48: Henri Stern - Principled Enough to Be Pragmatic

[00:00] The sheer arrogance of Silicon Valley in thinking that you can just do things to the French mind is so absolutely incredible. And this is why Silicon Valley is what it is. And there's so much to be excited about that we think we can reshape the world. And we can, in fact, because we believe we can. We wrote a strategy paper early on, which basically said there are three markets. There's the extremely diehard crypto natives for whom storing a mnemonic is a non-negotiable fact of self-sovereignty, and we will never be able to convince them.

[00:30] developers who want to build for a mainstream audience. And then there are mainstream developers who want to use crypto. And basically we said we will never win one and three doesn't exist. And so we have to go for two. We have to build for basically crypto devs who want to cater to a wider population that will teach us the things that we need so that when three comes about, we'll be ready. And that is like, we just got massively lucky with timing that three is coming now. Three is here.

Most of our biggest customers aren't here because they care about crypto. They're here because they care about the impact that the technology can have on their users. Pivot was probably the hardest moment in the company's life where we were doing an offsite [01:00] the atmosphere sucked and it was like six or seven of us the entire team and at some point i think i said so like clearly things aren't working right and like you felt the body language change and people relax we have eyes of course it's not working we all see it but now it's like part of the conversation and we can do something about it the conversation that i think had a real impact on me a little bit was i went to see rolof from sequoia and i asked him what would it take for sequoia to be excited to do ra he was like you're talking to me about how far you've come and i don't

[01:30] looking forward. And I think that was like such a wake up moment. The obvious searing pain of trying to create something from nothing is so wild in your mind that you end up saying, oh, but we've done so well. [01:40] Welcome to Dialectic episode 48 with Henry Stern. Henry is the founder of Privy, a crypto infrastructure company that allows every developer to put a crypto wallet in the hands of its users. [01:51] In the middle of 2025, Privy was acquired by Stripe, but remains an independent organization within Stripe, and Henry works across Privy and a number of Stripe's other crypto efforts.

I got to know Henry when I was a venture investor at the crypto firm Paradigm, which shortly after I left, ended up investing in Privy. Henry is one of the most thoughtful and principled people I know, and I deeply admire the way [02:21] like crypto that is laden with incredible amount of both speed and velocity and change, oftentimes dogma and ideology that ends up going too far, and people trying to push things far beyond they should or exploit things. [02:37] I think the way he has been able to remain focused, to serve developers and customers, and build a product and a team and company that he can be really proud of is deeply admirable.

We talked extensively about morality and technology, privacy, crypto wallets and where all of this was and where it's going, the thought process and the decision to join Stripe and what it's been like since he joined, and where crypto is going, even if it might be a little boring at times. [03:07] play philosopher with us despite his best efforts. I hope you enjoy the conversation with Henry. And before we get into the things, I would like to thank Notion, Dialectics' presenting partner. Notion is a collaborative workspace for your life's work that has natively integrated AI and agents into the place where you and your team do the actual work.

Over the course of the last year or so, Notion has totally transformed itself into an AI-native company that is first and foremost [03:37] agents, which allow you to have little guys in your workspace that can automate everything you don't need to do or don't want to do and allow you and your team to focus on the important work that you don't want to delegate. The biggest news in Notions world lately is Notions developer platform and workers, where you can design a wide range of ways that agents can better help you and your team focus on the actual work while they take care of the busy work.

The range of what's possible with Notions developer platform is pretty incredible and still very early days, but I just [04:07] something from Brian Lovin about how you can basically get your entire Twitter graph downloaded into a Notion database, categorized, updating constantly. I'm really excited to play around with this more, both in terms of how I present dialectic episodes to you all, but also the ways that I can hopefully continue to push the bar on how I research for these conversations. It's a delicate balance between trying to find a way to manually sink my teeth into all of my guests'

[04:37] places and unexpected things that I might not have found otherwise in the research process. Thanks again to Notion, and you can also learn more at com slash dialectic. And with that, here is my conversation with Henry Stern. [04:51] Thank you. [04:52] Henry Stern. [04:53] Thank you for having me here at the Privy office. It's a pleasure. Thank you for being here. We've got all the secrets on the whiteboard. Let's see. These are, you can see this is hard-hitting work we're doing here. Yes. [05:04] Well, if we have to explain anything, we have the whiteboard available to us.

[05:09] I want to start with, first of all, thank you for doing this. This is an honor. I've known you for a long time and been rooting for you for a long time and you keep winning. So. [05:17] yeah it takes it takes a village as you know but uh but i we have a long way to go indeed uh [05:26] at the preview website, [05:28] At the very bottom, the bottom right. [05:30] you have a phrase. It says, technical decisions are moral decisions. [05:35] Why is that important to you?

[05:42] Sorry, I'm thinking. I mean, the reality basically is like as software eats the world, the question of like what [05:49] is the part of moral valence that software builders are accountable for, just like grows. I think when we set out with Austin to build Privy, we were building something that had to do with ownership and with privacy. [06:00] and with how the web works. [06:04] I want to start with the premise that, you know, [06:07] we are fallible and we will make mistakes. [06:10] And the best thing we can promise is...

[06:13] We care so deeply, and when we make the mistakes, [06:17] We will... [06:18] react accordingly. [06:19] And I that that's what it stood for. And I was like, we should actually just have this on the site and just have it be something that we remember, because whenever we start LARPing as we know truth. And if you don't agree with us, then, you know, you're a heathen or conversely, like, you know, some some nihilistic converse, but they kind of meet of like, it's all about, you know. [06:41] uh pragmatic distribution and this has no you know this stop overthinking it i think that the truth is more nuanced and so i think starting off a premise of uh uh [06:50] This is going to be complicated, but we're in it.

