Did you forget your (private) keys? No Worries. Today we hit up the hottest ‘Cold’ wallet built to secure your crypto even if you forgot your private keys. Rishi Thomas, CMO at XYZ talk to us about CypherRock’s latest offering that evolved since 2018. Decentralizing the key ‘shard’s across layers is innovate and revolutionary. How? Check this out.
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Transcript
Cypherock - Rishi Thomas
Participants:
• JP (CMO of AdLunam)
• Rishi Thomas (Growth Lead at Cypherock)
JP
All right, all right. Let's get this show on the road. Ladies and welcome. Welcome to this episode of diving into crypto. This is JP from AdLunam Inc. bringing you everything about web3 on this show. Today we have Rishi Thomas, who's our guest speaker, representing Cypherock, and I'm going to dwell a little more about what is it that they're bringing to the industry and the insights that they have the team has bringing this to life. Right? But before we begin, of course, ladies and gentlemen, I'd like to remind you, please keep in mind that views expressed on this program belong to those of the speaker and are meant for education purposes only.
JP
It's not to be considered as financial advice in case we do get cut off from the show. Come back to AdLunam Inc. and you'll find yourself the new link to jump back into the room for this podcast. Next up, feel free once again to use those reaction buttons so that you know when you hear a gem from the speaker, something that you like. And at the end of the show, ladies and gentlemen, we are going to have a question answer segment where you can ask your questions directly to the speaker. Or if you would like to, you could also tweet them in or message them in to AdLunam Inc. or to the speaker directly and we'll make sure that we have them answered for you. All right? Okay.
JP
So that being said, once again, welcome to Diving into Crypto, the show where we talk about everything under web3. Diving into Crypto is hosted by AdLunam, which is the industry's first NFT integrated Engage to Earn seed crowdfunding and IDO Launchpad with a Proof of Attention allocation model. In short, ladies and gentlemen, the more you have your attention focused on the AdLunam platform, the more you will get rewarded. That being said, let's give a wonderful round of applause to Rishi Thomas, the growth lead at Cypherock. Rishi, welcome aboard. Okay, I can see that Rishi's mic has decided to take a break and come right back to the show. He'll be on in a second. Give us a minute as we do that once again. So let me tell you a little about cypher rock in the meantime, ladies and gentlemen, I've had a brief understanding about who it is that they are and what it is that they do.
JP
They are the world's first hardware wallet without a seed phrase. It is an exciting proposition because you know that hardware wallets. So even hot wallets, they're talking about cold wallets here, but even hot wallets, all of them require a seed phrase. So how is it that these guys have been able to do something that will solve half the issues of memory when it comes to remembering those twelve or maybe 16 words that you put in for your seed phrase, how did they solve that problem? I think it's a very interesting question to have answered and interesting solution to have on board. While we are doing that, I'm also happy to announce that our co-founder, Jason Fernandes was recently at the World Blockchain Summit, as was I in Dubai. Had a spectacular time with spectacular time at the event, making lots of connections, meeting a lot of people.
JP
Also, Jason spoke on the panel for investors talking about new trends that are happening. Watch out for the links that are going to be coming up soon. Okay?
JP
I see that Rishi is back. Rishi, do you want to say hi to the audience?
Rishi
Hey, sorry about that. Just had a couple of issues with the drop off the mic, but thank you for the introduction, JP, really appreciate it. Thank you for having me as well. Hey, everyone, I'm rishi. I am the growth lead at Cypherock. And as JP mentioned, we are working on a hardware wallet which essentially does not require you to maintain any sort of seed phrase backup. As everyone sort of knows, seed phrases tend to be like a very core sort of user experience problem with sort of managing crypto in the sense that they provide singular access to your wallet. So in the case you lose your seed phrase or someone else gets their hands on it, they can pretty much drain your entire wallet out without your permission. Which is why we are coming up with a novel solution to remove the seed phrase backup entirely and also leverage cold storage as a way of keeping your crypto secure.
Rishi
So, yeah, it's a little bit about the product. Yeah. Is there anything else you'd like me to share? Okay, awesome. Certainly Rishi.
JP
Rishi, we have phenomenal guests on the show, people who are the movers, the shakers the candlestick watchers, people who lead insight into the industry. And I'm certain that the audience at this point is curious to know Rishi Thomas from Cypherock, what got you here?
Rishi
yourself. Sure. So it was in:Rishi
look like? So, yeah, I think:JP
Okay, well, it's interesting that you mentioned that you actually started through the fintech aspect and then understanding financial systems through Bitcoin. I'm certain that there was a moment in that class where a switch must have flipped on and you must have thought to yourself, hey, you know what? Web3 is the space to be for me. Right. So, Rishi, what was that moment?
JP
Tell us a little about that.
Rishi
I remember a line that was thrown around when we used to just chat outside of class and when we used to just hang out and chat. And then there was how do you replace trust with proof? And that was like a moment that clicked. Right. So replacing trust with proof is like a fundamental aspect of governance where everything that we sort of do from a governance aspect is always requiring proof.
