#504: Michael Shaulov on Crypto Infrastructure

Michael Shaulov is the CEO and co-founder of Fireblocks, a secure digital asset infrastructure company. Prior to Fireblocks, he co-founded Lacoon Mobile Security, which was acquired by Check Point, and was then appointed the Head of Products, Mobile and Cloud Security for Check Point. In this conversation, we discuss an overview of the Fireblocks business, legacy financial infrastructure, decentralized finance, stablecoins, and the recent surge in interest across the crypto industry. ======================= With over 5 Million users, Crypto.com is the easiest place to buy, and sell over 90 cryptocurrencies. They are giving away 4 Teslas! To enter the Lucky Draw, download the Crypto.com App and trade at least $100 of Bitcoin before March 8th. If you’re new to Crypto.com, you’ll also enjoy 0% credit & debit card fees in your first month. Download the Crypto.com App now: https://crypto.onelink.me/J9Lg/thepomppodcasttesla. More details about the Tesla Lucky Draw: https://bit.ly/2Z1OsRE ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.com/pomp. This is a no brainer for both newcomers and crypto heavyweights - go sign up today. ======================= Pomp writes a daily letter to over 135,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Michael Shulov is a CEO and co-founder of Fireblocks, a secure digital asset infrastructure company. Prior to Fireblocks, he co-founded Lacoon Mobile Security, which was acquired by Checkpoint and was then appointed the Head of Products, Mobile and Cloud Security for Checkpoint. In this conversation, we discuss an overview of the Fireblocks business, legacy financial infrastructure, decentralized finance, stable coins, and their recent surge in interest across the crypto industry. I really enjoyed this conversation with Michael, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Crypto.com.

• 0:45Anthony Pompliano?

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• 1:30Anthony Pompliano?

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• 2:10Anthony Pompliano?

  O D U S dot com for your free download or search Exodus on the App Store or Play Store. Exodus, leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. Go check them out. I love Exodus. You'll love Exodus. Go use it. Lastly, do not forget that I write a daily letter to over 135,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, that's pompletter.com.

• 2:47Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:13Anthony Pompliano?

  All right, guys. Bang, bang. I've got Michael here. Thank you so much for joining me, sir.

• 3:17Speaker 02

  Thanks. Thanks for having me.

• 3:19Anthony Pompliano?

  Absolutely. Let's just get right into your background before we talk about Fireblocks. But where did you grow up and what did you do before Fireblocks?

• 3:26Speaker 02

  Yeah, sure. So grew up in Israel and I guess fairly, I guess fairly typical for an Israeli entrepreneur. Actually spent the first two decades of my career in cybersecurity, actually started in that domain when I had to do my mandatory service in the Israeli army. So I was working for the Israeli Cyber Command about 20 years ago as part of my military duty over there. And about 10 years ago, I started my previous startup that was focused on mobile cybersecurity. So if you guys remember the days where people were buying iPhones and Android devices and they would come to work and ask the IT to connect

• 4:08Speaker 02

  those devices to the network or to get emails and documents, something that is like completely trivial today. When that happened about 11 years ago, the IT guys will get a heart attack and will freak out. So. We built the first platform to basically secure those devices from cyber attacks and you know, work with a lot of the Fortune 500 companies. And about four years into that venture, we got acquired by a company called Checkpoint, that is one of the biggest cybersecurity vendors. And I was running their mobile and cloud security portfolio. So basically their transformational unit that was supposed to take them from traditional IT infrastructure into, you know, modern age.

• 4:51Speaker 02

  And so I've been there for three years and then basically there was something quite interesting that happened in 2017 that basically drove us into crypto, into this super exciting world of, you know, the new finance. What was that interesting thing? So early in 2017, there was a hack in South Korea that basically $200 million worth of Bitcoin disappeared from four exchanges in South Korea and reappeared in North Korea. So there was a pretty significant hack over there. And part of that hack was actually done through mobile devices because we had the best team in the world in terms of doing investigations around mobile forensics. We assisted in that investigation.

