Crypto is hard. Wallets are hard. NFTs are hard. Connecting to DApps, distributed apps, is hard. Brave is trying to make that simpler by building all of this functionality right into its privacy-safe browser.
In this episode of TechFirst with John Koetsier, I chat with Brendan Eich, CEO and co-founder of Brave.
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We chat about the new functionality in the Brave browser, why building a wallet natively into a browser is safer than doing it via an extension, and his vision of the future.
Check out the story on Forbes here, or watch our interview:
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TechFirst podcast: native crypto, NFTs, DApps in the Brave browser
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Transcript: chatting with Brave CEO Brendan Eich about putting crypto natively in the browser
TF221 – Brave
(This transcript has been lightly edited for length and clarity.)
John Koetsier: Cryptocurrency is still very much an early adopter thing. Only 13% of us have crypto and it’s still pretty hard to manage … wallets are complicated, accounts are challenging to set up.
It was literally hard to give my kids some small amounts of Ethereum because KYC and AML protocols — know your customer, anti-money laundering — are all in effect.
So Brave has done some super interesting things in the browser space. They’ve got privacy-focused browsing for one thing. Also, people earn crypto, the basic attention token, when they agree to see ads, so you monetize your time instead of Google or Facebook monetizing your time.
Now Brave is adding a native cryptocurrency wallet built into the browser. It’s free, it connects to hardware wallets — if you choose — and it will allow you to use dApps, distributed apps, natively in browser as well as buy crypto, make payments, trade crypto, and more.
Here to chat about it is Brendan Eich, the CEO of Brave. Brendan, welcome!
Brendan Eich: Thanks for having me, John.
John Koetsier: Hey, super pumped to have you. Why are you putting a crypto wallet in a browser?
Brave CEO Brendan Eich
Brendan Eich: Well, we want to make it possible for your kids to receive directly and that’s called self custody.
They don’t need to try to sign up with Coinbase or another custodial service where they might just be too young, or they might have a hard time with all that KYC know your customer/know your client rigamarole, which is really for the purpose of anti-money laundering and sanction list enforcement and stuff like that.
So it’s serious stuff, but it doesn’t apply to your kids. And if your kids can just get crypto from you in a browser wallet, provided they have a good way to secure the key, they could have it when they’re grown up … they can have it when it’s gone up.
John Koetsier: So what can you do with this wallet?
Brendan Eich: So this is initially starting off as a self-custody wallet. You can list your assets, you can get quotes, you can buy and sell, and then we’re adding more chains as we go.
We’re starting with Ethereum and EVM compatible chains. So we’ll have, I believe we’ll have Avalanche C-Chain support and we’ll have Polygon support, things like that. We’re going to rapidly add Bitcoin and Solana, which was announced just last week — I missed it already — in Lisbon, where I spoke on stage with Anatoly Yakovenko of Solana, and we’re going to add other chains.
We’re trying to be multichain.
But what I announced last week was in order to help dApps default to a low fee fast chain. We’re going to make multichain dApps, of which there are more and more, that support Solana and other chains in Brave, default to Solana. Now if the dApp wants to override that they can. If the user wants to override it, the user can. But you have to make a default.
It’s analogous to search engines … if you type keywords into a browser address bar, you’re going to search somewhere. In Vivaldi, that’s with Bing. In a lot of browsers that have Google deals, it’s Google. In Brave, it’s Brave Search for new users. We’ve made that the default for new installs and we’re going to promote it to our existing base.
John Koetsier: So the 13% who have crypto right now probably understood most of that. Some of that, they didn’t … the [laughing] 87% who don’t are going, like, what is a self-custody wallet?
What on earth does that mean? So let’s back up…
Brendan Eich: It’s like the old days.
John Koetsier: Let’s back up just a little bit there and say, ‘Okay, what is a self-custody wallet and what is that opposed to, what’s the other option?
