two keys transact regardless. So essentially the basic
premises any one piece can be lost without actually you know
losing access to your funds. Okay and in terms of actually
storing this back up what are in your opinion the best practices
with regard? To keeping this key card.
I mean, should you keep one in your house or should you have
multiple backups like maybe at a friend's house, or your parents,
or maybe the in a bank vault and, and your, and your
password? Also, I mean, a lot of people
now are using services like last passes through their passwords
and things like that. Can you maybe talk about some of
the best practices that you would recommend to, to keep all
that as secure as possible? Yeah.
So in terms of storing your back, Cup.
You know, as I mentioned it is encrypted which is comforting in
the fact that obviously that adds another layer of security.
If somebody finds it it's not just going to be like oh there
we go. I can read it, but we would
still definitely recommend keeping it somewhere.
You know like a bank vault. It's important to remember that
this key is not something that's needed to transact on a regular
basis and so it's really only used in the event of some sort
of Disaster Recovery or something like that.
So, again, it doesn't need to be the most accessible thing in the
world. So if you have a safe deposit
box, a bank vault, something like that, that's definitely,
you know, a great place to store it but it also depends on the
use case, right? So if you have a wallet in which
you're holding, like, I don't know, 20 Bitcoin it doesn't, you
know, you don't need to go to the same length as you would,
you know, if you're holding many Of dollars.
So I guess it really depends on, you know, kind of what you're
holding in that wallet. And what the, what the use case
is in terms of your passcode? Yeah, I mean, passcode managers
are definitely something that's has taken off in the past.
I don't know, couple of years also, something that you can use
the most important thing to remember is just to make sure
not to store your passcode with your key card, which might seem
evident. But I always point it out
anyways, because, you know, if somebody does have those
security is never evident. Yes, exactly.
So if somebody does have those two pieces then that's not a
scenario that we want. So obviously just making sure to
keep those both secure, preferably in your head, but if
not somewhere safe, but just not in the same safe.
Place as the key card so I have two questions there.
Different. So let's do one by one.
First of all, I was wondering is panel on bitcoin security with
Alan Reiner at a conference recently and he said in his view
he always argues that the backups the paperback of should
be unencrypted because I guess in his point of view, the risk
of you being not able to be retrieved the funds because
somehow you lose the password to decrypt, that paper backup is
higher than somebody sort of physically stealing that thing.
Do you agree with that? Or do you think maybe that's
something that's true for individuals but not for
companies? No, I don't agree with that.
The way our model is built is even if you forget your
passcode, as long as you still have your key card, you can
retrieve your passcode. So There's no reason to have it
unencrypted because so long as you have it, you can recover
your passcode. So, if you're, if you're storing
it, I mean, I wouldn't really recommend storing anything
unencrypted because that just adds a layer of risk, okay?
Then maybe my, so my second question is this and that's
something that's been on my mind, quite a lot, also sort of
thinking personally, right? So now I have a whole bunch of
different wallets. There's like so many in there,
some in there and, you know, some are in this like offline
thing in somewhere, maybe paper thing.
And then I think that Tends to be the case with many people and
then of course it can get very complex.
I mean, even if we talk about something as simple quote
unquote, someone using Bitcoin big go multisig thinking through
of like where do I store my passcode?
Where do I store the paperback of like this shouldn't be in the
same place at cetera just to have that clear?
I think the syrup from an operational aspect is super
important. So what I thought About what the
really what one should do is once you write a document,
right? Exactly outlining different
scenarios like if this happens and that happens, if this these
things have to be considered. So I'm curious is that something
you do with your clients is that you sort of walk them through
every step and maybe have this kind of different scenarios that
so they know what exactly they consider.
And what they have to do. If something goes wrong.
Yeah. I mean, obviously we are always
here to support them in the event, something goes wrong.
But when you know, when we do set up, I spend a lot of time
kind of walking through security best practices, how to set
things up excetera. So you know for example we allow
you to import an ex Pub as the to basically create the backup.