JP
Right?
Rishi
This is why we have audits. This is why there is any sort of governance mechanism or accountability mechanism. But trust is still very much within the system. You're still trusting an auditing agency. You're still trusting whatever report that comes out. Blockchain, the advent for smart contracts is to remove that entire process of trust, where it's very simple. It's data in, data out, and whatever you read is what it is. Right? And if you spoof the data, you have a very clear way of saying that this is not what it actually was and this is what it actually should be. So the immutability of blockchain and smart contract aspects is like a major switching point, which also, I think, had its own negative effects, right. Where now that this technology exists, this is probably going to be one of the most fought over technology in the sense no institution wants to give up power.
Rishi
institution and you have some:JP
Spectacular. I like that it's a bit of an underdog story, right. Or maybe in some way a David versus Goliath kind of story. And then somehow David's starting to get bigger. He didn't even have to fling a stone.
Rishi
Oh, no.
JP
You can see from that time till now yeah. David's certainly growing.
Rishi
Yeah. Even with I think right now, with banks having an issue, we've just been given a bazooka. Right. It's sort of like the writings on the wall. So I think it's been interesting to follow this past couple of months.
JP
Most certainly. That is something that you can see a lot of. I'm also curious to know right, since we're on the topic yeah. When it comes to wallets, of course it's something that's sensitive to a lot of people. Everybody's got one, most of them listed on exchanges, not your phrase, not your crypto. Coming to how the genesis of a wallet, I think you were around at the point at which this began too, right? Is that right?
Rishi
Yeah. I mean, they already existed. There was addresses and things like that. There's very much around. Yeah. I mean, this central technology. Right, okay. Right.
JP
way back in way back prior to:Rishi
Yeah.
JP
Around:Rishi
Yeah. So I actually wasn't around at the beginning of the company, to be honest with you, but still very much like early product phases. But I could tell you where the issues did arise. I think it was very clear wallets and how wallets interact with the entire blockchain ecosystem is still very difficult for an average person with no technical background to understand. That's just a core fundamental problem. Right. So when it comes to managing wallets on your own and then being able to choose a platform, then connecting a wallet, and then suddenly seeing all sorts of like when you're approving a transaction or you're approving a contract signature right. You just get this giant data dump, right. And you have no idea what you're sort of signing, to be really honest. So these are very core UX problems. Which is going to make life difficult if you want crypto to be like a widespread thing.
Rishi
Right. So I think that's where the core issue started, with just seed phrases. Because your seed phrase is pretty much like your one access key, right? It's pretty much like the one thing, it's like the one ring to rule them all, that type of situation, by mistake. And most people are pretty most people, even you, can be the most technical person, really knowledgeable. There have been people that have just lost access to their wallet simply because they would have lost their laptop while moving from one place to another, which had their private key, or they would have written a seed phrase in some form of metal or some form of paper. This idea was born out of the ability to remove that entire step because of how much of an onboarding problem that is and how much stress it causes over time. Right. For example, let's say you bought maybe $100 of Bitcoin maybe, I don't know, eight years ago.
Rishi
That's still worth a significant chunk, right, like eight or ten years ago. Or let's say you bought Bitcoin for like $500, and even now, in technically a bear market, you've made a giant chunk of money. So your seed phrase at the time, for example, let's say you've just done it as a joke at the time, and then now suddenly you're basically a millionaire. You're probably going to fumble a little trying to find that stuff, right. It's a purely user experience driven issue, right, where it's very important it was very important to sort of work on that first step naturally as the entire Web3 ecosystem has evolved. And I don't think anyone saw it evolved at such a rapid pace where just DeFi just enabled so much. The NFT ecosystem just enabled so much, where I think infrastructure is now trying to play catch up to the DApps, right?
Rishi
Your DApps will be just capable of everything, right. But then infrastructure is still very much like, okay, we are based on the BIP 39 phrase, and this is how it sort of works, but how do we make the user experience better? How do we make the apps seamlessly work with the DApps? You've recently had this account abstraction EIP been released. You have people working on MPC. We ourselves are working on infra is now sort of like we're trying to play catch up with the DApps so that it's a seamless experience for anyone who's brand new to the ecosystem. Right, yeah, I think that's really been a fundamental issue. What started out this entire company's journey, I think, was to really sort out what are the core user experience problems that's going to help with onboarding. I think that's an interesting point.
JP
Right, because obviously when we're moving from we've recently moved from like 3.5%, now 5% of the world's population looking at adopting crypto, right?
Rishi
Yeah.
JP
And one of the key barriers that virtually everybody goes through. Everyone in this room, everyone who's going to listen after every one of us that are making our entry. The initiation is to set up a wallet, right. And that in so many ways because it's so different from anything else that you've interacted with and done. If you're coming from a non crypto background, it becomes so difficult to do. It actually is listed as one of the hurdles of getting into crypto. Right. Curious to understand.
Rishi
Right.
JP
So how is this being a solution to that? Through one of those steps?