[06:53] And we're thinking about it and we're accountable to our work, which was kind of the bottom line that we wanted to set in starting the company. [06:58] You mentioned [07:00] sort of like close to the metal. In some sense, the story of computers is like abstraction. Yeah. Like getting farther and farther away from the metal. Obviously, there are elements of crypto that... [07:10] Um, [07:12] involve technical rigor and proximity, ideology, all these things. [07:17] But like... [07:18] I want to talk about different elements of this, whether it be privacy or self-custody or otherwise.

But what we've sort of seen is that people prefer convenience over whatever ideological or technical or force of the metal thing ad infinitum. And so how do you think about that? [07:34] That may be under the lens of that statement. [07:38] Crypto is a very interesting foil, and I have many views, but it's a very interesting foil because it is... [07:45] the best and the worst of a lot of like creative endeavor. And you have a lot of extremely ideological people who, [07:52] who are fighting for what they see as, uh, [07:56] a future path for the internet and that's like the best version and at the same time that often veers into like such an extreme level of non-pragmaticism yes and belief that actually you know [08:07] Uh, [08:09] everyone will adopt these experiences that if you actually just take a step back for a second, are so obviously broken and there's no world in which it happens.

And so I think [08:18] Um, what we had was a few experiences where we would go to talk to a user. We would say, this is how we've built it. We would get absolutely like basically destroyed for like, but you guys are building this on AWS. How can you trust the centralized cloud? And we're like, everything's encrypted end to end. The keys are managed by the user. And they're like, yeah, but no, the data won't be available if AWS decides to censor you. Like, that's a really good point. Um, there are solutions we can come up with it when that becomes the threat model.

But also for now, the threat model is more about privacy than censorship. [08:48] of horse, nothing would happen. This person would say like, you were like demeaning the space. Um, and then you'd go back to this person three months later and they were taking PII and dumping it in a Postgres database on their side. And you're like, what happened? And they're like, well, you know, [09:03] gone for gone, in for a penny, in for a pound, insofar as I'm going to do this, I might as well just do it easily, and I will take on the risk.

And I was like, there's no intellectual consistency here, basically. I think a lot of the lesson here was [09:17] Uh, [09:18] One, let's move away from trying to please everybody. Let's try and figure out what's right for us as users. [09:24] You're right. A lot of tech is about intermediation. But we want to know that if we scratch, we can figure out how things work. [09:31] And so that like stood out as becoming like this is the right line for us to have as a company. And like if you go to our security website, we have a security FAQ makes me deeply uncomfortable.

It's very transparent. It's how, you know, Andrew McPherson, who runs our security team ended up joining the org. He was like, okay. [09:46] This is like a very unusual security FAQ, but it's like very honest in a way that I haven't seen and makes me want to work with you guys. Um... [09:54] But I think that was the line is like, I think intermediation is a fact of life. I think privacy is not something people will go out and buy in and of its own right. But I think that doesn't mean that we can't try and build privacy.

[10:04] better tooling just the same. And this is why I'm, you know, in many ways, and it's obviously a very complex issue, but like a big Apple fan boy is like, sometimes things are just nice because they can be. And like, uh, [10:17] catering, [10:18] to [10:19] Human qualities is not a good product building thesis. Catering to the seven deadly sins. [10:25] is a much better product than Leaf Thesis. Yeah. And in our case... [10:29] We tried to appeal to privacy, and we actually found privacy. [10:33] that appealing to convenience and greed were easier [10:37] but baking privacy and sovereignty in was the way that we could do it.

[10:41] What do you think? Maybe back to that first statement. [10:53] Yeah. And you're abstracted probably even a further level and that you ultimately use server developers. But yeah, for sure. Um, [11:01] I talked to a philosopher late last year, um, [11:06] ad nauseum kind of about a bunch of elements of, of kind of how things have started to fall apart. And one of the big parts of it is that at least in his view, um, [11:17] This Silicon Valley or the technology industry writ large has this sort of view that technology is morally neutral.

[11:23] And so like you should just build technology and it's a, it's about what people decide to do with it. Yeah. [11:30] I guess I'm curious about your reaction to that idea in general and then how that sits next to this... [11:35] technical decisions are moral decisions, which if not [11:38] I've been complete. [11:39] disagreement with that idea, but it's certainly not [11:43] In total alignment. [11:44] I think it's just a narrow field of view in a sense. Like if you again, like software has eaten the world in many ways, like technology is everywhere.

And if you take a wider lens at it, like maybe the technology itself is neutral. [11:59] But... [12:00] the way in which you market it, the people you cater to, [12:03] you're ultimately trying to spike the ball to tell people how to use it. And that's certainly not neutral. And so I think I broadly, [12:10] I guess agree with the idea, which is the same technology can be used for great things or bad things. Nothing is inherently one way or the other. [12:17] But basically, I think by the time like a human, it's like Schrodinger's cat.

The technology is the moment you've looked at it. It has moral valence to it. And again, I'm less interested in. [12:30] defining what is moral and what is immoral. And I'm far more interested in people not being hypocritical and like owning up [12:36] to what they're trying to do. That's my main piece is you should own basically the outcomes that you're trying to drive the world towards. And as someone building tech, then you have a responsibility towards that. [12:46] Um, [12:47] I interned at Palantir for a hot minute and absolutely drank the Kool-Aid.

