#1353 Nick Neuman | How The Rich Protect Their Bitcoin

Nick Neuman is the Co-Founder & CEO of Casa, one of the preeminent custody providers in bitcoin and crypto industry. In this conversation, we talk about what custody used to look like before the digital age, how Casa is solving problems around bitcoin custody, examples of why self-custody makes it more secure, brand new inheritance feature, risks, and future of self-custody. ======================= Join me at Consensus 2024 May 29-31 in Austin, Texas. This year marks the tenth annual Consensus, making it the largest and longest-running event dedicated to all sides of crypto, blockchain and Web3. Use code POMP to get 20% off your pass at https://go.coindesk.com/3Q60F2Q ======================= Buy and sell cryptocurrency in a tax-advantaged crypto IRA with iTrustCapital. Enjoy 24/7 access, lowest fees in the industry, and tax benefits for your retirement. Open an account today at ⁠⁠⁠⁠⁠⁠www.itrustcapital.com⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 265,000+ 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://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Nick Newman. He is the co-founder and CEO of Casa, one of the preeminent custody providers in Bitcoin and cryptocurrency industry. In this conversation, we talk about what exactly custody used to look like before the digital age, how Casa

• 0:45Anthony Pompliano?

  is solving problems around Bitcoin custody, what some of the wild stories are that they've already heard, and he gives very explicit examples of why a self custody provider can actually help you hold on to your Bitcoin and make it more secure. We then even get into a brand new feature that Casa has pioneered around inheritance and how you can make sure that your loved ones can get the economic value that you've been able to create and put into Bitcoin if you happen to pass away or something happens to you. This conversation has a ton of different things that I think you will find interesting and informative. I always learn when I talk to Nick and this conversation is no different. So here is my conversation with Nick Newman.

• 1:25Speaker 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.

• 1:49Anthony Pompliano?

  Today's episode is brought to you by Consensus 2024 by CoinDesk. On May 29th through the 31st, I'll be heading to Austin, Texas to speak at Consensus, the world's most established global event for all things crypto, blockchain, and Web 3. I'll be sharing my thoughts on what the next bull run will look like, how it will differ from previous runups, and the broad macro investment thesis for Bitcoin. Bitcoin and crypto more broadly. That's not all. Consensus has tailored programming for Bitcoin maxies and multi-chain Mavericks alike, covering everything from post-having strategies to mining and more. Plus, get ready for the epic showdown, Bitcoin versus Ethereum at karate combat. That's just a taste of what's to come at crypto's only big tent event. Join me in Austin alongside 15,000

• 2:31Anthony Pompliano?

  other investors, founders, brands, and more to take in all that blockchain has to offer. Get your pass today by clicking the link in the description and using code POMP to save 20%. Again, click on the link in the description and use code POMP if you want to save 20% and I'll see all of you at Consensus 2024. Today's episode is brought to you by I Trust Capital. Are you buying crypto on an exchange because you're excited about the bull run? Well, I hope you're reporting your crypto gains to the IRS because they want you to pay your taxes. That's right. When you buy and sell crypto on an exchange, you need to pay the government taxes when you make profits. That sounds pretty taxing. There's another way you can buy and sell crypto without worrying about taxes. At I Trust Capital, you can buy and sell crypto inside of a tax-advantaged crypto IRA.

• 3:15Anthony Pompliano?

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• 3:58Anthony Pompliano?

  Capital. You can start maximizing your crypto investment today. Go to Itrustcapital.com. That's Itrustcapital.com.

• 4:08Anthony Pompliano?

  All right, guys. Bang, bang. I've got Nick here with me. Nick, I thought a great place to start this conversation is kind of like what the world used to look like before Bitcoin and Casa. And not just like, what did money look like in the 2000s, but can we go back a couple hundred years? And I don't think people quite understand how insane the custody of money and currencies used to be. And so like, when you think about the history of custody, what are some of the stories or the things that you pull out? You're like, let me explain to you how ridiculous this used to be.

• 4:39Speaker 02

  Yeah. Well, if you think about it, for all of human history, until the last 10 to 20 years or so, money has been purely physical. And so people have had to think about, how do I store this physical asset? That I really don't know how to protect, whether it's cash or go back even further, it was gold or coins. And so banks really sprung up around solving this problem for people hundreds of years ago, right? Like, how do we protect anywhere from a small amount of something physical to a large amount of something physical that is valuable? And then how do we make that easier for people to actually transact in it?

