Crypto Megan Podcast | Bobby Lee: Storing Crypto Securely, and the Future of Crypto Security

Welcome to the Crypto Megan Podcast. I'm your host, Megan Nielsen. I'm a high-end crypto and NFT portfolio and Web3 strategy consultant. I'm currently on a world tour as a Web3 keynote speaker at all the biggest Web3, tech, and fintech events around the world as an industry leader to educate anyone from beginner to C-level executive, and of course, to advocate for women in Web3. My mission is to inspire new people to get involved in the crypto and NFT space with quality, entertaining information they can trust as pioneers in this cultural and financial revolution, a paradigm shift.

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Welcome to the Crypto Megan Show. My name is Megan Nielsen. I'm your host for today, and I am at Bitcoin Miami 2023. It's absolutely amazing. I have a very special guest for you today and a company I recently partnered with because I'm so excited about the product they're putting out. I'm here with the CEO and founder, Bobby Lee, of Ballet Cold Storage Wallet. He's also a bestselling author. The promise of Bitcoin. And we have an action-packed show for you today. I cannot wait to introduce him. Bobby, thank you so much for being on the show.

Thank you, Megan. It's great to be on your show. Yeah, excited.

Yeah. So we're here at the Bitcoin Miami Show, and I must say, your booth is one of the most popular.

Yeah, a lot of foot traffic. Yeah, we have a very great team helping us promote and talk about our cold storage solutions.

Right. It's something that really called my attention. And also, you guys are very charismatic. You're interacting a lot with— everybody who comes by, and that's part of, you know, our mutual goal, which is to onboard billions of users, right?

That's right.

Yeah, and, you know, there's a certain art to that and a certain way things have to be done. And also it helps that you guys are so laid-back and inviting. You've got all the fun shirts as well. Everyone wants to come over. I mean, the booth is jam-packed. So I figured, you know, let's tell the story today and, you know, let's let them in a little bit on what you— let's start with your background. And how you got into crypto in the first place and kind of what you started with.

Yeah. So I have a tech background. I studied computer science at Stanford University. Even through high school, I was very much a math and science guy. So for me, engineering, computer science was a natural course, natural selection to major in. And I studied at Stanford. And then after that, I stayed in Silicon Valley, worked in the internet industry. So back then, I graduated in 1997, '98. So of course, went to Yahoo, premier internet— back then it was called Internet Portal.

Wow.

Back in the early days. Yeah. So I stayed there for 8 years and then moved on to do other stuff in tech, including cloud storage, IP television, also e-commerce. I ended up working at Walmart, global e-commerce, doing that in China. What else? And then I got into Bitcoin quite early. So I got into Bitcoin right after my brother told me about it, my brother Charlie, creator of Litecoin. So that was in 2011.

Okay, wait, let's just back that up. Your brother Charlie Lee is the creator of Litecoin. That's incredible.

So he, at the time, of course, he hadn't created Litecoin yet, but he discovered Bitcoin, I think, in early 2011, got me involved. So we were both— he was mining Bitcoin, I started mining Bitcoin using just rudimentary computer, self-made PCs with graphics cards in them. mining Bitcoin, just a few megahashes, a few hundred megahashes per second, whatever the transaction rate is.

Wow.

Yeah. So we mined the whole summer. The Bitcoins we got barely paid for electricity. But today it's a lot of money.

Yeah, that's incredible. You got it in your family genes, I suppose.

Yeah, I guess. Yeah.

Some of the earliest pioneers in this movement.

Yeah.

So that summer, 2011, I started mining Bitcoin. And then I made a promise to myself that if I ever— I was working at Walmart. Big cushy corporate job, right? So I promised myself if I ever did a startup, I would do it in Bitcoin. So soon enough, a year and a half later, I had the opportunity. So I left Walmart in 2000 late 2012, and then by early 2013, I decided to partner with two other guys, and we created BTC China, which was the very first Bitcoin exchange in China.

Wow!

So that was in 2013. I became the CEO and co-founder of the company, and in 2013 was a big year. So we took the traffic all the way up. And we saw amazing growth in China. We became the world's largest exchange by trading volume at the end of that year, so surpassing even Mt. Gox.

That's right. Wow, what a story! So there's like these inner workings of you used to work in tech. I actually just interviewed Yatsu yesterday.

Oh yeah, yeah.

And he has a similar background of starting during the internet days, the dot-com era, and just being heavily involved in tech.

Yes.

Which led him to the career that he has now.

Yeah. Yeah, it's just, it's not just tech. Charlie and I, we shared a passion investing in gold, gold coins.

Okay.

So I think that also played a strong role in our early acceptance of Bitcoin, because fundamentally, one of the most basic questions is, why is Bitcoin valuable? Bitcoin is not backed by anything. And that's one of the fundamental questions people ask. But I think it's a bit deceptive, because people have an assumption that for something to be valuable, it has to be backed by by someone or some entity or some government.

Right.