Brendan Eich: Right. So, I guess you could think of self custody like grandpa putting money in the mattress, or people keep cash in a lockbox at home … keep valuables, some people have gold. That’s self custody: you’re the custodian, you have to secure it against burglars, things like that, and any light-fingered people in your house.
John Koetsier: Yes.
Brendan Eich: But you can count on it being there if you’ve done a good job securing it and it’s pretty close to hand. You don’t have to go ask somebody to send it for you or take it out of a safe deposit box at a bank and give it to you. That’s self custody, and that applies to cryptocurrency in its original design, certainly, on Bitcoin and Ethereum with owned accounts. And it’s really how all these crypto systems work.
Solana has nicely woven multisig — multiple signatures — in, so you can have shared keys or multiple keys to get access which is convenient sometimes. But generally, think of it as you have the key to the lockbox and the lockbox is in your house. In this case, your browser.
John Koetsier: As opposed to having your money in a bank, as opposed to having somebody else control it, manage it and everything else. So you have more control, you have more security, but you also have more responsibility. So there is some give and some take there.
Now you talked about dApps … explain what dApps are.
Brendan Eich: Okay. So, dApp it’s somewhat awkward shorthand for decentralized app.
And decentralization is itself kind of confusing, because people sometimes just think it means having multiple machines providing parts of a solution for you. That would be a distributed system, that’s not decentralized. Decentralization in its cryptocurrency use really means a peer-to-peer network of many, many machines that all are confirming each other’s idea of the state of the world. It’s called a distributed ledger, or people will use distributed ledger technology, DLT, it’s kind of a three-letter acronym. Or people just say blockchain.
And maybe it’s not exactly a blockchain, maybe it’s a graph, or — doesn’t matter. It’s some kind of shared database and all these computers using cryptographic proofs and puzzle solving — these are mathematical games, really — can become convinced that they have the latest and consensus version of this database. And it’s important that you have some properties to the design of this network. It has to have rules for consensus that are resilient in the case of the network cutting in half accidentally.
Or, this is the really hard problem that was brilliantly solved in computer science over the last like 50 years, Byzantine Generals Problem or Byzantine Fault Tolerance. This is, for history buffs, that the Byzantine Empire as it aged, the emperor’s sons start not being trustworthy and their generals started not being trustworthy, and the emperor couldn’t be sure how many generals were going to betray him in some tense situation.
And that’s why you hear people talk about how, you know, the modern U.S., I don’t know, bureaucracy is Byzantine.
John Koetsier: Yes.
Brendan Eich: But in the case of blockchain, it means that there’s an actual sort of game theory model here where you can rely on the blockchain-decided consensus so long as a certain fraction of the nodes are honest and…
John Koetsier: Hundred percent
Brendan Eich: … that fraction varies. People argue about what that fraction is, but the more nodes, the better. It’s harder for anyone to grab 51%, or one third might be enough in some cases, but if you have a lot of them and you have consensus that looks good, you can inspect this, you can look back into the past … because it’s a public history, it’s not just a database. People say chain, it goes back in time. So you can become convinced that there’s no need for a trusted third party like a bank to tell you your money’s there. Your money’s there.
John Koetsier: Okay. So you’ve gone deep in the technology there and also the history [laughing] … tell somebody why they should care.
What is a distributed app that, you know what, they might want to use? We’re talking to 87% here. What’s a dApp that, hey, you know, that’s kind of cool, that’s a neat use case. I would actually like to use that.
Brendan Eich: I’ll mention the big favorite: decentralized exchanges. So we talked about banks and do you trust your bank. And after 2008, some people don’t and the banks kind of got away with bad things then.
So people like the idea of self custody, whether it’s some money or gold in a lockbox, or it’s crypto in their own machines wallet — something that is keyed to them only, they have control of the key, they have secured the way of getting at that cryptocurrency, but then they want to trade it sometimes. Stick with Bitcoin, you want to hold it.