• 5:22Speaker 02

  Because you didn't want to lug around, as a merchant, you didn't want to be lugging around a big bag of, you know, gold and silver coins. It's just a pain in the ass. You'd much rather go to the bank and have them write on the ledger and say, oh, I transferred this much from my account to this other person's account. And so banks were created as a security mechanism and as a ease of transfer mechanism for this old kind of money. Then we get into this newer world today where it's actually with Bitcoin incredibly practical for people to secure their own money. So we've still got this, all this old world custody and all these old world systems.

• 6:04Speaker 02

  And then Bitcoin comes along and it says, all you need to secure any amount of money that you want to is a private key. And that private key just uses math to give you as much security and control as the greatest governments in the world. The same tools as any government using cryptography to secure data, you now have to secure your money. And you can secure hundreds of millions, billions of dollars on your phone or on a simple USB stick.

• 6:37Speaker 02

  And I don't think people quite realize the change that that can bring about in how people interface with their money and with their data, because it now lets people practically control their money and not have to trust these third parties to do it for them. And you can go back through all the years and decades and centuries of banking and see over and over again, this problem with principal agent problem where the bank securing people's money cares a lot less about what happens to that money than the people themselves. Well, now suddenly you've given people a tool where they can control their own money and they're going to care the most about the security of their money and what happens

• 7:21Speaker 02

  with their money and make sure that it's it's safe. And that's now something that people can do for the first time in human history. And we at CASA think this is a huge change in terms of how humanity as a whole will work over the next few decades.

• 7:38Anthony Pompliano?

  How much of this change is bringing power back to people and kind of like restoring self sovereignty? And that is like the big, you know, maybe value proposition. That's the big change in the world versus it is more like taking power or taking some sort of advantage from the legacy system and incumbent, you know, organizations, et cetera. Like, is this a positive story of like you're giving sovereignty to people? Is it a subtractive, you know, story where you're taking something or is it actually like both? And there is kind of a zero sum nature to, there's only one place that can custody an asset, you know, without there being, you know, kind of everyone can win.

• 8:19Speaker 02

  Yeah. Well, I think that for CASA, we really view it as a as a positive story. We're putting power back into individuals' hands and putting control over what matters most to people into their own hands in a way that's safe and that feels approachable to people, doesn't feel scary. We think that's a naturally positive story. Does that mean that custody of an asset maybe comes out of a bank? Or out of some of those legacy systems? Yes. But if you look at the, the story of banking, there are repeated booms and busts and problems where these banks have to manage

• 8:58Speaker 02

  an immense amount of risk from storing and using and lending and borrowing with people's money. And so when you think about what that future could look like, I think it's actually a better future for the banks too, because they can focus on providing more specific services rather than having to think about how do I custody such a large amount of money? Or rather than having to take on that risk and to have all of these rules and regulations about how they manage that risk and to, to really mitigate that principal agent problem. And now a bank can focus on a much simpler type of offering that is really built around people coming to them when they need a financial service

• 9:41Speaker 02

  or a specific service around their money besides just securing it. And so now you've got this choice where today, in the traditional legacy banking system, people are forced to opt into the fact that their money is being lent out to other people in the economy and they're getting paid essentially nothing for it. Now you shift that to a model where people can choose that if they want. They can choose to put their money with a bank, have the bank lend it out and ideally to get paid a real interest return on that. Or they can choose self custody where they're the ones securing their assets. They know nobody's messing around with it. And yeah, maybe they're not getting paid on those assets, but for a portion of their, their savings, that's very worth it to them.

• 10:26Speaker 02

  And so I see it as a positive story. Actually, it is a zero sum game to some extent around the pure custody of the asset. But it's a positive story for both sides, giving more freedom to people, reducing risk for banks.

• 10:41Anthony Pompliano?

  Now, what are some of the craziest stories that you've heard of people trying to custody Bitcoin? Right? You, you obviously start the business because you want to solve this problem. But you've been around for a while, like you gotta have one or two insane stories of people either failing at this or doing ridiculous things to try to secure their Bitcoin.