And it turns out gold is a very valuable, what they call precious metal. And we all know the value of gold, but yet it's not backed by anything.

Right. Right.

So we, Charlie and I, talked about this way before Bitcoin was invented in the early 2000s. We talked about, hey, what makes gold valuable? Why is it important? Why do countries hold it?

Yeah.

Right? If it's not backed by countries, but why do they hold it? It's because In the end, it's an asset class that is limited in issuance and has special properties that make it very fungible and usable as money.

Right.

And that makes it valuable to a certain extent.

I just saw something with Mark Cuban is like, if you hold gold, you're an idiot, you know, because in comparison to Bitcoin now. Yeah.

No.

And so now we've evolved to here and he's like, what are you going to do, shave off a little bit of piece of it if you need to pay somebody for something?

So gold is no longer as good as— no, gold is In my opinion, not as good as Bitcoin. And like many others think that as well.

Yeah.

But, but to understand gold and now to understand Bitcoin, that's the— those are the stepping stones.

Right. Of course. Yeah. And Bitcoin is now the portable digital property. Absolutely. Which is, you know, very much easy to move around. And, you know, one of the, one of the questions I get from clients a lot that they can't wrap their heads around is, you know, there's no output. It's not like a company. What is it producing? Oh, it's not producing physical goods. Like, you know, people who are trying to understand the value, who are maybe investors in stocks, They're like, there's something being produced there, like, you know, kind of the Buffett approach. Like, there's no production here. What, what would your answer be to them?

Well, it's— so Bitcoin is money. So what is the purpose of money? Money is not to produce anything. The purpose of money is actually savings. It's actually for the purpose of saving your labor for future use in a different form, right? Right. Let's say I work in a shoe factory. All I make is shoes, and my boss makes, you know, he employs a bunch of employees, we make shoes. So if there weren't money, then all I would get at the end of the day is 2 or 3 pairs of shoes every day for my hard work.

Right.

So if you work at a chicken egg-laying farm, then all you get are eggs, right? Can you eat as many eggs as you make a day, so to speak? Can I wear as many shoes as I make each day?

Right.

And then we would barter, like, I want some eggs, you want some shoes.

Barter, essentially.

I want some meat, you want some vegetables, we need clothing, so we go, we barter.

Yeah.

But then money came around because the problem with barter is your eggs don't hold forever.

Right.

And my, my shoes don't hold forever. Their, their vegetables don't hold forever. So we want to save it so we could spend it later, whether it's for vacation or to give our children or grandchildren, whether it's education or buying a car. So the purpose of money is twofold. One is to trade for things today. The other is to save it so I could trade for things tomorrow.

Right.

And broadly speaking, tomorrow as in the future. And that's the purpose of money.

Absolutely.

So what we want is money to hold its value over time.

Over time, except for everybody says, then why is it so volatile? This is supposed to be—

I'll get to that. So think about, think about today we send money to people. So money, when you send to people across the world or across the town, you're giving it to each other, right?

Right.

But money, what if I want to send it to me myself in the future? That is holding through time. So if I hold money for 3 months or 3 years, I earn money, I don't pay it now, I don't spend it now, I spend it for rent or vacation at the end of the year for Christmas time, then I'm sending it to myself in 9 months or 12 months or 2 years or 5 years. So you're sending money through time and also through physical space. And Bitcoin is great at that.

Yeah, that's a great explanation.

And the reason for the volatility is because today, Bitcoin— people, the rest of the world still don't understand the value of Bitcoin. That's why Bitcoin has these huge price fluctuations.

Well, it's a nascent technology, and I mean, it's a very small market cap compared to To what gold may be or real estate, you look, it's just a blip on the radar right now.

It's under half a trillion dollars.

Right, which is insanely small.

I mean, it's small. It's very small.

Real estate is what, $10 trillion?

Real estate is— the global real estate is over $100 trillion. If you take all the properties—

Sorry, gold, $10 trillion.

Gold is $10 trillion.

Yeah, gold is $10 trillion.

Then we got real estate, there's $100 trillion. And equities market, over $100 trillion.

Right. And then you look at this tiny market cap of what Bitcoin is and you understand I like to use this, that Amazon, when it was first conceived, it corrected heavily during its first 5 to 10 years. I mean, that was like—

It was very volatile.

I mean, for a stock, it was insanely volatile. And that's what is nascent technology. And also the fact that there is not a lot of clarity around it. So we don't have a lot of big institutional money in it yet, despite what people may think.

Yes.

Despite the Michael Saylors of the world and everything else. So, you know, it just— it's just a small group of people who are investing in this asset. And it's normal that it's volatile. Yeah, but it's become more of a store of value right now than a means of spending. So that's another thing that people don't understand. But wasn't this conceived to be a peer-to-peer transaction?

It was. I think you have to have both, right? You have to have the ability to pay and spend and transact and transfer the Bitcoin, because if that process is not doable, then it'll be like assets that cannot be moved around. That's less valuable.

