Founder's Story - Why Your Passwords, Banks, and Bitcoin Could All Be Gone Overnight | Ep. 258 with Eric Dresdale Founder of Entrokey Labs

Episode Date: August 18, 2025

We start with a maze analogy that makes quantum tangible, then move into the arms-race reality: nation-states are funding quantum as a weapon, timelines are sliding from the 2030s toward the late 2020s, and boards waiting for regulation risk being caught flat-footed. Eric explains why EntroKey Labs is betting on software-only entropy generation and keying—a configuration-level upgrade designed to raise security today while preparing systems for Q-Day. Key Discussion Points:Eric traces the invention arc from a space-based patent idea to a terrestrial prototype and finally to a pure software method once the team focused on the real bottleneck: generating provable, high-quality entropy at scale. He contrasts hardware’s noise and supply-chain risks with a lightweight generator that scores and strips hidden patterns before keys are minted, framing quantum as the sledgehammer and AI as the scalpel already probing our defenses. We walk through how preparedness likely rolls out—government and defense first, then regulated industries—and why companies should begin with a cryptographic inventory and foundation upgrades rather than decade-long rip-and-replace plans. Takeaways:Quantum threatens today’s public-key cryptography sooner than most roadmaps admit, and AI is already exposing predictable patterns. The lever leaders control now is entropy quality. By treating this like Y2K without a date—auditing libraries, improving randomness, and adopting software-only upgrades—organizations can strengthen their posture quickly while staying compatible with current stacks. Closing Thoughts:This episode turns fear into a plan. If leaders modernize the base layer now, the trust stack can hold when Q-Day arrives. EntroKey’s wager is that a measured, software-only upgrade buys the world the time it needs. Get more leads and grow your business. Go to https://www.pipedrive.com/founders and get started with a 30 day free trial. Ditch the other hiring sites, and let ZipRecruiter find what you’re looking for — the needle in the haystack. Try it FOR FREE at this exclusive web address: ZipRecruiter.com/WORK. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Today's episode is sponsored by Pipe Drive, the number one CRM tool for small to medium businesses. I am excited to share more about them later in the episode. So, Eric, I've been really wanted to have you on the show because not only what Entrokey Labs is doing, but the possible threats that we are about to face, I don't think people are ready. I'm not seeing a lot of stuff around quantum computing because I think everyone is just caught talking about generative AI, but we're not really talking about what does it mean with quantum computing? And I know we'll get into that. But first, what does quantum computing, like what is this that we need to know about for the near future? Right.

So first, for the best visual I've ever seen, and I don't know if you've ever seen it as how people solve a maze versus how. quantum computing solves a maze, right? So when a classical computer, we go to solve a maze, we go one path, and then the next path, and then the next path, right, until we find the correct path. Quantum computing will run all different paths simultaneously to get to that answer. So whereas our current encryption has been wonderful today, it would take tens of thousands of years with classical computers that we have today to break our current encryption, quantum computing will we'll be able to do that in minutes, if not seconds. And so all of the encryption we have today that protects this video chat, our email,

our text messaging, every form of communication and data protection we have will get decimated in seconds when quantum computing is fully realized. It's a really scary concept to think that, you know, we say it, we're in an arms race right now. Right now, quantum computing is primarily being funded by nation states. So that means it is a weapon first and foremost. Quantum computing will do many amazing things to our lives in society. But its first application is a weapon. And so that is why you're seeing all the money being spent by nation states. It is a arms race to see who gets a crypto-realized quantum computing ready first, which means they've figured out error correction, they figured out all the things that

are preventing it from going forward, and they have enough qubits to run what's called Shore's algorithm. And that algorithm, Shores algorithm, is what will decimate all of our current encryption. What is Shor's algorithm? I've never heard that before. And does this relate to the fact of being able to figure out like the key to get into your crypto wallet? Or is that like something too small Are they looking more institutional? No, no, no, I don't think it's looking too small on anything. I think, you know, are they going to maybe target my crypto wallet? Maybe not.