So So one of the keys is generated on big go servers, the
second is generated client-side in the browser when you create
the wallet and then you have the ability to import a third one,
which we recommend generating on a separate machine because you
obviously never want to have any two of the three keys
unencrypted on the same machine because that opens you up to a
level of vulnerability that obviously isn't good.
So, you know, for example, Definitely walk through all of
those best practices and that sort of thing in terms of in
terms of management. I mean, that really boils down
to each individual customers needs and use cases.
So, some of them will have multiple people managing
multiple wallets and so, depending on, you know, whether
it's a wallet that's used for day-to-day spending or four more
long-term Holdings than my recommendations, SLI going to
vary. So it kind of depends on the use
case as well. No, I had an idea so we were
thinking about the sort of scenarios where and I think
perhaps we don't think about this enough.
But, you know, it, you know, we all have these Bitcoins and if
something happens to us when we get injured or permit, the
disabled or maybe we die or something like that, in an
accident or something horrible like that.
And, and those Bitcoins essentially will die with you,
unless you've done something to be able to pass them on to
someone else. So, how does how would be able
to implement some sort of third-party retrieval in the
case of someone dying? Well, I mean, fortunately, this
isn't a Sarah scenario that we've encountered, but I would
suppose that if something like that happened, you know, let's
say your father has a bigger wallet and he passes away, he's
left you with access to say the key card.
Then if you were to come to us and, you know, obviously, would
take whatever legal proceedings are necessary beforehand, but
once that's been settled in that regard, then you know, with our
key, we would be able to allow you to retrieve the funds.
But again, Not luckily not a scenario that we've we've really
encountered, obviously, the other option is to, you know,
have multiple administrators on a wallet.
So for example, if let's say your father had an account with
substantial Holdings, he could add you as an administrator as
well as your mother and then in that event, you know, the two of
you would be able to transact even without even without
Needing his approval or signature on the transaction.
Okay, so one could leave his key card with his will for example,
right? Yes.
Okay, and when, when someone comes to you with having lost
their password and wanting to retrieve the Bitcoins with their
key card, what sort of identity verification do you have to go
through if any to unlock those funds as having the key card
enough? Or is there an another layer?
Bhaiji verification that goes into authorizing transactions.
Yeah. So we still have to Factor auth
on that, as well. So, we have a recovery tool that
basically walks through the pot process, requiring regular login
to factor off, as well as the key card.
Okay. And this is perhaps more of a
technical question before we move onto to other topics as And
we kind of relates back to what we were talking about earlier.
And then the question of you who holds the funds and such does
bit go with the with the keys that they possess with that,
that third key that they possess, do they have the
ability to actually see the funds?
Do they have access to that? Or do they just see a bunch of
encrypted addresses in the sense like, do we are we able to view
wallet Holdings? Yeah.
Are you able to see client funds?
Using see That, that part of the three keys that you have, we
have visibility but we don't have the ability to spend or
transact or anything like that because we only have the key to
co-sign, right? So, so essentially what you're
saying is like in this safe, in these addresses that I've
created bit, go has the ability to see the balance, right?
Me actually see the addresses that that are created in that HD
wall and the end, the balance of strength.
Okay. That's something that wasn't
clear with me. Yep.
So one thing I would just add to what we've discussed.
I think we've talked a lot about multisig but another thing
that's I think interesting and not particularly well, known is
the fact that all our wallets are also HD which is stands for
hierarchical deterministic and you know as we mentioned when
you were sharing the screen that allows for the creation of
basically infinite new addresses from the Exceed.
And I think that's that's very important from, not really not
so much a security perspective. But from a financial privacy
perspective because the blockchain is a public Ledger,
it's obviously available to anyone, who cares to look at it
and what that translates to is the potential for sensitive
information to be made relatively accessible.
So, you know, for example, I'd say I'm a company that pays its
employees in Bitcoin. I send out, you know, there are
15 employees. I send out 15 transactions on
the second Friday of every month.