• 5:36Speaker 02

  And, you know, I've seen a lot of bad things happen to many people or many organizations through my career, but you rarely see people lose $200 million overnight. And so that was, you know, really eye opening for me. And I basically went down the rabbit hole and started to talk with a lot of the financial, well, you know, financial institutions or, you know, crypto fintech companies that were operating in the space to understand what are the gaps they have, why that happened, you know, and sort of understood the lack of infrastructure, I guess, that we had back in 2017, 2018, which really attributed to a lot of those hacks and to the, all the crypto

• 6:19Speaker 02

  that was lost in the last decade. And so that basically what happened and I think it was, you know, really what drove us to into this space to come and, you know, to fix a problem that initially I think we saw, we thought that it's just a bit, you know, very fundamental operational security or cybersecurity problem. But eventually what we discovered is that we are much more of a fintech company that is basically building the, builds the plumbing, you know, for, for how crypto can flow.

• 6:50Anthony Pompliano?

  Absolutely. And so if we kind of talk through fire blocks, maybe walk us through the evolution of the business, right? So kind of what was the original idea? And then kind of how has it grown over time with the product suite and remember the things that you you offer to customers today?

• 7:04Speaker 02

  Yeah. So interestingly enough, I guess, the product or the fundamental idea didn't change much since we basically contemplating what we're trying to solve. So the idea started from a fairly simple observation that there was lack of, I would say, secure hot wallets that are suitable for institutional usage. So that was problem number one. And problem number two that we recognized that actually the problem is not always with the storage or with the wallets themselves, is actually how do you meet or how do you send a payment? Because it was very evident that when you're sending a big transaction, when you copy paste the address, you basically, there are like five seconds where you get a heart attack,

• 7:47Speaker 02

  right? That you don't actually know if the crypto, I feel like when you press refresh on the block explorer to see if it's actually going to the to the address on the other side.

• 7:57Speaker 02

  And, you know, some of the first customers we started to work with were Genesis and Galaxy and some of those big OTCs that were doing hundreds of transactions per day. And it was very clear that this is a huge problem for them. And I guess, you know, when we thought about how the space is going to evolve, you know, I think we had in our mind something that looks like what how it looks today, right? That there is big, big money flowing around that, you know, left and right and and at scale. And this needs need to be solved. So we basically created a very secure hot wallet offering, which we call the Firebox Vault, that is based on multi-party computation with hardware security. And the second part, which we are, I guess, most famous for is the Firebox network that is basically serving

• 8:42Speaker 02

  like this institutional authentication layer, or basically the SWIFT for crypto for institutions to make sure that they authenticate each other from an address standpoint. That was, you know, how we started. With time, I think it evolved to a much more comprehensive offering, which is almost like a crypto backend as a service. So any financial institutions, whether it's a hedge fund or OTC desk or a market maker or payment provider or bank or exchange, they need to basically set up like a full stack of services that goes from a wallet to settlements to compliance to reconciliation.

• 9:24Speaker 02

  And then to the more advanced use cases like DeFi and staking. And now Fireblocks is basically more or less that, I think everybody would like to give this comparison, but a bit like the AWS for if you need to do crypto, basically a platform where you can activate different components and start sometimes from something that is very basic, but then just like activate more and more components and essentially take advantage and sort of bootstrap your business into then like in a full speed where you do everything possible in crypto.

• 9:59Anthony Pompliano?

  Absolutely. So one of the things I want to talk about today is just like the comparison between the legacy financial infrastructure and then what you're building with Fireblocks and kind of digital asset infrastructure. Some of it is similar and there's a lot of comparisons and then some of it is very, very different. And obviously you and I believe that some of those differences are advantageous compared to the legacy system. So maybe what we could start with is just the similarities. So when you look at the legacy system and the digital asset system, specifically what you're building with Fireblocks, what are the similarities between those two systems?