But during that internship, there was a privacy and civil liberties board that they would put the interns in contact with to just show them this is how we make morally complex decisions. And at least at the time. [13:04] The viewpoint was... [13:06] as an engineer on the team, [13:08] You need not work on anything you don't want to work on. Right. [13:12] However, the company may choose to work on things that you personally disagree with, [13:17] Please voice it. [13:19] We will take it into consideration, make a company decision, including this Privacy and Civilities Board as to whether or not we want to continue doing this.

[13:26] Um... [13:28] And ultimately, the bottom line is, [13:31] There will be someone to do these things. [13:33] and given a choice, we would rather sit at the table and be a part of building it, rather than let someone else who cares let's do it. - Or do the Google thing, where it's like, we're not going to... [13:42] We're not going to bother. We're not going to work with the government at all. Exactly. So I think that's my point is like you lean in and you own up. But like there's certainly – [13:51] the tech itself as a cold instrument.

[13:53] I agree is probably just an instrument, but as soon as a human touches it, that's gone. Right. And part of the, I think, intrinsic to this idea, at least his criticism, was... [14:04] if you believe technology is morally neutral, you sort of take this view that we should just like more technology is always good. [14:10] Maybe put it a different way. [14:13] You are morally motivated, is my sense. [14:17] Thank you. [14:18] I come out of it thinking, [14:20] Action is good and creation is worthwhile in its own. [14:25] And having to lie to yourself as to why you do it or what it means for you to do it is the thing that cheapens the whole the whole affair.

And so I think broadly that I am the thing that impresses me so much for the US. I was having this conversation with my wife yesterday, which is the. [14:40] - Ah. [14:41] sheer arrogance of Silicon Valley in thinking that you can just do things [14:46] to the French mind is so absolutely incredible. And this is why Silicon Valley is what it is. And there's so much to be excited about that. We think we can reshape the world and we can, in fact, because we believe we can. But, but I think like, [15:03] You know, it's the I'm.

[15:06] a lot of like very mission aligned companies that like espouse, [15:10] giant worldviews. [15:11] And then the actions just don't match up to the world. That rubs me a lot more poorly than say, like, you know, I want to build the world's best toaster oven because I really like toast. I think as long as people, like, speak it the way it is and acknowledge, like, the complexities. [15:23] I'm good with it. I generally find that more technology is probably better. And if nothing else, more technology is inevitable. [15:29] like we are on an accelerationist like world path.

[15:32] And so, again, I'd rather sit at the table. [15:34] then move to the woods somewhere and try to not participate. [15:40] Thank you. [15:41] You aren't building a toaster. [15:44] You are also a French mind. [15:47] How did... [15:50] I guess the root of this, and I think one of the reasons you're such an interesting person is you are, [15:55] Deeply pragmatic. [15:56] And you've been successful. Like this isn't just this purely like looking ahead, idealistic thing. I realize much more, much more ahead. And you're super principled. [16:06] And you do care about certain ideological things.

And so I guess I'm curious about like... [16:11] Maybe twofold, like one, what caused you to... [16:15] maybe from previous parts of your life or academia or whatever to want to [16:19] just do things. And two, like why this part of the world, why is this important to you? And why does this matter in a way that maybe, [16:26] No offense to toaster makers, but like, [16:28] is a little bit more [16:30] Of substance. That's a lot of questions. [16:36] I'll go to the last one. I mean, I think there's so much path dependency, basically.

I went to grad school. So why this field? The honest take is I... [16:45] have... [16:46] a lot that I'm very excited about in terms of building. And I think that when I was in college, [16:52] I... [16:54] It's very embarrassing, but I... [16:57] is also is a very good snapshot of a version of a millennial, but I'll go with it. I watched The Social Network in college. And the thing that struck me was not actually the whole story about Facebook and so on, which is great, by the way, like good movie.

But the thing that struck me is there's a moment in which... [17:15] Jesse Eisenberg playing Mark Zuckerberg, I think has to relabel files and writes a Perl script for it. And I was like, fuck, what am I doing manually relabeling my files every day? Like, I need to do computer science. You're the only person with that take away from the social network, but beautiful. And so I came into it thinking... [17:33] I need to learn to talk to computers because I cannot be a functional human if I don't do that.

And then I got to really love the people who were in the computer science department at Columbia at the time when I started doing it. And then I think through that, when I went to grad school, I thought I was going to do... [17:50] coursework in AI because I was like, this is where the future is headed. And this was in like 2016, 17. [17:57] And then I took one class by a professor called Dan Bonet, who is a cryptography professor. And I was like, oh man, I just need to take all of his classes.

He's amazing. [18:06] And that's how I ended up basically doing the like, you know, crypto curriculum more or less and ended up in this field. And so I just I really find that there are so many areas of deep meaning in like human endeavor. And I just happened to via pure path dependency gravitate towards this one. And I think the future of like, [18:23] Ownership and money and what it means to be a stateful actor on the web as pertains to these things is something that I find very interesting. But I don't think I was born thinking like, you know, I want to work on crypto.

[18:36] When did it flip for you, maybe to go back to the French part, when did it flip from academic to... [18:43] Entrepreneurial. And obviously that's a dramatic way. How did that gradient happen? Yeah, I think it took a bit, but I finished my undergrad, went to work with a friend of mine, and we both had real jobs lined up, quote unquote. This is the first company with Rho back? This is the first company I started with Zach, who started Rho now, which is a really successful direct-to-consumer healthcare company. And I think we really both just wanted to work together,

[19:11] and we went through YC and [19:15] At the time, I think what was most shocking to me was just that people took us seriously. We were just making shit up as we went along, and people... [19:24] just saw that we were going to grind and like were willing to give us a shot. And I felt that was very, very infectious as a, [19:32] I guess this was pre-grad school, actually. This was pre-grad school. And I went into it, and I felt like I had unfinished business with CS. I got into CS too late.

