The Pomp Podcast - Pascal Gauthier, President of Ledger: What is Cold Storage and Why Does it Matter?

Episode Date: December 19, 2018

Pascal Gauthier is the President of Ledger, one of the most well known crypto hardware wallets, and the creator of the Ledger Vault for institutions. In this conversation, Gauthier and Anthony Pompliano discuss his past experience building a data company that Yahoo bought for over 500 million dollars, his time in venture capital, and the importance of cold storage and why you should care about it. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- BlockFi BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Pascal Gauthier is the president of Ledger, one of the most well-known crypto hardware wallets and the creator of the Ledger Vault for institutions. In this episode, we discussed his past experience building a data company that Yahoo bought for over $500 million, his time in venture capital, and of course, the importance of cold storage and why you should care about it. Aside from that, this is our last episode of 2018. We'll see you again in January for season two of Off The Chain. Before we get started, I want to talk about one of our sponsors,

BlockFi. These guys are doing really interesting work in crypto lending. What they allow you to do is keep your crypto, put it up as collateral, and receive a US dollar loan funded directly to your bank account. They do loans ranging from $2,000 to $10 million, and they're perfect for helping you reach your financial goals of all sizes. You should visit BlockFi.com slash Pomp. Again, that's BlockFi.com slash Pomp. Again, one more time, type it in, BlockFi.com slash Pomp, if you'd like to learn more about putting your crypto to work without having to sell it. Definitely do it. This podcast is presented by BlockWorks Group, the only blockchain event and media production company I trust. If you're an investor, lawyer, accountant, or entrepreneur,

and want to attend exclusive events and dinners, visit them at blockworksgroup.io. I promise you won't be disappointed. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, we are here with Pascal. I'm super excited because I don't think a lot of

people know the intricacies of what Ledger does and how it works. But before we get to that, why don't we just start with your background and kind of how you got into crypto? Yeah. Hi. Hi, everyone. So, my background is actually in advertising technology. I started my career in 2000, just after the crash of the internet bubble. And I started by selling clicks and advertising and banners. And I built my career into this. My last company was called Credio. We listed Credio at the NASDAQ in 2013. And it was listed for a little above $2 billion in valuation, so that was an amazing ride, starting from France and building a company everywhere in the world, from 15 people to 1,000, and what I've learned

from advertising technology is how to scale companies, because it's one thing that ad tech companies do well, is to scale, and it's to become global very quickly, and after I left Criteo in 2013, after the NASDAQ introduction, I was thinking of opening my chakras to business and see what's out there. And, you know, when you start from France and you build a $2 billion company, there's, you know, advertising technology is pretty much done for you

because the probability that you will build another successful business like that in the same space is very low. And also I was getting frustrated by the GAFAs. Like, you know, in advertising technology, what's very difficult is to build a company where you have those big sharks swimming around you. And it's very tough to build competitive products

when you have gigantic companies like this competing with you. And so I thought, where can I go that I don't have this GAFA pressure and what's new out there? And Bitcoin in 2014, for me, was really like the hooray moment or the eureka moment, where certainly you see that there are new protocols that are very new. Not many people working on these protocols yet and a lot of potential. I think that everybody that's listening to this already agrees with the potential of crypto. But in 2014, maybe it wasn't as easy to see. And in 2008, even less. But I saw the potential and I thought, wow, this is a great potential to really find so many things that we do in terms of transmitting values to one another and peer-to-peer type of system and all the good things that people like in crypto.

But I also thought that it was a great business opportunity to build a company that could become really big, very global right away, because Bitcoin and crypto is a global phenomenon. You know, from Paris, where we have great engineers and not competing with Google and Facebook right away. So this is why I'm here. Awesome. What's the first time that you ever heard about Bitcoin or crypto? So, yeah, it was in 2014. I was actually doing, I was an entrepreneur in residence with Index Ventures in London. And we were doing these investment meetings and Bitcoin, you know, was a buzzword that started popping into the meetings.