• 10:32Speaker 02

  Yeah, so I think that to a certain extent, there will be similarities in terms of the participants in the market. I think that many years ago, people would say, you know, a few years ago, maybe there was like a notion that crypto is going to disintermediate everything. I think that we realize more and more that The players that own the end user are probably going to stay, right? So you will have neo-banks and banks and payment providers that will still basically hold the end customer relationship and they would, you know, basically provide some kind of wallet services or account services.

• 11:13Speaker 02

  I think that this is pretty much, you know, I don't think that eventually it will be that, or for the next, for the foreseeable future, I don't think that the entire world population will work with ledger nanos in their pocket, you know, unfortunately, I guess. So I think that that part of the market infrastructure will survive. And then you also have the market makers that need to basically supply liquidity to, you know, to interact with the different protocols. So I think that, so the perimeter of the, of the environment is, is going to be pretty much the same. What's definitely going, or I hope, like, you know, that what's going to basically

• 11:56Speaker 02

  be changed is, I think, two things. One is the counterparty risk and the transparency that people have into actually what's going on behind the scenes. And, and the second aspect is sort of some level of disintermediation or, you know, flattening of the pyramid of, of trust that exists, you know, inside of the ecosystem when it comes to just having, you know, today there are just too many layers that, you know, eventually constitute a lot of, eventually a lot of risk, right? A lot of dependencies that on normal days they work fine, you know, but on a bad day when the market is stretched, they break, right?

• 12:39Speaker 02

  And when they break, there is sort of this ripple effect that goes through the market. And eventually, by the way, it propagates to the end user or to the end customer.

• 12:49Anthony Pompliano?

  Absolutely. And let's talk a little bit about the the big differences, right? So obviously similarities are are clear and there are great opportunities. Where are the major differences? And why do you feel like the digital assets and Fireblock system is superior or advantageous compared to a kind of legacy system?

• 13:07Speaker 02

  Yeah, so I think that there are basically two, you know, the the base layer. I think there are two components that should be significantly rethought, right? The first one is what is really the concept of custody, right? Of or account management in in some ways. And the second concept is basically, you know, around the settlement or the clearing layer. Basically, how do you connect or how do you move the assets between in the marketplace? You know, so so for the first part, you know, we were very, I guess, you know,

• 13:47Speaker 02

  we we developed probably or we progressed a lot, the utilization of this idea of using MPC, basically multi-party computation for for wallet protection. But beyond the math that goes beyond goes around and beyond the security, actually, one of the most the advantages aspects of MPC is that you sort of remove the counterparty risk and and a single point of failure and the trust that you actually need to to put in the party that is servicing you. So that party can still be your, you know, back end, they can still enforce some of the policies. But at the end of the day, from a sort of like, you know, a final operation risk.

• 14:31Speaker 02

  So for example, our customers, if Fireblocks goes down and disappears tomorrow morning, their crypto is safe, there is a way for them to recover it, right? Whereas if you look at other custodial models, that is actually not the case. And that also like, you know, forces us to basically operate in a very different way, right? So all the accounts are segregated, right? We don't commingle things and. And at the end of the day, what people see in our UI is also what people see in their address on the blockchain, right? And those things are actually fundamentally different from the way that the traditional system works to where you will have, you know, an

• 15:14Speaker 02

  account in a bank is just like a top ledger that represents something that you actually don't have any idea what's going on behind it, right? It can be full reserve, it can be partial reserve, it can be like a 10% reserve, it can be, you know, invested in a lot of different things, but eventually you don't have any idea what it actually represents beyond, you know, what you see in the UI. So that's, that's, I think, like, you know, component number one, I hope it makes sense.

• 15:44Anthony Pompliano?

  No, no, makes complete sense. And like, I want to talk about certain aspects of the crypto industry. And I figure I can kind of just throw a topic out there and then you can give me an update in terms of what are you doing at Fireblocks? And then kind of how do you think about the overall kind of subsector, if you will? And maybe the place that we could start, we are recording this on the day that BNY Mellon is announcing all of their custody and kind of the oldest bank in America. And they're talking about everything from Bitcoin, cryptocurrencies, and digital assets. One of those I likely think will be stable coins. How do you think about stable coins for your business? And then how do you think of it from a kind of industry sector that seems to be getting a lot of attention from the legacy?

