Genzio Podcast | Paris Blockchain Week: Vault12 Crypto Inheritance and Quantum safe Encryption

Transcript

Gabriel:

We are live in Paris for Paris Blockchain Week. I’m here with Wasim Ahmad, Co-founder of Vault12. How are you doing?

Wasim Ahmad:

I’m great. How are you, Gabriel?

Gabriel:

I am doing fantastic. The weather here is amazing. The energy is absolutely incredible at the actual conference. Have you had a chance to go to the conference, yet?

Wasim Ahmad:

I did, yes. I was here last year, as well, and I thought it was kind of low energy last year. But this year there’s a lot more French entrepreneurs. There’s a lot more banks that are wandering around doing stuff, doing side events. So I think that’s huge progress.

Gabriel:

Why do you think that is?

Wasim Ahmad:

Well, I think it’s becoming, well, so first of all, there’s European regulations are in place now. So, turn of the year, those came into force. So, I think financial institutions that are generally risk averse can jump in and start looking at what are they going to do in the future.

I mean, they’re probably going to start with institutional type products, but at some point there is a future for retail crypto investors with the traditional banks that people are familiar with here.

Gabriel:

Absolutely. Before, and there’s a lot we can go with. There’s a lot we can go with from here, but I’d love to hear, and I’d love for our audience to hear a little bit more about your background and how you ended up getting into blockchain, because I know you’re a serial entrepreneur.

Wasim Ahmad:

Yeah. So yeah, I worked for a lot of startups, but back in 2003, I joined a startup called Voltage Security, which was a spin out from Stanford in the cryptography space. And they had a breakthrough in public key cryptography. And so I got to learn all about encryption and I got to work with all the most well-known cryptographers in the world and just an amazing retail-focused experience.

But then we went enterprise with helping financial institutions and others that we introduced end-to-end encryption for payment systems. And so that was hugely a desirable thing because there were so many hacks going on. And that company got sold to HP.

And then I did a bunch of other startups. I moved from Silicon Valley to New York. And then some people I had worked with at Voltage called me and said, “Hey, take a look at our product. What do you think?” And I kind of gave them my honest opinion.

Gabriel:

It wasn’t super positive?

Wasim Ahmad:

No, because it was really, really technical and really difficult to use like all blockchain crypto products are when they first start out.

Gabriel:

Right. When was this?

Wasim Ahmad:

This was like 2017, about 2018. So, anyway, I joined, I helped them write their white paper, we launched the company, we refined the designs of the product, and then we launched it in the app stores in 2019. And that was a great experience for the average retail consumer.

But the product had all of the knobs and dials that crypto OGs would recognize. 2019 was not the best year to launch a product that is about crypto inheritance and basically about death because next to 2019 was 2020. And so the world pretty much shut down.

And it took about a year before we could seriously talk about death, and asset management, and just the realization that what matters is, it’s not just can you pass your wealth on, it’s can you ensure accessibility to your assets when something like that kind of crisis happens?

And so, it was more about accessibility. You couldn’t get into safe deposit boxes. I mean, safety deposit boxes have gone away now. They’re not a real thing, but at the time, they were a thing.

The Winklevosses had taken their crypto keys, split them into pieces of different strips, and flown into different airports and put them in safe deposit boxes in regional banks.

Gabriel:

Wow.

Wasim Ahmad:

And so, that made sense back in the days when you could rely on the bank to hold that kind of stuff. So, we’re really a digital version of that. And so they were one of our early investors.

Gabriel:

Wow, okay.

Wasim Ahmad:

Yeah.

Gabriel:

So you’re backed by the Winklevosses?

Wasim Ahmad:

Well, just a little bit.

Gabriel:

Just a little bit?

Wasim Ahmad:

Yeah. Well, there’s a few others.

Gabriel:

Okay. Interesting. There we go.

Wasim Ahmad:

Yeah. Yeah, they’re on our website.

Gabriel:

Okay, amazing. There we go. So, can you tell us a little bit about how it actually works?

Wasim Ahmad:

So, yeah, it’s very straightforward. You download the app. And the app enables you to set up a digital vault. And you can then record your crypto keys, could be your seed phrase or your private key, or you can record a video with a riddle of what the seed words are. I mean, however you want to do it. It doesn’t really matter what format it is that you’re recording.

That goes in the vault, it gets encrypted, and then everything is split into pieces using Shamir’s secret sharing, which is an algorithm that’s a kind of tried and tested algorithm by one of the most prolific cryptographers in the world, Adi Shamir.

He’s the S in RSA.

Gabriel:

Oh, okay.

Wasim Ahmad:

And we had worked with his technology in Voltage, as well. So, it was very comfortable doing that.

Gabriel:

Oh, wow.