And, you know, at the beginning, it was like, what is Bitcoin? And, you know, in the end, it's like, why not Bitcoin? And, you know, Index made a few investments way back when. And it was at the time when Bitcoin was like skyrocketing to a thousand and just before the Mongoks incident. And, yeah, this is when I was first exposed. And I met with an amazing guy, Vence Cesaris, that a lot of people know, the CEO of Zappo. and he pitched me or he pitched like a group of people at index like in five minutes bitcoin and i was like okay done like you know i believe that guy uh and so uh he got me really excited

about the space and uh for me it was a no-brainer and the no-brainer it was a no-brainer but i a few i saw a few gaps into bitcoin and the two gaps that i saw was data the lack of data the lack of knowledge and for a guy like me like i come from a non-technical background you know i don't have a financial background as well. So for me, it was hard to understand at first. So I thought data and content was missing. And security was a big missing piece. And after the Mt. Gox incident, it was very clear the security governance was a critical piece where I think this industry cannot go further if we don't fix it. And that's what Ledger is about. We are about to fix this. Got it. And when you decide, hey, I'm going to go into crypto,

So did you know exactly what you wanted to build? Were there a couple of different ideas you explored? Like walk me through the process from, you know, once this comes in, say, okay, I got it. I understand Bitcoin. That's interesting. You start looking at different opportunities. You identify these two areas. How do you get from there to starting Ledger?

Yeah, so no, that's a great question. So first, I was lucky enough to have liquidity from my previous company. So when you have liquidity, you have time to be a thinker. And so I built my company called Challenger Deep. And Challenger Deep is the lowest point on Earth. It's in the marina trenches. It's under the ocean. And it's mainly unexplored.

And for me, the name of my company was because I wanted to explore that world, not knowing what was under there and knowing not much. And so I built the company before knowing what to do. And the first thing that I did was data. Because coming from the advertising world, data is something that we manipulate a lot. So we know the value of data. And so my first play was to build data. And the company actually now is called Kaiko.

So if I'm a challenger, you call it Kaiko. And I've got Amr Soubiran, who's the CEO and running a team of 12 people and doing great things in the market right now. And basically selling data, like market data to hedge funds and so on and so forth. So that was my first idea. But when you build a company, your changes of success are very low. And so I projected myself into this business thinking that I just wanted to invest and be part of this revolution and thinking that I would sort of buy coins, you know, that was part of my investment, build my company, that was the second part, but also invest in other people's company because the, you know, the possibility of me succeeding with my own company was very slim. And so I thought, like, you know, let's not put all my eggs in the same basket and let's also bet on other people that better know what they do. And so that was at the end of 2014 when I met Eric Larchevêque, Nicolas Baccar, and the founding team of Ledger.

And this guy pitched me security, which I thought was a big gap. And they were doing something around the SIM card because, you know, I don't know if you know, but the SIM card industry was invented in France. So actually in France, we have all these developers and people that are very strong at building, you know, security. that is a combination of hardware and software and that is protecting the banking secrets for the past 20 years and the telecommunication secrets as well. And so when they pitched me the simple idea of taking that SIM card technology and applying it to crypto, I thought, this sounds like a great idea. And also, this sounds like an idea of, this is why a company based in France has got an

edge and have something to say to the market that is very different and probably really good. So, you know, it took me five minutes to make an investment decision. And I told Eric, it's okay, man. Here's like 200,000 euros. It was a seed investment. So it's my biggest seed investment ever. I said, I give you 200,000 euros, but I want a board seed because, you know, I want to be with you guys.

And I also want to help you. And I want to know what's going on. And at the time, lucky me, the team was desperate for money. So they gave me the board seed without thinking about it. But then I was the first investor. I triggered the round. So everyone followed me. So the first round was 1.4 million.

or something like that. Apparently, other investors saw me investing like crazy, like a signal that Ledger was good. But Ledger was good because technology was good, the team was good. And being at the board seat has been amazing. So I've been three years at the company as an independent board member and last year and a half as the president of the company. So really helping with operations, scaling, and going to market.

Got it. And when they first pitched you, what was the kind of product or the idea? Was it what they ended up building or was it something else? No, the product and the idea was exactly the same that we have right now. So the Nano S that you see was the original idea. They showed me a prototype at the time that looks nothing like the Nano S, and they were like, this is what we're going to do. I'm like, okay, it's ugly as hell, but, you know, whatever.