• 16:27Speaker 02

  Yeah, so I think that actually also relates to the second part of the question of how, why it's different and why people are excited about stable coins. So I think that at the end of the day, one of the really fascinating things here is how stable coins are going to this intermediate people like, you know, Visa, right? In my opinion, right? And I think this is some of the reasons why you see Visa and Mastercard sort of like, you know, rushing to figure it out. Because, and I'll just tell you like our personal story. So we accept, we accept payments from our customers. It's basically a monthly license or a quarterly license that they pay us. And those are pretty high numbers, right? It's like in the 10,000s or 10,000s, right?

• 17:12Speaker 02

  And you know, before we start to use stable coins, so nowadays, basically thirty or forty percent of our customers are actually paying us with stable coins, they're paying us with USDC or Paxos, that's basically what we accept. But before that-

• 17:27Anthony Pompliano?

  Fifty percent, just so we're clear, fifty percent are?

• 17:29Speaker 02

  Yeah.

• 17:30Anthony Pompliano?

  Five zero, wow, that's a very big number, okay.

• 17:33Speaker 02

  Yeah, somewhere between forty or fifty percent, I'm sure exactly, but more and more, we're actually pushing more and more of our customers to pass with stable coins, and we'll get to the point, why, right? So before we started accepting stable coins, we were basically accepting either Wire, ACH, or Stripe, right? And then at some point, and yeah, Wire, ACH, they're okay, they're reasonably cheap, but it takes you, for ACH, it takes you twenty-four hours until it clears into your bank account, and for Wire, you know, like basically Wire, International Wire, takes three days, and occasionally it being lost, like you know, somewhere in the mid-Atlantic, and you never

• 18:14Speaker 02

  get it, and you know, people need to figure out which bank your payment is stuck. So it's more inconvenient, but it's not like awfully expensive. When it came to, but at some point, basically, we had a customer that told us that they want to pass thirty thousand dollars over Stripe in a credit card, and my sales lady asked us, asked me, "Hey, can we process that?" I go, "Hell no, I'm not paying Stripe," like, you know, ten thousand, sorry, one thousand dollars, which is like three percent of the transaction, right? And as a commission for getting a payment. So we told them to basically send us it in USDC. And it's really convenient, because they're basically sending it over the Fireblocks network, but in reality, like, you know, what I was supposed to pay, what I was supposed

• 18:58Speaker 02

  to pay to Stripe for like, you know, one thousand dollar commission, and hopefully get it cleared after forty-eight hours, I paid, you know, we paid, I think, fifty cents, like, back in the days, the ETH price was low, so we probably paid like, you know, fifty cents on the transaction, and it cleared within like, you know, five seconds. And basically, we send it to Coinbase, you know, off-ramp it using Silverget into our bank. Bank account, it was just magical, right? And once that happened, we basically told, you know, all of our customers, we basically put on the invoice. This is like, you know, the Firebox Network, ID, Pass and USDC and PAX. And we're trying to push more and more. Now then comes the question about ACH and wire.

• 19:41Speaker 02

  And the thing is that because it's truly digital, you can actually build automation, right? So you can build hooks in terms of getting those payments and reconciling those payments. You can look at the blockchain and you can use DeFi. So we're actually depositing into Compound and we, you know, we're getting like a pretty significant interest. You know, if I'm trying to basically put it as a, you know, put it in deposit in my, in my Silicon Valley Bank account. We're getting, I don't know, like quarter of a percent interest rate. When we deposit a USDC, clearly, you know, depending, depends on the day, but it's, it's orders of magnitude higher.