Will they target all of Coinbase's crypto wallets or all of Binance's crypto wallets? And that's what we say as it relates to Bitcoin, right? Because there's this constant argument about, well, Sha 256, which is the hashing algorithm that Bitcoin uses. and everyone should be worried about the banks first and foremost, and they're not wrong. But what we say is you don't necessarily need to break the Bitcoin chain to create panic, right? You can break a bunch of wallets and completely drain those. And there's enough that will send the markets into a tailspin. We saw when Google Willow was announced, I think it was two to the power of 25 that they broke through.

Right. Now, what was really interesting was earlier in the year, somebody wrote a blog post and said, oh, our 12 word seat phrases are fine for a long time. Our greatest high performance computing wouldn't be able to break that for a while because it's 2 to the power of 17. Well, Google just did 2 to power of 25. So our 12 word seed phrases are already potentially vulnerable. So when quantum becomes fully realized, everything goes away. And then you brought it up earlier on. When you combine that with AI, it's completely game over, right? And so we talk a lot about quantum, but AI is a huge threat as well, right? David, one of my co-founders, puts it really well. Quantum is a sledgehammer, right? It will just break everything. AI is more insidious.

It's like a scalpel. It'll get in there and pick it apart. I mean, I'm sure AI could figure out a lot of my passwords, right? because I think that you, I guess humans were very predictable. I probably need to start allowing the computer. You know when your computer says suggested password and it makes absolutely no sense and I'll never remember it? Maybe I need to start using that because everything, you know,

I'm sure there's patterns to all the things that I'm doing. So what is Q-Day and how far out in the future are these threats possible? So Q-Day is when they believe they'll have what they're calling a cryptographically realized quantum computer, which means it has enough qubits to run, as I mentioned, Schor's algorithm, which was this algorithm, the scientist, with the last name, Shores, created, right? And this is, when it is run and a fully realized quantum computer, that's what will break encryption. Now, there is, we've made a lot of acceleration on the quantum front.

There's still a while to go. There's still a lot of things that need to be figured out. However, you know, if you asked people three years ago, when the threat of quantum would be, they would have said, I don't know, 2040, 2045, and then it reduced to 2035. And now you're seeing IBM, you're seeing Google, you're seeing IonQ and some other quantum companies saying that they believe they're going to have this by 2029. In some cases, they're even claiming 2027, right? And so the big thing that we're trying to get to people, you said a lot of people aren't, you know, even aware of this, right? The problem is, is even the ones that are aware of it aren't being proactive enough. I won't say reactive.

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multi-trillion dollar global pain and suffering transition to a post-quantum internet. Well, I just said that these quantum companies are now saying 2027, 2029. So, you know, what I think we're going to, what's going to happen is a lot of, you know, oh, no moments and people are going to get caught on their heels because they're not taking it seriously enough is really the scary part. So I know Entry Key Labs, you know, I've read and I've heard some of your interviews talking about the world's first software only quantum resistant key generation. So is that what you see as a solution and what you all are working on? Yeah, I believe it's really, and we say it, and I'll put even bias aside as much as I can, it's the only viable way forward to do this at global scale. You know, we actually, Cambridge University just did a paper, a case study on us.

And it was really interesting that they even put in their paper that software only is really the only solution here. Hardware has so many different issues, right? It's, first of all, it's complicated. You have supply chain issues. There's additional threat vectors. When you bring it down to the core, which is the entropy generation, if you're using hardware there, it's impacted by ambient noise, it's impacted by temperature changes. It's impacted by all of these things.

Doing it as software only allows us, first of all, we don't have any of those vulnerabilities. Secondly, the size of our software is really small. I mean, number one, the generator for creating entropy and quantum resistant keys, it's 160 megabytes. You know, but what we did is we also took it one step further because what people don't realize is the importance of entropy to your cybersecurity stack. Think of it as a house. It is really the foundation of your house.

