#1062 Pascal Gauthier On Why Everyone Needs To Self-Custody Their Crypto

Pascal Gauthier is the CEO of Ledger In this conversation, we discuss self custody, the bear market, regulation coming to Crypto, the latest updates in digital security, and how Ledger has been able to build one of the most trusted brands in self-custody. ======================= If you’re trying to grow and preserve your crypto-wealth, optimizing your taxes is just as lucrative as trying to find the next hidden gem. Alto IRA can help you invest in crypto in tax-advantaged ways to help you preserve your hard earned money. Alto CryptoIRA lets you invest in more than 200 different coins and tokens with all the same tax advantages of an IRA. They make it easy to fund your Alternative IRA or CryptoIRA via your 401(k) or IRA rollover or by contributing directly from your bank account. There are no setup or account fees, and it’s all you need to do to invest in crypto tax free. Let me repeat that again:You can invest in crypto tax free. So, ready to take your investments to the next level? Diversify like the pros and trade without tax headaches. Open an Alto CryptoIRA to invest in crypto tax-free. Just go to https://altoira.com/pomp ======================= Bullish is a powerful new exchange for digital assets that offers deep liquidity, automated market making, and industry-leading security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with certainty and earn passively at scale across variable market conditions, in an environment backed by multibillion-dollar liquidity contributions from the Bullish Treasury. Visit bullish.com/pomp today to learn more. Note: Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to U. S persons. Visit bullish.com/legal for important information and risk warnings. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development. From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world. No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co Copper - the unfair advantage. =======================

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

• 0:02Anthony 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. Now let's kick this thing off. Pascal Guthier is the CEO and founder of Ledger. In this conversation, we talk about self custody, bear markets, regulation, employment, and what he's seeing right now on the ground when it comes to security. I really enjoyed this conversation with Pascal, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by Alto IRA. If you're trying to grow and preserve your crypto wealth, optimizing your taxes is just as lucrative as trying to find the next hidden gem. Alto IRA can help you invest in crypto in tax advantaged ways to help you preserve your hard

• 0:45Anthony Pompliano?

  earned money. Alto Crypto IRA lets you invest in more than 200 different coins and tokens with all the same tax advantages of an IRA. They make it easy to fund your alternative IRA or crypto IRA via your 401k or IRA rollover, or by contributing directly from your bank account. There are no setup or account fees, and it's all you need to do is to invest in crypto tax-free. Let me repeat that again, you can invest in crypto tax-free. So, are you ready to take your investments to the next level? Diversify like the pros and trade without tax headaches. Open an Alto Crypto IRA to invest in crypto tax-free. Just go to altoira.com/pomp. That's A-L-T-O-I-R-A.com/pomp. Start investing

• 1:27Anthony Pompliano?

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• 2:12Anthony Pompliano?

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• 2:57Anthony Pompliano?

  No other infrastructure provider covers as many assets across as many exchanges with the speed and security that Copper can offer. To learn how Copper helps the world's largest institutional investors secure their digital assets. Head over to copper.co. Again, Copper, the unfair advantage. Check them out at copper.co today.

• 3:17Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:18Anthony Pompliano?

  Pascal, how are you?

• 4:20Speaker 02

  I'm great, thanks.

• 4:21Anthony Pompliano?

  I'm, I'm, uh.

• 4:23Speaker 02

  Get back.

• 4:24Anthony Pompliano?

  I'm very interested in, uh, I'm just gonna start throwing out topics. Let's just jump right in. Centralized exchanges, contagion, lending, all of the things that are not.

• 4:36Anthony Pompliano?

  Holding your own private keys have been in the news recently. What's your take? Is the entire Bitcoin and kind of crypto ecosystem eventually going to end up being 100% self sovereignty? Is it going to be, hey, I keep 90% of my assets in, you know, kind of my own custody? And then I might use some of these services at specific times? Like, what's kind of like the, the vision that you have as to where the industry goes over time between self custody versus third parties or even decentralized type platforms or whatever?

