I'm Kevin Robertson and I'm here to talk
to you today about how crypto is broken
one of the big things that people talk
about in terms of adoption of
cryptocurrency are things like
transaction speed and transaction volume
and cost but we actually believe that's
not the core reason why people aren't
using crypto broadly today we believe
that using crypto for most people is
dangerous if you look at a lot of wallet
apps out there all the warned users
about their private keys
you set up a new wallet store your
private keys safely if you lose them you
lose your money now for technical folks
that might be okay but for most people
that's simply terrifying the result of
this is that only the most technically
savvy users know how to use crypto in a
self sovereign way exchanges are the
default for the rest of us people go to
exchange as a bi crypto and we all
understand the risks that are associated
with that hundreds or tens of billions
of dollars that have been lost on crypto
exchanges over the past seven to eight
years so how is this shaped crypto and
what we actually do with crypto today
well the simplest example is people
don't use crypto to buy real things
instead it's there for speculative
behavior along with that crypto has this
obsession with TPS we need to focus on
transactions per Section
we're per second to get more users sort
of if you build it they will come
mentality but our thought is we're
getting close to the chasm of crypto and
in order to cross that chasm safely if
we want people to use their crypto on
their own and hold on their own we need
a new solution so we asked the question
what if crypto was more like cash cash
has a lot of benefits to it billions of
people understand how to use cash
transactions are instantly final they're
largely anonymous and if you destroy it
or lose it
you gone it's gone so if you burn your
your
if you burn your cash you no longer can
spend it along with that cash is still
massively used so a lot of folks talk
about the move to credit cards or
spending things digitally but in most
societies cash is still used for
transactions under $25 in order to think
about if we want to make crypto more
like cash we have to understand what
cash is and what it represents it's
something distinct from money cash is a
transferable IOU if I hand this cash to
you you know that you can go hand it to
someone else in exchange for good or
service it means that you have to trust
that cash is real and that someone else
work will accept it it's also
transferable there's been a number of
experiments in this the easiest one is
printing out a private key and handing
it to someone that's great it's
incredibly cheap but it's also
technically difficult to use and beyond
the first person it's not infinitely
transferable to more and more people
other people can simply copy the private
keys the other solution is something
like a hardware wallet
hardware wallets store the crypto in a
fairly safe way but the problem is
they're not easily transferable and
they're fairly expensive and along with
that you have to trust the stack of the
hardware wallet you have to trust its
firmware and its software recently
there's been a move towards Java smart
cards Java smart cards are great because
unlike harbor wallets they're fairly
cheap but you also can't trust them
either they have a full Java smart card
operating system running on them with
massive vulnerabilities what this really
boils down to is that trust in usable
crypto comes down to trust and keys and
key storage and so what we're proposing
is something that we're calling call
calling is an experiment in physical
crypto cash it's transferable it's
trustworthy and it's low cost maybe
physical cash is what we need to
actually achieve price stability out in
the world against crypto rather than
stabilizing crypto against fiat which is
inflationary we can have crypto which
you can actually use to spend on goods
and services
let's talk a little bit about how Kong
works it has a printed face value on it
it's really simple to understand how
much you have and how much you can spend
it's tied to a smart contract so unlike
a hardware wallet it's not storing the
asset directly on it but rather the
smart contract does that for us and what
that means is that we get all the
security benefits of the EVM it's got a
time lock on it crypto cash is not a
prepaid gift card you can't pull the
crypto off of it immediately that's a
really important feature because I hand
this to someone else they have to have a
good expectation that the crypto is
actually backing it and lastly and most
importantly a secure element chip and
we'll talk exactly about how that
functions in a moment this is all
somewhat familiar because in some
countries cash used to work this way in
fact in the early 20th century you could
actually take certain notes and exchange
them for precious metals at the federal
reserve crypto cache is similar at the
end of time lock you can take your Kong
and you can retrieve yourself the token
that is backing it so let's come back to
the secure element the secure element is
the most important part of crypto cache
because it's where it stores the keys
but there's a few issues with secure
elements today many of them allow you to
load code onto them but there's a
handful that don't
they're only configurable you can
generate an ECDSA key pair get the
public portion but not the private
portion by design the private portion is
locked up forever you can get signatures
out of it however to verify that in fact
that device is the authentic device
containing those keys the only problem
with this is that existing secure