And I was like, I really should try and get a PhD or something at some point, but let me do this. And basically, when Shout with the company we started failed, I went back to grad school, and a core part of my endeavor there was, do I get a PhD or not? And I think at that point... [19:54] it stood to me that like, [19:57] I wanted to build products and like what was a good place to do research and build products. And that's how I got into crypto post fact was like, actually, this is the job I should take out of grad school was in crypto where I can do research, but it leads to products being shipped.

Remind me, you when did you move to the US college or earlier? I know earlier in middle school. [20:15] And so did you, was it because of that that you didn't, like, what created this sort of more American bug in you around that? [20:24] some mix of ambition and to go back to the agency or whatever, like, [20:28] I mean, I just spent the time here. Yeah, the arrogance. I became arrogant when the, no, I mean, I think the honest take is I lived in New York a very long time through when I was like, you know, 10 or 11 to college.

And then I think probably a lot of it, I was in a French school, and a lot of it, I think, came through college and the people I hung out with. I started my undergrad at Stanford. I was around folks. [20:50] who [20:51] We're just very... [20:52] unusual in the best of ways. One of the projects I was very lucky to get involved in through one of my RAs, Alan, was we built a tree. [21:03] We went in a backyard of one of the row houses, and this was the wide-eyed freshman joining along because it sounded fun.

But basically, this is folks who are really into theater tech who had decided to try and build a physical sculpture to something. So I think one year, they built Egypt in a dorm room where they put down a tarp, stolen sand from the volleyball courts, and put it down and then tried to rebuild that. [21:33] of life. [21:34] from Norse mythology, and they wanted to host dinners in the tree. But what they did is, like, it was a metal structure that had been welded together with then some chicken wire, monster mud, and we had shaped this, like, theatrical tree that then ended up having a table for, like, 12 people and, like, hosting theirs and so on.

And so I was just like, this is... [21:53] really fun and cool and I think I [21:56] finding myself in that environment felt very intoxicating and so that's i i think honestly the take is like [22:01] A lot of it is just... [22:03] I was... [22:04] the pure product of like that plus, you know, going through YC in 2014. It's like a very specific part of the world at a very specific point in time that ended up making a big impression on me. [22:13] When you went back to grad school, did you think you would do another startup?

Yeah, no doubt. Okay, so there was always sort of a matter of time. And I think, in fact, the first startup, we ended up shutting down, and I specifically remember at the time thinking, I do not want to be a founder for founding's sake. [22:30] There's nothing inherently valuable to the act. And so unless I have an idea that I believe is worth having in the world, why should I do this? [22:40] And obviously, my mindset changed a lot because I came out of grad school being like, I want to build something.

And as long as I start with that premise, there are too many interesting things that are broken in the world for me not to find an idea that's going to be interesting. [22:53] Speaking of that, I suppose... [22:58] - I think it'd be cool to trace a few of the arcs of Privy. - Sure. - I think it was on Cheeky Pint you said to John or to Zach, every year we look at the company and it's unrecognizable from the prior year, even the last few years. You're also dealing with a market, crypto is a market that is [23:14] Both probably, I think a lot of people had an experience of it not moving as fast as they would want, and it moving maybe in directions that they might not want.

[23:23] I think you probably have experienced both of those. [23:26] Um, [23:28] And I think that has made it a really interesting substrate for your – [23:34] deafness in balancing ideology and pragmatism. So maybe to start, [23:39] you mentioned it earlier, like you, you have all these old medium posts about like, how do we actually have a world where we can smuggle in privacy or whatever it might be. Um, let me see if I have it. Uh, [23:52] Well, one of the titles of this poster is great. There's too little to be gained from treating your user's data as [23:58] with respect, which is probably...

[24:00] I think maybe broadly still true or still felt, and really an example of like, [24:06] Nobody actually cares about this. Why does... [24:09] Why does digital privacy actually matter? [24:12] I think for me, basically, just the reality is like the majority of our lives are now spent in the digital medium and you have this like data exhaust that you're putting out. [24:21] I actually just went through a digital audit by a firm, or they went off of my name, and they tried to pull everything. It's really impressive. [24:33] aware of what's out there and what is like intentionally out there versus not.

And there were a few things that surprised me, but broadly, it's like pretty wild. They like went through my entire like family tree, all of the like things both. [24:46] in crypto terms and not. It was a very interesting experience. And basically, I'm just deeply aware. [24:51] of how much digital exhaust we all drag with us. [24:54] And I think there is this disconnect in terms of, you know, risk and danger of the fact that, like... [25:00] our sense of fight or flight has been developed in the physical realm. Like, you know, if you go like this, I can, I feel that viscerally, but the amount of risk I'm taking on in a digital surface is very real.

And yet my brain is not at all wired to perceive it in the same way. And so unless it like slaps you in the face, AKA somebody finds a Snapchat of you doing cocaine or whatever, and people lose their minds, but, or, or the iCloud photo leak. But, but even then just [25:30] real world that I think just like we're not exercising the same judgment in digital spaces as we are in physical spaces. And so at least I grew up, [25:37] just very aware of like [25:40] those risks and dangers and thinking, how do we build back into that?