• 20:22Speaker 02

  So, you know, overall, I think that stable coins are just this phenomenal thing. And I think that the traditional players, they see it. They also essentially need it regardless of their specific initiative, right? So whether they're planning to do Bitcoin custody or they're planning to basically tokenize securities. They need a settlement like, and that settlement, settlement like has to be digital. Because digital in a sense that it has to run on blockchain. Because if it's not running on blockchain, it actually reduces all the beauty of why they're doing it. Because they basically want to do atomic swaps, which they call DVP. But basically those are atomic swaps. And that just reduces the counterparty risk between those institutions.

• 21:08Speaker 02

  And it's very, very, very meaningful for them.

• 21:11Anthony Pompliano?

  Got it. And so if we talk a little bit more about DeFi specifically, how do you see either your existing customers? Like where is the demand for the DeFi products? And then how do you think about what is centralized versus anything decentralized that either you're interfacing with? Or things that you guys are building?

• 21:29Speaker 02

  Yeah, so I mean, personally, I'm really a big promoter of, you know, DeFi. And, you know, I think that this is definitely the biggest promise of crypto.

• 21:43Speaker 02

  But I don't think it, I mean, it's definitely one of those areas that are emerging. Funny enough, we released our support to Compound nearly a year ago. I think it was like beginning of February 2020, and no one cared. We had a, we had like a press release. I think the only, the only publication that covered that was the block. And even on that article, you know, we had some of our customers that basically commented, yeah, we're not going to use it.

• 22:15Speaker 02

  And then like May came and liquidity mining started and it basically, I think propelled, initially, I think everybody thought that it's just like a speculative activity. And once the liquidity mining will dry, it will basically disappear and, you know, things will go back to C5. But I think the most exciting thing is that it's here to stay. So people continue using it. Now I think it basically moved the market to be much more acceptable. And, you know, people understand the risk. They also understand how to use the tools. And maybe the most important thing is that it really built the on-ramp into those protocols,

• 23:00Speaker 02

  or at least like from my perspective, the institutional on-ramp, because it forced us, and to be honest, like also some of our competitors, to really devote strategic resources to create institutional browser extension APIs for DeFi. And now our customers can basically securely access anything from Uniswap to Curve to, to, you know, Compound, AV, you know, any, any of those protocols. And the amount of interaction that we're seeing over there is overwhelming. So when we released our, you know, initial set of capabilities around the generic capabilities two months ago, we thought it's going to be a niche use case and we'll have, you know,

• 23:45Speaker 02

  five or 10 customers are going to use it. Like 90% of our customers basically want to use it. And so that's pretty, pretty amazing.

• 23:53Anthony Pompliano?

  Absolutely. And so when you think through the most surprising thing that's played out over, let's call it the last 12 months. So obviously, we've had a public health crisis. We've had massive kind of government and central bank intervention. Most of the crypto industry has exploded in growth from a user standpoint, from a value transaction standpoint. I'm going to go on a limb and say Firebox has done very well during the last 12 months. But what's been the most surprising thing to you as all this has played out?

• 24:24Speaker 02

  I think that the most surprising thing was actually how, you know, there are two things. One is the propagation into mainstream, right? I mean, of course, it basically tied to the health crisis that is tied into the concerns from inflation. But 12 months ago, and again, we always played in the, what we call the crypto native space. So those are like, you know, our core customers, you know, BlockFi, Celsius, and Genesis, and you know, all the folks that,

• 25:04Speaker 02

  you know, we know and love. And we were also very close, or at least we were trying to work with all the big banks, right? In the big banks, it was always sort of, you know, they were interested, but it was unclear to when they're going to do it, or why they're going to do it, and what's going to be the trigger. And of course, there was always like, you know, the regulatory concern that that was basically an element that no one had nothing, like there was, you were sort of like the mercy of the regulator, right? When are they going to approve it? So I think that at the end of the day, the triangulation of those three things, basically,

• 25:46Speaker 02

  the, I think, the overall transformation, then the real, I think, economic force behind,

• 25:58Speaker 02

  you know, behind Why Bitcoin and why cryptocurrency important? And then I guess surprisingly, basically the timing with the regulatory clarity from the OCC and the SEC eventually is what sort of drove almost like the speed in which those banks have changed from it's sort of like a niche group of, you know, in their innovation department or a few folks that they have like a VP of blockchain to a mainstream conversation where the really like, you know, the number two or number three in the bank are driving. And this is for them, the most important thing, you know, not only the banks, but also, you know, I see it with Mastercard and PayPal and all those big players.