Like, you know, people want to protect value, so I thought that having another device would make sense. A lot of people say, like, but why would you have another device? You have your phone or you have your computer, it's good enough. Like, you know, software only is good. Like, nobody's going to go for another device. but actually what we found but I believe in that vision

and in this theory but we found that for now another device is cool but I also know now which I didn't know at the time when I invested is the core technology at Ledger is not so much the device it's not the hardware

it is the operating system that sits at the heart and this operating system has been beautifully designed so it can operate in any kind of hardware so I think that the massive innovation of Ledger is to have built a security platform that is partially closed

because you want to protect the secret, but also partially open so any third-party developer can actually code now on Ledger platform and the Ledger operating system can go in any kind of hardware, which is why we're able to secure individuals. That's what we do with Ledger Nano S product,

which is why we're able to secure enterprises and B2B. This is what we do with the Ledger Vault for hedge funds, family offices, law enforcement agencies, like anyone that holds coins and need governance on top of security to make it easy to use. These are the three things that we do. And finally, we will secure objects because objects will be connected to blockchains

and objects in the future have critical digital assets that need protection and you can use ledger technology in order to do that. What's your take on the current security landscape? Right. And the reason why I ask this is I think most people who aren't overly familiar with the crypto industry, they read these headlines that are, you know, there's exchange hacks. There's people who are, you know, they get hacked, they lose bitcoins, you know, they do all this stuff. What's actually going on on the ground? Right. What are like the threats on the security side? And then we can get into kind of how you guys actually use cold storage and different things to kind of mitigate those. But what are those threats and what's kind of that security landscape today?

Look, it's a great question. I think, number one, crypto and those blockchains, this is very new. This is the first time that we've created a digital asset that is unique. And because this digital asset is unique, it can be stolen very easily. So I think what makes the technology absolutely great makes it also very fragile. If you think about digital assets before, nobody can steal an MP3 from you. It doesn't really matter. To steal a Bitcoin, it's a big problem.

And to steal 10,000 Bitcoin or 100,000 Bitcoin, that's also a much bigger problem. And you can steal that in one transaction. And if you think about assets and commodities, like anything, you want cash, gold. to steal anything at scale at this type of scale is very difficult like you know when was the last time a bank was hacked like two billion dollars in cash that they never recovered like it doesn't really exist how do you steal two billion dollars worth of gold of oil the only way of actually doing this at scale is to have an army and to invade a country that's that's how you do it but with crypto you can be a hacker in your living room and uh you know somewhere anywhere

in the world and you know you hack exchanges every day so the stats that we have is exchanges every day lose 2.7 million dollars so it's a big number we feel and they've lost so far 1.8 billion dollars wow and we think we believe that it's because in the old world and the new world being crypto but in the old world security is taken for granted because you cannot really lose value that much you cannot really use money again you cannot lose gold like if you give your gold to UBS like you know nothing is going to happen again because it's difficult to to steal gold like how are you going to do that you bring trucks like you know guys with guns like it's very difficult but with Bitcoin and crypto in general it's very easy to steal so but but because we

come from this world where everything is secure I don't think that there has not been a mentality shift yet from most of the players in the space and you would think you know people should take security seriously because we're being hacked every day but actually no and when I read stuff about the new technology that is being deployed today and everyone talks about cold storage, like it's a great technology. I mean, cold storage is not a technology. It's nothing.

Like, you know, you can put your keys on a piece of paper. Well, let's talk about it, right? So let's describe what is cold storage, right, to start with. In a very simple way, I can explain cold storage in one sentence. You write your private keys on a piece of paper, you put it in the book, and you put it in your library at home.

Okay, that's cold storage. Because it's the actual private key that is not in any form or shape connected to the internet. Yes. Okay. And so what are the different ways right now that people are doing cold storage? There's what I would consider there's custodians. So basically you give your private keys to somebody else and they hold them for you. There is self cold storage where you put your crypto on a device and you're doing this yourself.

What's the pros and cons between those two things? The self cold storage or custody versus the use of a custodian service? I don't think I would put it like that. I think the main difference right now in the market is the technology difference. And I'm sorry that I will advertise for Ledger. But I think that we have a technology approach that is very different from what the market is doing. So most of the markets, whether it's custodianship or self-custodianship, that doesn't really matter. But the technology to protect the private keys, most of the market says we cannot be connected online because we don't have enough security.