If I'm the recipient of one of those transactions, I can
obviously see which address the the funds came from and I'll
also be able to see the other transactions that it made that
particular day. So for example, that would allow
me to infer without too much difficulty.
For example, how much my co-workers salaries were or, you
know, any sort of thing like that in the event, that, you
know, I'm a hedge fund, that's holding assets and different in
different wallets. Somebody could, you know,
identify me as the person who has control over those and then
potentially threaten me, or any other number of unfortunate
scenarios. And so HD, while it's prevent
that by basically masking where you, You know which one of these
addresses the transaction was coming from by spending from a
different one each time and so what that does is it just kind
of allows you to maintain that privacy even though you're
transacting on a public Ledger that's really interesting.
I like that idea. Thanks.
Yes, so we're kind of coming up towards the end of our show.
Is there something else you want to cover it with regards to a
big goal or multisig that we should have asked about?
And that you feel is important and we haven't, we haven't come
to yet. No, I mean, I'm just really
excited to see the ecosystem, taking the lead and kind of
following the path that we've set in the sense that, you know,
we as a company. And our CEO Will O'Brien
published a piece titled something.
Like it's time to end the cold storage Ice Age.
We've really encouraged the ecosystem as a whole to adopt
standards like multisig. We see these as not nice to have
but as really core to making Bitcoin something that's a
viable Financial instrument across the board and you know
it's not technology. EG that we want to hide away and
be the only ones offering we really want the industry to be
using it and improving upon it. Because ultimately, it's in the
entire ecosystems best interest to have more people safely
securely holding their money. And so I think that's that's
really the direction that we're headed in.
Obviously we want to stay a step or five ahead of everybody else
doing this but, you know, we think it's important for the
industry as a whole. Yeah.
And I think it's important. Well, for industry leaders to
like you say in set those standards which then get adopted
by by every other actor in the industry.
So good job on B, gopher leading the way on security and and it's
also like we talked about being in the show.
It's, it's very it's very interesting to see how that's
evolved in the last. Like it seems to be happening so
fast, just a few months ago, we were talking about insured
wallet. It's and cold storage, and kind
of looking at that as a solution for securing Bitcoins.
You know, I might be interested in seeing where those, where the
security is going to is going to go in the next six months.
I mean, I think in six months from now, we'll be looking back
at this conversation and saying even though today we're looking
at this and saying, this is quite secure would be looking
back on this and saying, wow, like that was so insecure.
We've got so many more layers of security now.
Yeah. I agree with that and also just
making it more usable. That's something that we're
constantly working on. So it's just like you can never
really rest on your laurels in the security and usability
space, particularly when you're basically creating a new
industry. So a totally agree will have a
very different conversation in in six months time.
So yeah. So perhaps moving on just before
we end the show, so you are also So a blogger, you write for
point, you've written for coin test for Business Insider, and
you also write on your own blog area on subsume.com.
And so, I was reading through your blog earlier today and and
you mentioned this before the show that you were in Africa,
can you talk about your experience there and maybe
relate that to bitcoin? Yeah, absolutely.
So I think one thing that a lot of naysayers of Bitcoin, repeat
it Is that oh, you know, we don't need it, the financial
system works. And first of all, I would argue
that that's not necessarily the case it very much works or
doesn't work depending on who you ask and what their financial
status is. But more broadly, I think that
yes on the whole the United States for example and A certain
part of Europe have you know, Financial systems that are
largely functional but when you start moving into other parts of
the world, you see that that's not necessarily the case.