• 5:09Speaker 02

  So, yeah, I mean, I think what just happened is a reminder of what Bitcoin exists. And, you know, so Bitcoin exists not to have intermediaries. And so that's, that's a big reminder for everyone that if it's not your keys, it's not your crypto. And, and also it's a big reminder that people shouldn't be greedy, like, you know, greed is, is bad. So therefore, if you have Bitcoin and you've been holding Bitcoin for a long time, you know, the, the price appreciation is, is good enough. Like, why would you trust anyone with your Bitcoin for an extra 4%? You know, to me, that never made sense. And what we've seen recently, you know, it was a proof that, you know, it didn't make sense. But also, it's not just that.

• 5:49Speaker 02

  So I think the future looks different and the same at the same time. You know, I think what, what just happened is clearly, if you're a centralized value proposition as, as a, as a consumer, as a customer, what you would want is much more regulatory oversight, like, you know, you would want to, you should have much more confidence that the balance sheet of the company that you're giving coins to is, you know, is good enough. So eventually they can cover the loss. You want to make sure that there is clear regulation in terms of, you know, how all of this is, how custodians work and so on and so forth. And so I think, you know, what, what the market just triggered is, you know, sort of more self custody for, for more people, but also sort of more regulation for centralized

• 6:33Speaker 02

  value propositions and sort of more oversight from, from, from the regulator. And also a lesson to, to everyone, which is if you, if you have to, absolutely have to trust your points to someone, you know, make sure that they're The best ones.

• 6:48Anthony Pompliano?

  Yeah, as you kind of see this moving forward, one of the big questions, and maybe even just observations in the market, is that Bitcoin has become more financialized in the last, you know, two or three years. We have large Wall Street firms that are now participating. We have public corporations and you just get a different type of market participant. Naturally, their business models are financial services, right? And so they create all this stuff around it. Bitcoin was built on the premise of you don't need these third parties. Do you think that we will continue to see more and more financial services built around these assets? Or is it something where we'll kind of obfuscate

• 7:30Anthony Pompliano?

  away credit or lending or, you know, some of these services that are very popular in our traditional financial system with Bitcoin, given that it's a bearer asset, we may not need them?

• 7:41Speaker 02

  Yeah, but I mean, you know, I think what Bitcoin is and what cryptocurrencies are, you know, is just like a public way of exchanging value. And so, you know, before it was cash. And so, you know, between you and I, if I wanted to give you $20, I would just hand you cash. And as soon as you went digital, then you had to have a, you had to have an intermediary. And so I think what Bitcoin sold is this, like now, if I still want to give you something just for me to you, I can use the Bitcoin network. And the beauty of the Bitcoin network is that it's a, it's a worldwide public ledger. So actually, before it was, you know, me to you in the US and I give you $20. Now, you know, I'm in Europe, you're, I'm in the UK right now, you're in the US, I can actually give you the $20 right

• 8:25Speaker 02

  now, whatever, like in form of Bitcoin. And, and that works very well. And so, you know, people always underestimate how powerful that is, but it is only very powerful because it doesn't have any intermediaries and because it's a, it's a, it's a public ledger. Now, it doesn't mean that, you know, the coins don't have value and it doesn't mean that, you know, Bitcoin is not also a store of value. And so in that regard, it will attract financial institutions. But

• 8:50Speaker 02

  I think what just happened also shows that it's not so much that not your keys, not your coins, it's also not your keys, not your communities. If you don't have your keys, you can't engage. What went well in this market was DeFi. Actually, DeFi has shown that it's actually, it works pretty well, given the circumstances. And so, but suddenly, if you want to engage in DeFi, like you need to have your private keys. If you want to engage in NFT communities, you need to have your private keys. And so for us, what's happening right now is, you know, is just like the proof of this vision that we had from the beginning, which is there are a bunch of things in our lives that will become tokenized. We will become even more digitalized in a way.

