The Nano S revolutionized how people secure their millions in crypto by bringing it to a secure, USB-sized device you can completely disconnect from the internet. At CES, Ledger unveiled a new Bluetooth-enabled hardware wallet, the Ledger Nano X along with the Ledger Live Mobile App that brings features including app-driven transactions to Nano X users and wallet balance tracking options for both Nano S and Nano X users.
While the big security issue of private keys are largely solved with hardware wallets, what will it take to make cryptocurrency part of both day-to-day purchases and long-term savings? I met with Ledger President, Pascal Gauthier, to find out where he sees this intersection.
Pascal Gauthier, the president of Ledger was already involved in the ad-tech industry before creating one of the world’s most popular hardware wallets, the Ledger Nano S. Gauthier worked on three companies that were sold between $300 million and $3 billion before joining European investment fund Index Ventures, where he got involved with Ledger.
Gauthier invested in Bitcoin in 2014 and became aware of security risks involved with owning and storing crypto in the aftermath of Mt.Gox. Investing in this new security and data project wasn’t enough for Gauthier and he became president in 2017 after serving three years as a board member and investor in Ledger. Gauthier also founded Kaiko, a cryptocurrency market data company in response to the lack of market data he encountered while buying his first cryptocurrencies. Gauthier soon realized cryptocurrencies wouldn’t be able to take off without a safer way to store them. He explains how his business is motivated by the huge security risks surrounding cryptocurrencies, “This industry will not thrive if security isn’t tight. The fear of losing value would prevent crypto from growing and I saw an opportunity to use French key and pin technology to secure private keys for safer storage of cryptocurrencies.”
While the big security issue of private keys are largely solved with hardware wallets, I asked Gauthier to discuss what it will take to make cryptocurrency not just a store of value, but something we transact in daily, connecting immediate transactions with long-term storage.“Whether I think about Ledger or any other product on the market, this is a very young industry and products are still just okay, not great. That said, once Ledger is mobile, there is security and governance that can help you control transactions, allocating rules for sub $500 transactions versus larger transactions, which will make the day to day type of transaction much easier,” explained Gauthier.He added, “We believe the wallet technology should be temperature agnostic, meaning hardware wallet technology should allow you to go from cold storage to hot without being connected to a computer to make a transaction in a single motion.”
The Nano Ledger X and mobile app are part of the process to create more trust and security in crypto, but much depends on preventing users from becoming the single point of failure in accessing their crypto. “Technology is not people-proof,” Gauthier told me, citing mistakes like sending one million dollars to the wrong address and countless stories of users forgetting not only their private keys, but sometimes also their pin to access their Ledger wallet.
As Ledger’s new product and app create potential for greater usability, its current product, Ledger Vault and custodial partnership with third-party custodian, Komainu are helping bring security to institutional investors and banks. Since the market isn’t clearly defined in terms of regulation, Ledger offers both self-custodianship and the option to use a third party custodian through their partner, Komainu. On the role of custodians, Gauthier told me, “Right now, cryptocurrency exchanges are acting as de facto custodians but the amount of money stolen by hackers is indicating we should put this role into third parties. The chairman of the SEC said there’s not strong enough security measures to approve a Bitcoin ETF yet. We feel Ledger tech will empower better security, but until it’s properly executed, the security provided by many custodian players is not sufficient.”
Cryptocurrency and the technology to secure and transact in it still has a long way to go, but adding security features and new ways to govern them seem like steps in the right direction.