So I spent a good amount of time last year traveling through
southern Africa and a lot of what I saw was really really
eye-opening in terms of, you know, how different economies
work and what those financial systems or Lack thereof look
like so you know, I think the most, the most eye-opening part
of my trouble for me was the time I spent in Zimbabwe and I
met a lot of people who really gave me a great deal of insight
into how the economy had been devastated by their president /
dictator Mugabe and he had through, you know, basically
completely Reckless. Fiscal policies printed money,
use it to finance Wars, excessive pay to his government
and army officials and by doing so basically cause it's rampant
hyperinflation to the point where I think it was the second
worst case of hyperinflation in the history of money, which is
quite astounding. But basically, what what
resulted was the fact that money was depreciating at such a rapid
clip, that people could not afford to buy anything?
So stores were completely empty because the merchants couldn't
afford to stalk them, hospitals had no medication doctor who are
not paid, so they were not working, people were dying for
things that should have required, a minimal dose of
penicillin and it really, really destroyed the company the the
country's economy to the point where they eventually had to
switch back to the dollar in order to stabilize things and
things are certainly important. Proving now.
But there's still the, the after-effects of that kind of
economic disaster are still being felt very strongly.
And so for me, I guess the, the relation with Bitcoin is the
fact that because it's not controlled by any single
government or single entity. There really is a substantial
potential for avoiding this kind of thing.
In the sense that, you know, currency manipulation is A lot
more difficult in an environment in which there is no single
actor, be that the government or a president controlling all of
the money supply. And you know, I don't think that
it's probable that you know in the next 10 years were going to
see everybody, ditching their currencies and switching over to
bitcoin, however even having Bitcoin as like a secondary or
supplemental. Currency for example in in a
place like Zimbabwe. A I think could have
significantly alleviated the effects of this kind of
hyperinflation and so obviously it's difficult to say how these
things will play out in the long term from a geopolitical
perspective, but I think that Bitcoin has a whole lot of
potential in markets outside the US, which is sometimes
underestimated. Yeah, I mean a lot a lot of
times People will use Africa and South America, as examples of,
you know, where Bitcoin can Excel.
And I think there's a lot of Truth to that.
However, a lot of these people, I think maybe have never even
set foot in Africa, or South America.
And well, I have exactly know. But that's what I mean.
And and and when I read this post, it really shines through
that. Not only do you talk about this
with sort of this, that the obvious advantages that people
can can Take from using Bitcoin and cryptocurrencies in those
places. But you have actually been there
to see how people live and how how we can benefit them in their
in their daily lives. So I think that you're
particularly well, placed to talk about it.
So that so that article that you wrote is called why Bitcoin
matters in Africa, it's on your actually was written about eight
months ago but it's on your side, Ariana Simpson.com and
along with all the other articles that you've written.
And I encourage everybody to go to Ariana's blog to read those
articles. Thank you.
Yeah. Well so we're the end of our
show. So thanks so much Ariana for
joining us with really interesting to talk about this.
I very much agree with your assessment and sort of because
stands, I think multisig is going to be absolutely integral
to be coins future. This is not some sort of
optional add-on, but I think we'll be totally embedded in.
In how well its work in the future.
So it's a really interesting topic and it was super
interesting property, right? So thanks for coming on, thanks
for having me, great to be here. So, one last thing, if you want
to try out bit, go, you can do. So, and that's a bit go.com, you
can try out the just a regular multisig or they also have.
If you are a company that wants to use some of the more advanced
features is like a request form. I think it's still in beta but,
you know, you can do that. And I think they will get back
to you. Yep.
Also a next week we will have or hang out with Daniel pellet,
he's the CEO gems. So James is a social networking
tool that is going to have its own currency.
So I think it's going to basically incentivize users by
paying them and sort of giving them stock in the company.
So it's really exciting and there, Are also doing IT Crowd
sale, that's organized by quantify.
So you may remember quantify from, or episode, maybe a month
ago or something when we had Tom ding on.
So that's going to be next Sunday at certain November 23rd,
at 5:30 UTC. So that's 9:30 a.m.
Pacific Time or 12:30 p.m. eastern time, and yeah, please
watch live with us. Would be fantastic.
And to do that. You may want to subscribe to our
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base. Now as that's just 125 and
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next week.