• 26:43Speaker 02

  That for me, the fact that it happened so quickly, it's really surprising. You know, I would expect that this will be a really gradual process that will take maybe two to three years. The fact that it basically happened really in their, I guess, speeds, you know, overnight, I wouldn't expect it.

• 27:01Anthony Pompliano?

  Yeah. And talk a little bit as you kind of think through, um, you know, the customer base that you've built, you're serving as kind of this amazing infrastructure. How big is this, right? And I know that it's a little sensitive in terms of like what data points you want to share or you don't want to share, but just like, what can you share with folks that they understand just kind of how much of a critical piece of infrastructure you guys are becoming?

• 27:23Speaker 02

  Yeah, so we now have about 200 customers in our space. It's always hard to say how much is that, you know, from a percentage standpoint, but you know, it's a, it's decent, I guess. And interestingly enough, we have a lot of big, I mean, I don't know if the big, big guys, but we do have the mid big guys in the, in the space that are using us and partnering with us. And, um, you know, just to give some interesting numbers, in the last 30 days, and to be honest, I didn't check today because I assumed that things have changed overnight.

• 28:02Speaker 02

  But in the last 30 days, maybe 31 days, we, we've, we've, we were, our infrastructure was responsible for about $80 billion of on-chain settlements. And that's sort of represents somewhere between, you know, three to 5% of the overall on-chain transactions. So. Think it's already quite decent, you know, in terms of what you see as a market activity. And I think one of the things that we continuously think about is how to make sure that we are not becoming a critical risk, right, for the for the for the for the industry or for the for the market.

• 28:44Speaker 02

  And, you know, we have quite of interesting approaches over there that we're going to evaluate in the next 12 months.

• 28:52Anthony Pompliano?

  For sure. And when you think through like the obstacles to the business as you continue to grow, what do you see as the largest obstacles or challenges? Is it something that's internal in terms of scaling and just building? Or is something that's external that you've got to be aware of, but might actually be outside of your control?

• 29:10Speaker 02

  Yeah, I mean, I think that one of the interesting, you know, there are a lot of challenges, to be honest, because we are really scaling quickly at the beginning of, I mean, 12 months ago, we were 30 people in the company and now we have over 90 or maybe like, you know, we're approaching 100 people, right? So scaling like threefold in 12 months during COVID was not an easy task, but hopefully we've managed that well. And also from a customer standpoint, clearly making sure that all of our customers are happy and they're getting the SLA and the services that they need. And, you know, we do serve as a really critical component for them. And that's also a challenge to to continue and perform.

• 29:52Speaker 02

  But, you know, strategically, I think that we are at this point where the market and the use cases open up, right? It's almost that every scaled company right now can be everything for everyone, right? I mean, you don't need to take specifically Firebox as an example. You can also even look at players like Coinbase or BlockFi that you can see how diversified they are, right? In terms of the use cases that they are serving. And, you know, same applies for us, right? We have use cases that are around trading and we have use cases around payment that we use have use cases around prime brokerage and we have use cases around lending.

• 30:35Speaker 02

  And now, you know, there is this amazing use case around treasury management for corporations and there are use cases around.

• 30:43Speaker 02

  You know, merchant, uh, merchant, sorry, cross-border remittance. And one of the, I think like strategically for us, the, the challenge is, is really how to navigate and how to time, um, which one of those pockets we want to go after and address at every given moment. Uh, because eventually I believe that you need to have the right product and you need to, you know, have a quality product to, to serve a specific niche. Um, so timing it and putting the, the resources is something that we, you know, I, I see it as one of our challenges for the next, uh, like three or four years.