And so we're going to put everything offline. And the day that we need to do a transaction, we're going to send someone to check what is offline and actually to bring it back online. Which is why it's very inefficient. which is why every solution that uses this type of technology, again, it's not really technology. It's just like putting a computer in a dark room is not technology for me. But you need to go from cold to hot. This is why you have a 48-hour delay if you want to have your money.

You cannot do a transaction in real time, which is silly. With us, we bring this technology to the market. That is not a new technology, actually. It's a technology that's been used by the banking industry for a long time. So typically, if we think about the enterprise industry, we've developed everything. Our operating system is ported onto an HSM, a hardware security module. The HSM protects the private keys, and through the devices that we have, the Ledger Blue, you can actually sign on the HSM, and the communication between the Ledger Blue and the HSM is secured.

The HSMs have been designed to be online all the time. You actually don't need to bring them offline. So the HSM acts as a protection of the private key. So, hold on. Before we keep going, I want to make sure that I clarify this so people understand. The cold storage is secure based on what it does, right? But there's some downsides to it, right? The ability to go from cold storage to hot can take a while, right? Because of the nature of it. That's why it's secure and just slow, etc. What you guys have developed is something that is secure, but also doesn't have some of those downsides that true cold storage provides. Exactly. Right. And so today you have two separate pieces of hardware, if I understand this correctly. Correct.

Let's talk about the actual ledger itself. What is that? What do you mean ledger itself? The USB. The USB. I'm not sure I'm following you. Not the HSM, the other hardware device. The ledger blue. Yes, yes, yes, yes. It's an authentication device, okay?

It acts as an authentication device in the sense the private key is not in the ledger blue. What is on the ledger blue? It's just a part of the private key because, okay, let me take a step back. So basically what happened is we are four in the room right now and we all run a hedge fund. Okay. And we have $100 million in Bitcoins. Okay. Who has access to the private key?

I don't trust you enough, so only you has access to the $100 million. And actually, your LPs, everyone is going to ask you, what's the governance on these coins? So actually, what you want is a set of rules so we know how we're going to operate this $100 million and who's going to have access to the coins. And so typically, if we need to make a transaction above $10 million, we have agreed administratively that all of us four need to sign the transaction, for example. If it's below $1 million, then only you can sign, et cetera, et cetera. All these rules are coded and enforced by the hardware. So basically, we can now sort of have any coin in our hedge fund and any coin, all the governance rule will be run by the hardware. So some coins, as you know, support multi-signature at the protocol level.

Other coins don't. But actually, in our technology, it doesn't really matter because all the multi-signature and all the rules are enforced by the HSM and by the technology. but i'll give you another example why being online sort of all the time why still being secure is very important and why cold storage in many cases won't work in the future how do you stake coins when you're in cold storage you can't it's a big limitation of cold storage so typically all these companies that are doing cold storage on one side and then they go hot the day that you want to stake your coins they're going to have to come up with a different solution because cold storage is not going to work for this. Our technology sort of

adapts to whatever evolution of the market is coming because as all the rules and the security is provided by, it's actually the combination of the hardware and the software, every layer on top you can bring onto the platform. So typically right now we're developing proof of stake and delegated proof of stake as new protocols that will be implemented both in our hardware wallet and in the Volt solution. So if you work with us, you'll be able to stake your coins or delegate the staking of your coins

to a third party. All right, before we continue with this conversation, I want to mention our sponsor again, BlockFi. Remember, they do crypto lending. So you posted your crypto as collateral, they give you a US dollar loan and you can use the US dollars

to do whatever you want. You should visit blockfi.com slash pomp and then tweet at me that you went. If you tweet at me after you went to blockfi.com slash pomp, maybe i'll throw you a like a smiley face or the fire emoji the fire emoji is the best remember go to blockfi.com slash pomp and i'll see you on twitter and so how does the hsm right let's say go after your example with four people at a hedge fund with

100 million dollars uh and bitcoin that's sitting on the ledger blue how does that piece of technology actually when all four people say okay i want to sign off on this what was the user experience for signing off to to uh to get those private keys actually move some percentage of the crypto uh the experience i mean like what would we experience us as yeah so we all say okay let's do it you know we get the hsm and what do we do yeah so it's a sas product right now so you wouldn't be getting the hsm what you'll be getting is a part of our team coming to your office uh showcasing your product explaining to you how the platform works and you'll do the the key ceremony so what It's very important that you do the management of the keys.