Wasim Ahmad:

It’s also technology that’s quantum safe, which is good. So, you get to choose who those pieces go to. So we call them guardians.

So you can choose three friends, three family members, three business partners, that kind of thing. And it can vary. You can have whatever number of people you want. It’s not like multi-sig where it’s three or five and that’s it.

Gabriel:

Right.

Wasim Ahmad:

And then you can also set the threshold, which is, if you want to access a crypto key, how many okay’s do you need? So, you can say three out of 10 or five out of 15. Some of the guardians can also be devices that you own.

So, like I have an old iPad and an old iPhone, and they’re stored kind of hidden away. And so if I’m just trying to access a key to a wallet, I can just do it on my own. I don’t need anyone else to be involved.

One of those people, like the humans, can be designated as your beneficiary. And what that means is-

Gabriel:

Only one?

Wasim Ahmad:

Only one. Yeah, yeah. So, one person who is going to receive all of that technical info and hopefully will know what to do with it to unlock your assets, should you pass away, should you be in jail, or should you be incapacitated, which is what we found out during the pandemic, that there was also an issue that people were not close to where their assets were.

Gabriel:

Wow. Is there a power of attorney involved? Or, how can you verify someone passed away? Is it just like a medical document or someone is sick? So, how do you…?

Wasim Ahmad:

So we’re not getting in the middle of, are you dead or unreachable? Right? I mean, I know there’s other people that have smart contracts and death APIs and all kinds of stuff. We’re not doing that.

So, the beneficiary, the guardians, hopefully, these are people who you know and who know you. So they’re going to know that you’ve passed away and they can initiate the request to access the assets.

Gabriel:

So once they have the access, they can initiate it at any point?

Wasim Ahmad:

Yeah. They can initiate it at any point. Now, if you’re alive and they’re doing it, they’re being naughty, you can veto it. You can also set up a time lock and say, “Well, they can request it, but they’re not going to get access for a year.”

Gabriel:

Oh, wow.

Wasim Ahmad:

Or whatever timeframe you think is reasonable.

Gabriel:

Interesting. Okay, okay. That makes a lot of sense.

Wasim Ahmad:

And if you don’t like the people, you fall out with the people that you designated as guardians, you can just change them. The system will recalculate, redistribute, it’ll just handle all of that. You don’t have to worry about keys in the system, or verifications, or none of that is really surfaced for you.

Gabriel:

Wow.

Wasim Ahmad:

It’s very, very simple.

Gabriel:

It sounds like it’s super simple.

Wasim Ahmad:

Yeah, we deliberately made it very simple. I mean, look at the apps that exist in the crypto world. They’re horrible. Metamars, like, you know, you use it once and then you’ll desperately try to find something else.

I mean, they’re all getting a little better, but all the trading apps look the same now, right? We’ve reached this sort of plateau level, but there’s more that can be done.

Gabriel:

Gotcha. Okay. And so, how can people get involved with this right now?

Wasim Ahmad:

So with Vault 12, very easy. Just go to your favorite app store, iOS or Android. You can download the app, it’s called Vault 12 Guard, and set up your digital vault.

I mean, it’s great for just backing up your keys. And then if you want to have the inheritance piece to safeguard your generational wealth, you can then choose a beneficiary, and that way you are protected from that.

Gabriel:

Wow, okay.

Wasim Ahmad:

Yeah. The thing to remember, though, is inheritance sounds like it’s something for older people, but all the stories, all the anecdotes about who needed it didn’t do it, didn’t have it, are young people and their families can’t access

Gabriel:

Wow. Are there any particularly interesting anecdotes or stories that come to mind in this place?

Wasim Ahmad:

I mean, I think Matthew Mellon, the heir to the Mellon Banking Company, financial institution. BNY Mellon, super early to crypto. He had invested a ton of money in, I think it was Tether, I can’t remember which crypto asset it was specifically.

And he set it up and put it in cold, split it up and put it in cold storage in like five or six different places. And it was so secure that he did not, it was not documented anywhere that anyone can find. And he didn’t tell any of his family.

And, unfortunately, he passed away. He just passed away. It was unexpected.

Gabriel:

Wow.

Wasim Ahmad:

And he was very young. And that money is all inaccessible.

Gabriel:

I mean, was it in banks or is it like…?

Wasim Ahmad:

No, no, it was just in private storage, cold storage. Custody somewhere.

Gabriel:

Wow.

Wasim Ahmad:

Yeah.

Gabriel:

Wow. Okay. Well, there’s an example.

I’d love to, we were talking a little bit earlier about just kind of where we’re at. You mentioned quantum safe and you mentioned kind of like the early, kind of what crypto was and then what it became. I’d love to hear your thoughts on where we’re at with crypto.