Right.

Right. And on the other hand, it also has to be something where it can store and appreciate over time, and hold its value. Right? So that's where we're going, we're seeing for the first 10, 12 years, and we're going to see it for the next 10 years, I think, is for Bitcoin to mature in its value. You know, start out, when we started, when Charlie and I got into it, it was in the tens or 50, I forgot exactly how many million dollars total of Bitcoin value. Today it's like $300, $400, $500 billion, and I think it's going to cross $1 trillion. When it crosses $10 trillion, if gold stays where its price is today, then that's when Bitcoin will finally overtake the price of gold.

Do you believe that'll happen soon?

It will happen. It will happen, I think, in the next 5 to 8 years.

Which is relatively soon. You're talking about financial standards, right?

Yeah, I think so.

I absolutely agree because—

Because in 8 years Bitcoin, or actually in 6 years Bitcoin turns 20. Right, so it's pretty amazing.

It is pretty amazing. I'm all about this ride. I've been in it quite a long time, but not quite as long as you. I remember my friend in high school told me about it. It was like 2010, and you had to buy Bitcoin on your terminal of your computer. It was no easy way. And so as we segue into the difficulties of purchasing it and storing it, and as a nascent class, there aren't a whole lot of technologies or ways to be able to deal with that yet. Buying it has become a lot easier. It's still not frictionless and seamless, which is what it needs to become in order to adopt, for everybody to adopt it, or the billions to adopt it. And then storing it is even harder.

It is. So storing it, my story is when I got into 2011, I mined Bitcoin, but I didn't actually buy Bitcoin. Because being the computer geek and the nerd that I am, I couldn't find a good enough of a storage solution. So I put off the buying until I find out the good storage solution.

Interesting.

So you took 9 years. I wasted 2 years of not buying it at a good price. Yeah, yeah. But nonetheless, I think— so my first startup, BTC China, BTCC, so we made it much easier for people in China to buy Bitcoin. So we felt that we did a very good job with that. And for my second startup, Now I'm tackling the storage side. How to basically for storing Bitcoin, the old approach was to store it with a custodial like an exchange.

Right.

So with BTC China, our customers store it with exchange, and I saw firsthand the issues and difficulties both for the company and for the consumers in terms of storing it on an exchange platform. So that's why after selling the company 2018, this time with Ballet, I dedicated myself to to do a company that's completely about self-custody. So my company, we never, never touch customer assets. We really want to empower the individual, whether it's 1 million, 10 million, or 100 million people, to self-custody their crypto, Bitcoin, at scale, and make it really easy for them to self-custody. And that's the Bally solution. This is the Rio Series card that we have here.

Oh yeah, and we're going to get into that right now, but before we do, The exchanges are what people feel comfortable with and it's easy for them. I consult for a lot of high net worth people and even them, they're saying to me, but can I just store it on the exchange? Nothing's happened. This is pre-FTX. Nothing's happened. Nothing's going to happen. I mean, they're risk-averse.

Short-term memory. Things happened since Mt. Gox.

Exactly. No, but they weren't around then. They're new.

There's so many.

Yeah.

Every, every way there's new people coming in, nothing's happened.

And so I'm looking at them and I'm like, this has happened across Several bigger clients of mine.

A lot.

A lot of clients. And it's just, I'm just going to leave it there. It's fine. And then I say, well, what if something happens to the exchange? What do you do? Nothing's happening. They're too big. They've been around for years. It's all these kind of things. And I said, no, but that's not the idea of this. Not even complacency, just like it feels comfortable and safe to them too. It feels safe to them because they are not managing it and therefore they can't mess it up.

Yeah.

So then I said, no.

They don't appreciate the complexities. By not managing it, they don't really see the risks.

And I try to explain to them, it's just a piece of paper. It's a paper note. It's an IOU. If you have your crypto on an exchange and we need to get that off and— oh, but it's then the next step of, oh my God, it's very overwhelming to people.

It is.

So you actually— and one of my— several of my clients have told me that I have very different views of security, you know, like that I'm too concerned with the security of this. I think it's twofold. I think that, A, they can't imagine how this could evolve over the years and how valuable it could become. And B, just, you know, the complexity of, you know, things do happen all the time and we do see this. There are things that are unfolding all of the time that you say, hey, look, we should have stuck to the principles, which is not your keys, not your crypto. Right. So even Celsius, I remember last show, I politely told them that I could never put my clients— help them to get their money on there.

Yeah.

Because we need to control our money. And if you had your money in Celsius, if something happens to them, they go down. And in fact, they did. 3 months after we discussed it and I told them I can't do that. Yeah. So this is back to the principles. It's back to the principles of controlling your own money. That's what this was designed to be, not just another bank within the crypto world. Right. So we were talking about this earlier, you and I, about non-custodial solutions.

Self-custody solutions.

Self-custody.