• 10:59Speaker 02

  I mean, there's, so there's a store, we've been around for six years now. We're one of the largest secures of Bitcoin in the world. And there are stories from people not using Casa and stories from people using Casa. And they, the endings tend to be a little bit different. You've seen all of the stories of people not using Casa to secure their Bitcoin over the last decade, where people are hunting through, you know, landfills for hard drives and all that crazy shit. But there's, even we have helped people onboard to Casa coming off of paper wallets from very old Bitcoin wallets where they had, they created this paper wallet in 2012 and haven't touched it since.

• 11:41Speaker 02

  And they're actually kind of worried like, is this Bitcoin still there? When we dig into this, or am I going to find my 100 Bitcoin that I bought all the way back in 2014? Or something like that? And we've helped people move from those very kind of scary situations into a much safer situation with Casa where they've, they've got peace of mind of like, I know my assets are here. But we've also had some pretty wild stories at Casa because we deal with a lot of larger holders of Bitcoin because of the way that Casa is built. It's incredibly secure for really any amount of Bitcoin, but especially larger amounts.

• 12:23Speaker 02

  And, you know, one story that pops to mind is one time we had a, a client who was in South America actually get rugged and somebody tried to steal his Bitcoin. They got in, they, they got him to open up his Coinbase account, go into Coinbase and like send some Bitcoin out. But he was also a Casa user and the majority of his Bitcoin was sitting in Casa. And he, none, none. Of that Bitcoin was actually able to be stolen because of the security model that Casa has. And so we got called the next day immediately by our client, wondering, what do I do with this? How do I make sure that I'm safe? And we kind of talked him through some general security and cybersecurity stuff.

• 13:07Speaker 02

  But the moral of the story was if he'd been keeping all of it on Coinbase, he would have been screwed. Like they would have accessed that and moved the funds out right then and there. And because he had Casa and self custody and the security model of a Casa vault, he was able to be protected against that. And so that's something that.

• 13:27Anthony Pompliano?

  So that's an individual who got drugged. They try to access their Coinbase account. What is the security mechanism like? What are you guys doing at Casa that prevented in that specific scenario? Somebody being able to take his Bitcoin out of Casa.

• 13:42Speaker 02

  Yeah, so if you, if you think about self custody or, or even securing it on Coinbase, you know, Coinbase is a single point of failure. When you're self custody, most people, maybe they're using a single hardware wallet or they're keeping assets on Bitcoin in a mobile wallet on their phone. And that's also a single point of failure. So if you've got that at home with you, or if you got your phone in your pocket, like all somebody needs is access to that one key to move the assets. So the way that Casa works is we've, we're removing single points of failure. That's Casa's whole philosophy, resilience and removing those single points of failure everywhere we can. And so with Casa, instead of just having one key protecting your assets,

• 14:26Speaker 02

  you've got multiple keys protecting one pool of assets. And you need a subset of those keys to actually move funds. So an example of this would be at our three key vault level, you've got three keys protecting your funds. One key is on your phone, one key is on a hardware wallet and one key is held by Casa. You need any two of those three to actually move the assets out of the vault, which means you, most of the time, you're going to move assets using your phone and your hardware wallet. It's the same thing you do with your normal hardware wallet today, except for you've got this extra layer of checks and resilience against it. But if you ever lose that hardware wallet, you can always fall back to that key that's held by Casa

• 15:09Speaker 02

  and access the funds with a key that's on your phone and a key that's held by Casa. And so this lets you, gives you room for making mistakes, lets you be a human. And in a theft scenario, it lets you keep that hardware wallet somewhere else so that in case somebody is, you know, comes into your home or they're, you get drugged or whatever it is, they don't easily have access to that hardware wallet. But you still have the ability to manage funds, have that resilience, all from the Casa app on your phone. And so we found that it's a very good trade off for people, especially when you're securing larger amounts of money because it just protects you against both mistakes and theft.

• 15:52Anthony Pompliano?

  And that's a three key version. Do you have other like tiers of security?

• 15:57Speaker 02

  Yeah, so our, our higher tiers, we've got one higher tier of security, which is a five key vault. And this is really for large holders of Bitcoin who are securing, you know, meaningful amounts that they need a significant amount of security and resilience for. And so with that five key vault, it's, it's a three of five, which means you have five total keys protecting the assets. You need any three of them to come together and approve a transaction in order to move funds. So this is something, you know, people don't typically have five keys and one of these keys is held by Casa, but they don't even typically have four, right? And so when people sign up for this plan, we actually send you a really nice box that has everything you need to get set up.