Rishi
Yeah, let's just talk about onboarding and this problem in the first place. Right. So the current state of wallets, even when you set up something as established as MetaMask, right. If you see it goes through the onboarding process, there's this giant red box saying that please keep this thing secure, otherwise you're going to lose all your money. Now put yourself in like an average person's position opening up a bank account, right? You're opening up a bank account, you're setting up your username, you're setting up your password. Now imagine if your bank account, where all your salaries, all your retirement funds, your investment funds are linked to this account. Imagine if your bank just the first login page tells you if you don't keep your password right, you are going to lose access to all your money. That's essentially where we are currently.
JP
Right.
Rishi
That's a fundamental step. The way to solve that is there's really two ways to go about it. One, either make infrastructural changes that get rid of this process completely. This is a long process and it's also sort of simultaneously being worked on, or the other way is just hide that entire problem for the user, but still be able to give them the ability to access the sensitive information in a more secure manner. That is something that can be done now. Right. And this is sort of the approach that we've chosen at the moment, where you still have a seed phrase, right. But you're just not going to have to deal with it immediately. Right. There's no process of sitting down, writing this stuff down and then having to worry about it day in, day out.
JP
Right?
Rishi
Yes. That's the entire way to solve this. Right. You have to remove the stress, you have to remove the pain of managing the security aspect so that you can focus on functionality. That's really how you get penetration with app usage or general technology usage, is when you remove the fear from the entire process. Right?
JP
Exactly. All right. So that being said, removing the fear and just having the ability to ease into it, especially for newcomers, right into the space. Because effectively what you're doing is you're taking a large chunk of pain that would be a barrier to adoption and You’re giving people the ability to do that.
Rishi
Right, okay.
JP
So I want to pivot this question slightly to focus more about the community. You've been around the block. You've seen, no pun intended, but you've seen that there's been a number of people that are willing to come on board and so on. And you're doing your part in mass crypto adoption globally. Right. What is some of the way that community is coming on board and what are some of the things that these guys are telling you about? Hey, this solves a problem for me.
Rishi
Yeah, that's a really good point. I think what ends up happening is I'm sure you guys have sort of experienced this too. I think each individual builder or just builder group, right. I like to refer as companies and web three as like builder groups. Right. It's just easier to mention it that way because then you can sort of bunch DAOs and everyone else into that sort of category. You tend to have your initial set of people. Right. The initial set of people are the ones that okay, I like your approach, I'm willing to test it out and I'm willing to give you feedback. These are three blessings that you're going to receive as an early stage builder. So from a community angle, right, the most important feedback that we have possibly received is one is this is like people's money, right? From the product perspective, that what we're focusing on building.
Rishi
People are using this as their bank. Right. So this has to work. There's no in between. It either doesn't work or it works perfectly. Right. Because you're going to face a lot of fear in the case that you just don't suddenly see your money in our application. So that is one the trust that you are putting into the company simply because whether you like the technology, you have audited what we've put out on GitHub or you have seen our security audit or whatever it is, trust is one. I think number two is just use case which helps with feature roadmap. Right. What are the things that people really care about? If you are a persona that is really into NFTs, right. You want to trade NFTs. You hold NFTs for some reason, like some of these blue chips that you want to keep, you will have an entirely different wallet scheme and the way you use wallets will be very different from each of these other people.
Rishi
Right. So what sort of works for you? What are the things that are missing for you and how can we fix them? I think that's a really being able to share that I think one is a very personal thing, which is why when I do receive the trust of people to share that with me and be able to be like, can you optimize this for me? I think that's really great and I think finally it's just the ability to be like, hey, for someone to go, hey, I just checked out this product. I think it's really cool. You should try it out. Word of mouth is probably the greatest thing that you can have from any company, right? Because that is the most viral aspect of any sort of product lifecycle. The day you have people just championing your own product for you where you don't have to go around just beg people to use it, you've reached a point of inflection where now you double down on the feedback you receive.
Rishi
Right? So community is actually like a really core aspect of just building really great products because it gives you the ability to focus on what are the hard truths, because you might be thinking about a certain way to build a product which might be completely counterintuitive to how something else might be. Or you would just come up with use cases. You would hear of some use cases that you just never heard of in your life, right? And they'd be like, I use it this way. I was like, oh shit, I never thought about that. It's a discovery process. It's really exploration, which I think the community has been really solid and has been a really core aspect of us being able to just build a better product.
JP
Well, that is spectacular. And you're right, the more people that are using it, the more that endorsement comes in. You know that you've got something that's working. Right. To add more to where this aspect of community is concerned, given that some of the production factors obviously are going to be that you can ship a wallet to somebody in some particular space.
JP
As opposed to having it online. Right? I know that this may be, but this is, I'm sure, also one of the core reasons that you've decided to use a hardware wallet. It's also one of the proverbial challenges. Right? But tell us a little about how that journey is and what the market is doing at this point of time. What are your users doing at this point of time and still loving it?