Cold storage is what I use, and I've been using— we discussed Ledger a lot, and Ledger is a wonderful product, but it's very complicated for most people.

It is. I use it myself, Ledger. And I have 2 degrees in computer science, and I've been in tech all my life, so I can figure out how to use a Ledger. I know how to set it up. I know how to do backup seeds properly, and I know how to install the mini programs on it. and pair it with my computer program, my computer software, and plug in the cables and do all that, and also memorize the passcode, right?

Well, that's next level. I mean, that's a lot of work.

But it's not suited for the mass market. And that's why even recently Ledger just announced a recovery service, which has been very controversial.

Very controversial within the people like us, who have been very deep into crypto a long time. And I use Ledger as well. And so I've got my whole security protocols and I'm fine with it. But when I try to walk clients through this. Yeah, it's— this is— it's hard to be at scale that way, and they're afraid of messing it up. And in fact, oftentimes they do, and it's nothing we can do about it.

Sometimes they don't even know about it until it's too late, right?

Right.

They mess it up during the setup stage, or they mess it up later, but they don't know about it until the day they say, oh my gosh, let me go to the backup, right? The backup doesn't work.

Yeah.

Yeah. I used to work at EMC, a data storage company. Now it's acquired by Dell. And one of the key tenets back there. It's about data backup and all that, data storage and backup. One of the key insights there is that they say a backup— when you do a computer backup of your hard drive, your computer, whatever, server center, the backup is actually not valid until you've restored from it, until you've tested the backup.

Interesting.

So let's say you spend days or hours backing up data, right? Right. It's actually not done until you pull the data all out again And check to see if it was there.

And how many times do you do that?

No one does that. Yeah, it's like— That's the thing. Unless you're an enterprise, unless you know about this principle, no one does that. They just back up something and they think it's safe. And the reality is it could be safe or it could be faulty, right, where the backup screwed up.

And I think all of these fears are kind of what keep people from getting involved in the first place. It's just they're so afraid of messing things up that they think like, what's the point in even getting involved if I could mess this all up and lose it all?

That's right, that's right.

So just to clarify, Ledger is a wonderful product. I use it. It's great. It's my favorite on the market for certain things, but I'm obsessed with finding easy solutions for people. My mission is to onboard, like you, the next billion users.

What I say is Ledger has good geek security. If you're a geek, you're a nerd, it has good nerd security, has good geek security, but doesn't have good usable security. Usable security is where it actually can be usable for the common person, because the common person, Does not have that knowledge and the capability, they can't use it well. They can't have the highest security. It's like if you and I motorcycles are faster than cars, right? Motorcycles.

Right.

But if you and I can't don't know how to ride a motorcycle, we can barely get that moving past the speed of a bicycle.

Right.

Right. So for us, maybe we can ride a bicycle faster than a motorcycle because we don't know how to operate a motorcycle.

Yeah.

So it's about usable security.

And okay. You could say, okay, well, they could just sit down and learn or get somebody like me or you to help them out and learn. But then they don't have the kind of motivation or desire to even go that far because that's, you know, it's overwhelming and they just say right away, okay, fine, not for me. So you've developed a product that is kind of conducive of new people to be able to do this easily and seamlessly.

Yeah, exactly. So the story started in 2018 after I sold the company. At that time, I took a year off. I wasn't sure what I was going to do next, or retire, or stay in the crypto industry. But one episode where I purchased about 12 different Ledger devices, and I gave it as gifts to my colleagues. And I said, hey, this is a great device. I use it. You guys should all use cold storage, blah, blah, blah. And I thought that they would all be able to figure it out. Turns out that was not the case. It was the wrong assumption. So actually, that summer, I had to hold this special seminar. Tutorial session, ran it for like 2 to 3 hours where I had to physically, manually, personally teach people how to set up and use the Ledger device. Okay, this is the Ledger Nano S back in 2018. And from that episode, I realized, wait a minute, even though crypto had that— had been around for, you know, 8, 9 years, and I've been in crypto at that time for 7 years, right? I realized my mission is not done because there's so many people people out there for the next $100 million, the next $1 billion, how are they going to use and store their crypto in self-custody?

Right.

Again, not relying on an exchange.

Cold storage.

Cold storage on top of it.

Yeah.

How are they going to do cold storage and self-custody if the state of the art is a device that's so hard to use and so hard to set up?

Right.

Yeah. That's why I decided to create Ballet. Our mission was to create a Cold storage has to be self-custody, has to be cold storage, where people can easily use it. And the amazing thing about Ballet is there's no setup.

Right.

You get this, you buy this, and then it's ready to use. There's no need to back up anything. This card is the bearer asset, physical bearer asset. So whatever you load Bitcoin on here becomes a gold bar. So if you load $1,000 or $10,000 worth of crypto— and by the way, we support multiple currencies. Over 1,000 different currencies and NFTs. This becomes a physical bearer asset, so it becomes a gold bar worth $10,000 or $100,000, or even just a few hundred dollars.