Why did you grow up? [25:46] So where are them from a technical standpoint? [25:48] I think from a technical and personal standpoint, I think what I really valued maybe as an immigrant coming to the S. and so on, the most privileged version of random white French dude coming to the, but I... [26:03] I think it was being able to control how I present myself to people is extremely important. And, you know, the idea for a long time of people being able to Google someone, [26:12] made me very uncomfortable, which is it was always the case that you could show up and you decide what you brought with you into the room.

And now actually there is this like, you know, hidden baggage that you're dragging with you everywhere. And that like felt very like real to me. And so I think to that end, I think digital privacy ended up being something I really care about and I was very interested in and still am. And I think the thing that's so interesting in the moment today in tech is, [26:38] is just that the [26:40] the arms race has changed completely. Like the, the, the launch of Sora, uh, [26:45] makes it that you can spend a lifetime trying to be careful about your digital exhaust.

But now all you need is like two angles of your face and three sentences spoken aloud. [26:55] Um, and that's it. You have been, you know, [26:59] uh, [27:01] ingested by the machine who can now output you uh at infinity saying anything they want we won't even need to do this podcast that's the point one of the things that came up in this audit was like there's too much of you on youtube and like the deep fake potential is like infinite now and like that is just a cost of living at this point in time and it's true but so i think that's very interesting which is we're not we're in a shifting threat landscape and maybe this is the place where i reject the french ethos the most this is going to be a very like europe or themed uh uh podcast [27:31] But, you know, the French response to global warming is turn off lights when you leave a room.

Yeah. [27:39] not a useful mindset as opposed to thinking about how do we change how like nuclear waste is recycled? How do we and so like I think that the acceleration has been to see the world as it is be truth seeking, understand the way things actually function. And given that fact, [27:55] How do you then counterposition to lead to the best outcomes as opposed to trying to rewrite the world? So I'm coming back to the prior question, but I think crypto's biggest sin is trying to reinvent the Internet and financial systems from scratch.

It's a very useful intellectual exercise, but that is not how change happens. Change happens. [28:12] based on where we are today, [28:14] to then moving the machine in the direction that we want, and very seldom, in my opinion, [28:18] is there such a disruption that completely negates past innovation? Yeah. And we just get, you know, the Neanderthal to compete with the Homo sapiens. Like, it ends up being some... [28:30] inner binding of the two, and we're seeing it play on an AI today. But I think the question of, like, you know, how do you protect your digital privacy on the web when AI...

[28:39] just makes it that the level of input that you need to destroy privacy is [28:43] infinitely small is actually quite interesting. And so I'm actually, you know, not here lamenting AI and saying is the end of everything. Just saying like, you know, the stakes are super high. [28:52] And the tools at our disposal are very interesting. And to the earlier points still of like, you know, moral valence of tooling, uh, [28:58] creation of like napalm led to the creation of the best like burn creams we've ever had and so like the the solution isn't the problem if we know how to look for it is I guess my my hopeful take.

[29:08] you use the words destroy your privacy. There was a, in one of those old media posts, you have this interesting distinction between privacy and security, but I like to go a little deeper on. You say, [29:20] You can define privacy as the state of being free from unwanted public attention or observation. This is different from security whereby a product or service works as its creator intended and does not unwittingly expose or leak information. The relationship is one way. Bad security means bad privacy, but good security does not necessarily mean good privacy.

Secure products can degrade their users' privacy. In that sense, security is about creator intent while privacy is about user intent. [29:46] making sure you are [29:47] secure or safe. [29:50] What is... [29:52] What are the ways that privacy actually matters? I think to me, it's like the most hokey sentence ever. So bear with me. I think it just comes down to like, you know, how much right to self-determinism do we have? And that's the distinction between like privacy and security. Security is systems work as intended. Privacy is to me a problem.

[30:10] people can have the expectation that the things they think are happening are in fact happening. And so it's much more in the eyes of the beholder. And again, like privacy is, there's just no single definition for it. Like privacy, [30:21] Some people love being extremely public on Instagram and they have a very different and yet they can have a sense of privacy that matters to them. But their definition of privacy is very different. Yes. [30:31] Yeah, I don't know. I think in a world in which basically you were just a composite of all the things you've ever said, written and done, this maybe has some like weird ties into cancel culture as well.

But like, in a world in which you are just those things, and that is what exists of you. [30:43] then like, [30:44] There's just very little ability to make mistakes. [30:48] willful decisions to change things in life. Like you are the sum product of everything you've ever said or thought and [30:54] And [30:55] saying actually i've changed my mind on this doesn't really matter anymore yes and so i find that there's something like deeply problematic [31:02] with not being able to have like maybe humans, this is we're so far down a rabbit hole.

So please take us out. But humans, I guess intrinsically have some version of like a decay function. [31:12] where the things I thought a year ago are not that interesting to me anymore, the things I thought six months ago, a little bit more, and so on. And so there's probably actually some weird curve where the things I thought when I was seven years old remain extremely important to me. Yes, yes, yes. [31:26] I think the way we're able to [31:28] filter out opinion, hold opinions, and then over time, filter them out to get to where we are today is really important.

And I think in a world in which everything is recorded. [31:37] and stored and can be brought back [31:40] it just completely changes our ability to like, you know, determine what we want to do moving forward. [31:45] Lightness is a virtue. Lightness can be... You don't want to... [31:48] accountability matters and being able to move through the world without the weight of everything. [31:57] is freeing in a way that I think is like... [32:01] - This might seem so strange, but I was listening to Kevin Kelly talk about how having like [32:08] a belief in the future is really important for being able to move forward in the world.