Rishi
Yeah. Okay. The insight with hardware, right? The pure insight with hardware and the wallets in the wallet space is purely driven by the fact that the core activity of the wallet is your private key generation. When your seed phrase is generated, that is the main activity. Everything else is just a feature on top of it. Okay, so the reason why hardware is going to stick around and why people care about hardware is because all of that private key generation and how the initialization of the wallet, right, from when the seed phrase is created to the point where you use the wallet, never touches the Internet, right? So that entire process never touches the internet. So you already eliminate a lot of attack vectors, right? Like, maybe your computer could be compromised, maybe your webcam could be compromised. There's just so many attack vectors that could potentially take case from software and just internet perspective, which is why people tend to love hardware, which is why you'll hear OGS of crypto, true OGS will actually build their own wallets because they're just paranoid.
Rishi
They would be like, okay, I want code that's auditable. I'm just going to build my own stuff, I'm going to add my own feed. I don't recommend doing that for everyone because you're probably going to get something wrong and probably end up losing a ton of money. But the entire inside of hardware is the ability to remain disconnected from the Internet, right? That is one insight about hardware and why people really care about hardware. The second one is that if you use hardware wallets, it acts as like a two factor mechanism, right? So for example, if you're doing a transaction from a software wallet, let's say you want to purchase an NFT, you do it from a software wallet. You get a signature, you just hit sign. Okay, cool. Sign, sent, delivered. You've gotten the NFT or not or something goes wrong, however that works.
Rishi
Okay? So within the hardware space, when it comes to hardware, what ends up happening is you sign the contract, you get all the information. All of that information is then verified on the device, on the hardware piece itself. Why is that important? Because then the true information, right, the true information is you are able to see it on the hardware itself. Because the reason why that is important is because in the case your screen is compromised or there's like a clipboard attack or something else that happens on your laptop, you have no other source of truth to verify the authenticity. Right. Whereas within the hardware space, you have this other device that is connected which will transmit the information that is available to verify from your screen. So if the information matches, then, okay, fine, we can go ahead. You have consensus if the information doesn't match now you know something's gone wrong, so you can backtrack, right?
Rishi
That's another reason why people really care about hardware. I would say these two factor aspects of the hardware as well as just the ability to create your privacy offline, these are two really big reasons why I think hardware is still going to be prevalent until there's any sort of infrastructural changes. Like I said before, you either build infrastructural changes that are going to make all of this obsolete or you build just better user experiences on top of the existing infrastructure so that people don't have to take a lot of stress and fear. So I think these are the two core reasons of why people would care about hardware being private, key generation offline, and the other one would be like using it as a two FA sort of mechanism.
JP
Yeah, interesting you mentioned that. But I would also think, I mean, you're going up, of course, against the other hardware wallet totally. Guys that are out there, right, without naming a few names.
JP
One of the things I think that also is added to the narrative is that when you have yourself a hardware wallet right. It is way cooler than anything that you have online. It just is. Right. Like earlier, I used to get these ones with these small digital displays, but there's been so many advancements with where that's at this point of time. What it looks like, what it feels like. But yeah, there's a cool factor to that too.
Rishi
Yeah. It's like futuristic to have this sort of feel like a spy. You have this sort of spy device. But no, I would personally really like to I would name Ledger, and they've done a great job of actually at least bringing the ideas of hardware security to people's eyes and at least they understand that this is an important part of security. And now, because that market itself and that concept itself is out in public and that's something that people can see, people can choose what is the best option for themselves. It's like sort of any competitive market, right? Like a car. You're introduced to a car. Sure, there's really popular cars, but at the end of the day, you're going to choose something that's for you and that's totally fine. Which is why our core differentiator had to be something that is genuinely just way better than the market.
Rishi
Otherwise it's just not going to make a lot of sense. Which is why we decided to focus on such a core UX issue with seed phrases. Better not. Okay.
JP
Curious to understand also, since we're on the topic, right, when it comes to a hot wallet versus a cold wallet yeah. One of the things that stands in your favor is the fact that, hey, you know what, don't need the seed phrase for the utility, or even in many ways, the recovery. With the changes that have come out with the ERC three, four, seven. With the changes that have come out with a number of features because of that on a bunch of exchanges, for example. Right. Shed some light on that. How does that impact you? But does it complement what you're doing? Give us the lowdown.
Rishi
Yeah. Account. The entire account extraction concept was to simplify wallets for people. I think that's generally a good thing.
JP
Right.
Rishi
The software versus hardware debate is a classic security debate. It's convenience versus security. Right. So software wallets are super convenient. They're the most convenient. I don't think hardware will probably ever be able to be as convenient as software. Which is why if you want to make quick trades, you just want to put small amounts and quickly snipe some NFT. Software wallets are great for that. Right. I think hardware tends to be like long term holding. You want to sort of manage your company funds, treasury management, you treat it more like a bank. Now, coming to account abstraction. Account abstraction's entire idea was to sort of build a layer. On top of whatever wallet, whatever entity owned account, EOAs, you want to build it on top of any sort of wallet and then sort of make the entire whether that be a seed phase part, whether that be it's mostly recovery mechanisms and permissions.