• 31:24Anthony Pompliano?

  Yeah. And, and in terms of, um, kind of the macro environment of the industry, uh, talk a little bit about how you see, uh, this collision course with, uh, with Wall Street, right? It's just a world where they're all going to capitulate and they have to support digital assets, uh, and it'll coexist alongside the legacy world. Do you see it completely disrupting them and they're eventually all going to be built, uh, and playing on top of like open decentralized protocols? Just when you kind of zoom out from just fire blocks and you think industry, uh, and you kind of meet Wall Street, you know, at some point in the future, how does that play out?

• 31:59Speaker 02

  Yeah, I think it's a good question. You know, I've always been sort of, uh, a strong believer in, um, like very disruptive innovation, right? So I think that people always think that, uh, you know, people over sort of underestimate how long it will take for the change to trigger and they always, um, overestimate, you know, how, I mean, they, they don't really able to understand how quickly that change, when the change actually comes, how quickly it's going to disrupt them, right? Um, and, you know, traditionally you've seen it with companies like, you know, IBM and like, you know, Blockbusters and others that basically

• 32:44Speaker 02

  it took way longer to something to happen, but when it happened, it happened so quickly that they just couldn't react. So I think that overall, this change is actually going to happen fairly quickly for them. And I think that some of those institutions will be able to react and accommodate. So I guess they will be the Microsofts of the world, you know, yes, like, you know, the cloud is going, is, it will be a disruptor for them. And for some period, they will lag behind AWS or Amazon. But eventually, they will be able to, to catch up and they will become as powerful as them. And I think some of those guys will be the IBMs and they will basically, you know,

• 33:30Speaker 02

  over time become, will become less and less relevant because they won't be able to monetize, modernize their infrastructure. And by the way, the, the modernization of their infrastructure is really, really deep. Because, you know, just to give like stupid examples, if you, to, to, for their systems to even deal with the precision that you have with Bitcoin or Ethereum, right? Basically, like, you know, six digits, right? Precision, right? They don't have systems that know how to do it today, right? Basically, they need to replatform everything, including the web interface of the bank. So as you can imagine, you know, some of those guys will not be able to catch up with, with that at all.

• 34:15Anthony Pompliano?

  Yeah. What is the thing that you're spending the most time thinking about as we move forward? Right? You founded and run one of these critical pieces of infrastructure. What keeps you up at night right now? Or like, what are the one or two data points or milestones that you're looking for from an industry perspective?

• 34:33Speaker 02

  Yeah, I think that there are two things that are keeping me up at night. One is, or maybe like, you know, three. The first one is just day-to-day operations, right? That, you know, to make sure that we, as I said, make sure that we, everything functions properly, right? The, the system is, the system is up and running and, and all those things work for our customers. The second is really the strategy of sort of how to... Make sure that we, I mean, again, there is sort of like the five years strategy, but also there is like the 12 month strategy of how do we really go about the newer,

• 35:16Speaker 02

  the newest players that are coming in, right? Like the fintechs of the world, the neo banks, that they're going, all of those guys are going to move in the next 12 months and they're going to provide services. So for example, Revolut is a customer of ours, but it's also very clear that all their, you know, competitors are going to do something in the next 12 months or so. And we need to basically be ready to, to, to set an infrastructure for them. And the last piece is actually talent, right? So hiring and, and scaling and making sure that we have the best talent there is in the company is also something that, you know, as a CEO is very important for me. I,

• 35:56Speaker 02

  I'm like a strong believer in the A player brings in a player and like, you know, B player brings a C player. So fundamentally, the reason why we were able to execute so quickly was because we have great people and we, as we scale, you know, to, to maintain it is always something that you need to be very thoughtful of.

• 36:19Anthony Pompliano?

  Absolutely. Before I finish up, I was to ask everyone the same three questions and then you'll get to ask me one question to finish up. The first one is, what is the most important book that you've ever read?

• 36:30Speaker 02

  Professionally or personally?

• 36:34Anthony Pompliano?