• 16:42Speaker 02

  Our team gets on the phone with you, walks you through setup, make sure you've done everything right so that you can feel comfortable with your, your self custody setup.

• 16:51Anthony Pompliano?

  And when you say that this is for larger amounts of Bitcoin, like what are the differences maybe that, you know, somebody would pick three keys versus five keys? Is there like a threshold, a number of Bitcoin or a dollar amount?

• 17:03Speaker 02

  I would say a lot of it comes down to personal preference and just how comfortable you feel generally when people start securing in the hundreds of thousands of dollars worth of Bitcoin, we start saying, hey, take a look at the five key vault and see if this is something that you want to use in order to give yourself a little more room for for error, because basically the one of the main differences is in the three key vault, you can lose one key and still be okay and not not lose access to your Bitcoin. In the five key vault, you can lose two keys and not lose access to your Bitcoin. And so what that really means is in order to lose your Bitcoin, you need to lose three keys at the same time with that five key vault, which is just incredibly difficult.

• 17:47Speaker 02

  We've never had somebody do that before, because you got to make a lot of mistakes in order to to lose that much stuff all at once.

• 17:56Anthony Pompliano?

  Now, one of the questions I always get from folks is, you know, hey, if I have stocks and something happens to me, if I die or I get incapacitated, there's a pretty well-known understanding, the legal system, etc., of how to deal with my assets with, you know, a spouse or a Mexican or whatever. Bitcoin still falls under a lot of that. So if you have a will or kind of the legal constructs, but actually accessing it may be difficult. And so if you're having your assets sit in a place that other people don't know how to access, it's kind of like, who cares what the law is, like, in practice, they can't actually get to it. And so I know you guys have thought a lot about like inheritance and this stuff. And so maybe help us understand, like, how do you think about the problem? And then what are you guys doing to try to solve it?

• 18:40Speaker 02

  Yeah. So it one of the benefits of the legacy financial system and somebody else holding your assets for you is that in case something happens to you, they can make sure that the assets go to the right person, right? But then, when you're doing that, as we've already talked about, you missed out on this entire aspect of Bitcoin that is really critical to what Bitcoin has brought to the world. And so you want to be self-custoding your Bitcoin, but now suddenly you got to think, well, if I die, how do I make sure that my family can access this easily? And that's something that we've heard over and over again as a problem from our customers

• 19:19Speaker 02

  over the years because there's people who even, you know, invested a smaller amount of money in Bitcoin six years ago when Casa first started, where it's now a really meaningful amount of Bitcoin that they really want to make sure their family can access in case anything happens to them. The, I think we, we were pulling some stats around overall inheritance and it was something like the average inheritance in the US is like $80,000 or something like that. That's one Bitcoin. And so suddenly anybody that has invested early enough in Bitcoin to have one Bitcoin is already basically at the average inheritance for assets in the US, not including any of their other assets. And so how, how did

• 20:02Speaker 02

  we approach making sure that you could hold your own keys securely while you're alive, but your family can access it after you pass away? Is we actually lean on this multi-key model that we've already built around for security. And you can make sure that your family can access enough keys to securely receive the assets if you pass away. And the Casa software really helps them through that process. So one of the things that we've heard from talking to people in the community and in our customers is my, I, I've been using a hardware wallet for eight years or whatever, you know, I've figured out how

• 20:42Speaker 02

  to do all this stuff. My wife or my husband has no idea how this stuff works and he or she is just kind of along for the ride. And they would feel really uncomfortable having to use a hardware wallet in case I passed away. And so how can I make sure that they have access to this in a way that when they're already in a stressful situation, they really feel comfortable that they're going to get access to this Bitcoin? And, and that's something that we built for really nicely. So. The way that CASA's basic inheritance setup works is you invite your spouse or whoever's going to be your recipient to set up a CASA account.

• 21:23Speaker 02

  All they got to do is scan an encrypted QR code that contains the private key to the mobile key on your phone that shares it with their phone. And then if you ever pass away, they go in, tap a button in the CASA app that requests access to that vault, and that starts a six-month timer. And at the end of that six months, the CASA app unlocks the ability for them to use that mobile phone, and it unlocks the ability for them to request that key from CASA. So that gives them two out of the three keys in order to access the funds, and they never need to worry about using that hardware wallet. And so it's something that I think our customers are really happy. We launched it last week.