Rishi
You want to simplify that now that implementation, it's great. I think the only problem is right now it's ethereum specific. I'm not sure about how it's going to sort of play out multi chain, but yeah, I think it's a step in the right direction and I think, you know, all of us working on wallets should think about how we can implement some technology like that because it's just augmenting your already existing service. Right. Why wouldn't you it would be foolish for you not to implement something that's trying to help you and try to help your users in the first place. Right. So you're just adding a lot of value right. When it comes exchanges. A whole other part, right, where I think I'm not sure how this is going to play out for centralized exchanges, but I would like to imagine that there is some world where all of the wallets that are controlled by the exchanges with maybe hot wallets or maybe a mix of how I don't know what their wallet sort of scheme looks like, but I'd hope that it would sort of derisk centralization by adding some of these features on top of that.
Rishi
And I think it's still complementing what we're building from an account abstraction perspective. I would like to see how it sort of plays out across blockchains and not just be ethereum specific, just like how BIP 39 is BIP 39is a standard. You have BIP 39, which is what gives you seed phrases like BIP 39 by bit. It's a bitcoin improvement protocol, but it's across every single block, it's become a standard. Right. So I think it's really important and I think these next couple of months, if not years, is going to be focusing on what are the standards of our technology that could make this technology more usable and I think this is a step in the right direction.
JP
Yeah, I would agree with you. Right. If you focus on the availability and the utility, then yes, that clearly is hands down something that you want to have. And I think you touched on an interesting point as well, Rishi, when you mentioned that if you're somebody that wants to day trade on all day long, right, then it's useful for you to use your hot wallet, but later it's also the ones that maybe the ones that you want to hold on to. Do you want the security? If you want the security, you definitely want to have a cold wallet situation.
Rishi
It's the classic you want to do a credit card versus bank transfer versus however you use your sort of current fiat system is what we're trying to do, but just better with web3. That's really what it is.
JP
Yeah, exactly. Of course it's a very interesting debate. It's a very interesting point that each individual actually has to ask themselves, right. Do I do better with just the one? Is that okay for me? There's no cost involved or do I get a hard wallet and then utilize that but pay something for it?
Rishi
Yeah, fair enough.
JP
Okay, fair enough. Pivoting a little from our discussion, right. Want to get an idea now that of course that this is what Cypherock is doing. This is where we are. But also from the perspective of hard wallets, what do you see as some of the trends that are evolving in the industry at this point?
Rishi
Sure. I think anything infrastructure right now is just going to be super-hot. Right. Anything with infrastructure. When I say infrastructure, what does that mean? What are the protocols focusing on? You hear a lot of this zero knowledge technology that is really picking off zero knowledge basically for protocol security for wallets. That's going to be big. I think wallet technology is also like a really hot space right now simply because all of these updates are happening and they're happening fast. What else is what is an interesting thing for me to actually see is how does the regulation in the EU play out? And I personally really would like to see what the EU sort of does with crypto regulation simply because I think that's going to become almost like a global standard, much like a lot of other rules like GDPR and things like that.
Rishi
But I think the focus right now is just on pure infra because that's going to really enable just a lot of users and also a lot of just generally remove the frothiness and murkiness of anybody launching a token and anybody launching NFT collection that would just ruin a lot of people again and over. So I think we're starting to get like probably due to better infrastructure and better maybe some sort of regulation that hopefully supports it. I genuinely think that there's going to be just a lot of really great opportunities for just people not only to make money, but also to really build ideas that could reshape how we sort of see society. I think infrastructure, the first people is going to impact is DAOs. Right? Because now you're sort of, I think the nouns DAO had recently announced a way for you to vote, but it's completely anonymous through zero knowledge.
Rishi
Right. So I think that's really cool because what ends up happening is that you can prove that you own the NFT saying that you're part of the voting process, but then you can vote without having your sort of NFT and your name attached to entire one of the first use cases was in government polling, right. Like one of the first blockchain use cases. You're seeing that happen now. It's literally happening now. But at a much smaller scale than maybe smaller societies and communities. But you're going to see this scale up a lot because largest players are the slowest to move because they need to make sure that everything works. Right. Infrastructure is always really cool to follow simply because you get to see the action up front. How all of these protocols are going to involve, I honestly think multichain sort of infrastructure that enables multichain interactions are going to be really big.
Rishi
Like interchange operability. That's going to be really big too, I think, simply because if you want the entire global economy to shift onto a blockchain system, our current infrastructure is not ready to handle the throughput. Right. So how do you increase it? There's multiple ways you can think about scaling. So I think the interchange thesis is going to be really interesting to watch as well. But yeah, I would say I just generally prefer the infra side of things simply because you can think of the long term. Fair enough. Fair enough. Yeah.
JP
Exactly. I guess. Yes. When you look at the evolution and then are we ready for some of it? It is a question asked because those solutions really need to come up a lot quicker if we're going to have as smoother process of mass adoption as possible. And that's exactly what we're all aiming for. Right, fair enough.
Rishi
Okay.