So you could have the nicest house in the world, but if it's built on sand, it's going to crumble. So just being able to produce. Entropy at scale is one piece. Being able produce provable high quality entropy, such as we do, which is, you know, on IID on what's called the NIST 890 series of tasks, right? That's where they create the standards. You know, most companies in under perfect conditions are doing 0.84 out of one, one being perfect entropy, perfect randomness. Right. We actually are at 0.997 consistently on that. And the other interesting thing is that, you know, we created this really novel calculator,

right? So if you look at how they score entropy on those standards, as I mentioned through NIST, it's a statistical analysis. They use a few vectors. They're looking at the distribution of the ones and zeros, right? But that doesn't tell the whole story. You were talking about it perfectly with creating these randomized passwords, right? Now, you said AI will be able to guess my passwords. Well, guess what? If you don't have good entropy, AI is going to be able to find the patterns in the data that you're inserting in your keys. And so what we've been able to solve is not just great entropy, but we can score that entropy down to a key. We can now with an AI find the hidden patterns and hidden patterns within patterns and remove them before we insert them in

the key. What that leaves you is something that is nearly impossible. to hack because the AI won't be able to find the patterns to exploit them. I hear a lot about entropy, but I have no idea what that means. Can you explain it? Yeah, entropy is just chaos, right? So it's not hard to create randomness, right?

People can move their mouse all over the place and that's randomness, right? But that's not creating chaos, right? So they will, an AI will be able to find the randomness. You know, just like if you continuously shuffle a deck of cards, eventually a pattern forms, whether you realize it or not. And so entropy makes that harder to find the pattern of.

Now, what we do is even in great entropy situations, you still might find patterns. You know what hiring feels like? Like searching for a needle in a haystack. You post a job, get flooded with resumes, but most just don't have the right experience or mindset. That's why I tell every founder I meet, use ZipRecruiter. ZipRecruiter finds amazing candidates fast and right now you can try it for free as zipRecruiter.com slash work. Here's why I love it.

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Try it free at ZipRecruiter.com slash work. One more time, ziprecruiter.com slash work. ZipRecruiter, the smartest way to hire. We're able to find those patterns and the hidden patterns within those patterns and completely remove them. So there is nothing for the ADI to exploit. So it sounds like, It sounds like what you're saying, though, Eric, is that my AI will be able to solve every magician.

You talk about the cards. I've always wanted to be a magician when I was a kid. Now, I could be a magician to solve all those problems. But, no, I mean, I'm, tropes aside, it is, it's almost scary, like you said, nation states. I think we've seen every technological advance. There's, of course, the positives, we already know that. but we've always seen the also greatest threats and negatives there was a recent hacking that just happened i think in you know in the government in the u.s and they just traced that back to a different

country and it seems like this is a common a common story going back to let's think about you know going back in the past or recent past what happened in your life um i know you also have a co-founder What happened where you or you both were like, you know what? We need to solve this. Yeah, so, you know, the original concept behind this came from my previous tech company. And my co-founder there, who is part of this as well, Richard Kane, he's an AI and high-performance computing researcher and just one of the beautiful minds, similar to our chief scientist as well for this company.

But we were doing biometric digital identity. And he came to me in 2018, and he goes, I have a really crazy idea. I'm just going to throw it out there. What if we create the most secure identity solution in outer space? And so this was before Starlink got birds into the sky. All right? And I was like, sure, let's go for it. So it's just like, yeah, that's a crazy idea.

We'll get down with that. We filed that patent. And then you forget about it. You go about life. We did have some conversations with Star, early on, but again, they were just getting their first satellites up there. It was too early for both of our companies. And at the end of 2023, you know, that startup had sort of ran its course and now all of a sudden I got this patent awarded, fully uncontested. Now, over the past

three years, I'd become very close with David Harding, one of my co-founders on Entryke, who is a, you know, also brilliant engineer, mathematician, cybersecurity. security guy. And I called him up and I was like, there's something here. You know, I'm not the technologist, but there's something here. Will you take a look at this patent? I'm, you know, I'm thinking about selling it. And, you know, I nudged him for about two to three weeks and he calls me up and he's like, you're not selling that patent. And I was like, okay, go on. And David was able to do something. I found out that that most, you know, people of that caliber an engineering can't do, he was able to distill it down to its most simple and elegant form.