And this almost feels like the inversion of that. It's like not having to know that your past is chasing you. [32:17] Again, it can be easily taken out of context and applied. It's not an argument against accountability, but... [32:24] And maybe this is like, you know, this maybe just points to my deep cowardice, which is one way to do it is to try and be extremely vocal about the ways you change your mind and have original viewpoints felt strongly. Yeah. [32:38] that you embrace. And you have, you know, a handful of figures on the web who have very strong ideas, very polarizing ideas, and they change very quickly.

And again, as long as I can see some version of like an intellectual through line for how they got from A to B, I like love that. And I find it to be so inspiring. But I think the alternative is like, that's the point. And I think the alternative is, [33:01] Don't engage in that way. Don't let people see these things. These are conversations that we get to have, you know, in this case on a podcast, but typically one on one. And I've also in this been very careful to not espouse any opinion here.

I'm like spewing about what it means to have opinions, but I've not said anything of any like valence on on any topic. But but that's the other point is like basically given that I don't know how this plays out. [33:24] be more private. [33:26] is the way in which I get to keep my thoughts to myself, have those thoughts and move about in the world unencumbered by having to, uh, relate my present set of actions to my past set of thoughts in a sense. Yeah. Yeah. And, and maybe to tie it back to identity, there's some level in which maybe, maybe part of what this informs is an ability to like move lightly through the world with multiple identities to that, that don't need to be like, [33:47].

[33:48] the classic thing, like who you are with your mom versus your wife versus with your best friends from college, like those being different doesn't mean you are [33:56] in conflict as a person. And yet our digital lives, like... [34:00] make it harder for those things to be harmonious. There's this rumor going around, [34:05] crypto circles and Stripe that I am in fact, [34:09] the heir to the Patek Philippe. [34:11] uh, family. And that's because there's a Henry Stern. [34:15] And, uh, [34:16] And it's obviously very untrue, but I've had people come up to me and say, man, your watch, it's so cool.

Like what a fuck you to your family. And I'm like, I have no idea what you're talking about. But then I found out that that's what I meant. And, um, [34:28] And I find it really fun when basically like, you know, that version of like the substrate of information that we have in the world ends up being completely wrong. And so actually, that's a fun idea that I like to toy with, which is like, can you have like misinformation canaries about yourself on the web where you just put out every here and there a completely false fact, but just to kind of trace information.

[34:49] how data makes it through in identity. So various musings. It's fascinating how we are just like so, we evolved to like have this, [35:01] gossip and these sort of like local context of information you might have heard about a person. And now over the last, really the last 25 years, but sort of over the last 80 years, [35:12] Now there's a possibility that actually someone can know a tremendous amount about you. [35:16] or have a tremendous sense that they know a lot about you. [35:19] and bring that in and some of it's stated and some, yeah.

- But I think the other interesting question, and for one it's worth, like no one cares about me, which is so lucky, at the end of the day, like the version of, [35:29] We're trying to change that here. Clear. Thank you. [35:33] You know, there's a Victor Hugo coach to live happy, live hidden. And the point is anonymity in itself is such a blessing. And I think it's a very complex thing, right? Because I only have a Twitter because of work. [35:47] uh, personally, but also like, I'm, I'm a deep lurker.

I enjoy reading other people's stuff, but I, exactly. But I, I don't enjoy putting out my opinions because it feels so valent in a sense. Um, um, [35:59] But I think the point is this, which is living in a world where... [36:03] We basically went from phase one, which was we exist in the moment and the activation energy to capturing something for the future. [36:12] is while there actually maybe phase one happened with the printing press. So we, there's a pre Gutenberg days where it was oral history for the most part.

And you have to get a scribe to do anything. Um, [36:22] then, you know, post Gutenberg capturing information for posterity becomes that much easier to, you know, probably the advent of the internet and like micro blogging where now, you know, [36:33] Um, [36:34] putting out information [36:36] to be captured for posterity becomes that much easier. So we went from like, uh, you have the activation energy and putting out basically like long lived information has gone way down, um, [36:45] But we were always saved. [36:48] by the fact that no one cares.

And the amount of work it would take to do a really deep psychological draw up of someone on the internet is probably not worth it economically. [36:57] And that has changed. Like it is now really easy to send out three agents and, [37:01] to like cut these things. And I'm curious how your, you know, research for the podcast has changed and so on. But my guess is just that basically you can get a like, [37:08] deeply harmful psychological profile of anyone for really cheap in a way that used to be reserved for, you know, blackballing someone in a deep way.

Yes. And the question for me is, like, what happens next? [37:20] And the reality is society will be too schizophrenic if it becomes too easy. I mean, this is what we're seeing in many ways with like what has happened from 2018 to now in terms of what was happening. [37:32] the moralization [37:34] To now, like, just tech itself is an interesting foil for how society is evolving. I find it's a good Rorschach test for, you know, cancel culture to now like, very abrasive masculinity to like, some version of what will come back and we're just swinging back and forth here.

Yes, yes, yes. [37:50] And I guess my question is, is that, [37:52] in a world where everybody has that power, I actually suspect it becomes a lot less powerful. - Yes, the overtime window has to, I always used to joke, back to my crude Snapchat analogy, like at some point we will get-- - If everybody's got dick pics, is your dick that interesting? - Yes, yes. - And I think like, [38:09] That's like how do we keep carrying on meaning in a world in which everyone's sticks are out there is the question that I have.

