Max Guise, Bitcoin Wallet Lead at Block, speaks with CoinDesk's Christine Lee at CES 2023 about what the Jack Dorsey-led company's plans are for crypto and the future of self-custody in the wake of FTX's collapse.
The fall of FTX has many crypto retailer, retail investors questioning the future of centralized exchanges. And yesterday, I had a chance to sit down with Max guys, Bitcoin wallet lead at block at CE S and got his take on the future of self custody. Have a listen when we look at the collapse of FTX and many of the other issues that we've seen in the industry over the past year. The number one thing that we're really struggling to look at is a lot of real people lost money and I'm not talking about venture capitalists who invest in FT X. I'm talking about real people who put deposits with FX and then lost of life savings. And it's really a big part of the reason we're involved in this in the first place. We want to customers in control of their money. The best way not to gamble with customer funds is to not be able to do so in the first place. And that's why we want to put the actual keys that represent Bitcoin ownership in customers hands, not in the hands of the third party, right? So Jack Dorsey who now leads block Formerly Square said in a recent investor call that it's no longer just a payments company. What does that mean? Where are you guys headed? What's the vision? All right. I think really there are a handful of different businesses within block that have very broad visions across basically omni channel commerce. So what we have built with Square is an ecosystem of products that serve both the very small sellers at farmers markets that we started out with as well as much larger merchants and broader businesses as we've grown our portfolio over time. And then with cash app, we have 44 million active users using our money app, including lots of folks who buy and sell Bitcoin through the app. And then what we're building with our Bitcoin wallet is aimed at making it easy and safe for a broad set of people to truly. So cash app is still a centralized solution, but you're building out your decentralized solution through this Bitcoin wallet. And you've got in your hand, I see a prototype and I'm really excited about this. Tell us what this is all about. Yeah. So the wall we're building will put the actual secret keys that represent ownership, Bitcoin ownership in customers hands. And I mean, literally one of the one of the keys will be in a mobile app that's the primary interface, the customers to interact with their wallet. The other in a purpose built hardware device. Look at this one of the keys safely off. Do you see this? It looks like I was, I was playing around with it. It looks like something you would you'd at. So it might hurt but it holds your keys and your coin. So yeah, how does it work? Yeah, it holds one of the three keys. So what we're building is what's often referred to as a multi signature wallet. There are three keys, 21 of which is in the phone, one of which is in the hardware component and you need two to move money. So when customers have these in both in their hands, they can move money at any time without block and block, can't move their money for them, can't do anything with their money without their permission explicitly granted by, you know, the keys that are in their hands. Tell me about how that user experience would work. So what now you're carrying instead of a physical wallet, you're carrying this, this hardware wallet, which, you know, I'd say it's a cool improvement from the regular thumb drive looking wallet. So, and you've got your phone. So how does it work? Yeah, we actually want people to leave this at home tucked away somewhere. So it's not something that's too, I don't want to carry it around. And the reason for that is what the hardware is actually doing is providing safety. If you lose your phone, you can come back. And the third key in the system is held by block in what we call cloud recovery services. And so what that does is if customers lose one of their two keys, they can easily regain access to their funds by working with us. And that's why we want folks to leave the hardware home. The other thing that the hardware does is provide an added layer of security for transactions above the limit that customers set. So for payments applications is we see the utility of Bitcoin expanded and folks can actually buy, buy and sell goods and services using Bitcoin. We imagine that happening via the app up to a daily limit that customers will set themselves. So I'm always thinking of SIM card swap. I mean, you have a company that stores your information, someone can go into store and just swap your SIM card, but you're also keeping tabs on folks, but nobody can just go into block and say, hey, I'm so and so this is my name and number like you're doing a multi six so that it's way harder is that how it's working? This is one of the really powerful things about putting keys in people's hands instead of needing to go into a physical location and provide some information that frankly has probably been leaked already in a breach. Like the Equifax breach. You, when you prove ownership of the hardware, you're doing that with a secret key, just like when you sign Bitcoin transactions and So there's no, there's no SIM swap to be done on this wall, right? And you're also on a panel with coin desk titled How Keep Control Of Your crypto. You want to give us a preview of what's going down. Yeah, I'm really excited to speak on the panel later today. We have a couple of awesome panelists alongside talking about their products. And I think this is a really unique moment for us to underscore why we want to put customers in control. Specifically, one of the reasons we got into this in the first place is a lot of folks don't have access to custodial services in the first place. And even the ones that do are subject to all sorts of risks that come from mismanagement of funds like we talked about with FX. And I think you'll hear from a number of are building. I am curious. So Jack Dorsey is no longer head of Twitter. I don't know if he has any involvement at all, but he's fairly friendly with Elon Musk. So is there a partnership or some plan with Twitter? So there's nothing specific that I can talk to with respect to Twitter. But what I can say is there's a really wide range of partners that we're interested in working with some of those are large exchanges. So you can think about Coinbase and our very own cash app and you know, more regional exchanges that serve audiences in, for example, Latin America and Africa, like bits and, and we have a set of partners that we're interested in working on beyond that as well to help expand the utility of Bitcoin through payments that we got to wrap it up. But do you have a timeline for the Bitcoin hide wallet? You'll be able to try this out later this year? Ok. Is there any magic to why? It's that shape? Uh, it's a block, It's a block. Ok. So you can see the 3D. Uh, I'll, I'll, uh, I'll hand it over in this phone. Ok. Uh, the surfacing is, is, uh, uh, inspired by our Park block logo.