• 22:07Speaker 02

  Our customers are really happy with, and we're seeing a bunch of people setting this up over the last week. And it's something that, as we think about overall, how do we just improve the usability of self-custody? Make it simpler, make it safer for people? This was a big hurdle, and now we've crossed that hurdle in a way that feels really great for people.

• 22:28Anthony Pompliano?

  Now, there's a lot of folks that I am guessing say, hey, this is great, but if I give somebody else access, is that six-month, I'll call it almost like a burn time, so that the people who have the QR code, etc., they're actually not able to do something while I'm alive, right? Like I have a chance to intervene in that six-month period and say, hey, hold on a second, that person I thought I trusted, or, you know, my ex-wife or ex-husband, maybe I actually don't want them to have access to this?

• 22:54Speaker 02

  Yeah, yeah, that's exactly what it's for, because you want some time. The estate proceedings typically take time anyway. And so this gives you some time to react, say, I'm not dead, in case you actually, something, you know, hasn't happened to you. And then you can reject that request within that six-month period. Typically, people are, whoever they're using as their recipient is somebody that they trust, but you also have the ability at any time to revoke their access to this in case you were to get a divorce or whatever happened there. And so it's something where that just gives you some extra security buffer time for making

• 23:37Speaker 02

  sure that somebody can't access your assets without your knowledge.

• 23:41Anthony Pompliano?

  Got it. Now ETFs have recently been approved and I could easily see people saying, hey, you know, I don't want to mess around with all this custody stuff. BlackRock, I see Larry Fink go on TV. He sounds like he knows what he's talking about. I'm just going to give my money to BlackRock and have them hold my Bitcoin. Maybe describe a little bit as to what the differences are between CASA and ETF custody.

• 24:01Speaker 02

  So when you think about an ETF, what are, it's very similar to a custodian. They actually, almost all of them, use Coinbase as the custodian in the background for the Bitcoin. And we've already talked about some of the risks of using a custodian. You know, we've seen the risks play out over the last couple of years when there was a bunch of custodians in 2022 that completely blew up and people are still trying to get access to their money. So that's something that you really have to consider is that custodial risk. But a thing that has been very interesting for us with the advent of the ETFs is it's actually bringing more people to self custody in a way that we hadn't expected.

• 24:46Speaker 02

  So the ETF is kind of putting Bitcoin on the mind for people and people are ready to make an investment. But then they're thinking one level deeper about what does it mean to have an investment in Bitcoin? And why am I investing in Bitcoin? And for the people who are investing in Bitcoin, because they really view it as a long term hedge against the traditional financial system, against the US dollar inflation, whatever it is. They're thinking, I'm going to be holding this thing for potentially decades as this hedge, right? For a percentage of my portfolio. If I'm going to be holding it for decades, what are the chances that the custodians for these things are not going to have a problem over those decades?

• 25:28Speaker 02

  It's certainly larger than what the chances that they have a problem in the next year or so, right? And so in that situation, maybe I need to be holding the keys myself. So I know I'm the only one that has control over this asset. And when you think about the, so that, that's been very interesting because the reason for why you're investing in Bitcoin and why people are coming to it has been popping up more for people lately with the ETFs. And self custody ends up being the answer for that.

• 25:58Anthony Pompliano?

  Now, as this is occurring, we're talking a lot about individuals. Institutions have different use cases. And so does CASA eventually want to kind of work upstream and be able to service the institutions as well? Or is this something where you guys are hyper focused on the individuals and you think that is like the really big opportunity for the business?

• 26:17Speaker 02

  We actually do help institutions today. Like that, one of the, what I was just talking through around the ETFs versus self custody. A lot of that thinking is things we've been seeing from institutional investors who are taking these really long time scale investment type of bets. And so these tend to be, you know, family offices and maybe there's like an individual family or a person who is behind this entity. But it's, so it's not like a public company, for example, but it's like an investment office for an individual's family or family's wealth. This is the type of client that fits right, right in the bullseye with who we serve today.

• 27:00Speaker 02

  And so the, we're seeing it across the spectrum from both individuals and from these institutional types of clients. And, and it's, it's very interesting from a business perspective, just to make sure that, that we're serving each one in a way that fits what they need from us. And it's been really great over the last couple of years to see that growth.

• 27:23Anthony Pompliano?