• 9:35Speaker 02

  And everything will be in a form of a private key, whether it's your money, your wealth, your identity, your health data, whatever data that you have, even your very private communications. And, you know, all of this is moving onto a blockchain and security would be sort of first and foremost, but also if you want to engage, you will need to have your private keys. And so it doesn't go with security and ease of use. And so I think what we're really going for at Ledger is not so much the financial world. It's sort of everything. It's for your digital self, like how do you protect your digital self? And how do you engage with your communities?

• 10:09Anthony Pompliano?

  So I want to talk about Ledger Live because as I've used the product more and more, it's become fascinating to me. I've always thought of when somebody says self custody or a hardware wallet, you basically take the assets off of an exchange, you put it into the hardware device, and then you like bury it in your backyard, don't touch it. And, you know, you can't really do anything with it until you move the assets back on to an exchange. Ledger Live is a mobile app that you all have built. I think it has desktop as well. And on it, you allow people to do things with their assets while they're still on the hardware device and or at least connected to the hardware device. Can you explain a little bit more as to? How people should think about this?

• 10:53Anthony Pompliano?

  Is this like an exchange, but rather than the exchange holds your keys, you're holding your own keys, but you still get a lot of the same functionality? Or how do you kind of think through why you all built this kind of interface? And also the integrations with the various other services and kind of functionality that you have here?

• 11:09Speaker 02

  Sure, the way to think about Ledger and the consumer value proposition that we have is the nano or the hardware part is the security and the validator. Like this is where your private keys are and this is how you secure your private keys and how you sign transactions. That's all that it does. In order to engage with your crypto, then you need an interface. And the interface is a software interface that is either on your computer or on your phone. Actually, what's cool with Ledger is, you know, if you want your interface to be Ledger Live, you can. But equally, if you want it to be coin-based, non-custodial, or various other wallets, they all have like a Ledger integration. So you don't need to use Ledger Live. You should only use Ledger Live if you think it's a better product for you.

• 11:48Speaker 02

  And actually, we invested a lot into Ledger Live for it to be the best wallet in the space. And the reason why we believe it's becoming the best wallet in the space is that we build it in a very open manner. So now, third parties can actually code the apps and apps on top of Ledger Live. And so when you open your Ledger Live, you have this galaxy of apps. You know, think about like your iPhone and the App Store on your iPhone. It's exactly the same thing where from the comfort of your Ledger Live, you can actually use One Inch, you can use Ledger Market, you have your Ledger card, et cetera, et cetera. And so what we're really saying is you should never compromise on security, but also what we're trying to bring to you is real ease of use. And so some of the best use cases in the market right now in Ledger Live,

• 12:33Speaker 02

  like typically if you want to mint an NFT, it's better done on Ledger Market with your nano. It's actually the best experience, the only experience and the best experience in the market. So that's really what we are investing in right now a lot is just to make all of this much secure and easier to use for everyone.

• 12:53Anthony Pompliano?

  How does someone build an app to get it on there? Do I have to go through like an application and approval process? Can anyone come in and build something? How does that work?

• 13:01Speaker 02

  Yeah, everyone can come in and develop something. You go to developers-ledger.com and you follow the instructions and then we got the Discord, you engage with the team and then the only thing that we do really is to do the security review. So the dungeon is reviewing every app that goes on Ledger Live and/or Ledger.

• 13:19Anthony Pompliano?

  Got it. That was the one I questioned was basically there's some sort of like fail-safe process or at least a process to review the security so that when I go on, I know that these have all been vetted by the Ledger team from a security standpoint.

• 13:30Speaker 02

  Correct.

• 13:31Anthony Pompliano?

  Got it. And when you start to think about building more software interfaces, how much of the aspirations of the company is hardware versus software? Like you obviously have the leading position when it comes to hardware. You are essentially synonymous with self custody.

• 13:50Anthony Pompliano?

  When we gave away a Ledger yesterday and people went absolutely nuts, they loved it.

• 13:56Anthony Pompliano?

  But then you got the software. So like where are you planning to take the company? Is it more software moving forward and you'll keep, you know, kind of the hardware you have? Or do you keep investing equally in both or how do you think about that?

