#511: Zach Herbert on Building Crypto Hardware
3/12/2021 · 44 min · transcript via mlx
Tags
Key topics
— Foundation Devices is building open-source hardware wallets and decentralized internet devices, starting with Passport, a next-generation Bitcoin hardware wallet shipping by end of March.
— Open-source hardware matters for Bitcoin because transactions are immutable and security breaches carry permanent financial consequences; auditability and transparency become critical safeguards.
— Apple and Google's restrictive ecosystems create structural barriers to Bitcoin adoption and decentralized applications by controlling what software can run, limiting background processes, and extracting service revenues.
— Foundation's strategy combines open-source security, air-gapped QR-code transaction signing, and compatibility with existing wallets rather than building proprietary software.
— Future roadmap includes a Node product (self-hosted applications with integrated hardware wallet) and ultimately an open-source phone with Bitcoin as a core OS feature.
— Institutional self-custody of Bitcoin remains distant; career risk and liability concerns drive institutions toward custodial providers despite technical feasibility.
Market & price signals
— None discussed.
Actionable insights
— Early Bitcoin security requires accepting trade-offs: open-source devices will initially lag proprietary alternatives in camera quality and performance but offer superior sovereignty and auditability.
— Institutions will likely continue using qualified custodians for the foreseeable future; change will begin with converted hedge funds and family offices acting as large individuals, not with fiduciary entities like pensions or endowments.
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