One of the most striking things about the cryptocurrency industry is people’s willingness to talk about it. As the CEO of Ledger, perhaps the most secure hardware wallet in the world, you might think that Eric Larchevêque would send a spokesperson on his behalf. Yet the professional, poised, and, above all, humble Larchevêque is always willing to talk–especially if it helps the advancement of the bitcoin industry.

The first time I spoke to him at a conference, I was still fairly new to the bitcoin industry and wet around the ears. As I trembled with my notes terrified of asking a stupid question, he smiled encouragingly, responding to everything I had to ask with no signs of impatience, irritation, or checking his watch–even if he had repeated himself constantly to other journalists throughout the day.

This time around, just after the unveiling of the Ledger Nano X at CES during the worst bitcoin bear market in the history of cryptocurrency, he was just as candid as ever.

I caught up with Larchevêque to get his opinion on cryptocurrency hacks, the Yellow Vests in France, how Ledger is riding out the crypto winter–and why he believes things could get nuclear soon.

Let’s Talk About Cryptocurrency Security

With the Cryptopia hack, security has been thrust into the limelight again. In fact, CCN.com reported this week that $1.7 billion of cryptocurrencies were stolen in 2018, with almost $1 billion of that from exchange hacks. After so many hacks, how is it possible that cryptocurrency users are still not properly protecting their funds?

“It has a lot to do with education,” Larchevêque admits, “not knowing what the best way is of protecting their funds. If you spend a lot of time on Reddit or reading blogs and educating yourself, then you know you need to use 2FA or get a hardware wallet and that you should not store funds on an exchange. But there are many users who do not take the time to educate themselves. “When we have greater adoption, more people will take the time to learn about basic security principles. But for sure for the time being, hacks are going to continue and in the years to come the story will unfortunately repeat.” “At our level, we are trying to do what we can to explain best practices but education is the biggest challenge that we are confronted with.”

Are Bitcoin Hardware Wallets Just Too Much Hassle?

Let’s assume that most cryptocurrency users have the necessary technical savvy to set up 2FA on their accounts. However, activating a hardware wallet like Ledger can be a cumbersome process. Is it just too much hassle?

“It’s a fair question. As a hardware wallet, we aim to be as simple as we can. But when you are your own bank you have a lot of steps to take, a lot of responsibilities. You have to make sure that all users take the time to understand what they are doing.” “The notion of being your own bank is complex. Even with the easiest hardware wallet in the world, as long as the user has to take care of their own 24 words, it will always be challenging.” “We are making a lot of progress with the hardware wallet interface and ease of use, but when it comes to the back up we are still in the stone age!” “You still need to secure your 24 words, write them on a piece of paper or place them in a safe. So far, we didn’t find any easier use case for that. So I think it will always be a challenge for users because if they don’t understand the notion back up and the fact that it is critical to not share the 24 words with anyone, we will continue to have issues.” “One of the easiest hacks is always social engineering. You have an issue with your hardware wallet, you want to find support, you look on Google, you find fake Ledger support, they ask you your 24 words to help you. And people give the 24 words! So it’s not just a question of being easy to use, it always comes back to education.” Let’s Talk About the Ledger Nano X

The Ledger Nano X that caused quite a stir at CES in Las Vegas is available for pre-order. Unlike the Nano S, this hardware wallet is designed for users on the go, with added features like Bluetooth and a mobile app. So what was behind the features that the company added and what are their main goals with the Nano X?

“We want our users to be able to securely access cryptocurrencies wherever they are. Right now, with the Nano S if you want to make a payment in a store for instance, or if you are on the go and you want to exchange some funds with some friends you have to take out your laptop you have to connect.” “So so we really wanted to have a hardware wallet that you can use on the go. That you can use with your iPhone or your Android phone.” “That was a feature that our users had been asking for for a long time. So for us, it was clear that we had to bring a new generation of hardware wallet. The biggest feature of it is obviously Bluetooth, but the second is more memory.” “One of the biggest drawbacks of the Nano S is that you cannot have more than 6 or 10 apps, but the Nano X has much more memory so we can bring a better experience and can help encourage wider adoption.”

The Pace of Cryptocurrency Adoption in France

On the subject of adoption, then, the last time we spoke, you mentioned that France did not have a really “big push” on crypto yet. Would you say that has changed at all with the recent protests and the Yellow Vests?

Larchevêque laughs.

“Not really,” he replies in brutal honesty. “I think that this call to take the money out of the banks and the protester with the ‘Buy Bitcoin’ sign is something that’s been exaggerated a lot by the media.” “The yellow vests do not really know about Bitcoin and they do not really think that cryptocurrency will solve their problems.” “They only have a lot of issues with the money they get, with jobs, with social conditions, so it’s quite complex and wide. I am not sure that these protests have changed anything regarding the popularity of cryptocurrencies.” “France is still not at the forefront of adoption regarding cryptocurrency. What is moving in the right direction is the stance from the government which beginning to regulate in a light manner.” “For instance, for people who want to do ICOs, they put some regulation, but it’s an optional regulation. This is not something that you see in other jurisdictions. So it shows they are ready to innovate and to bring an intelligent approach so that projects can exist and scale in the right environment.”