• 14:07Speaker 02

  Yeah, so I answer your question by asking you a question. What do you think your iPhone is? Is it hardware or software?

• 14:15Anthony Pompliano?

  You want me to say both, so I'll say both. My guess-

• 14:19Speaker 02

  I want you to say both, so what would you say, really?

• 14:22Anthony Pompliano?

  Yeah, I mean, it's both, but I think majority of the value is in actually the software, but you need the hardware in order to be able to do it. Yeah.

• 14:30Speaker 02

  Exactly. No, so, you know, what I would say is iPhone is an experience, like, you know, the-

• 14:35Anthony Pompliano?

  I'd agree.

• 14:36Speaker 02

  Hardware, firmware and software that builds an experience for you where actually the comfort that it gives you is really the experience. It's like, oh, now I've got my music, I've got, you know, my everything on my iPhone, I've got my contacts. And really the way they use your iPhone is really an extension of the palm of your hand. Like, you know, now you connect to the web, like, you know. People keep on saying like, I don't understand Bitcoin. What they're actually saying is, you know, they don't understand the underlying technology. What they don't, or probably what they should say as well, is like, I don't understand the web, but it actually doesn't matter because my iPhone does everything for me. And so what we are thriving for at Ledger is the same that what Apple does, but we're gonna, Apple does it for the phone, we're gonna do it for your wallet.

• 15:17Speaker 02

  So in the end, you know, the Ledger product will be an extension of the palm of your hand where it's gonna be everything that you have in your wallet today because you have a physical wallet on you right now. You will say yes, because everybody has one. So that will go into a digital form at some point. That will be a ledger. And then it will be as easy to use to connect to Web three as your iPhone is easy to use to connect to Web two. That's sort of the vision that we have. And in time, you won't say, but you need like hardware, because without hardware, software doesn't exist. Like, you know, we need to, I think, you know, people and VCs like think too much about software as if it was the, you know, they like it because it's simple.

• 15:58Speaker 02

  But but actually, if you think about the biggest companies in the world, they all have either a hardware component or a firmware, operating system component. If you think about Google, they have Android. If you think about Microsoft, it's an operating system. They have a bunch of hardware. If you think about Apple, I mean, is the is the biggest company in the world and they're the best. Why? Because they got hardware, operating system and and software environments. If you think about Amazon, they have AWS, et cetera, et cetera. So if you think about the biggest companies in the world, there is an element of hardware and there is an element of operating system. And why? Because through hardware and operating system, then you can create a software environments around it to build an experience. And so that's what Ledger is trying to do.

• 16:42Speaker 02

  And it's modest right now. And we understand that we are at the beginning of everything. It's the beginning of crypto, it's the beginning of Ledger. But in the future, we think it's going to be much bigger. You need hardware to connect to Web three. You need secure hardware to connect to Web three. Otherwise, Web three doesn't work. And so we need to build an experience.

• 17:00Anthony Pompliano?

  As you think about kind of building that entire experience, how much of the team comes from the finance world, the tech world? Or they're like what I'll call crypto native? I'm fascinated by the types of experiences, the types of expertise that you put on the team. Goes back to like the team you build is the company you build, right? And in some way, the team you build is the product you build. Where do you think about finding these individuals? And how much does that infuse into like how you're thinking about building going forward?

• 17:31Speaker 02

  Yeah, yeah, that's a great question and my answer could be, I mean, it's my answer is, uh, the, this, the, how do you build Ledger, you know, the strategy of, you know, building a company? You know, Ledger is a very unique company in the space because we're trying to, like, we have the, probably the deepest technology stack in the sense that you need to do hardware security, hardware, operating system, software, software ecosystem, design, et cetera, et cetera. I mean, if you think about it, like, you know, FTX is a much easier job, like, they have a they have an exchange, et cetera. I mean, you know, Sam's business is amazing, but if you think in terms of technology and, you know, what they have to develop, like, it's no no wonder where they can be still like a hundred people being such a big exchange.