JP
All right. So I'm curious to understand, also Rishi, that you're working on something different. You're working on something unique. You also lead marketing at Cypherock, right. So building your community from the bottom up, building a niche from the bottom up must have been a challenge, right?
Rishi
Yeah.
JP
Tell us a little about that story.
Rishi
Yeah, I think it still is simply because when you're building in a space like wallets and security right. The default assumption of people is skepticism, which is natural. It's skepticism and fear. So removing skepticism and fear and introducing this level of trust through verifiability, how do we remove every sort of doubt that you may possibly have about the product so that you can try it out for yourself and you can recommend it to your friends? This is the marketing journey. This is theoretically what we're trying to solve for. So the initial steps as a company, what we sort of did was number one was just getting third party security audit, so getting our hardware tested and penetration tested. So our hardware was actually tested by this firm called KeyLabs. And KeyLabs had released a keynote where they were able to brute force a treasure. They were able to place snake on a ledger.
Rishi
So these guys really know their way around hardware and they've sort of hacked some really big existing technology and we passed that security audit and any of the fixes that they had recommended, we've made. So that introduces one layer of trust that is not based on us as a company. Right. So you can trust the technology two was sort of being able to at least make our code for the wallet as well as the software, just open source. Like we have it on GitHub, you can sort of check it out. We're going to be launching a bug bounty, ideally like this year itself. So if people do find errors and things like that, we have a way of responsible sort of disclosure and being able to reward them. So anything possible that could remove just fear from people and introduce sort of verifiability and trust.
Rishi
Right. I think incentives are going to be a part of incentives are really going to be a part of growth. Like overall, being able to sort of incentivize people that are purchasing it by giving you the ability to give your friends a discount while earning money. And just like the referral mechanism, I think that's really powerful simply because I think a product like this, until you try it, you can't really recommend it. It's very difficult. So just sort of solving for that continuing to sort of be part of the security and infrastructure conversation, right? Like just being thought leaders in the space and being able to be like, you don't have to trust that. I know what I'm saying. You can verify I know what I'm saying by whatever I'm putting out in terms of my writings or what I'm saying in press conferences. And that goes for the entire team because each of us represent the organization.
Rishi
So yeah, I think the early days really is solving for is really building credibility. That's really the core fundamental problem that we're focusing on and just going from there. Okay.
JP
I think, yeah, that's the trend that kind of makes sense, having to build it up slowly. Your community is, of course, vastly expanding. There's always going to be excitement around stuff like this. This is phenomenal. Right, right, you're right. Pivoting back to this particular point, are there some of the regions that you see across the world that seem to be more responsive to having something that's physical versus digital?
Rishi
That's really hard to say because this is a really global footprint. Honestly, I think where there are it's a natural flow, right? People usually get on boarded through exchanges, then they create their first software wallet and then ideally they come around to creating a hardware wallet. Right. So where there is exchange penetration and then there's a software wallet creation, then there's a natural realization of hardware which goes which I think is global. Right. The graph of just hardware adoption doesn't look very different from crypto adoption, right? Like, I would wager it's the exact same. I think, you know, there would be slight differences between countries with their willingness. I think the other fundamental difference would be I think people invest in hardware when they do want to protect a larger sum of money. I think that's just a natural sort of response because it is an investment.
Rishi
Right. Like software you can create for free, but hardware, you have to pay for it. Right. There are cheaper options in the market. There are more expensive options in the market. So just depending on what is the investor distribution and just a general wealth distribution in terms of holdings, I think that's probably another factor. But, yeah, I'd say it's very global. I think there's, like, a wallet set up for everyone. That's interesting. Rishi so I want to come back.
JP
To that particular point because I've already got a question in from one of our audience members who's asking, okay, so how does one choose what's the right hardware wallet?
Rishi
Okay, yeah, good question. I think that really depends on what is your current usage? I think one is what type of person are you when it sort of comes to just web3 interactions, right. So if you want to secure NFTs a lot, or do you want to view them? Do you want to see them? Do you want to view them within the hardware or that's what I'm really trying to get at. If you're a DeFi person, what is the storage implementation for you? And I think, in general, what is it that you're trying to solve for? And the obvious one is which do you believe has the best security? So one way to sort of think about what is the best security or what is the best way to or secure mechanisms out there is, number one, is it open source? Can you sort of verify the code of the wallet?
Rishi
What are the sort of components that this hardware uses? And that's something you can sort of verify from YouTube and things like that, and also from different sources you can learn about. Has there been security audits that have been completed? Right. So you don't have to trust this single entity. What is sort of the development roadmap look like? Assets? That what public statements have they made about how many assets that they've secured or what is the usage like? Yeah, I think there's a different set of questions. We created a quiz that allows you to sort of see how safe your crypto is according to your current usage. So, yeah, I would recommend checking that out and sort of being able to see if your current wallet scheme sort of works for you. But, yeah, I think there are certain questions, but if you want to get distilled and answer, I'll be happy to sort of type up notes about what are the things that I think about, and we can chat.
