Do you think that's a fair characterization of why we saw the exploit happening now?

I mean, I think it's cause Mark, uh, Carpels, uh, broke the news last week and I did a podcast with him a couple of days ago.

I think what happened was I think that this group, or it could be multiple groups was making.

these implants for some long period of time.

We know that ledger implants have been discovered over the last year, I believe is my understanding from seeing some of these tweets, right? Some folks have posted about how there's some awareness.

Someone did a talk about one or two of them that they discovered.

So it seems like there was a scattering of these implants that have surfaced over the last year or so.

First and foremost, just from the manufacturing from Ledger's side, was there anything that they could do to prevent this version of an attack? Besides like the whole reseller aspect, but on the physical device, was there anything that they could have done so that this attack was not even possible?

uh i've really looked at the very early versions where you just had a few wires uh connected to the ledger and actually if you look at the board itself it's labeled like this is spi this is uh power and so on so i do think that last year this was still a very basic product And very likely, they already had some proceeds made that gave them the option to improve the product and reach the point it is at right now, which also makes me believe, now that they've got $100 million minus whatever was frozen, what's going to come next?

And if I could just mention that as well, that IoT chip does have its own onboard processor as well.

It can run applications.

And I know as well that Nordic Semi offers the ability to license through them to use a proprietary SIM instead of eSIM.

but you'd have to be a company working through them, which maybe is possible for this kind of group to do.

I personally think, I'm curious if Mark agrees, that you could basically get this implant to be just that chip implant and on the board.

And if you did that, I mean, it's so compact.

Tell us about that.

the need for transparency, why Ledger has, um, accompl- you know, subsumed so much of the market to date anyway?

Yeah, this is, uh, an interesting one.

I'd say first on the transparency side, Bitcoin has this unique property wh- where it's irreversible.

And so I think most of the traditional financial industry, you know, if something goes wrong, you got FDIC insurance, you can reverse transfers.

None of us really care about the security architecture behind our bank accounts or our brokerage accounts, unless you have, you know, huge amounts of money that exceed, you know, those, those limits, because there's FDIC insurance.

And now all these, you know, neobanks are mashing together these FDIC insurance policies and saying you get covered for tens of millions of dollars i- in, in one account.

Well, feels like one account.

... human authority hardware device would allow people to, to do on the beneficial side.

And then Drew.

Yeah, I mean, you guys had a great back and forth.

See it in Tomas.

Yeah.

I want to zoom us out maybe a little and then we could zoom back in because that was like very zoomed in to this dice roll entropy issue, which is valid.

But I would zoom us out and say each decision that we make affects how many people are able to self-custody on cold storage hardware.

Right.

Journey, where's your head at, pal?

A very high level overview before perhaps we get into some of the specifics.

sure and i'll try to keep it brief so that you can ask me questions you know because i don't know how to in the weeds right we want to get here but essentially uh cold card right is a is a popular bitcoin only hardware wallet made by a company called coin kite um that's mdk or rodolfo novak's company you know he's a pretty huge um name in the in the bitcoin space and On Thursday afternoon, reports started to come out that funds were being stolen.

It seemed like from folks with cold card devices.

And so you can imagine the entire industry scrambled to figure out what was happening, what was going on.

And the root cause that was first disclosed, I think, probably blocked the best job getting on top of this and disclosing it fast and writing up a report.

So many of us were kind of figuring out in real time.

Obviously checking that for all the other hardware wallet companies, checking that our customers were also not affected.

Do you think these frontier models that we've seen come out in recent months might have been the key that has allowed some attackers to figure out this exploitable attack vector and go through it and then obviously now go through the process of generating seeds and then running them through all these addresses to see if they can steal this Bitcoin basically? My quick answer is

I don't know if we would've even yet shipped our current, you know, Passport Prime product, which started shipping back in the end of March.

March.And so there's this tension of, well, are we developing the happy path? Are we building out more advanced features? And we're trying to constantly balance that, 'cause our goal is that we wanna have the ability for new users to come in and get set up really fast in a secure, opinionated way, and that, that opinionated way is our opinion.

It's how I and the team think, uh, a new user that's, you know, pretty new to Bitcoin should come in and get set up and backed up so that they're not gonna make any mistakes, right? So they're not gonna hurt themselves, they're not gonna lose their backup, they're not gonna screw up their seed word generation, anything like that.

But I do think Bitcoin companies should be supporting, like, the advanced path as well, and that includes, like, as open source as possible, transparency, reproducible builds so that advanced users can verify what firmware is actually running on the device, a way when you boot up the device to check the hashes of the firmware, so you, like, you have, you know, guarantees about what it's doing and, and other advanced features like that.

And our approach is to do both of those, and they're always in tension.

Always in tension.

What I've seen from other companies in the space is to just to pick one, right? So Coldcard is a great example of picking the path of going for every advanced feature under the sun, but not having, like, a happy path, an easy path for new Bitcoiners to onboard, and therefore requiring lots of tutorials and learning and all this stuff.