And he said, you don't need to do this complexity of just trying to do it for protecting identities. We can just generate keys. And I was like, oh, okay. And so that started where we were just buzzing. And again, this was, this started off doing this in outer space, pulling in cosmic radiation, which is, you know, if not the most, one of the most intropic or chaotic natural phenomena us in the universe. And so we start up there and, and we're, we're buzzing. We call up Richard

and we're like, hey, cool, outer space, but really expensive. Can we do this terrestrially on Earth? And he's like, oh, yeah, you could do it this way, but we could use these cheap pieces of hardware. And then it just kept evolving. And I think we both knew very quickly to answer your question that we had stumbled upon something that was going to be big. But David and I talk about this all the time. You know, once we brought in Scott, our chief scientist, and he figured out how to remove the hardware and to make this a software-only solution,

I don't think either of us could have predicted how important and how big what we are creating truly is, because this is societal shifting, what we are undertaking and what we have built and solved. I do not say that egoically. I don't say it, you know, delusionally, you know, even as a founder, I'm aware of my rosy-colored glasses. This one, you know, it is a paradigm shift, what we have created.

And what we are doing as supported by that Cambridge paper, I said, you know, is potentially reducing the time and cost on this transition, again, that they're claiming to be north of one trillion over 10 years by 90%. 90%. So you could take that 10 years and shrink that down to one, right? And so on and so forth. So we knew pretty quickly we had something big. I don't think either of us, though, could have prepared for what this evolved into

and what the inventions that came out of this were and are. I mean, changing the world, right? I think every founder, at least most would say, you know, what is my mission, my goal is to impact the world, right? This is why we work 24-7, you know, grind, do all the things we need to do to ensure that we leave this. This could be essentially an enormous legacy for you all beyond the actual positive impacts it has.

But I'm curious, though, because I haven't heard a lot about this before, so I obviously don't think a lot of people know about it. So how, or even understand like how big of the thread and then how, you know, obviously without your solution, the other solutions, how do you convince people that they need to protect themselves against something that, you know, you can't see it yet. You don't know if it exists yet. So that's a great question. I think right now, I think, you know, some of it is, is just meeting people where they're

currently at, right? I mean, there's only so much pushing and. selling and nudging you can do, you know, if these boards are like, well, we have a hundred and one priorities over here that we need to handle today. And that's, you know, in our mind, but five, 10 years out, we're going to deal with these 101 things first. Right. And, and I get that. I truly do. Right. But they meant what we have learned from talking to the CISOs, the chief information security officers, a lot of major Fortune 100, 500 companies, right? Is because this is so big, they're kind of defaulting to the government and the standards

bodies to guide them on that process, right? This is going to be, in our opinion, really government-led in terms of adoption, right? We're going to start at the most critical place and the most critical infrastructure and keeping our nation's secrets and military safe. And then once we feel comfortable with that, we're going to start mandating this. First, we'll come regulated industry. You're going to see, right, financial services, banking, healthcare, transportation, logistics,

telco. These are the areas that you're going to see immediately following government, where they're going to say, hey, you need to get on this, X date because this is the cutoff time, right? I mean, and you're starting to see shifting landscapes around the world, right? Everyone said RSA encryption needed to be downgraded by 2030 and completely removed from your tech stack by 2035. And Australia has jumped out in front and said, you need to get RSA completely out by 2030. And so you're seeing now more and more attention being paid to this at the government level and then that's going to drive more attention at

the enterprise private industry level. And so it'll be really interesting. What we're experiencing is certainly a more accelerated pace in terms of exploration around these new technologies like what we've created and others in the post quantum space because the government truly understands how critical this is. So Eric, thank you for sharing that. I mean, like my head is about to explode because the beginning of this, I was super scared for the future. It also kind of reminded me of how, like, when I think back to generative AI, and they were talking about AGI is like 30 years, 50 years. I feel like every three months, they're like, oh, no, AGI is like next week.