JP
Definitely. Definitely. I think that's a very interesting question. I think the moment somebody heard you saying that, we have another one that's come in, and I think this one's from Colleen Man. The question says, okay, hey, so what are some of the best practices to safeguarding your crypto, especially for those who travel a lot? But the moment I saw this question, I have to split this down to two Rishi because I know that there are some of those that are the really adventurous type who would wear their hardware and go cliff jumping, base jumping, or skydiving or something of the sort. And then there are others who, if their head wasn't attached to their body, they'd forget them. Right. I happen to be in the ladder category, okay. And that would make me extremely insecure about having a hardware wallet. And then, oh gosh, I've lost it now.
JP
That's it. I got to go through a garbage dump and with a bulldozer for the next 17 years.
Rishi
I understand. No, I get that. These are two very good questions. Two very good questions. I think I'll preface this. Me and my team, we've actually written detailed guides for both questions. So I'm just going to go off of what we've already written. Okay, let me answer best practices of keeping your crypto secure as of now. Right. So one is that ideally, never store your seed phrase on paper. Right. I think that just causes a lot of pain. I'm obviously, naturally going to be an advocate for our product. But in the case you don't want to, I would just say there's other cryptographers that have ways of storing their seed phrases, maybe on metal in a distributed manner or on some form of like. They use this concept called steganography, which it's kind of complex, but there are ways to manage it. But seed phrase security is, I think, number one.
Rishi
That's just the number one step. Number two, you know, consistently check the permissions that you are allowing from your wallet. Right. Everybody who's used the NFT and DeFi ecosystem sort of knows about services like revoke, cash and other revokers that will help you sort of manage your permissions. Because honestly, if you're sort of an Internet Explorer, you're going to go around clicking stuff you want to add to a mint list, stuff like that. Somewhere or the other, you're going to click on something that you just shouldn't have clicked on and then you're going to lose stuff. Right. I think being able to manage your permissions is really important. Number three is actually public Wi-Fi is just something I just never recommend to anyone. Public Wi-Fi is just simply because port scanning is one thing that most people can do, but there's just multiple ways that you're sort of exposed because of an open network.
Rishi
So try and not use public Wi-Fi if you want to use your own hotspot, ideally to use that really sort of like deep enthusiasts like to use VPN. That works too. VPN is good as well when you're sort of exploring and browsing. Coming back to sort of just wallet security in general, if you are someone who has assets distributed and you have assets that you absolutely want to secure and there's assets that are disposable for trading purposes, really think deeply about your wallet set up, right? What do you want to keep cold that you don't want it touch the line of day? What do you want to keep semi cold? You want to keep it secure, but you want to be transferable. And then what is your daily wallet that you just want to spend out of? So I thinking about the wallet set up is really important because I think that's going to be a very definitive sort of conversation moving forward for people as crypto becomes more popular.
Rishi
So I think these are some of the top of the mind things when it comes to just crypto security that I can think of at the moment. Oh, just another point of that. Please just never respond to any Twitter DMs related to links and emails. Just for the love of God, just don't even if it's from your own mother, just don't do it. Right? People are just really crafty. I actually broke down a hack which there was someone trying to fish NFTs or something from my account and it was like a fake open sea, like a security breach. And it looked really legit. It looked so good that I just had to write about it. So just never just don't interact with stuff from your email and from your Twitter DMs. So while traveling, right, while traveling, I would say okay, so if you're already like sort of a traditional hardware wallet user, you're already a wallet user of some sort.
Rishi
Carrying around your seed phrase is just never advisable. I don't think that's ever advisable. Ideally keep it in one place because here's the thing, even if you do lose your wallet, ideally just like Pin, protect it in some way and use whatever protection mechanisms there already exist. Use a hard password, use a random pin, something that's going to make it difficult in the case you lose your wallet. Our product sort of makes things. These are the things that we thought about when were sort of working on building Cypherock product. But what ends up happening is that your seed phrase actually ends up getting split into five parts, right? So each of these parts is stored on a hardware component. There's like four cards. If you go through our website, it's four cards and one wallet that connects to your computer. You only need two out of these five, right?
Rishi
So in the case you even lose these parts, you don't have to worry about losing your crypto because you have these other parts stored elsewhere, right? So if you're traveling, you can keep two of the cards at home or one card at home and one in different locations. Let's say you take one card and one device to your vacation spot, you lose maybe the card you're still protected because no one can really do anything from just one out of the five parts, which is why obviously I'm going to recommend our product. But like really sort of nuanced reasons for it. Two is just generally don't wear crypto merch, just don't do it. Don't let people know you invest in bitcoin. Don't let people know you invest in Ethereum, just don't talk about it. There's no reason for you to be out there telling everyone ETH to the moon or Bitcoin to the moon.