• 18:17Speaker 02

  Uh, because from a technology and, you know, uh, uh, software standpoint, like, there's, you know, there's not much to develop, actually. Um, but the problem at Ledger is this, like, and so every piece of the puzzle needs to have experts. So security hardware engineers, it's a very specific kind of engineers, like, there aren't many people on the planet that actually understand this, like, you know, the chip and pin technology and HSMs and, you know, all of this. So they have to come from a very, very specific background that understand security very well, and these are very rare engineers. When you do the hardware around, then you're going to design. And right now, we're working with a bunch of Apple people. And so actually, the, the future of Ledger is to deliver devices where Apple and Ledger would have made a baby, where it's gonna be

• 19:03Speaker 02

  as beautiful as your iPhone, but, you know, as secure as your, as your Ledger. And this is sort of what we're working on. And then, you're right, and then, and so, and then you have, like, the operating system engineers, that's your the base of your secure platform. On top of it now, you need to build software. And the software is, is a different kind. And so for this, you try to find the the people and the engineers that are specific to the vertical. Right now, we, you know, we have a very strong NFT vertical and we're trying to, we're starting to have, you know, people that are very, very specialized into uh, the NFT and the NFT communities, et cetera, et cetera. So it's a, it's a very complex puzzle. It's like a

• 19:44Speaker 02

  a thousand pieces, they're very small and, you know, it's a complex puzzle, but, but basically, that's, uh, you know, that's that's all that there is, you know. Building a business is just the people and the, the war for talent. So you need to find experts. Where Ledger is very strong is, um...

• 20:01Speaker 02

  The deep tech, the cultural aspect, and when we need to get, where we need to get better is the, you know, the, the financial aspects. You know, you don't have many people that come from the financial industry at Ledger, but we're hiring more and more. So I guess where we need to get better is this.

• 20:14Anthony Pompliano?

  As you look at the bear market, there's lots of people who get disenfranchised, who aren't as excited as maybe they were last year when, you know, prices are going up. You've been around for a while. What do you take as lessons learned from past bear markets? And what are you telling your team now as you guys are kind of building through this one?

• 20:32Speaker 02

  At first, I told my team that I like bad weather. I prefer when the market is there because actually this is where, this is when you, you can build. I hate when the market is too hot and like any company can raise like a hundred million dollars and you know, it's just, just crazy and you don't know how to make a difference between good and bad companies, et cetera. Bear market is actually good because you can see who is resilient in the market and who is failing. So I welcome bear markets. Also, especially that in this bear market, Ledger is doing extremely well. We're growing year on year, actually quite rapidly now. We had 15% growth year on year in H1 and I think we're growing faster in H2 right now and July is a killer month, especially that we launched the Ledger

• 21:15Speaker 02

  market yesterday. That, that was such a beautiful launch. We, we sold 10,000 passes in less than 24 hours, which is the first time ever. Like this is, this is actually the biggest achievement overall in the industry. And so our business is actually thriving right now and it's time to build. And I like when the market gets, gets bearish right now because it's time to build. This is what I told my team. I say, it's time to build. We're not firing anyone, but we will be very strict on performance. We want everyone to be at 120% right now in the company. And the team appreciates that. Like people understand that we need to work hard. This is the moment where we need, you need to work at your hardest. So when the market picks up again, then you're ready. And so what we're doing right now

• 21:57Speaker 02

  is to get ready for the, the, the bull market that's going to come in, like anything between six, 12, 18 months, God knows when, but doesn't matter. Like when it's, when it's going to come, we'll be ready.

• 22:10Anthony Pompliano?

  As you think of kind of that market, what do you think will turn it around? What, what'll bring the, the bull market back, if you will?