elements that operate like this run on P
256 P 256 is not the native curve used
in Bitcoin in theorem K 1 is but the
great thing is we can use a smart
contract to bridge the two so what we do
is the smart contract is the custodian
of the tokens for the time lock period
and then it also has the public key in P
256 form because of smart contracting we
can have a P 256 proxy con
tract which understands that key and can
verify the signatures for us broadly we
believe that Kong is the first of a new
kind of device that we're calling silo
effectively there's silicon locked
contracts they remove all of the
security required in entrusting a
hardware wallet stack and they put it on
chain into the EVM if you can trust in
your chip and your key storage
everything else is open and auditable
you don't need to worry about some
firmware bug you don't need to worry
about someone messing with your hardware
wallet in transit this could be used for
all sorts of applications not just money
you could do this for asset tracking you
could do this for art NFTE etc etc but
this brings us to the next conclusion
which is if this is the right way to
store crypto in a usable way that you
can hand from person to person we need
to think about the chips that we're
putting it on to and the next step is
that we need to look really closely at
opening up that silicon this is an
example of a chip that was in a Samsung
Galaxy product from 2011 and here the
designer took some liberties and
actually putting art at a gate level
into the chip now that's all nice and
fun but what if instead he put in a few
gates that extract the private keys
millions of people might be using this
device with really secure open-source
stacked on top of it but if somebody has
ability to pull the private keys off of
it all those guarantees are for naught
we're proposing a new project which
we're calling arks and I don't have
enough time today to go super into
detail on arcs but effectively the
notion is this we need to think about
trustworthiness and our chips and we
need to put bounties behind them so
think about it this way if you have a
chip out in the wild and it says it can
only store private keys on it
then that's what it should do and if
someone can extract the private key then
the bounty is yielded we could use this
model for much higher things in the
stack as well but if we can do it on
silicon chips we can create incentives
for people to start breaking them and
saying if I can make money from this
that's useful securing crypto is only
the first step though one of the big
pieces of this is that Keys underpin
everything so when you log into Google
or Facebook or even a decentralized
service like using PGP or signal or tox
all of these things are relying on key
storage and so if we can have better key
storage we can change the dynamic so
that when you go and setup a user who's
not technically savvy they can have key
storage which is tangible and
understandable and way less risky than a
private key that can be extracted or
pulled off there's something really
interesting that's happened since 2009
in 2009 we had this breakdown and Trust
in the financial system which arguably
is one of the big reasons why Bitcoin
took off in the ten years since then
however we've had this rise of all of
these online apps and online services in
the web 2.0 era but we're finally seeing
in 2019 is people are realizing that
maybe that wasn't such a great idea
maybe trust in Google may be trusting
Facebook with all this data wasn't
wasn't what we needed
when Snowden revealed that that even if
we use things like HTTPS when the
government inserts themselves in between
servers we can't trust that our data is
not being spied on now everyone in this
room knows about this and we're all
working to solve this problem but if
people can't store their keys in a way
that's understandable
then how how are they not just going to
go again and delegate it to a third
party in the same way that they're using
exchanges this brings us to a few simple
conclusions the first is that we need
usable self sovereign crypto people
storing crypto on exchanges is not the
way that we intended for it to work if
people continue to do that where we're
just gonna have more breaches and more
losses and decrease the overall trust in
the system
and moreover exchanges are really there
just to encourage speculative behavior
but if instead we want people to spend
crypto having in a physical form that's
easy to do that and trustworthy is
really important
the second is that to achieve this we
need an open hardware stack starting at
a silicon level we need to look really
closely at how our chips are made and we
need to think about incentives behind
those so that if I go out and build an
open chip and I I discover after the
fact that that chip has a bug in it or
someone's built a backdoor into it then
that there are crypto economic
repercussions to that somebody
effectively has to pay so what this
brings us to is that what we've designed
today
komm it's physical crypto cache it works
and it's the first silicon locked crypto
but this is really just a demonstration
of what we can start to build for the
space in terms of all sorts of silicon
lock crypto for things ranging 2nf teas
to crypto art to then all of the keys
backing our services so that our users
don't delegate them by accident to other
services which in turn will break break
down the trust thank you very much for
your time today come find us we have the
metal briefcases and we're handing out
kong and we love for everyone to test it
I'm Cameron Robertson thanks a lot
[Applause]
you