The HSM, you will never see unless you want it on premise, but that's a different discussion. But let's say that you use a SaaS product. We take care of the HSM, we take care of the technology, and we just come to help you set up your authentication devices. And there are different types of authentication devices. There are some for the administrators and some for the operators. So typically what's happening is you cannot operate the phone and administrate the phone at the same time. Got it. You know, your CFO and, you know, some people in your company or in our hedge funds will be the ones setting the rules.

And then traders will be the ones sort of spending the money, if you know what I mean. And so, and again, all these rules are enforced by the hardware. And the hardware provide many other good things like segregation of accounts, audit trails, et cetera, et cetera, that you cannot really get with software only. Okay. And then who's buying these, right? Are these mostly retail, individual investors, or are they larger organizations, enterprises, a mix? Where are you seeing most of the interest today in the hardware products? Family offices, hedge funds, big institutional players.

Everyone needs technology at the heart. What you have to understand is right now when we say Ledger Vault, we are showcasing a product, and it's a SaaS product. However, you can sort of strip down our technology right down to the operating system. So in theory, anyone in the industry can work with us and work from the bare HSM with the operating system sitting on top, and you could code everything on top of that. So we have various discussions in the marketplace. Some people just need the products, like the SaaS product, because they want the end-to-end product that does everything for them. And other people have more complex security schemes, and they want just the hardware and the software of Ledger running at the heart of everything that they do in terms of their security. but then they build their own applications on top.

So in reality, you could use the operating system and rebuild everything on top, including your blockchain explorers, et cetera, et cetera. And or you can start using different bricks that Ledger provide to you. Got it. And then what can you tell me about the company in terms of number of customers, revenue, units sold?

What data points can you share with us? We have many data points. Better. The more you share, the happier I'll be. Exactly. Look, we sold 1.4 million units of our Ledger Nano S. In what time period? Since we started.

Okay, got it. That's a lot. That's a lot. We had a killer Black Friday. So interestingly, as the price was plunging down, our sales remained very strong. So we believe that the price is not everything and that there's still a lot of interest in the communities and a lot of people still joining the crypto market. Do you know what the numbers were for Black Friday? What the numbers were?

Like the number of units you sold? I know, but I won't disclose. Okay, that's fine. Okay, no worries. But good. And actually, I can give you a referential. Quite similar to 2017 Black Friday, which says a lot. Wow, that is pretty impressive.

Okay. So a little less, to be fair. But close. But close. Not to a factor of five times less. Actually, on par. Sort of on par. So that's one number.

we ship those products uh in more than 165 countries which is also a cool number uh meaning like everyone on the planet is doing crypto um there's not one dark country for us like where nobody orders our products like you know um it is a very global business yeah yeah a very global business uh when it comes to the vault product we've already uh signed and or onboarded 30 clients so that's good congratulations and counting uh we have uh more than 500 prospects and, again, it's a very global business. We have, this week, opened our office in New York, or, I mean, announced that we are opening the office in New York.

Dimitrios is now our global head of vote based out of New York, and we have a strong team here. But we equally opened an office in Hong Kong to cover APAC. So, for us, it's all about being a global tech provider for this industry. And, interestingly enough, we have great conversations in Europe, in the U.S., in APAC, everywhere. same discussions uh so you know to to you know to testify that the crypto market whether it's retail or b2b is truly global got it and where do you guys want to go next right so you've got

a product that i think people like they are buying obviously um they feel like it secures their crypto assets um today it is mostly focused on support of cryptocurrencies how many do you guys support that's a great question uh we have a live page to say how many we support i don't know like a lot a lot okay and um do you support all like erc20 tokens so when these tokenized securities and stuff come out you also be able to do that or is it more specific around each individual token no i mean the idea is to support everything but the bigger idea i think is for us it's uh it's an open platform i mean part of the platform is open so the latest tokens that uh that we are supporting have actually like the applications have actually been coded by

third-party developers that code on top of our platform and then of course we we vet and we approve the application just to make sure it's running smoothly on our operating system but technically anyone can develop their own app so any community that has a new coin and that that want that new coin to be supported by Ledger, today can actually do it. They join our Slack for developer and you have a team there that is helping them design the code.