Only much more portable than that much gold, right?

Exactly, exactly.

Much easier to move.

And the social contract is don't lose it.

Right.

Right. If you want a solution where you can lose it willy-nilly with good backup, then don't come— don't use this.

Right.

So you have choice.

You have choice. Exactly. This is an alternative in the market for people who feel that they want to I'll get into this story because actually I brought my mom to the show. She bought one of your cards. This is my test when I'm like—

If your mom can use it, right? What happened?

Tell me. She loved it. She's just like, wow, I can touch— she wants something she can touch.

Yeah, you can touch it.

You can feel. This is like an Amex Gold Card feel. It's very cool. She bought one of these and she was really happy about it and thought, wow, I got my souvenir, loaded it with Bitcoin, it's preloaded. This is amazing. And just before we get back into this, I also did the same thing you did. I got my family Ledgers for Christmas. And my idea was I wanted to load crypto on it for them and be like, hey guys, you got your cold storage. This is great.

Yeah, super safe.

Super safe. Yeah. And I ended up having to do all of the setups.

All the setup to load the 24 words. I loaded it.

I had to get their words down, which is, you know, I don't want to know people. It's my family. So it was just a test run and stuff. But I realized, yeah, I love this wallet, but how am I going to do this for these hundreds of millions of people.

And where are they going to store the 24 words?

Yeah, exactly.

A lot of my friends put the 24 words in the same box it came in and the Ledger device altogether. I'm like, if you're going to do that, then you might as well not get the Ledger.

Yeah. And then there's like, well, then some people talk about, oh, let's store half the words somewhere else in another country, half the words here. It's a lot of stuff.

It's a nightmare.

For the average user, it's difficult. And so now they've come out with their new solution. But so this is a different solution where you get a physical good and you understand, like it's intuitive to most people because sometimes they tell me, oh, but what if I lose my Ledger? And I have to tell them, well, that doesn't really matter. It's not about the Ledger, it's about your words. And they still don't get it. So people understand a physical thing.

Exactly. So that's the social contract. We decide, we realize, I realize in 2018 before we started this is that The reason I wanted to do this company is I realized that for most people, what people hate is when they have a wallet, whether it's on a phone, a mobile wallet on a phone, or a hardware wallet, electronic wallet like a Ledger, Trezor, or whatnot. What they would hate is if they still have it, yet they wake up the next morning, they find out that account has been hacked.

Oh, interesting.

And all the funds are gone.

Interesting.

Wouldn't you hate that?

Right.

Electronically hacked.

So you're like, wait, this is in my possession.

But, but everything's gone, right? You feel totally let down.

Yeah, right.

But on the other hand, if you say your money's there, $1,000, don't lose it, and they say, okay, I got it, don't lose it, and then they leave it on the kitchen counter, it got stolen. Well, they know they're at fault, right? It's like leaving cash on the kitchen counter. What do you expect, right? Or leaving cash on the— on your bed in the hotel room. What do you expect, right?

Right.

So as long as you keep it safe, whether it's a home safe or a bank safe, or you dig a hole in your backyard, or you hide it in your bed mattress, however you want to hide it safely, then as long as you don't lose it, you won't lose the crypto. That's a promise we give to our users, right?

Yeah.

It's much easier for the 1 billion people to understand that, and they can do it. It's a usable security.

And I've seen how much traction it's had by people who have been stopping by of all generations. By the way, I've seen young people, older people, and they love it and they're very intrigued by it. And so I think it's a really great solution for many multiple generations who want to get in and do this on their own. But so let's stop there for a minute and go back to, okay, so we've understood that keeping your crypto on an exchange is basically at the mercy of the exchange and it's an IOU.

Yeah. So there's 2 risks on that. I'll just point out exchanges One, exchanges can go down like Mt. Gox, like most recently FTX. And there'll be more, by the way. There'll be more exchange blowups.

Absolutely.

Okay, so exchanges themselves can go down. And secondly is, even if the exchange doesn't go down, let's say Coinbase, it hasn't gone down, right? But the reality is your account can get hacked. So plenty of people have had their Coinbase accounts get hacked, even though Coinbase the institution is, is a publicly listed company. It's very well and functioning, right? So you have 2 risk factors people don't realize. People think about the number one, but they don't think about number two. Yeah, your account can get hacked. It's always the weakest link.

Yeah, yeah, and many people don't even have 2-factor notification. They just have the most simple login. So that's, that's one issue. And then let's take it the next step to hot storage. Yeah, so let's describe the difference between hot and cold storage.

Hot storage would be a wallet software that you run on your phone or on your PC laptop, right? Right. It would— all the so-called private keys The private keys are on there, it's ready to go. It's usable because you can instantly use it to send transactions, to receive money and send money. And you don't need any hardware device or pairing up to do. And I think those are great for small amount of funds.

Small amounts.

It's no different than what the cash or credit card that I carry in my regular wallet when I go buy something, small amounts. But certainly I wouldn't put my own net worth on my bank card or in cash in my wallet, right?