Rishi
Just don't do so. There's Jameson Lopp, who literally has a physical list, who maintains a list of physical attacks on people because they mentioned crypto. And this happened in Bogota, this happened in multiple places. There's no reason for you to be shouting off to the top of your lungs, x, I'm a whale and this is how much money there's no reason for that. Being low key is like it's going to really save you over time. What else is there? I would say in the case you do carry a wallet, the safe that's currently used in hotels, just as a security person, one tends to be just extra skeptical simply because even hotel safes need to have a fail safe option. In the case they can't open the safe, they can't just throw it out, right? So probably have your own sort of way to lock up stuff and just make it super secure simply because there's this attack concept called the evil maid attack.
Rishi
It's literally what it says, right? You have an evil maid, this person comes in, looks into your laptop or does whatever, probably just be a little more on the safer side and just carry stuff on your person and things like that. Or just find a way to secure it on your own and not rely on a third party whatsoever. But yeah, what else is there? Ideally don't keep a lot of money on software wallets, even if you're traveling, because a natural tendency for conferences is that okay you sort of use you want to keep your high value NFTs easy to access because you might be attending events or there are services that allow you not to expose your assets that could be sort of drained. I don't know if it's called token proof. Is it token proof? I can't remember. But there's ways of sort of managing your assets without having to expose them on a software wallet.
Rishi
In the case you scanned a QR code, you want to mint an NFT and it doesn't turn out to be what you want it to be and your wallet gets drained. It's just avoidable. But yeah, I think these are just some of the things that I can remember off the top of my head.
JP
Interesting.
Rishi
But yeah, I actually have just a detailed report on both these concepts and if whoever is interested, I can just share it to you as well. We published it on our website.
JP
And I think that is something that most of our audience will want to know. Also most of the community should know more of because it's a real life situation. I mean, people lose the most dearest things to them throughout the existence, right? It's something that just happens. There's no judgment there. It's just sometimes these accidents just occur. And of course, heaven forbid that happen with the entire bank that you're carrying inside your pocket.
Rishi
We have this joke in just general security practices that you can build the most secure solution on Earth. You can build, like, Alcatraz or whatever. You're just never going to be able to solve for human error. It's impossible. We're just bound to make mistakes. It is impossible because you can create a solution for a solution for a solution, but there's going to be some sort of loophole that someone out there comes and exploits. Right? So best ways to mitigate that's the genius of the human being, right?
JP
That's the genius of the human being. For better or worse, that's what it is, right? Super okay, I've got two questions. The last one, again, that's coming from the audience is basically how many tokens can that wallet hold? Can the Cypherock wallet hold? How many types I assume that they're thinking about how many types of tokens.
Rishi
's support for more than like:JP
Super I think that does answer the question, and it also brings us to the end of time that we have today. Rishi so my final question to you is this one, right? You've shared with us so many things throughout your own journey. The journey of Cypherock, the journey of we've also had this touched upon the debate about hot wallets, cold wallets. But I think one of the things that we really need to understand about thought leaders out there, such as yourself, is what's your personal philosophy and what keeps you going?
Rishi
Yeah, I really do like this question simply because I honestly think what gets me excited about crypto, right? What gets me excited about Web3 in general is how much of a societal shift in terms of technology it is.
JP
Right.
Rishi
It's helping us reshape how we think of communication, governance, interaction, banking. Just fundamental truths that we've known for our entire history are currently being reshaped with technology. Right. So when it comes to personal philosophy generally, it's more of like I think one of the things is that I just never accept something to be absolutely true, because what you believe right now is the absolute truth. And what's completely this is going to remain for the eternity may not persist. Over time, things are privy to change? Who thought 200 years ago that banking would be completely reshaped or privacy would be reshaped, or how we sort of interact with each other would be reshaped? We never accounted for these things, right? So being sort of malleable to what might happen and never really dismissing a thought is just like, that's just stupid. I think that's one, that's what the technology has taught me.
::Rishi
I think the second is sort of just general, just being able to have just general curiosity, I think, because the more you know it's a classic, right? The more you know, the more you realize that you don't know, right? You'll go down this rabbit hole, then you'll realize, okay, there's this entire field of study that I just no idea about and now that is going to take me an eternity to learn. And then you stumble across just these multiple fields. This is going to take multiple lifetimes to learn about this stuff, right? So I think humility and curiosity goes hand in hand, right? You would never really know everything. It's impossible, right? So just sort of just having a curious outlook. And I think the third in terms of person philosophy is just like being able to sit down and just listen to other people and their thoughts.
::Rishi
I think being able to sort of sit down with just articulate people and be able to tease out what they're thinking about and why they're thinking about could teach you a lot personally. Which is why I think podcasts are really great. Just going out and meeting people at different events and then seeing what they're building, what they're interested in, why do they do it? I think that's really powerful, even this platform, right? You're trying to bring in people, you're trying to educate people, you're trying to expose them to new ideas. I think that's fantastic. I think that's just general growth and yeah, I would say these are three sort of fundamental principles that I would probably have personally.
::JP
Absolutely spectacular. Rishi, thank you so much for being on the show today. Thank you so much for sharing your insights and your thoughts. You guys at Cypherock are doing something phenomenal. Hats off to you. Once again, thank you for being on the show today.
::Rishi
Oh, thank you for having me.