Got it. And then, you know, five years from now, what is your hope for Ledger in terms of what does it look like? Is it still a security company and you guys have just gotten bigger and more global? Do you envision adding other business lines or kind of other areas to expand into?

What's that look like, you know, kind of five years out? Yeah. So there is another business line that we're already doing, which is machines, IoT. So we call it IoT right now. We didn't find a better name. But I think the world, because of crypto, we just shifted into a new world.

And this is the world of critical digital assets. There are many digital assets that you don't want to lose now. I'll give you one example that has nothing to do with crypto. But if you have a pacemaker, and that pacemaker becomes a connected object and is connected online for many good reasons, like your doctor gets a live feed of your heart, et cetera, et cetera, you really don't want that pacemaker to be hacked and stopped

because then you die. And until very recently, this was not even a problem. And so there is a big joke in IoT to say there is no S. The S of security doesn't exist in IoT because we've all seen the Silicon Valley episode where IoT gets hacked, et cetera. But this is reality. Many IoT objects have been hacked.

And so it's not just IoT. is to say that those critical digital objects are coming to life now. You know, crypto is one, but like your heart being hacked. Imagine like autonomous cars driving in New York and suddenly someone hacks into the system and gets all the cars to crash, you know, in a world and kill everyone. You know, there is that. And so the vision of Ledger is we're going to be the company

to secure those critical digital assets. so if you work in a company and you have that problem and you're a sane paranoid like you're going to come to us and make sure that your security scheme is actually the best that it can be and today we believe that for today and for the next five years we probably have the best technology that is sort of reliable always online protected by hardware and software and that can be integrated in any kind of any kind of device because the hard thing with security you know we come from that industry and we have strong security engineers within the company The difficulty with security and the way it's been done in the past is you secure object by object.

So every object is going to have one security scheme and sort of one software and one operating system running into it. And we are sort of building the platform to secure it all. So that's going to be interesting. And the interesting thing is third party developers will be able to code on top. And so that's very new in security as well. Usually security, I don't tell you what I do. You trust me that I'm good and it will work. Trust me.

And in our case, and it's not exactly true, but then you go through certification, et cetera. In our case, we will go through certification, but also part of the platform will be open for third parties to develop on top with the certification that is going to be secure. So that opens many very exciting opportunities and possibilities for the future where anything will be able to be secured with the Ledger operating system and applications will be whatever the coders make them. yeah it's fascinating that you guys are going outside of crypto right because all these other kind of you know uh critical digital devices um the pacemaker makes a lot of sense what other types of products fall in that category for you you may not even be addressing them yet but just like what are the other types of products in that mission uh critical digital uh devices yeah i mean the pacemaker example is to say that it doesn't need to be crypto like whatever has value and

however you define value has to be protected very securely in the future but i can give you another example that has more to do with crypto and is also very interesting and shows why crypto is going to have a strong impact on our societies. The tokenization of energy, whether it's a molecule of oil, electricity, water, all of this is very interesting because energy is being traded every day. And yet, the way that we account for that trading is very light. The technologies are not great. So typically, we started the partnership with a utility company in France, where Ledger is building the technology to be a certificate of origin of the energy. So the way it works is like every windmill, I'm going to make it simple, every windmill

in Europe, at some point, we have a Ledger element on it. And when the windmill will produce one megawatt of green energy, it will go through the Ledger device that will authenticate the fact that it's one megawatt of green energy and send that information onto a blockchain to produce a green token that then will be able to be traded by traders. So if you want to make sure to buy green energy, you will buy those tokens. And certainly what you're doing there is you're not only validating the amount of energy, but you're validating the quality or the type of energy that is being created.

And I'm guessing that you can do things like geography, time of day, you know, I don't know what type of regulation, carbon credit, you know, all kinds of things that you can actually code into that token based on your kind of point of generation device that's generating that data. Yeah, completely. Yeah, very, very cool. Okay. And then what's the areas of crypto specifically that you think are really interesting, but maybe people aren't building companies in, right? So obviously you got involved in Ledger because somebody pitched you on an idea, you got excited about it, you invested and eventually joined the company. What are those areas today that you're like, man, if somebody pitched me on X, Y, or Z, I think that would be really interesting to see somebody build a huge company there. so i think that still lots need to be done in data like you know with all the data i love it data is cool because and especially in the crypto world all this data is available like so you can