In the past, I’ve talked to Bitcoiners who said, ‘No, no, I’ll send it. I’ll tip you.’ And I’m like, no, you won’t — and you shouldn’t. And this was four years ago, so they definitely shouldn’t have. They should have HODLed it all.
But people are sending BAT and many other kinds of tokens and coins, and when you send it, while you can send it straight to another person whose address you have — maybe they gave you the address through a secure messaging channel — but if you type that address wrong, or if some imposter tricked you and gave you a different address and you thought it was your friend, you’re going to be sad, because you’re going to send that cryptocurrency or token to the wrong address and you can’t get it back. One of the other properties of blockchains is it’s generally immutable and final. Once it’s sent, there’s no undo.
John Koetsier: Yep.
Brendan Eich: You know, banks may have some advantages here. You can dispute a credit card charge…
John Koetsier: Yes you can.
Brendan Eich: … or put a hold on a check. But it’s a trade-off, like you said.
With blockchain and direct sending it’s — you gotta know what you’re doing. And we can make that easier with name services and ways to confirm that it’s really your friend through secure channels, and that’s something that’s on the agenda at Brave because we have the whole browser user interface as a canvas to paint upon.
But, I mentioned exchange, suppose you don’t just want to send to a friend, you want to trade your BAT for some Bitcoin. Then you either have to go to a regulated centralized exchange which is a custodian, like Coinbase, that also has an order book. They have ways of letting people bid and ask for, you know, ‘I have three BAT and I want 1/1000th of a Bitcoin, and will somebody send me that please?’ And you’ll haggle on the price and you’ll come to an agreement and that’s all cleared by the central exchange.
But thanks to dApps — to decentralization on blockchains with smart contract systems, the ability to do computation all around the world on these machines that form the network, where they all agree on the computation or on its observable inputs and outputs — that you can do a decentralized exchange. You don’t need a regulated, centralized exchange like Coinbase or Kraken or many others, Binance.
You can just do it through a smart contract address on Ethereum, mostly. And again, I’m getting a little expert here because this is not as easy as it should be, but think about it as you’re sending some BAT into a contract address on Ethereum, which is a special kind of address — it’s not an Ethereum owned address that might be your friend or an imposter — and you’re sending them kind of a message in there to tell the decentralized exchange smart contract system that you want to trade that for Bitcoin.
And through the magic of this blockchain and this smart contract system, all these computers working to agree on what to do, you can actually get Bitcoin back.
John Koetsier: In other words, it’s essentially like in the traditional financial system, putting money in escrow in some sense — not exactly, but sort of — and you have some more safety and control over how that works.
Brendan Eich: Yes. It’s like an escrow, but there’s no escrow officer who could embezzle…
John Koetsier: Yes.
Brendan Eich: … so there’s just this world computer. If you trust that enough, you can avoid trusting some singular third party that does go wrong, makes a mistake or is a villain. And the other thing is, I mentioned getting Bitcoin back on Ethereum. That sounds crazy, but people have actually wrapped Bitcoin. My friends at BitGo did this first.
John Koetsier: Yep.
Brendan Eich: So there’s a way of taking a cryptocurrency from one chain, the Bitcoin blockchain, and wrapping it onto another blockchain, Ethereum … and that’s really unlocked a lot of the potential for exchange and decentralized finance.
John Koetsier: Very interesting. So another thing that you’ve done is you’ve added support for NFTs. Obviously, super hot category, tons going on there. Talk to us about NFTs and how that works in the Brave new cryptocurrency wallet.
Brendan Eich: Yeah. NFTs, non fungible tokens … I saw it just today, somebody said, ‘They’re like buying an experience, it sounds confusing.’ Or people are selling like 8-bit pixel art, just sort of an 8-bit game aesthetic going on of funny-looking apes, smoking monkeys…
John Koetsier: Bored apes, yes.
Brendan Eich: Bored and gambling monkeys…
John Koetsier: Space apes. [laughing]
Brendan Eich: And you know somebody could copy those pixels, but if you have an NFT and you do the right cryptographic signatures, you can say, ‘Hey, that’s my art. I put that into this NFT and I’m going to sell it.’