[38:19] - Yeah, two things that come to mind, and we'll finally move on, although I could talk to you about this all day, is, I think his name is Nathan Jergensen. This guy used to write for Snapchat. [38:29] It's possible I made it wrong, but basically this philosopher in residence thinking about the impermanence of digital identity or the permanence of it. I feel like you would find it interesting. I don't know what he's doing now, but it's an interesting dumpster dive. Somebody was thinking about this actually quite early. [38:44] The other thing that brings to mind actually hilariously is I don't know if you've heard Tyler Cowen talking about how he's writing for the LLMs.

[38:51] And this whole thing is like, [38:53] He wants the LMS to know as much as possible about what he thought. [38:57] So I think part of it is like someone he's gone, but also, I don't know, he's reading some interview and he's like, [39:02] talking about Iceland. He's like, now the OMS know what I think about Iceland. And like, if people want to know what I think about it, they can ask. They can ask. I mean, and for what it's worth, this is maybe my draw to like action, which is like, ultimately, what we're going through right now is the quintessential like, [39:17] intellectual masturbation exercise on so many levels.

And I think, [39:22] Again, Silicon Valley kind of sometimes talks itself up in histrionics around like, you know, all of the ways in which these are all very deep. But like, I think then taking a step back and seeing like, what action was taken? How has it actually impacted the world? And like, is this good or bad? [39:36] it ends up being quite simple. And so I think being able to like move in and out of like, [39:40] this context to just like, is this company producing something valuable? Does it make me happy as a consumer?

And like, it isn't that much more complicated than that is, uh, I find like very important to get back to maybe this is why working in tech in New York is, is, is this is a, a call to arms to tech in New York, which happens to be much more easily to ground in reality than probably if you're, if you're operating in Silicon Valley. [40:03] In what ways does Privy still work on privacy? [40:07] And it's really tough to a large extent. Like, you know, we pivoted. The core product failed.

And I think a lot of the infrastructure and architecture that we built remains. Like, you know, data encryption, key splitting, running secure environments in which we can provably show that no one knows the information. It used to be about knowing information. Now it's about securing keys. [40:27] But the core concept is very much the same, just the substrate of data has moved from, you know, intelligible information to now like, you know. [40:35] key information. [40:39] So I think that the reality is basically it works on it because I do believe – [40:44] that [40:45] Encryption is key to privacy.

[40:47] And having everyone have keys. [40:50] is key to enabling encryption to exist throughout the web. [40:54] And so I'm probably holding out hope that the self-sovereignty project of Web3, [40:59] We'll come back. [41:00] Um, [41:01] as we distribute stable coins across the world and as we make it that, you know, digital currencies work. And I think the project itself is at risk in a sense. There have never been darker days for Web3, and yet I've never been more optimistic about crypto. I think finally the space is having real deep impact.

[41:15] on people who otherwise don't care about the technology, which is maybe the definition of impact, is the only space that has ever so deeply pandered to itself for so long. So I'm as optimistic as I can be about the space and about the ability to do meaningful, impactful, positive work in this space. But also I think... [41:34] this idea of we're going to build an alternative internet that is user-owned. [41:38] has never been in more dire straits. And I think my hope is that Privy is still working on privacy because we're sort of laying the groundwork for how to enable people to [41:48] have keys to signify intent and encrypt data.

[41:52] To jump forward a little bit, I think around the time I met you, you were – [41:56] and I'm sure I'm skipping over some stuff, but you were starting to think about embedded wallets, which sort of became this massive, amazing wedge in. The crypto wallet... [42:08] at the time, and certainly for most of the early history, it was this sort of idealistic, to go back to the point you were just making, this idealistic idea that you were going to bring your self-custodial wallet wherever you went. And it wasn't just your money, it was all of the things you were.

It was your identity, whatever. Um... [42:24] Do you think that there's still merit to [42:26] the idea of the wallet in that form factor at all? [42:30] Yes. And I think in a sense, this was the interesting take we had. The biggest issue of identity. [42:37] writ large. Like how you define identity on the web? Typically, people will say this is about basically portable identity. I record something once I get to have it everywhere. It is controlled by me, not by a platform. That's at least a very like, you know, common way I would think about it.

[42:51] and basically... [42:52] any work on identity. [42:54] ends up being a question of how do we... [42:57] incentivize platforms to play along in a game that cuts out their edge. [43:02] And that this intermediates them from their users, which is to say their lifeblood. And so I think that's the core reason why identity projects end up going astray is if you are pure enough about following the identity path, you end up building a protocol. [43:15] that you can never get anyone to adopt because all of the people who have the greatest impact in adopting it are the most dis-incentivized.

[43:21] from adopting it. [43:23] Um, [43:24] And yet I think [43:26] Well, we'll end up with [43:28] is maybe federated, like versions of identity, localized. Like, I think there's basically a gap between... [43:35] you only exist within the platform ecosystem, or you exist at a government mandated level. [43:41] And I think basically being able to federate different parts of identity between platforms is still a very viable dream. And I believe that like having basically digital currency that can flow between platforms. [43:51] is actually a very easy test bed. [43:53] for figuring out what a wider wallet can do.

If I have a wallet that allows me to take... [43:57] Currency. [43:59] in the digital form from platform to platform, and then saying, you know, currency is just one type of data, but I can take other data, I can take KYC information, I can take my driver's license, is just a spring from there. So I think there's still merit to the wallet, but in itself I would recommend that no one work on that wallet in itself because it doesn't solve a lived problem for any user in a very direct way.