really do a lot of cool things with it i don't think uh you know companies are doing enough you know my company kaiko i think is doing good right now but i think we could definitely do better i think there's a big play in data and when you see where the data companies are at right now I think it's good, but could do better. So if someone came with a grand vision of building this big data company, I think it would make a lot of sense for the industry because there are so many products that you can build, indexes, how to forecast the price, a lot of intelligence on the data

that the industry should build. So I'm working hard on that matter also with Skyco, but if someone has super cool ideas, I'm willing to look at it and to invest. But I think data is going to be key for this industry. I think there are cool projects coming. I think delegated proof of stake, proof of stake, like we're going to watch this very closely,

because it's an intriguing part of the space. Everything is sidechains. I don't know, lightning, liquid, all of this is very cool. So companies that are working on lightning, we look at them a lot, because we believe it's important for the future of this industry. And I'm curious about atomic swaps, you know, personally. I don't know.

It just, right now, it doesn't work so well, but it feels that... If it did, it'd be important. It could be important, you know, because finally, you know, swapping those coins, like, you know, without having to go through an exchange, a centralized exchange, et cetera, et cetera. Everything that is going towards the essentialization, I think, is interesting. everything that goes towards centralization and rebuilding

the old economy with these new tokens I think is less interesting personally but I think it's fair alright before I end I usually do a

like a rapid fire round of questions and then I end with letting you ask me a question so think about that while I fire some of these off

oh man what do you think the most important company in crypto is other than Ledger another great company in crypto the most important

the most important company in crypto other than Ledger wow so man that's a very tough question and now i'm gonna sound like you know i'm ledger maniac and ledger only but um you can't say ledger i can't say ledger i won't say ledger uh i want to say can i ask you the question before you know while i think about this one okay so uh oh you want to ask okay all right you asked me the question what you're thinking yeah so the question is uh you know what is very exciting like because you interview a lot of

people etc so what seems to be like 2019 trend like if you had to say one trend what do you think it is it's hard to say what the trend is so i'm not going to try to call the trend i'm going to tell you what i'm personally interested in based on conversations i've had with people and what i think it uh more and more people are shifting towards or looking at right i think it's fair um i think it the timing's hard that's why that's why i'm kind of answering it this way uh the state-backed digital currencies i think are going to come i don't know if they will be successful or not. But I think most people are either oblivious or they're kind of writing them off as, oh, those aren't going to work. I don't think we've yet seen a well-capitalized, well-coordinated

nation state say, blockchain thing is actually pretty interesting. I'm going to create a digital currency that looks similar to those digital decentralized currencies you guys have, But we're going to kind of back it and use it for monetary policy and things like that in the way that we're used to central banks doing. So I think we'll see more of that on 12, 24, 36 months. But that'll be an interesting thing to look at. Another area that I'm personally interested in, I see more and more people looking at is blockchain bonds or smart bonds. So the idea of taking, you know, kind of traditional fixed income type assets, but creating digitally native bonds. Right. So they're actually issued on the blockchain and all the things that you can do with that and around making faster, cheaper, more global, more secure, etc.

And then the third thing, and this sounds pretty stupid, but but I actually think the trend of 2019 is just going to be building sustainable businesses. Right. And so if you think of 17 was like the year of the ICO, everyone was fundraising. And then that was like the the finish line for a lot of these projects was let's make this big announcement about fundraising. Then in 2018, it was the like, retraction back to not even sanity, but like a true bear market, right? And I think, you know, we're starting, we're recording this bitcoins at like $4,000. So we're like, we're around the capitulation point for many people. And I think, you know, a lot of tourists got washed out, etc. But I think what happens through the second half of 18 and going into 19 is the real entrepreneurs, they're not shaken by any of this. They're still building. They're going to focus on building companies that have cash flow, profitability. They're going to get monetized going public or acquired.