  What's been the most surprising part kind of building this business? Obviously, you know, whenever somebody signs up to build a business, I always joke like they've got to be naive in some degree because they, in hindsight, may not have actually started it if once they get into it, they realize how hard it is. But are there things around custody specifically, or the way the market has kind of developed that are still surprising to you?

• 27:43Speaker 02

  I think the, maybe not around custody specifically. You know, we really went in very convicted about self custody and private keys and what those can do for people. The thing that continues to surprise me but shouldn't is just how much the Bitcoin market as a whole weighs into how much people are thinking about Bitcoin and what that means for how you manage your business. You know, we saw like over the last couple of years, businesses blow up because they didn't properly manage their risk for a downturn in the market and a significant downturn in the market. And we've always taken an approach of wanting to make sure that we're properly managing for growth through different

• 28:24Speaker 02

  market cycles. But that doesn't mean that it's not hard to manage through those cycles because you go through periods in the bear market where nobody wants to think about Bitcoin and nobody cares. And then you go through periods in the bull market where everybody's thinking about Bitcoin. Everybody wants your product and you have to figure out how to get people in the door properly without being a bottleneck and then make sure that they're staying through those bear markets. And so that's, that's, I think, is one of the challenges for, for building a business in Bitcoin is just navigating those market cycles. And it continues to surprise me, even though it shouldn't, how strong of a factor that plays into how you need to be managing the business at different times throughout a decade.

• 29:10Anthony Pompliano?

  And then talk about the team a little bit, right? You know, people hear that you're building a custody solution. They immediately assume like, well, you guys got to be pretty talented when it comes to cybersecurity or some of these other, you know, more technical types of roles, you know, that are needed. So where's the team from? And how do you guys think about what is the skill set needed to build a successful company here?

• 29:30Speaker 02

  So the team is from a range of different backgrounds. I think one of the most important things that people look to with CASA is my co-founder, Jamison. So Jamison Lopp is a really well-known Bitcoin security expert. A lot of people follow him and read what he writes and he's been doing this for a long time since like, I think, 2016, he's been working in the industry, whether at BitGo or at CASA. And so he has a ton of experience both in cybersecurity and in custody and Bitcoin security. And so that is a huge advantage for CASA. And that's something that, you know, when we were thinking about

• 30:12Speaker 02

  what the team looked like and how we made sure that we had the right types of expertise, Jamison was a huge piece of that. But There throughout the rest of the company, there are incredibly talented engineers from all sorts of different parts of the, you know, different, the world and different industries and all of that, who just come to Casa because they are interested in working on a hard problem around Bitcoin self custody and believe in the mission. And then we've got the same types of people who are on our client service team, getting on calls every day with our clients to walk them through using the ledger if they need help with that, or to do whatever things they are thinking about,

• 30:55Speaker 02

  to help them through whatever they're thinking about with their, their custody, security, their general cybersecurity. There's a lot of considerations to, to think through today in, in Bitcoin and our team is really great at helping people through that. And so we try to hire people. One of, one of the biggest things that we look for in people is can you take complex concepts and make them simple? Because that's what we have to do every day at Casa, because we're really taking some very complex ideas around private keys and around self custody, which are new to humanity as a whole. And we're trying to make those simple and help people understand why it's so important.

• 31:38Speaker 02

  So that's what we look for. And that's, that's where I think we've really had a lot of success as a company over the last six years.

• 31:46Anthony Pompliano?

  Now, as we look forward, how do you see the custody environment kind of developing? And are the other things maybe on your product roadmap or otherwise that you guys were either excited about? You think is essential to kind of continuing to empower these people or anything else that's noteworthy?

• 32:02Speaker 02

  Yeah. So one of the big things that we think about is how do we apply private keys to more than just your Bitcoin? More than just your money. Private keys as a whole are something that is incredibly valuable as a technology for securing any type of data. So how do we help people have a more sovereign, more free life where they've got more control over all the things that matter most to them? And that could be their money in the form of their Bitcoin, but it could also be. Really important files or their identity online or their passwords. You know, you're seeing, we've seen a lot of development over the last couple of years around

• 32:41Speaker 02

  pass keys where Apple and Google have integrated private keys in the, with the name pass keys into their overall authentication ecosystems. And it completely gets rid of the need for having a password. And passwords are one of the biggest cybersecurity weaknesses over the last, you know, 20 years, because people really suck at making passwords. And it turns out private keys are a great authentication mechanism. And if you can build an easy way to use them, then you can really get, get rid of passwords completely and make people's online accounts much more secure. And so pass keys is something we're really looking into right now. It's like, how can we use this to make Bitcoin security easier?