Yeah, that's a great analogy because, you know, I use hot wallets for certain things. They're simple, they're easy, we just get it done. And it's not necessarily that you would keep your entire life savings on that hot wallet or whatever it may be. So a lot of, you know, new companies that are trying to make this easy, just as you are, I love. They're creating that, you know, kind of like hot wallet within the app that they open up. So it instantly goes into that wallet and they have it stored there. And that's great for people being able to open up accounts and things, but then what do you do after that?

Yeah.

Right? Where do you store it long-term? Where do you have your actual, like, you know, more funds, the bigger funds that you want to keep safe?

Yeah.

So that's where Ballet comes in handy.

So Ballet, our solution is cold storage. It's a metal card made of stainless steel, and this one's actually 24-karat gold. So I tell people this, you can actually almost all the human senses, right? Have you— do you know about our special feature?

Let's hear it.

Okay, so you can, you can see it, right? You can see it, right? You can touch it, feel the embossing, right?

Now I see that the B there, you can hear it.

Because this is the sound of Bitcoin, right? This is the sound of Bitcoin. It's a metal card and 24-karat gold plate, 24-karat gold, real gold, okay?

That's cool.

If you carry this in your wallet, it's probably the only actual gold card gold card, right? All the other cards is just made of plastic.

Wow, Amex, you gotta get on your game.

It's not gold. This is 24-karat gold.

It sounds like gold, but it's not, right?

Yeah, this is actually 24-karat gold, okay?

That's cool.

So this is an actual gold card.

So it's playing on all the human emotions.

Yeah, exactly.

Like the clout, you know.

Yeah, so you can't taste it, but you can smell it. So there's a— if you scratch with your fingernail gently, it's like scratch and sniff, right?

Right.

If you scratch gently the QR code and go ahead and smell it. Do you know about this?

No.

Go ahead and smell it now.

Okay, wow.

That's the smell of Bitcoin. That's the smell of crypto. That's the smell of ballet.

It's interesting.

This is our branding and also for anti-counterfeiting purposes.

This is very cool.

Every Ballet card has that unique trade secret scent on it.

That is cool.

And we don't advertise it a lot, but it's on our QR codes.

You know, this—

Yeah, tell your mom about it.

I'm gonna tell my mom about this. And this is one of the reasons why, because I've been looking— I, I'm like tirelessly looking for solutions for newcomers and for— to, to help onboard the I just did a conference about this with Anthony Scaramucci, actually, in New York, is how to onboard the next billion users.

Yes.

I'm just tirelessly looking for these solutions.

Yes, exactly. We created Bally for that.

Yeah. And so I found you guys, and I'm really happy with this. And the cool thing, one of the cool things is I see, like, when I did this for my family and I wanted to give it as a gift, like, you can actually gift these gift cards.

Absolutely.

Right? To, like, for Mother's Day or for a birthday or something like that. get people involved in this cool cutting-edge new technology, right, that they're excited about, and they can have their own wallet in this way. And you've got many different styles and amounts and things like that that you can preload it with.

Yeah.

This is really very cool. So as we kind of come to the end of exploring this wonderful product, I want to go over one topic with you, which is something that people ask me all the time. They tell me, oh, but you don't have to trust Ledger.

Ah, this is a misnomer.

Yeah, right. You don't have to trust Ledger because it's all offline and you have your words and that's it.

Yeah. So this is actually not true. So I'll admit, I didn't think much about this topic up until 2018, 2019. When I was about to create this company, I really sat down and really thought about this whole thing about trust.

Right.

About wallets, vendors, and trust. It turns out, I realized, and this is true for all wallets, okay? I don't care if it's a hardware wallet, software wallet, or ballet's cold storage. You always have to trust the vendor of the wallet for 2 fundamental ways. Number one is you have to trust that they're technically competent.

Right.

You're going to get screwed, you're going to lose money, and it's going to be a bad experience.

So you're dependent on Ledger to keep updating the product in a proper way to make sure that—

Not just keep updating, but first of all, they have to deliver you a product that is good enough, that is not buggy, zero-day exploits and stuff like that. And then further, you have to— because they use software and all that, you have to trust that their future software, the Ledger Live and all that, and the firmware, the future firmware will be updated in a timely manner in a way that fixes the bugs, and also the features are not introducing more bugs and backdoors.

Right.

Right. So we're getting very technical here, but you have to trust that. Right? And there are cases where some companies release a firmware patch, it actually made things worse.

Right.

Okay. Introduced more bugs and more backdoors and stuff like that, to patch it again. So that's why many hardware wallets, not Ledger, but some other ones that go unnamed, they have a lot of updates. And they've had a lot of problems where funds are lost or get hacked, right? Even the web wallets, software wallets. Recently, there's a recent wallet, I think Trust Wallet had an issue. Yeah, I remember that. So, you know, it's very sad. They use bad software for the entropy generation, and hackers figured it out, and they could sweep all the wallets.