Th- this will ask something from the companies that are providing, uh, in this space.

I, I, I don't know what you think.

Yeah.

Yeah, there's, there's, uh, there's some complexity and irony here.

Um, so we announced the company in mid-2020, and I think I did it on, uh, I know I did a blog post, but I know I also, uh, went live or, or joined at the time Marty on, uh, TFTC, and I talked about what we were doing.

So from like the day one that we announced, um, Passport, uh, we explained that we were building on, on CoinKite code, on open source, um, code, as well as on Trezor code, 'cause many folks forget that CoinKite Had built on Trezor code as well, and the Trezor code was licensed under a license called GPL, which is a copyleft license, meaning that effectively if you have GPL code in your code base, then you have to open source all of your code as well.

So that's what they mean by copyleft.

It's like, um, it's like a viral license, you know.

What are you doing at Foundation to kind of, uh, you know, protect yourself from that, so to speak?

verify

mantra that I think we all in Bitcoin believe in.

But I do want to point out, I've seen so much talk about, okay, now we all need to be doing dice rolls and going through all these great lengths to do this stuff.

And I don't disagree necessarily with everything.

But I would say that from my perspective, that this was more of an example of a single company that, you know, I would say maybe the term would be negligence from a single company, a single vendor in the space.

And I don't think that you reflect badly on all of the other wallet vendors who have real teams and real processes and who make great products and who have agonized every single day to make great secure tools for everyone in Bitcoin.

And I have, I think very highly of almost all of the companies in this space.

And

And as we go forward, it's going to become more and more pressing.

Yeah, I would love to add to that if I can, just from the perspective of obviously a company that has access to the GPT cyber model, and we're actually allowed to use those models to analyze our own code base.

But the model also let us last night analyze the cold card code base, we had to KYC for that.

Like myself as CEO and my CTO, Ken, like we had to up, we had to upload our driver's licenses and stuff.

So fucked up.

And yeah, it's really brutal because there's a very small number of people then that have access to those models and Fable of course is even worse.

And Fable is notorious for just cutting access in refusing to do these things.

So the library is open source, but the firmware around it on the cold card is not.

or something.

I'm going to wake up to be as energetic as Zach Dunn.

But anyway, no, I had been thinking in the back of my mind, like even joking about running in this district for a while.

We've lived here since 2013.

And Angie Gin Button is my incumbent.

She wins every election.

We got within 200 votes of winning or flipping the seat in 2018 before the gerrymander happened in 2020.

So I think we just have to normalize it by just doing it.

And do you see AI as a helper in this, or it could be potentially worse?

It's funny, 'cause I was gonna just bring that up.

So you ...

We, we just had a moment where you read my mind.

So obviously at Foundation we make, we make, uh, hardware, right? We make security hardware.

And we've seen already with AI in just the last few months how challenging and tumultuous the security world, the, the, you know, information security world, cybersecurity world is gonna be over the coming years.

I mean, we've had back in, in March ever...

Also can be used for do some serious damage.

Mm-hmm

... is, like, you know, how much are things like cancer connected to, like, your circadian environment? And if you, if you maintain, if you live 24/7 in an environment where you, you, your body doesn't know what time of day it is, right? Like, so many potential chronic or long-term health issues from that.

Uh, and then I, I suspect, too, I suspect a lot of the, uh, there's a lot of, uh, a lot of people have gut issues.

You know, there are a lot of, like, kind of, you know, IBS, colon cancer, all this kind of stuff-How, I mean, I know, I think a lot of it is food related.

Uh, you know, and, and also, you know, just so many different prescription medications and, and everything like that and, and all the chemicals and all the crap that everyone's eating, and seed oils and stuff.

But I also wonder how much of it is water related too, because I, I don't think it was this bad in the water like 30 years ago, you know, 20 years ago.

I think things have gotten worse, especially with like this PFAS, you know, which are these forever chemicals and microplastics and all this stuff.

Okay

What is changing with the threat model?

Well, I don't wanna, like, scare people.

I don't-- Like, it's not our style, and, like, we're, we're using all these tools at Foundation and as individuals.

Like, we're using all these AI tools.

But I think it's gonna be Whac-A-Mole, tumultuous couple years.

And by Whac-A-Mole, I mean that there's gonna be new vulnerabilities and zero-days every few weeks, and then they're gonna be patched, and then there's gonna be new ones, and then they're gonna be patched.

And it's gonna be hard for the existing software and especially operating systems to keep up with this.

... possible there.

Like how do you even rebuild that?

Yeah, so I think, um...

Well, firstly, we started to do it without realizing, which is, uh, pretty intr- Uh, like, so with our, with our new device, Passport Prime, which is like our, our third generation, you know, we don't even call it a hardware wallet.

We're actually not sure still what to call it.

Like we've used different terms like, um, personal security platform, a personal security device.

Uh, so we're still, I think, working on like how to properly define it, but we, we kicked this off in, uh, in 2022.

We kicked this project off at the end of 2022.

Rust is so hot in Bitcoin.