• 22:18Speaker 02

  But you know what, like you know, for me, like this is not really a bearish market because you asked me, and so I've been in this game for a long time. I've seen every bear market since like Mongox to now. This feels great. Like, you know, I remember post Mongox, like 15, 16, you know, it was horrible. It was, it was a nuclear winter of crypto. Like, nothing was happening. It was, uh, it was very, very difficult. Uh, the bear market of 18, 19 was also very difficult. Like, you know, it's, uh, uh, you know, like, you remember in like in 17, like, it was the start of like financial institutions looking at this and then, and a bunch of funds being created, et cetera. And everyone disappeared in 18, 19. They

• 23:01Speaker 02

  were like, okay, bye bye, we'll see you later. Actually, it was a mistake. We didn't, we didn't think we would do this. In this market, nobody's leaving. You haven't heard any major financial players saying, oh, you know, okay, like, we thought crypto was good, but fuck it. Like, we're not gonna do it anymore. Actually, everybody's in the market. Everybody's investing, big banks, uh, uh, small players, uh, there are new companies being created every day. So, you know, it doesn't really feel like a bear market. And also, the phenomenon is just getting bigger now. Like, you know, it was Bitcoin only in, uh, in 14. Uh, it was sort of Bitcoin and Ethereum in 17. And right now, it's Bitcoin, Ethereum, like every other coin, every other layer, NFTs. I mean, you know, so that's why, you know, I think

• 23:45Speaker 02

  Ledger is growing year on year because there is so much happening in the market, even if it's a bear market that I don't really fit. It's a pretty bear market.

• 23:54Anthony Pompliano?

  As we watch regulation and regulators around the world get closer and closer to figuring out what that framework's gonna look like, is that a tailwind for self custody? Like, will more and more people just say, you know what, I just wanna buy assets and hold them for a long period of time? Uh, some of these things that regulators are worried about, um, I just don't wanna deal with it. The tax regimes are too onerous in the United States or elsewhere. If I spend it, or if I send, uh, uh, kind of these assets to other people. So, does it lead to more just like buy and hold and self custody? Or how do you think about regulation as a tailwind or a headwind, uh, for your business?

• 24:35Speaker 02

  No, I think as we go, like the buy and hold thing that was very true in 14 and the years after is going to be less and less true because now as soon as you get coins, like you want to engage into communities, into DeFi, into Lightning, into the different things that you can do with your coins. So I think the buy and hold strategy definitely still exists, but what's, what's going to happen more and more is like people will sort of engage with their coins and make payments and do this and do that, et cetera. So which is, which has an impact definitely on our strategy. I mean, if you think about the NOS and when you're going to see the future of our products, you'd be like, ah, okay. So the future of Ledger products is not to just buy and hold, like, you know, you've taken NOS, you put one Bitcoin on it and then you, you put it in the safe deposit

• 25:18Speaker 02

  box and you never look at it again. It's actually, you will want to engage with that Bitcoin into, you know, sort of different things, whether it's staking, well, not for Bitcoin, but whether it's a staking for you ETH or whether it's DeFi, NFT, Lightning for Bitcoin and various other projects that have been built on top of Bitcoin right now. I think that's what's happening. Your coins will always be in movement. You always want to be doing something with them. But again, I don't think, you know, centralized value proposition will disappear. It's just that they will need to give you something that, that you don't have otherwise. And so, but it's going to be a challenge. For me, it's

• 26:00Speaker 02

  a challenge between weak tech and strong tech. Like, you know, if, if self custody does everything that centralized value proposition can do, but better, then self custody wins and, you know, people won't need intermediaries anymore. It's not completely, completely the case today. Might be the case tomorrow where you actually don't need a bank anymore and you can just manage your funds yourself.

• 26:21Anthony Pompliano?

  Yeah. It, it, um, the promise of it is, I think, becoming more obvious day, day in and day out that, uh, that this is where we are, uh, that we're headed. When you look back over your career so far, uh, in the industry, what, what's the thing that surprised you the most? Like as you look to see where we are now, is there something that sticks out in your mind as to, I can't believe this happened or I can't believe we're already here in only 2022?

• 26:43Speaker 02

  I think the thing that surprises me the most is that sometimes I feel that the industry is a bit too focused on top line growth and grid. Actually, you posted something yesterday about like, you know, the Speed always wins. I can't remember exactly what was your post, but you said something around like

• 27:02Anthony Pompliano?

  The upstart CEO. He basically said, all things held equal, the company that like iterates the fastest wins.