And amazingly these sell for some amount of money. There’s actually higher quality art from people like Beeple, who I know through OTOY where we’re both advisors, and some of those pieces have sold for quite a lot.
So, think of it as art, but also I want to mention the Unlock Protocol. It’s a project from a friend, Julien Genestoux, who’s got a system of using NFTs for memberships. Think of it as like a key to the club, whether it’s a private club or a subscriber club with a creator or a newspaper or online publisher. And that’s a great model, because you can then do things to benefit that NFT owner. You can give them extra perks. You can give them passes to get a content that people who don’t pay for the NFT can’t get.
And it’s not fungible in that you can just pump it around and use it in an exchange and sell it for something … you have to find a buyer who wants it, like a collectible, like a pass for our neighborhood pool which we bought from somebody who was moving out of the area. And that’s what NFTs are good for, in my opinion.
John Koetsier: Okay, cool. So, let’s talk about safety of using this. What protocols have you built in to make it safe for somebody to store their cryptocurrency in the Brave browser?
Brendan Eich: Yeah, we had fun last week when I was in Lisbon. As we were tweeting about things at the conference, somebody came in and said, ‘I’m using the MetaMask extension,’ which is a wallet extension on the desktop browsers like Chrome, Firefox … can even use it on Brave, but we have the built-in wallet.
And I want to highlight this not to say MetaMask is something you shouldn’t use — it’s widely used — but that if you use an extension, you’re kind of at the mercy of Google’s rules for that extension in Chrome. And you cannot, as an extension creator like MetaMask, you cannot take over the entire canvas of the user interface. You cannot be sure that you can put trusted user interface elements that cannot be impersonated or spoofed by the page, up. And so people are getting fake MetaMask extensions by mistake or by being tricked and they’re installing them, and then they’re putting their precious crypto in through their key that they remember or they have a hardware key storage system for, and then that extension could steal it.
And that’s really bad. So we’ve started fighting this and as soon as you fight it on Twitter and mention MetaMask you get swarmed by these … I think they are people, but in parts of the world where it’s inexpensive to pay them to do this, they pretend to be helping people get their currency back, or they pretend to be MetaMask support team and they say, ‘Hey, we can help you, go to this link’ and it turns out it’s a Google Docs form…
John Koetsier: Yep. And ‘You put your private keys in there and we’ll help you with that.’ I’ve had the same attack given to me, absolutely. Yep.
Brendan Eich: It’s terrible. It’s flagrant criminality and…
John Koetsier: Somebody falls for it, I guarantee.
Brendan Eich: They do. And the person who contacted us last week was falling for it, and we said, ‘Wait a minute, you don’t have the real MetaMask.’ And that saved them.
But at the bottom of this form, it shows a box to put your private key material, the 12 words, chosen words in … and right below that Google has a nice little fine printed message saying, ‘Do not put passwords into Google Forms.’ [laughter] No one reads the fine print. So it’s better to laugh than cry, but this is serious criminality and it’s a bad problem.
And MetaMask, no insult to them as an extension, cannot do everything that they would like to.
We’re a browser. We can give you a unique page that you’ve seen before, that’s customized to you, that is almost like an art — maybe it’s your favorite bored ape — that you can use to confirm that you’re dealing with a secure user interface, you can enter your 12 words. We can tie that into the outside of the browser which extensions cannot modify and help users understand to look for that so-called ‘browser chrome.’ That’s the old phrase we used at Mozilla, it became standard, it inspired the name for Google’s browser. But the outside of the browser that cannot be impersonated, often called the chrome or the user interface, we’re tying into the wallet and we’re tying the wallet into it.
John Koetsier: So for those who aren’t into crypto and listening to this, you’re wondering what are these 12 words here? Well, when you have your money in your mattress, in a custodial wallet that you have control over, then you have a secret phrase.