Where you involved in that at all?

“Yes! In France, Ledger is seen as quite a big successful company in technology and in blockchain. So, of course, we spend time and resources in making sure that regulators understand what they are trying to regulate.” “So again, it’s education and we are putting some kind of lobbying to make sure that the regulation and legislation makes sense and couldn’t negatively affect the business of Ledger.” “We are very attentive to everything around regulation and cryptocurrency.”

Des #scaleups à perte de vue, un renouveau pour @LaFrenchTech, un nouvel avenir pour l’#innovation en France ! Avec @EmmanuelMacron un échange passionnant cet après-midi ! pic.twitter.com/Rl2qgnLL1G — Mounir Mahjoubi (@mounir) October 9, 2018

Let’s Talk About the Bitcoin Bear Market and How That Impacts Demand

Bitcoin and cryptocurrency prices have a direct impact on demand for Ledger wallets, and any other hardware for that matter. At the start of 2018, Ledger raised $75 million in Series B funding and the company was getting ready to scale up. So, how are things looking now? How is Ledger weathering the crypto winter?

“For sure, it has an impact because when the price is down the presence in the mass media is much smaller. There is less traffic and fewer sales. So what we do is only good governance of the company.” “We think we could have 12-24 more months of a bear market. Or some kind of nuclear winter in crypto. So we are just adapting the growth of the company to make sure we can withstand two years of bear market.” “There is not much that we can do, we cannot impact the market, we cannot change the situation by ourselves. We are convinced that we are in a cycle, which means that sometime it will be a bullish market again. But at the same time, we feel that it may take some time.”

OK, so it’s just a case of growing sensibly?

“Yes exactly, it’s adapting the growth and investments of the company to make sure that we take into account a bear market.”

Ledger’s Solutions for Institutional Investors

OK, so how about the Ledger Vault? It was already ready last summer and you had a handful of customers. Are there more developments on that front?

“Yes, we launched [it last] summer into what we call ‘early access’ with 20 customers who worked with us to deploy the Ledger Vault. Now we have launched the Vault into production. We have released new versions and are moving forward with dozens and dozens of new customers.” “Now it’s really about commercially deploying the solution globally. That’s why we opened Hong Kong and New York recently so we can have all the sales force to deploy and expose the Ledger Vault to all of our customers.”

Ledger proudly announces the opening of our #HongKong office. This is in line with the international vision for our #development. Read more about the opening of the Hong Kong office here: https://t.co/c2kCPanaOh — Ledger (@Ledger) October 31, 2018

What types of customers are they?

“We have purely crypto hedge funds, of course, but there are also some financial institutions, some investment banks, some family offices, who really want to have a cryptocurrency back office.” “Not only do they believe in crypto as some kind of investment vehicle but they also believe in the future of tokenization. That we will have some kind of bonds, stocks, securities or fiat money with tokens. And they want to prepare themselves by having the back office ready first.” “That’s why despite the bear market, we continue to see a sustained interest from these institutions because they want to learn about cryptocurrency. Having a solution in their own back office is really the first step.”

So are you still confident of 2019 being the year of institutional investment? Are we still on the right track?

“Yes, because if, on the hardware wallet front, we are not going to see growth this year compared to last year, the level of institutions will be much much higher. So this year will be much more about institutions, at least from our point of view.”

What Lessons Has Ledger Taken Out of the 2018 Bitcoin Bear Market?

OK then, so to wind it down, what would you say are the most important lessons you’ve taken out of last year?

“Well,” he laughs, “the most important lesson would be that this is a business where it is impossible to forecast anything!” “It’s quite difficult, especially when you are in a hardware business because you need to take some orders at the factories sometimes 40 weeks in advance. So the lessons that we took is that we have to be very careful and to always try to see the next cycle in advance.” “In six months the situation can change completely. In 2017, we have seen the situation change completely upwards and in 2018 it was the same, but downward. So, to pilot a company in these conditions is like hell!” “You cannot adjust all your investments, all your pipeline, and production lines accordingly. So the biggest lessons we’ve learned is that it’s a crazy market and we have to be very careful when we try to forecast.”

Eric Larchevêque Isn’t Pessimistic, More Like Pragmatic

In fact, his PR representative has to interrupt, reminding him to mention that despite the bear market, Black Friday sales of the Nano S in November 2018 were almost on a par with 2017. To which he replies:

“That’s right, I don’t want to paint a gloomy situation. The situation is still quite good. It’s just that we don’t have the crazy growth that we had before. But there is still a need for a new generation of hardware wallet and consumers are still ready to invest and buy new products. The market is still here.”

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