• 33:24Speaker 02

  But also, how can we use this to make security around everything else that matters in your life easier? Private keys as a whole are a game changer technology and CASA is all about helping people utilize that technology to make their lives better. So that's what we're thinking about over a short, medium and long-term time horizon.

• 33:44Anthony Pompliano?

  Now, what are the risks to people using the CASA product or some of these kind of self custody products? Like, obviously, losing keys is one, but I think a lot of folks also just say like, hey, I'm not technical. I don't know what to even think about as a potential risk. Like, how do you all think about, as an entrepreneur, you know, your job is to kill risk, right? And kind of mitigate it both for your customers and also for your business. And so like, what are the things that you're like, hey, we gotta get this right? Or we gotta really make sure that we prevent these from potentially, you know, hurting our business or our product?

• 34:16Speaker 02

  First and foremost, you gotta be reducing risk around losing keys, like you said. And you're thinking about loss and theft of keys, because that's what people are coming to us for, is they're coming to us to make sure that they can manage their private keys and store their Bitcoin securely and not have to be afraid about, about losing it due to a mistake. But then you got to start thinking about, okay, what are the different ways that that might happen? What are the different ways people can lose keys? Yes, you can just lose a hardware wallet, or it can break, or whatever, it can get stolen. But there's also keys on your phone, access to your accounts that maybe secure those keys.

• 34:55Speaker 02

  And so there's things like your ability to secure your online identity. One of the things we do for our clients is we actually get on to video calls with them before they, before we sign a transaction with the Casa key. We make sure that they're actually requesting access to this key and we have a security procedure that we go through. Well, suddenly you've got AI deepfakes improving significantly over the last few years. And so we have to be thinking about, okay, how are we going to protect against AI deepfakes in live video when we're doing some of these video verification checks? And so there's different methods, both kind of crazy things like making people like pat their foreheads

• 35:39Speaker 02

  or like spin around and show the camera around the room or whatever that helped to defeat an AI today. But there's also things like using private keys, whether it's an OTP code, just like a 2FA code, or something like that to authenticate that somebody is who they say they are. And it's not like a hacker with an AI deepfake. And then there's really simple stuff like just make sure your Apple ID is properly locked down. Make sure that you've got advanced data protection turned on for your Apple ID so that somebody can't hack that Apple ID. We've seen a kind of a string of, particularly for target individuals lately, getting their Apple IDs hacked.

• 36:21Speaker 02

  And that is often like the doorway to so many accounts for people. And so you really want to make sure that that door is locked well. And it's very hard to get an Apple ID back if you get it hacked from you because Apple does not transfer those things easily. It's similar, kind of like a SIM swap, right? And so We start to build these concentric circles of cybersecurity around how we help our clients and advise our clients to secure themselves because once you take on that responsibility of securing your own keys and of controlling your Bitcoin yourself, you do want to start thinking about what are the other cybersecurity weak points in my life and how can I start

• 37:05Speaker 02

  reducing that risk, as you said, in a measured, ongoing basis?

• 37:11Anthony Pompliano?

  And then the last thing is Bitcoin's price and its relationship to custody. Obviously, as Bitcoin's price goes up, the asset is more valuable and so people probably feel psychologically like, hey, I have to be even more serious about protecting the economic value that's here. Are there any other correlations or maybe even causations between price and custody that you guys have seen in terms of customer trends or things you think about within the business?

• 37:36Speaker 02

  One, I mean, hands down, the biggest thing is I'm suddenly securing double or triple the value that I was four months ago. I need to do something about making sure that this is secure for both me and my family in case I pass away. That's by far the biggest correlation to the market that we see in our business. I would say, you know, there's, everything else is kind of noise. There's different minor trends that we see. Some people will, tend to want to do more with their Bitcoin, whether they're wanting to like borrow against it or something like that as it goes up in value. But overall, it's just, I'm suddenly

• 38:19Speaker 02

  securing a lot more value than I was before. I want to make sure that that's really secure.

• 38:25Anthony Pompliano?

  Yeah, that's, I do think a lot about individual customers of all asset classes, right? But definitely, I think because of the volatility in Bitcoin.

• 38:38Anthony Pompliano?