• 27:10Speaker 02

  Yeah, correct. And so you seen my answer?

• 27:12Anthony Pompliano?

  I saw it. I would love for you to explain your thought process.

• 27:16Speaker 02

  Yeah, no. So, so, so I think this is, I think this is kind of wrong. And I think this is specifically wrong for the crypto industry. I think the crypto industry should sometimes sort of slow down and, and, and not be focused on top line and greed, but like more focused on building the right product for the user and like sort of long term. And always having like the security of the user, the protection of the user like at heart, like, you know, and I know it's hard sometimes because you have this temptation to grow, grow, grow, et cetera. And so my point is like for a security company, it's typically, you know, being the fastest in the market. You know, move fast, break thing is, is the worst thing you can do for, for your consumer base. This is actually, you need to do the opposite. And I, you know, there is a tale of the tortoise and the hare.

• 28:01Speaker 02

  And that's our tale. And, you know, the, the tortoise wins in the end, like, you know, and why? Because if you want to go too fast and you break things, when you do security, it just doesn't work. Like, you know, security needs to be absolute. Do you know how many coins Ledger lost since we created Ledger?

• 28:19Anthony Pompliano?

  How many?

• 28:20Speaker 02

  Zero.

• 28:23Speaker 02

  No, but you know, and

• 28:24Anthony Pompliano?

  It's important.

• 28:25Speaker 02

  Yeah, well, yeah. And this is why Ledger is Ledger. This is why people trust Ledger. We have five million devices in, in the wild right now, and people are trying to hack our devices every day. There actually, there was the note from the IRA, I think, and they were, they were recruiting people to hack Ledger or to hack like hardware wallets, including Ledger. So you can be sure that the NSA or there are a bunch of people that are trying to hack Ledger. Till now, like, you know, and, and we looking at everything and every dashboard of the dark web, et cetera, to see for exploits and if someone has found a way to, to break our products. But so far, you know, nobody has managed to, to break a Ledger product. And we actually make sure that it doesn't happen because

• 29:07Speaker 02

  This is why we have a dungeon and this is why we're playing defense, but this is our role. And so sometimes I rather, me, I always prefer to be right than to be first. And in the end, like if it means that I lose the business, okay, then then it means that I'm not the best businessman, but that's okay. Like, you know, my, my, my, my customers will always be safe. And this is, this is the promise. So, so that's why I feel that sometimes the market where I'm surprised is like, the market keeps on doing the same mistakes. If you look at the NFT market, you know, these guys came out after Bitcoin. And so you would have imagined that they would look at, you know, all the mistakes done in Bitcoin and not do the same mistakes. Actually, they do the same mistakes over and over again. They don't protect their users. So people get wrecked, get hacked, et cetera. And actually, when NFTs came to market,

• 29:52Speaker 02

  there were, you know, you could have told your user, like, use a ledger from the beginning. So to avoid being, you know, wrecked and and hacked and not just ledger, like, you know, other products in the market. I don't care. Other hardware wallets. But, uh, but I don't know, going too fast, like, you know, going too fast and that's, and it's still happening today. And that I don't really understand. You know that every software wallet that you have on your phone right now, or every software wallet that you have on computer, you can get, you can have your private keys drained in less than thirty seconds. The only thing that it takes is you download the malware and it's happening already and it will happen at scale. You download the malware on your phone or your computer and your coins are as good as gone.

• 30:31Anthony Pompliano?

  It's crazy.

• 30:32Speaker 02

  What are, you know, when you connect to most software wallets in the industry, do they give you like a big red warning to say, be careful, pair your software wallet with a ledger or with, with a hardware wallet, whatever it is, et cetera? Actually, not really, like, you know, because people are, people are shooting for ease of use. So they, let's make it very easy to use. And yes, there is a risk, but okay, you know, it's a small risk. So we're willing to take that risk. I think the, the industry should be willing to take zero risk. Or the minimum possible risk because.