Yeah. That's with all technologies, right? You hit a tipping point. Exactly. And then it's just full bore, right? And then the speed of unlock and acceleration is just crazy. We're being it with quantum now, too, and it's only going to accelerate it further. So it just makes me laugh because it's like every two weeks, it moves back like five years

until it's like tomorrow, right? Exactly. But I'm glad you shared today, and I really hope a lot of people watch this just because it is so crazy how we are not talking about this every day, although I know, I know it's tough to think about these things sometimes, but corporations, you know, need to know about this. Businesses need to know about this. They need to get in touch with you. And if they want to, because they should, how can they do so? Yeah, go to HTTPS, Intrachy Labs.com. There's a place to buttons on there to get in touch with us through there. You can always email me directly at

Eric at Entrykey Labs.com or reach out to any of us on LinkedIn, which is typically where we're posting. A few of us are on X. But yeah, listen, I mean, this is something everyone should be aware of. This is should be carried with the same weight we did going into Y2K, right? The difference is with Y2K, we had a date certain of when that was coming. With this, we don't. And that's why companies and people, not that people have the control because they're going to rely on the companies. That is products they're using or services. But this is where companies can't be laxadaisical about it. They can't procrastinate. They need to start looking at their entire cryptographic library, auditing what they have, find the weaknesses, and then start putting things into place that will help them create the

right cyber posture for what is coming. Because, yes, we can talk about quantum to the, you know, the day ends. But what we, and what we touched on a little bit and what people also need to be aware of is AI is already here. AI is already breaking encryption. We have that on good authority. And so if nothing else, people need to start improving their, their cyber posture for that reason alone. But it, you know, nobody should find themselves a year from now just starting to think about how they're going to handle the transition. Because in my opinion, I'm just speaking for myself, that is far too late. So yeah, please get in touch. We've built something really novel. Again, we, we, we, I like to call it a paradigm shift delivered as a configuration change. Because what we do,

requires zero rip and replace. It requires no infrastructure change. It works with all the existing and what's coming hardware and software infrastructure. And nobody else has been able to figure out how to do that. And thankfully, we now have the IP moat to defend that. But this truly is a history making invention and company. And again, not saying that egoically, it is just fact of where we are. we like to say we are and will be the most important cybersecurity company over the next 10 to 15 years. Well, in that 10 to 15 years, you're going to look back and people are going to be like, Eric, you are right. In August, the August 14th of 2025, you made this claim. You said this.

And they're going to look back and say, you know what? I took action and thank you for that because this could save a lot. I mean, this is, like you said, it's history making. It's legacy making. and hopefully, you know, millions and if not billions of people will be positively impacted with what Enterkey Labs is doing. And thank you for joining us today and sharing everything. You've got to come back in a few months because we already know technology in a few months

from now, who knows what it'll be then. And, you know, it'll be 2026 and a half at that point. That's exactly right. And I'll just say one last thing before we fully sign off because we talked a little bit before the show about this, right? what could what could this look like if if cue day happens and and and the world doesn't have a solution in place or or preparedness? I'll liken it to a zombie apocalypse. I mean, you know, when when two countries go to war, right, and this is again just my view, they start dropping

bombs on each other. Historically, that creates nationalism, right? The country is like, yeah, we're here for it. Go America. Look at how we were in, you know, World War II, right? Everyone comes together to get behind the nation. With quantum computing, that could take out electrical grids, hospital systems, create absolute chaos. And so as opposed to other wars, when you enter into this digital warfare, it will actually create more dissension, more separation, because it will devolve into people just trying to protect themselves instead of a country coming together united.

Right. I mean, as part of one of our studies, you know, just the economic impact alone should QDAY arrive would be $500 billion a day in losses. That's many countries' GDP. So imagine on a map, this country's GDP, next day, this country's GDP, this country's GDP, that is how serious this could be. And I can't imagine our cars are driving themselves. if you could hack that our homes are connected you hack that and then on top of that you could wow yeah i mean i'm picturing this like a movie where you have AI creating uh different false narratives of videos and such saying it's this country doing it or that country like you said

it's tearing people apart that's exactly everything around us is being torn apart at the same time our bank accounts are being depleted and then on social media but this has been great eric i a great time. I learned a lot. You clarified a lot of things. I had so confusing. I had no idea about a lot of these things. I know a lot of my friends have no clue. So when I bring it up, they're like, huh? I don't understand. This really simplified it. So thank you for that. And, man, I'm excited for the future. I'm a negative person, but this is turning me into a positive person if people take action. So thank you for this. Yes. Thank you. I appreciate you, Dan. Thank you.