It’s like a password; it’s 12 words and with those 12 words anybody can get access to your funds … if they have them, so you want to keep them safe. And Brendan’s talking about essentially, hey, because we own the browser experience here, we can ensure that it’s not being impersonated. We can ensure that it’s safe. So that does seem quite interesting.
I have to also say that when I go to a dApp and it’s like saying, ‘Hey, connect to Coinbase wallet’ or something like that, I’m always like … Mm, I’m not sure if I really want to, you know? That seems really scary to me. So it’s kind of neat to imagine, maybe just using a browser, your crypto is natively available there, your dApps just work there, your NFTs just come in. That makes a ton of sense to me. I think it’s a very cool thing.
You’re obviously on mobile, you’re on desktop on the Brave browser, Brave app. What’s next?
Brendan Eich: So as we add these other blockchains, we want to make it easy to connect them. I mentioned wrapped Bitcoin on Ethereum. We have wrapped BAT on Solana already, thanks to a cool bridge or proxying system, let’s call it, called Wormhole.
And if you look at wormholecrypto.com, you can read about it. It’s actually a multichain sort of transporter, like in Star Trek, for getting between different blockchains.
And you put the BAT in on the Ethereum side into a smart contract, and one cool thing about Wormhole is it doesn’t require a central trusted third party to be the custodian of that BAT when it’s sent in. That’s how BitGo’s wrapped Bitcoin works on Ethereum. Bitco has a South Dakota Trust, so they’re regulated. You can trust them if you send Bitcoin in to that Trust, it can pop out as wrapped Bitcoin on Ethereum and no one will embezzle it and leave you holding an empty bag.
But — because what’s on Ethereum is really a bag wrapping around Bitcoin — but BAT is on Solana through this Wormhole bridge and there are lots of other assets that can be proxied or bridged this way. And that gives you even more power to find the best price, find the best decentralized finance ‘DeFi’ system. And Solana has a bunch of them because it’s fast and cheap compared to Ethereum.
So we’re seeing all sorts of excitement around the combination of a self-custody wallet that’s multichain and decentralized finance smart contract systems on mobile chains. And again, you have to be kind of expert to use them, but if you do, you can make good yield … better than a bank will pay. Banks are paying hardly anything now. Interest rates may be creeping up on the lending side, but on the saving side, they’ve not moved much off the zero bound that the central banks ran up against.
But if you use crypto, because of the — I think, to be fair, the youngness of this space and the ability to find arbitrage opportunities and find, let’s say, crypto whales who want to hedge — you can get a better yield on your savings, on your committed assets that are put into an account to be lent. And so it’s a saving and borrowing system in general. There could be things like derivatives. FTX has a smart contract system on Solana called Serum, it’s a decentralized exchange. You can do things there, all sorts of interesting pairs that act like derivatives because they give you higher leverage, like a stable coin and a very rare sort of, or unusual token on a DeFi smart contract system. Those can be traded as a pair.
But what we’re looking forward to do in Brave is make this all useful by non-finance Quant maniacs. And that means, just let me earn some return. I’ve got some assets sitting. I’ve got some BAT sitting there. I opt into auto-yielding and you can give me 3.5%, 5%, maybe 8%, and if I don’t like it, I’ll turn it off. If the rates go down, you’ll alert me. I can decide what to do.
We’re going to automate this as much as possible to make auto-yielding or auto-earning an option for people.
John Koetsier: So, Brendan, talk a little bit more about that, because … I’m going to be honest with you, you’ve done a really good job over the last 10 minutes of probably convincing that 87% that this is way too frickin complicated for them to ever get into or even think about, because you’re talking about different ways of doing arbitrage, and wallets, and exchanges, and moving money, and people that are not into crypto — even people that are into crypto don’t know all the things that you know, obviously — but people who are not into crypto are just going like, holy frickin mother, this is a whole different world.
It’s got a whole new terminology and I don’t understand any of it. It all seems kind of synthetic and weird. It seems pretty dangerous, people are always grabbing crypto and everything like that.