Right, right, right.

So, you have to trust that they're technically competent. It wasn't their intentional fault, right?

Of course.

So, that's number one, trust.

Not usually intentional.

Number one is they have to be technically competent. Number two is you have to trust that they're not evil, meaning that they have a good heart, good intention, they're not out to steal user funds. Because even if they're technically competent, but they're evil, they can get you. There's no fooling around. Like many wallets, they offer, for example, open source their firmware. You can read the code. Now, just because they open source it doesn't make it secure. That's also a misconception. know. But people say, oh, it's open source, it must be secure. No. Open source is only secure if a lot of people review it, it stands the test of time, right? If some random new wallet company comes out and open sources software, it's not going to be secure on day one. So, you have to trust that they're not evil.

Right.

Backdoors. But the problem with open source is, even if they're open source, it doesn't mean— if they're evil, it doesn't mean that the version that's running on the device is that version that you saw on open source.

Wow.

Right. Because they could update it with a newer version with more backdoors and more evil stuff. Right now, I'm not accusing of anyone doing that. No, no.

But there are possibilities that we need to run through as users of these devices and understand what the complexities are behind these. And so Ledger's clearly demonstrated that they're on a wonderful path and they're helping so many people. And I love their product. But so is there any way to get around this? Trust? Or what do you think is—

I don't think there is. I don't think there is. You know, it's true in the physical world too. When you go buy Coca-Cola, a bottle or a can of Coke, you trust that the brand— you trust that the bottle or the can is actual Coca-Cola from the actual factory, that it's not rat poison.

And then we're getting into like real conspiracies by the end of that. You know, if you can't trust that, then, you know, what is life anyway?

Seriously, right? I don't know if it's a bottle of Tylenol. Yeah, yeah. Coca-Cola. If you go to drive through McDonald's, you got to trust, right? Whether it's the companies, the food, you know, all that. And that's the world we live in, right? That's why they're brands, right? The reason a brand exists is because it's been trusted over years and years and years. And for Ballet, we're building that brand, right? Starting with a great name.

Because it's the same for Ballet.

Absolutely. We're building that brand. Yeah. First of all, it starts with myself, my brand, my personal brand. I've been in crypto for 12 years. When I started Ballet, that was 4 years ago, at that time I had 8 years of crypto experience. Now I have 12 years of experience, and I'm preaching about Bitcoin and cryptocurrency. And, you know, Ballet starts with a great name, and now we're 4 years, and one day we'll be 5 years, and one day we'll be 10 years. And that's how we build the trust. And Ledger's doing the same thing, Trezor, everyone's doing that, right?

Yeah. Well, coming from a person that's building their name in the space as well, my number one thing is reputation and the kind of people who I That's right. Who I do these discussions with and I partner with, I want to be sure I can put my brand behind them to as far as the extent possible, right? And so for me, that's super important that you guys have that transparency and that you're out here personally here talking to the people and explaining these things. Yeah, exactly.

Very few, you don't see that much wallet companies or exchange company where the CEO comes out and meets the customers and there's a public face, right? A lot of times it's CEO hides behind or the CTO hides behind. They're anonymous. I think it's terrible.

It is terrible. I mean, you want to build up that— yeah, the brand, the image, the trust. And you won't get these next billion people in if they don't have somebody to, to see as the face behind the brand.

Or—

that's right, they need to— this is so new and, and so scary to so many people that we need to do as many— like, as many steps possible to get them to understand that we're here for the long run and we want to help.

Yeah. And people always ask me, oh, how should Why should they trust ballet? I'm like, because I want to ensure. I've ensured that the ballet system, all the all the how the security works and all the key generation, the BIP thirty-eight protocol. I've ensured through the best of my knowledge and experience that it really is rock solid.

Right.

Because if it weren't, I wouldn't endorse it. I wouldn't have started this company. I wouldn't be able to sleep at night.

Right.

But I've been sleeping well for the last four years, and I can tell you.

Well, that's a good sign.

Yeah, we're one of the. We're one of the only wallet companies, crypto storage, self-custody companies, to say proudly that over the last 4 years, not a single user has lost money.

That's amazing.

Either due to hacking, and most importantly, or due to user errors.

Right.

Right? A lot of times you might have a— because hacking actually is not a big percentage of loss.

It's phishing.

It's phishing.

It's human error.

It's human errors. It's humans either making errors due to phishing or humans making errors due to their own missteps.

Or they're impulsive, you know, playing on that sense of urgency. I mean, that's where the hacking comes from. I always, I always say this too, it's not actually hacking that's happening.

It's human errors.

Yeah, yeah, people just making mistakes.

And we, we've lowered the bar to the security to make it truly usable. So as long as you don't You keep this safe in cold storage and don't lose it. You will not get hacked and you will not lose money.

Right.

Right. And I'm very proud of that. And I don't think any wallet company can come out and say that.