• 31:06Speaker 02

  Once your private keys are gone, everything is gone. And so you imagine in the future with so much wealth that can be put on public blockchains with your identity, with all of these on public blockchains, you can't play the game of like, oh, it's it's good enough. No, no, no, it has to be absolutely secure. It will never, you know, you can't have this good enough strategy. It has to be certain. And so I think what's troubling me right now is like the industry, even after everything happened, you know, still doesn't think about real security, real governance, security, all of these things. Most of the big, largest exchanges on the planet run a bunch of the security on nano S's and nano X's. And I don't think that's good enough.

• 31:51Anthony Pompliano?

  Last question for you is the dungeon, I think is how you pronounce it, that you all have is a team of white hat hackers. Explain what this is. I don't think a lot of people know that you all have this and what they do on a day to day basis.

• 32:06Speaker 02

  Well, you know, the black hats and the white hats, the black hats are the guys that are trying to steal from you. And the white hats are the guy that are trying to protect you from the guys that are trying to steal from you. They're all from the same sort of pedigree. Except that some choose the light and other choose darkness. And so when you build a security company, you absolutely want to have hackers in your company because this is the only way that you can find ways of hacking your product before it actually happens. And so what you want is to have the best hackers in the world trying to hack your own products in order to further secure it.

• 32:48Speaker 02

  And so what the dungeon done, what the dungeon does is this, like we hack Ledger product, but we hack every other product in the market. And we hack every other product in the market, not because we assholes, but because we want everybody to raise the security bar. So actually, our goal when we hack another wallet, and we hacked a bunch of other wallets, is to tell them how to fix it. It's not just to hack them and to laugh at their face, because we don't do that, like, we're not interested in that. What we're interested in is whoever uses another wallet tomorrow, like Ledger is doing the job to make everything more secure, and not just Ledger product, everybody else in the market. So that's our mission, actually. We want to make things, you know, Web3 secure and easy to use,

• 33:34Speaker 02

  but not just with Ledger product, with everything else in the market. So everybody gets tested in the Ledger lab, and sometimes, you know, most of the times, we crack open sort of most of the products or chips or everything that exists in the market. And the reason is, most hardware technology that exists prior to crypto was not designed to protect crypto secrets and was not designed to protect Bitcoin, ETH, et cetera, et cetera. And so there is a lot of R and D that goes into, okay, how do we solve this big problem for the future? And if nobody is trying to solve this for the industry, then the industry won't exist. So this is the role of Ledger, and it's not just the Ledger products. It's just like, we're trying to help the whole industry

• 34:18Speaker 02

  do better with security.

• 34:20Anthony Pompliano?

  Where can we send people to find you on the internet? Or find out more about Ledger?

• 34:24Speaker 02

  Well, ledger.com, our YouTube channel, Instagram, TikTok. We serve everywhere. And honestly, we have great content on YouTube. We have a great Ledger Academy, et cetera. We're investing a lot into content and education. So people should definitely check that out. I'm on Twitter somewhere. You can easily find me. So I think it's, yeah, that's that.

• 34:48Speaker 02

  And I tweet, so it's not always very interesting, but sometimes I reply to you. So, you know, people can like my comments when I reply to you on Twitter. And yeah, that's it.

• 35:00Anthony Pompliano?

  I love it, man. I'm a big fan of Ledger. I enjoy doing all the different things we do together. And obviously, as you said, probably the single most important thing is you guys have lost zero coins. So keep up the great work. Anyone who has not looked into self custody, I keep saying it, go check it out. If you want to use some of the platforms, generate yield, all that, that's fine. And you got to put 100% in self custody, but you should definitely understand how it works. And the best way to get started is just take $5. Take $5 of Bitcoin, $5 or whatever, stablecoin, whatever, just go put it in self custody, move it back and forth, learn how to use it, and you'll be off to the races. So, thank you so much for coming on, Pascal, and we'll definitely do it again in the future.

• 35:41Speaker 02

  Merci, Ponce. Salut.

• 35:44Anthony Pompliano?

  All right. Bye, buddy. Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends, and I'll see you all for the next episode.