So, really briefly, how are you changing that? How are you going to make that simple for the beginning user who wants to get into some crypto — maybe they’re going to download Brave and maybe buy a little bit, maybe get a little bit of BAT by watching a few ads here or there — how are you going to make this world accessible for them?
Brendan Eich: So that’s, so, by the way, I know people who started out like you describe, they had no clue and they were scared.
But some of them were adventurous — this is how the frontiers were formed in history — and they took a chance and they learned by doing. And if they lost a little bit, they didn’t gamble too unwisely and they ended up liking it and learning.
Now it’s still too complicated, but what I’m describing with automation should make it much easier. So when you go to a bank, you can see a posted annual percentage rate yield on the savings. Again, it’s pretty low. I did sweeten the future pot here by saying in spite of all this complexity, if we automate it, you can make … I said 8%, I’m seeing that still on some DeFi systems … that should cause some of your listeners to think twice about not being scared, because that’s a lot better than zero or 0.1. And so…
John Koetsier: Yes it is.
Brendan Eich: … you’re going to see people migrate to this and you’re going to see the people who are the most frontier friendly, let’s say, there’s no particular aspect to them I can generalize about, except they’re ready to take a chance for some higher return and they’re ready to take an adventure.
And they will then, I think, pave those dusty Western town streets and put up the street lights over time and others will move there. And that’s how all this happens. That’s how it’s happening in Brave.
John Koetsier: Yup. Okay. That makes sense. Now, talk to the person who has dabbled in crypto — maybe a little bit more than dabbled, they have a couple hundred K in crypto, some in Ethereum, some in Bitcoin, few other coins, maybe some BAT, maybe some other stuff, Rally, whatever the case might be — and you’re saying, ‘Hey, I’ve got a way for you to make an 8% return on the funds that you’ve got in crypto.’ What do they do?
Brendan Eich: So we haven’t shipped this. This is not coming out this week, but we envision next year — in the first half, I hope — the ability to sort of opt in, press a button, read the terms and agree, because it’s a centralized system and there’s always risks … but there’s no, you’re not signing up with anybody, you’re not identifying yourself.
Press that button and your funds go into the smart contract system and you get yield back. And it’s an annual percentage rate yield that could be high, like 8%, but it’s compounded daily, so you’re getting a smaller amount each day that exponentially it’s up to 8%. So, that — or you know, 1.08 — so that’s cool, and that’s just the push button if you’re willing to read and understand what you’re doing. And there’s, like I said, there’s no zero risk in life.
John Koetsier: Yep.
Brendan Eich: Life is risk. So the current contract system could have a bug. The people who run it could have put a backdoor in it that allows them to steal the funds, or one of their bad employees to steal the funds. All sorts of things can go wrong. Ethereum, god forbid, or Solana could go down or fail, you know, meteor strikes.
But these are fairly low, low risk events — low odds events. I would say the risk is odds times the cost. So that has to be high if you put a lot in there, but the odds are low. And I think people are gonna pave these streets…
John Koetsier: I look forward to those streets being paved. They need to be paved, because as it currently stands, even with some of the custodial wallets — the Coinbases and other things like that — it’s a complex world and there’s a lot going on there.
And so there needs to be things that bring these technologies together, allow ordinary people to use and buy NFTs if they choose, whether as tickets to events or just proof of ownership of something. That sounds pretty cool.
Brendan, I want to thank you for taking this time and look forward to seeing what Brave brings out, not only today, as you release this new version and this wallet, but also next year as you allow people to invest or maybe reap a return. I can tell you one thing: a known risk with the inflation we have right now, the money that’s sitting in my bank in just cash is losing maybe a percent a month, you know, that’s probably a high rate over the past month.
Brendan Eich: It’s painful.
John Koetsier: Yes, it’s not doing well. Just inflation is eating away that value. So, thank you so much, Brendan, for your time.
Brendan Eich: Thanks for having me on, it’s my pleasure.
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