And you're going to see some really big kind of behemoths emerge. we probably can't tell who they are until you know 21 22 23 but they're getting built today right into 2019 and so i think that's going to be a trend in hindsight we're going to look back and say oh 2019 is really the year that a lot of those companies got built um which i think is a good thing and needed by the industry yeah so i agree with everything you said and actually it's a great segue to um so i can give you my answer on your question so i think uh right now i don't sort of rate anyone including ledger uh so your question is hard because you're like oh who do you think is great like i think we're all average right now uh and uh and i include ledger into this

i think there is so much that we can do i mean what service did you open recently that is doing crypto where you were like oh my god like you know this is going to change my life not many like you know most services are very clunky i have a list of improvements on our own services that is you know so long and we keep adding things etc so like you say i think the bar market is an exceptional moment for for this industry i mean because it forces you to do the right things and to actually build great products that make a difference and uh when you can look at them and actually be proud and so i think no one is doing an a plus job right now like you know there are a lot of a lot of b companies uh and uh and we are thriving to become a's so i think

a few teams are doing some really good solid things in the market but we're not quite where the market needs to be and no one has a killer product right now and again you know we think ledger is cool technology but we also realize the the amount of work that we still need to do in order to become the company that we want to become and so i think that everyone is sort of like that i mean other big companies are sort of like in in that game like you know they're doing okay but and not doing amazing, or I don't think anyone is doing amazing. But that's a cheap way of answering your question. So now I'm going to tell you who I like apart from Ledger,

but I thought CryptoKitties was really cool. I think it was an amazing moment. It broke the Ethereum protocol, and having these CryptoKitties remind me of my childhood with the Tamagotchi, et cetera, I thought that was a cool crypto experience. I love it. What's the most important book you've ever read?

the lord of the rings why why because uh because it's a fantastic book to to travel actually two two books lord of the rings and foundation by azimov foundation by azimov actually is uh is a book that helps me every day so lord of the rings because i like to go into evade in different countries etc you know i think an entrepreneur needs that not that i'm the best entrepreneur on the planet but like you know i think like to be able to protect yourself in a new world and And that's what Lord of the Rings does really well. But equally, Asimov, whose foundation is an amazing book. And it's something that helps me every day because they have this thing of, and I read

it in French, I'm sorry, but psychohistory, where they're mathematicians that do these equations to predict the future. And I think it's a very interesting idea. And so they predict the future. And sometimes the future doesn't quite happen the way they predicted it. So they start the equation again and predict another future. And so for me, I always look at my life in the next five years, next 10 years. I always have a plan for five years, 10 years.

After that, it's too long because you have a lot of accidents that are happening. And so Asimov, actually, and Tolkien were strong readings as a kid. I love it. Let's admit that there's aliens. So it's a non-crypto question, right? So aliens exist somewhere out there in the world. Most of the times they are presented as human comparables. right um but you never really see alien animals or alien pets do you think that those exist or

do you think it's all just one homogeneous species out there as aliens so interestingly i read recently that uh octopuses were actually not from this planet there's actually a real theory that is going on yeah you know the octopus yeah octopus in the ocean octopus in the ocean there's actually very strong and academic research that's been done on the octopus and you know some people have the theory that the octopus could be an alien form because of the way it's like i don't have the i don't remember the details but because of the way like octopuses are which is very different from any other living species living creature on the planet you know what you just made me think of and i've never thought about this before uh a lot of times people say you know

are the aliens already here right meaning yeah are they here on earth i've never thought about are the aliens here but they just live under the sea yeah and so but apparently there's someone that has this theory of the uh you know octopus being like a creature from the space that was actually dropped on earth because they have such a structure that they believe it's uh it's it's too different to be actually from here uh so yeah maybe you know that's the wildest answer anyone said i love that answer and my wife hates octopus so like when i told her that she was like told you so she's like this disgusting animal like you can't be from this planet she's got a like she got a deep fear do they uh do they serve octopus for food in uh in france they do actually own a

restaurant in paris uh and we do serve octopus is uh it's my wife despair oh okay she doesn't like it hasn't tried it no no no all right maybe we'll all come to paris and we'll uh we'll go and we'll eat some octopus maybe you're invited yeah i'd love to tell people i ate alien that'd be great. Exactly. All right, man. No, thank you so much for coming. This is awesome. I'm a big fan of what you guys are doing at Ledger. And so we'll have to do this again as you guys keep growing. Sure. Thank you for having me. Absolutely. All right. You reached the end of the podcast. Congratulations. I appreciate you listening all the way to the end. You deserve a trophy. But before I hand out the virtual trophies, remember to go visit BlockFi.com slash Pomp.

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