[44:19] And yet, [44:21] in some inverted way, [44:23] As I understand it, feel free to correct me, the embedded wallet was really the [44:27] I don't know if that was the exact pivot, but that... [44:29] was the sort of like... [44:31] unlock [44:33] to really make things start to work for you guys, at least in terms of the kind of core goal of serving developers and having... [44:39] Do you disagree? No, I completely agree. But I think what we did in doing this was also we, you know, there's a reason the embedded wallet doesn't have a first-class feature right now around, like, you know, social security number encryption.

[44:51] or things like that. Like we move to saying, not only will we give, uh, [44:56] we will basically move from being this like horizontal platform that can capture any data to being a very verticalized one that capture one type of data, which is what assets do you hold and how do you make them easy to spend? And then what we did was we'll say, and this moves from being something the user has to willfully intentionally bring with them to this is something that a developer can build into their platform.

So they are now building, you know. [45:19] global store value or, you know, fintech, whether or not they sought it. But like now value can be captured at the app level. [45:25] controlled by the developer in the UX that they want. And so I think like the, the, the unlock was saying, uh, [45:32] developers can build with crypto without needing their users to be crypto people. [45:35] I see. And is that the... [45:38] Is that what made the company work? [45:42] to wildly play. Yeah. Um... [45:44] When did it go from [45:46] - You were working on allowing customers to basically manage their users' data in a way that was responsible.

It wasn't really working. [45:55] you [45:56] were acquired by Stripe last year. [45:58] and you were quite successful, [46:01] in some dimension of things. And you have, if we wanted to put maybe the crudest analysis on it, there are millions of people who have Privy wallets by way of your developers. Like what? [46:12] What was the inflection point? I think there were a few chapters, but basically through the first version of [46:20] It was purely vision built. [46:22] And it was, this is what we think ought to exist in the world.

Can we get people to agree? We launched a product in like December of 2021. [46:30] 2021, by April, Asta was like, [46:34] This is not working. We weren't. She was like, this is too hard. We're pulling teeth. And I was like, yeah, but this is about grit and so on. By July, I was like, all right, yeah, you're right. This is too hard. It should not be this hard to get people to care. We are trying to... [46:48] Reshape nature. [46:49] As opposed to like the market always wins and we are trying to change human behavior and that is not the right path.

Like we need to figure out some ways. What were you most trying to change? You were trying to, you really were just trying to sell developers something they didn't care about. [47:03] Something they didn't care about and something their users weren't asking for. [47:06] I see. And we were trying to convince them you should care about this. And by the time you're doing that, you've already lost the game. You've lost the plot. We're not an advocacy group. We're a company building products. And so I think by July, I came to agree with her.

And we had a few paths. We were like, okay, what have we learned? [47:28] You had already raised from Sequoia. We had already raised from Sequoia. And I think this is where there's real truth to the IDMAs really matters. [47:36] Like in so many ways, we pivoted, but like it's so related to what we were doing before. And I think part of the question we had over that summer was, [47:45] Do we just reset, start something entirely different, go to AI or whatever? And I think the take was like, no, we still really believe that there's something here in the idea maze.

We just went in through the wrong gate. So let's like get out of the maze. [47:57] "What did we learn about the path we charted? "And let's go back in." We were pretty methodical about it. And we came to a few ideas. - How sacred was selling to developers? - Very. - Okay. - 'Cause I'd worked on consumer products before, and I know how hard it is. And so that was not questioned. - But it was always developers specifically. Developer infrastructure. - Yeah, and I think that was, the sense here was like, it's what we know.

We're both developers. We care about the craft. [48:21] And like, frankly, again, like if, if, if like, [48:25] you want to be selling the means of creating the future. That is a very good way of like having impact. And so like, [48:32] developer tooling, [48:33] is the way in which we get to start. That wasn't questioned, interestingly enough. [48:41] Yeah, and so we got to this idea of we need to change onboarding. It started with onboarding and we knew that embedded wallets were part of it, but actually the first launch was not embedded wallets.

It was enabling people to off into crypto apps and link their existing crypto wallets to an off system more easily. And we basically just we'd seen the data and the data was people want to have key management be easier. So we'll have to build that next. But we're trying to cut very thin MVPs. And so basically by January of 23, so a year later, after the initial launch, we relaunched. [49:10] with this new product. [49:13] And [49:13] We had like very, you know, one foot in front of the other goals.

Our first quarter, we were like, we need to have five customers in prod. Our second quarter, we're like, can we make it 12? Our third quarter, it was like, can we make it 25? [49:25] And we got very lucky because there's an application called Frentech that used us. [49:29] And we were very clear that like, [49:32] that used us, that blew up. And then everybody started copying them. [49:36] And so we went from our goal being 25 in Q3 to having about 150 developer teams building with us at the end of Q3.

At that point, we had enough data. [49:44] and enough customer contact that we, uh, oblivion or irrelevance was no longer the threat model for like why this wouldn't work. It was like us just messing the product up, not being able to scale. And so I think that- Was there any fear of like, will there be, because interestingly, I, I, we, we knew each other back then. I remember well before Frentech, you had like envisioned this correctly, which is like, I need to get enough developers that one of them is my, one of them rips basically.

Yeah. After that, [50:11] One, I guess, do you think that was a reliable strategy that can actually work? And then two... [50:17] Was there any fear that like, will there be another front tech? I think the fear was can crypto... [50:22] exist beyond... [50:25] called Following It Has. And I think we were basically very comfortable, or at least appropriately uncomfortable, making a core bet, which was... [50:36] We have to have one, like we can't stack bets. I think that was a very important like mindset that we had, which is like the startup can be a series of like, you know, bank shots and pools where you have to hit like three sides before you get the ball in.

There needs to be one core bet that we're making.