Wasim Ahmad:

Well, I mean, it’s easy. Everyone always focuses on the ups and downs. Everyone keeps saying to me, “Oh, well know crypto crashed this week.” Well, it didn’t if you bought at 50K, it didn’t crash. So there’s always going to be ups and downs.

But beyond those headlines about speculation, the beauty of cryptocurrency is that it’s based on mathematics. It’s not based on, is there gold in Fort Knox? Or, what a government wants to do or any of those things. It’s based on mathematics.

And that mathematics is also part of cryptography, the thing that protects the whole system from working, which is blockchain, but not from working, but working. And that’s the beauty of it, that it’s its own thing that is sort of pure in nature. And that’s why I think there has been this huge, huge momentum behind it over the last 15, 16 years.

And then I think in the future, people are more worried about AI right now, but on the horizon is quantum. And there’s been a few articles I’ve read about, “Well, one day quantum computers will be able to cycle through and find all the Bitcoin that’s been lost.”

Well, they might be able to do that, but it depends if the seed phrases are protected using quantum safe algorithms, then they’re not going to be able to just cycle through and find that.

And so, that’s really the trick, is making sure that you’re, the most important secret that you have, which is to do with your wealth, is backed up somewhere so that you can access it when you need it. And it’s protected in a way that isn’t going to know get drained in the future somehow.

And you can do that today. You don’t have to, it’s not something you have to worry about in the future. But it gets headlines, so it gets covered in the mainstream general business press.

Gabriel:

Right. Yeah. Can you speak a little bit about what it means to be quantum safe? Because we all hear about how AI and compute is growing at such exponential rates. How long is that? Is it forever quantum safe? What does that actually mean?

Wasim Ahmad:

Yeah, so you could say that there are a few forms of cryptography. And one form is where you multiply two numbers together, two prime numbers, and you get another number. And that’s used to encrypt things.

And so, that form of cryptography is subject to a quantum attack where you basically start counting prime numbers and multiplying them. And at some point you arrive at the magic number that unlocks that particular thing that’s been encrypted. So those forms of encryption allow this kind of quantum attack.

There are other forms of encryption, for instance, Shamir’s secret sharing, which is set up in a way that you need a few different pieces of information. And even if you have one of those pieces of information not there, you cannot break into it.

So you can’t just cycle through with a quantum computer and try to find that. It just simply doesn’t work that way because of how it’s encrypted. So, in our system, the guardians, they represent those pieces of Shamir’s secrets that have been shared.

Gabriel:

Interesting.

Wasim Ahmad:

And so, if you lose one of those pieces, you’re not going to be able to break into the system, or if you don’t have one of those pieces.

Gabriel:

Right, right.

Wasim Ahmad:

So, that’s broadly speaking, the difference. It’s kind of two broad types of algorithm. So one set is subject to quantum attacks, and the other is just simply mathematically not.

Gabriel:

Interesting. And is there up until a certain point, like or no?

Wasim Ahmad:

No. No, no. It’s mathematics, it’s pure, it either works out, it’s one or zero.

Gabriel:

You’re a serial entrepreneur, you also are recognized for your philanthropy. I’m curious what advice you would have to aspiring entrepreneurs, who, especially in this age where things are moving so quickly, seemingly, aspiring business people now have technical prowess and skills that they didn’t have before because of everything happening in AI. What would your advice be?

Wasim Ahmad:

Set yourself up in the US. Be a US company because the regulations are going to be way more optimized for you to build stuff quickly and get to market. And, hopefully, whatever you do in the US will be transportable and distributable elsewhere in the world once the world catches up with regulations and all of those kinds of things.

Right now, the biggest barrier to success is not, as you said, it’s not technology, or technical prowess, or any of those things because you have all these wonderful AI’s to help you.

But it is things like, how will you market your product? How will you distribute your product? And there are still, don’t get me wrong, there’s still barriers to this.

Google will not let you advertise. Apple will not let you do various things that they let other app developers do. And this will change, hopefully, in time this will change as new laws come into place.

We know the laws are coming in the US but they’re not there today. They’ll be there in August. And I think after that, some of these other companies will have to change their policies to recognize the risk factor around compliance and crypto, and all those things.

So, the first place where things are going to be really great for developers is going to be the US. So just set yourself up in the right jurisdiction. Before, a few years ago, the answer was, “Set yourself up outside the US.”

Gabriel:

Yeah, yeah, yeah.

Wasim Ahmad:

Right? We didn’t do that. We’re an American crypto company.

Gabriel:

Nice.

Wasim Ahmad:

And we stuck to our guns. And now I’m very glad we did. But, this is an opportunity that’s open to anyone and everyone.

Gabriel:

Wasim, thank you so much. I really appreciate the time.

Wasim Ahmad:

Thank you so much.