  Either what? Whatever, whatever comes to mind?

• 36:37Speaker 02

  Think, you know, personally, one of the best books that I read is Catch 22.

• 36:41Anthony Pompliano?

  Why?

• 36:43Speaker 02

  And I think, you know, I read it at the period that when I was sort of like, you know, toward the end of my military service and it sort of like, you know, changed my perception about the world and, you know,

• 36:58Speaker 02

  I guess the some of the you know, things that we the perceptions that people have about how the world works and but like, you know, what what really matter and like, you know, how I guess

• 37:15Speaker 02

  you know, how we we perceive things that are absolutely not the real truth, right? That was basically, and it's sort of like, you know, it goes about in a very sarcastic way. Right? So that was basically, I think, one of the most interesting books that I read. It was like 20 years ago and I think, you know, professionally, probably a book called First Steps to Epiphany, which is really like a bible of how to develop product and, you know, achieve product market fit.

• 37:45Anthony Pompliano?

  Absolutely. Second question is more personal, sleep schedule. I've been using the new Eight Sleep Thermoregulated Bed. I used to be like a five, six hour sleeper. Now I basically sleep like on an ice cube and and get much better sleep. And it's been like life changing for me with the Eight Sleep stuff. But what is your sleep schedule and how has that kind of changed over the years?

• 38:08Speaker 02

  So I guess like, you know, before I had kids, I would sleep like, you know, 12 hours. I really like to sleep. And, you know, nowadays, my five years old, unfortunately, like, you know, comes in the middle of the night and kicks me like, you know, for the rest of the night. So I wish I could say that I have like, you know, a six hour sleep. But yeah, maybe I should like, you know, bring a big ice cube and then he will like, you know, stay in his bed.

• 38:33Anthony Pompliano?

  I love that. Last question is more fun. Aliens, are you a believer or a non believer?

• 38:38Speaker 02

  Oh, that's a good question.

• 38:42Speaker 02

  I think that, you know, like real aliens, like, you know, green aliens that come to visit us or like if there are like, you know, other forms of life.

• 38:52Anthony Pompliano?

  Whatever you think.

• 38:54Speaker 02

  Yeah. So I think like, you know, B, I definitely, you know, I studied physics. So I definitely believe that like, you know, B is definitely a good probability that there is like another life form in in in the universe, you know, like Area 51 conspiracy theories are, I guess, like, you know, I, I, I, you know, I think that after I stopped watching, you know, X-Files when I was, I don't know, 16 or 17 years old, I I sort of dropped that conspiracy theory.

• 39:26Anthony Pompliano?

  I love that people now have to say, you know, are we talking about green men or not? Right. When they talk about aliens, because people are getting smarter about the whole thing. What one question do you have for me to to finish up?

• 39:38Speaker 02

  Actually, that's a good question. So like aliens, what's your view?

• 39:42Anthony Pompliano?

  I talked about a million times. So I think that they there's other intelligent life that exists somewhere in the world, but it is so far away that you and I in our lifetime won't come in contact with. Which, you know, kind of kind of calls into the question, does that mean that they actually exist or not? Right. If we don't get to engage with them, then maybe it doesn't matter.

• 40:00Speaker 02

  Yeah, but maybe like, you know, our grand, grand, grandchildren, we like, you know, have some kind of crazy technology that we'll be able to propel them through wormholes and they will be able to meet them.

• 40:10Anthony Pompliano?

  Absolutely. How can we find people to find you on the internet? Or where can we send people to find you on the internet or find out more about Fireblocks?

• 40:19Speaker 02

  Yeah, sure. So on our website, fireblocks.com and LinkedIn, you know, pretty active there, Michael Shaulov.

• 40:27Anthony Pompliano?

  Awesome, Michael. Listen, thank you so much for taking the time to do this. I think people are really going to enjoy it. You've built some amazing technology and a great company, and I hope that you keep going and we'll have to do this again in the future.

• 40:36Speaker 02

  Sounds good. Thanks.