 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 the wallet apps out there, all of them warn 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 exchanges to buy crypto, and we all understand the risks that are associated with that. Hundreds or tens of millions 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 a succession with TPS. We need to focus on transactions per second to get more users. 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 it on their own, we need a new solution. So we ask 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're gone. It's gone. So if you burn your crypto, 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 wanna 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 a good earth surface. It means that you have to trust that that cash is real and that someone else 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 hardware 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 in keys and key storage. And so what we're proposing is something that we're calling COM. COM 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 COM 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 of 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 if 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 cash is similar. At the end of the 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 cash 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 P256. P256 is not the native curve used in Bitcoin and Ethereum. K1 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 P256 form. Because of smart contracting, we can have a P256 proxy contract, 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, they're silicon lock contracts. They remove all of the security required in trusting 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 can be used for all sorts of applications, not just money. You could do this for asset tracking. You could do this for art, NFTs, et cetera, et cetera. 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 onto. 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 it 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 stack on top of it, but if somebody has the ability to pull the private keys off of it, all of those guarantees are for naught. We're proposing a new project, which we're calling ARCs. 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 in 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, then 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 Talks, all of these things are reliant on key storage. And so if we can have better key storage, we can change the dynamic so that when you go and set up 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 could 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 10 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 what we're finally seeing in 2019 is people are realizing that maybe that wasn't such a great idea. Maybe trusting Google, maybe trusting Facebook with all this data wasn't what we needed. And 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 are they not just gonna 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, 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 it 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 discover after the fact that that chip has a bug in it or someone's built a backdoor into it, then 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, com is physical crypto cash, it works, and it's the first silicon lock 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 to NFTs, 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 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'd love for everyone to test it. I'm Cameron Robertson, thanks a lot.