  There's people who probably think of like their cost basis or like dollars in, in some cases is small, whether it is, you know, very early in Bitcoin or they put a little bit in. But if it doubles or triples or quadruples, you may be ill-prepared to think about certain aspects of that. Custody being one, but you can imagine things like, you know, inheritance, but also I've even seen the security, not necessarily custody security, but if you, you know, I don't know, put $25,000 into Bitcoin years and years ago, and now all of a sudden you're sitting on a million bucks just because the price went up and maybe even forgot about your Bitcoin or something.

• 39:13Speaker 02

  Right.

• 39:13Anthony Pompliano?

  There's people who are like, hey, you know what? I can't tell anyone. And I've told the story before on the podcast, but there's a gentleman, I'm going to use almost no detail so no one can figure out who he is, but he, he reached out to me on Twitter in 2020 and Bitcoin had started to go up into the end of the year. And he was in his car and he pulled into his driveway and like into his garage. And he was talking to me and he didn't get out of the car and we're on, you know, we're like talking on Zoom or whatever.

• 39:40Speaker 02

  Yeah.

• 39:40Anthony Pompliano?

  And all of a sudden I realized his wife and kids were outside of the car. And he was having a conversation so that they couldn't hear him.

• 39:48Speaker 02

  Yeah.

• 39:49Anthony Pompliano?

  And he was telling me that I think he had, if I remember correctly, like $4 million or something in Bitcoin.

• 39:54Speaker 02

  Yeah.

• 39:54Anthony Pompliano?

  And he was working in a manual labor job, kind of very physical intensive. He was commuting a lot, all this stuff. And he had not told a single person in his life because he was one, afraid of how they would look at him differently.

• 40:08Speaker 02

  Yeah.

• 40:08Anthony Pompliano?

  Two, he was afraid that everyone would kind of show up with their hands out like, okay, well, give me some. And then three, I think he kind of didn't want the pressure of, oh, if everyone knows, then like, I gotta think about security and I gotta think about, you know, custody and like all these different components. And so I remember thinking like, you know, imagine if you're going to like a construction site and you're like a multimillionaire and you're working with people who are living, you know, kind of paycheck to paycheck and just like the psychological, you know, weight that that carries.

• 40:33Speaker 02

  Yeah.

• 40:34Anthony Pompliano?

  And some people probably make good decisions and some people don't, right? And so something like CASA feels like, almost like a peace of mind that people can use that allows them to say, okay, hey, look, there's a lot of stuff I gotta decide right now, but custody at least is something where I can go and try to find professionals to be able to help me to do it.

• 40:51Speaker 02

  Yeah. And that's something that we, we've heard that, that or similar stories to that where people have told nobody in their life that they own Bitcoin or let alone how much Bitcoin they own. And our client advisors at Casa play many roles, you know, security advisor.

• 41:13Speaker 02

  The one that people don't really think about that they play for some people is Bitcoin therapist. Just some of our clients just don't have anybody to talk to about Bitcoin and they want to get on the phone and talk to our advisors about Bitcoin for a little bit. And I think that that's something that's a valuable service that Casa plays for people, but it's not something you would maybe think about. Because you're thinking about the security, you're thinking about making sure that I've got all, all my ducks in a row for my family in case anything happens to me. But we're also just a bunch of people that love Bitcoin and are happy to talk about that. And so we can be that outlet for people too.

• 41:52Anthony Pompliano?

  I love it. It's, uh, it's pretty cool that, uh, you hold Bitcoin, you like Bitcoin, you get to work on Bitcoin, right? You get to help other Bitcoiners. All that stuff is, uh, is perfect. Where can we send people to find, uh, you on the internet? And if they want to, uh, look at more, you know, kind of product details or potentially buy the product, where can we send them on that front as well?

• 42:10Speaker 02

  So our website's casa.io and then on Twitter, you can follow me at N Newman. That's N N E U M A N.

• 42:19Anthony Pompliano?

  Awesome. Well, Nick, thank you so much for doing this.

• 42:21Speaker 02

  Thank you.

• 42:22Anthony Pompliano?

  That Casa has, uh, is really over the last six years, become one of the preeminent custody providers. And a lot of people I know use the product and seem, uh, very, very impressed with it. And obviously you and Jamison and others at this company have been, uh, great contributors to Bitcoin over the years. So, uh, we'll definitely do this again in the future.

• 42:39Speaker 02

  Thanks, Pop. It's been great to be here.