Right.

No, that's incredible. So many recent companies that have had issues, people losing money and all that. Yeah. The only case where you can lose money is if you lose a card.

Right. Or if you're making that apparent.

This is— and we tell people straight up, don't lose a card or to use it to spend money. Once you put money in here, crypto in here, how do you get it out?

Right.

You have to peel the sticker. The top part, and there's a yellow sticker underneath with a different QR code. And if you scratch off this bottom strip, you'll have numbers and letters underneath here. Okay, so the 2 pieces of information— what's below the sticker and what's underneath this QR code— I'm sorry, what's underneath the QR code and what's below the scratch-off— those are the 2 critical pieces of information, what we call the pass— the private key entropy.

Okay.

Don't abuse that. Don't lose that. So if you've peeled it and scratched it off, don't take a photo of it. Don't let anyone else see it. Okay, because at that point we cannot guarantee the security. Okay, so as long as you don't open it, as long as you don't lose it, you will not get your crypto lost. Okay, that is a guarantee we give.

That's amazing.

That's a Bally assurance.

Yeah, and you see, you know, it's all about finding the solution that's right for you. You can diversify.

Exactly, diversify.

Many different wallets, you know, you can have that sense of, you know, security in your own wallet storage and your own strategy. But I think, you know, this is an excellent wallet to add to the collection and to add to the diversification. And for the people that want this kind of solution, this for me is one of the number ones. I mean, this is incredible.

And for a few hundred dollars, this is perfect. For a few thousand, you can choose to use this or not. And if you have millions, you know, by then you shouldn't just use Ledger or Ballet or whatever. You should use different products.

Yeah. Like a diversification.

Yeah, there was a combination of several things.

Exactly. Yeah.

Millions of dollars.

Yeah, yeah. So, um, I just am so glad that we got to talk today. There's a lot of really cool plans in the works. I know I'm going to be making my own ballet cards with the company to distribute. I'm super excited about that. And, you know, even plans for possibly going to El Salvador.

Great.

Yes, because I have had some relationships there with— we met the ambassador last year here. And so I see, as we discussed a little bit with part of the team, that there was a certain percentage of people that didn't download the wallets in El Salvador because it was too complicated.

Yeah.

So we thought that maybe this would be an interesting solution there for maybe the older generations that it's more difficult for.

Yeah, people hold crypto, hold their own Bitcoin in their hands.

Yeah, yeah. So many countries across the world can use this. I'm super excited to see the evolution and, and, you know, the trajectory of your guys's journey. It's been really cool already, and I'm so glad that we, we got to talk today. And thank you so much for being on.

Thank you, Megan.

Thanks. And so before we go, what can we expect from you? And you just wrote your book. Yes, The Promise of Bitcoin. What's, what's next for you in the evolution of your career?

So, so I'm a big Bitcoin fan. Some people call me a Bitcoin maximalist, and I don't shy away from that. So this year Ballet is starting to sell physical Bitcoin.

Oh.

So Bitcoin denom— so we're selling the cards, still metal cards, same Ballet technology, same awesome secure Ballet technology with a 2-factor private key entropy, right? But now it's denominated. So instead of a generic wallet that stores multiple currencies and NFTs, we have one specifically that's called Pure Bitcoin, right? It would have the Bitcoin logo. It'll also say the denomination. We have it in 0.1 Bitcoin, 0.025, 0.01, and 0.005. And we have them in plastic cards as well. So we will sell them loaded with Bitcoin. And unfortunately, it's not available to the whole world yet. We're starting with the US. It's available in about over 2 dozen states. We're initially piloting this. And then over time, as we get more licenses to sell this across different states with money transmitter licenses, then we'll sell to more customers in the US. Cool.

So that's a good one.

Now, for the first time, people can buy Bitcoin directly from Ballet. Go to bitcoin.ballet.com. Because think about it. Now, what do you tell people? They say, I want to buy Bitcoin. I'm interested. They have to go to an exchange. And they have to do registration, KYC. They have to buy the Bitcoin, place an order through the order book. And then they have to then wait a few days and then withdraw the Bitcoin onto their— they have to buy a separate wallet to withdraw the Bitcoin onto it for self-custody. Now with Ballet, you can just go to bitcoin.ballet.com, just place your order, buy it, and then it gets shipped to you and you're done. It's like buying a gold coin.

That's really cool. And it could be like a great gift idea, right?

Yes, exactly.

This is what I see as, okay, let's get our families involved and give them a cool memento with something already loaded with Bitcoin. And that's really cool. That solves the problem of my Christmas where I had to load up all their ledgers. And I really like that. That's very cool.

So we're doing that now, and it's off to a great start.

Very cool. Well, Bobby Lee, it's been great to have you on the show today. Thank you so much for coming by. Thank you, Maria. And I look forward to the future of Belay.

Yeah, excellent. We're looking forward to the next 1 billion users.

Yes.

Yes.