Over the past year, investors have faced the consequences of keeping their cryptocurrencies on exchanges. Those who did so lost control of their assets and even lost them permanently. This highlighted the importance of the phrase “Not your keys, not your coins.” However, while this was a loss for exchanges like FTX, it proved to be a gain for hardware wallet manufacturer Ledger. Ledger experienced a surge in sales following FTX’s bankruptcy filing. In fact, November 2022 became their biggest sales month on record.
Despite some controversy throughout the year, Ledger remains one of the most well-known and widely used crypto wallet makers in the world. Recently, Cointelegraph interviewed Ledger’s Chief Experience Officer, Ian Rogers, and CEO Pascal Gauthier to discuss the current state of the crypto market in the United States, trends in crypto storage, and the differences in doing business in the U.S. and Europe.
Gauthier points out that there has been a shift in the perception of Bitcoin in 2023. When the SEC implied that Bitcoin was a utility or commodity rather than a security like other altcoins, it triggered a change in tone. Large companies like BlackRock started their application process for a Bitcoin ETF, and the media narrative around Bitcoin changed almost overnight. Bitcoin went from being associated with illegal activities to becoming accepted and embraced by major financial institutions in the U.S.
When asked about U.S. regulations, Gauthier acknowledges that the next administration will play a significant role in shaping the fate of crypto in the country. If Biden remains in power, the administration could continue to be aggressive towards crypto. However, if there is a change in leadership, the future of crypto regulations remains uncertain.
The conversation then shifts to offline storage devices, or cold wallets. Mark Cuban previously criticized crypto wallets, calling them “awful.” However, Gauthier explains that the industry has evolved beyond simply using cold wallets for long-term storage. Cold wallets now offer a range of features, allowing users to connect to Web3, perform various actions with their crypto, engage with decentralized applications, and even declare taxes.
When it comes to user experience, Gauthier rates the industry’s progress at a three out of ten, while Ledger aims to be a ten. The user experience is not just about the hardware and software but the entire end-to-end experience. Ledger wants to provide the best user experience without compromising on security or self-custody.
The discussion then delves into the issue of safeguarding seed words, with some users going to extremes to protect them. Ledger has developed a solution called Ledger Recover, which allows users to shard their private key into three encrypted shards and distribute them to different custodians. Only the user can bring the 24 words together if necessary, adding an extra layer of security.
Gauthier addresses concerns raised during the announcement of Ledger Recover in May. Some users expressed worries about the three collaborating companies reconstructing the private key. Gauthier assures that this is not possible, as they lack the necessary tools to decrypt and reconstruct.
The interview concludes with a discussion about the differences between the business climates in the U.S. and Europe. Gauthier believes Europe tends to over-regulate or regulate too quickly, while the U.S. has a slow and bumpy legislative process. However, he also highlights that when change does come in the U.S., it often leads to positive outcomes. Additionally, he mentions that Europe has a history of heavy taxation and regulation, which may hinder innovation.
Overall, Ledger’s recent success reflects the importance of offline storage and the growing adoption of cryptocurrencies, particularly Bitcoin, by major financial institutions. Ledger’s commitment to providing a seamless user experience while prioritizing security positions them as a key player in the industry.