Wrench Attack: How to Protect Your Bitcoin, with Max Guise
Transcript — TFTC
Article: https://www.tftc.io/wrench-attack-bitcoin-protection-max-guise
Transcript page: https://www.tftc.io/wrench-attack-bitcoin-protection-max-guise-transcript
Published: 2026-08-05
Machine transcription, lightly cleaned; may contain errors.
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[0:07] Max Guise: You've had a dynamic where money's become freer than free. Let me talk about a Fed just gone nuts, all, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be.

[0:34] Marty Bent: Probably should be.

[0:35] Max Guise: Probably should be.

[0:36] Marty Bent: Max, it's great to be here with you.

[0:38] Max Guise: Yeah, thanks for having me.

[0:40] Marty Bent: Thanks for coming. We've got the new BitKey in my hand.

[0:42] Max Guise: Awesome.

[0:42] Marty Bent: We just set it up and I think a lot of people are going to be extremely happy with what you guys put together. I think based off our conversation, our ongoing conversations over the last year, I think we should start from the beginning, like the hard— really hone in on the hard problems of self-custody and how you guys have approached that design problem as it pertains to Bitcoin self-custody. Because not your keys, not your coins, obviously, it's been a meme for well over a decade at this point. But for many people, the sort of jumping over the hurdle of taking their coins off an exchange onto a hardware wallet It's a no-go for them. There's too many sort of hurdles, seed phrases, having the hardware while thinking about how to secure it. And this is the design problem that you guys have been focused on. So from first principles, how do you guys approach self-custody?

[1:37] Max Guise: Yeah, it's almost exactly as you described right up front, which is about the hardest problem since self-custody. And so the way we think about this is we want people to be able to own their own coins. And we know there are a lot of barriers to that. We know there are a lot of problems that they might not be able to solve themselves and for which they want and need great tools that make it really easy to get the right security, recovery, and privacy properties. And so, we started looking at this as kind of that holistic problem right when we started developing BitKey. And we started with a really long list of things that we wanted to solve. And I think everybody knows you can't solve everything at once. And so, we tried to hone in on what is it that's really in most people's way.

[2:16] Marty Bent: Right.

[3:10] Marty Bent: Right.

[3:10] Max Guise: And what we found was lots of the things that we were thinking about, our customers were thinking about too. And one of the next ones that we took on was privacy. So, at some point, we should probably dig into some of the improvements we've made there. So, one of the things that typically happens with systems that protect Bitcoin and self-custody systems in particular is that you have to make a trade-off. Maybe you get really good recovery properties, or maybe you get really good security properties.

[3:38] Marty Bent: Right.

[3:39] Max Guise: But especially if it's like a collaborative custody system that integrates hardware and software, a lot of times that means giving up privacy, like maybe giving a third key in a 2-of-3 multisig up to another company that's going to be there and support you when you lose parts of your wallet. And that comes with a privacy trade-off. That company can see your wallet, your balance, all the transactions that you've made in the past and future. And that's a trade-off that I think had been largely accepted. We spent some time working on that problem, figuring out how can we make it better so that, you know, you can lean on a custodian exactly when you'd like to, or lean on a self-custody system or a collaborative custodian exactly when you'd like to, but maybe not have to give up all that privacy.

[4:57] Marty Bent: Yeah, well, I think this was the biggest point of feedback of the old BitKey that I always got is there's no screen. Like, I need to be able to verify the receive address or the send address. And I think you guys did an incredible job of answering that question of like, when screen, and if so, how? I mean, it takes up the full bottom of the wallet. And it's funny, we were going through the onboarding process of this and I was using it like an old BitKey, like looking at it this way, and you're telling me like, no, there's a whole new UX. You need to look at the screen and you put your finger on the back. So there's a, a new way of interacting with this ergonomically, which I like.

[5:33] Max Guise: One of the things I think, you know, as part of our— the core part of our development process is we do user research. So we sit down with customers, potential customers, we watch people use the devices that we make, we watch people use the software that we make, and that heavily informed the choices we made in like the send flow and some of the things that you'll see when you're, when you're sending from that device. And then what you were just describing is actually something that we're currently adding, some additional things to kind of help people use the new device in, in a way that's a little bit different. If you're an existing customer, you may have enrolled your thumb as a fingerprint on it, be tapping on the, the stone side of the device.

[6:10] Marty Bent: Sure.

[6:10] Max Guise: There's a little bit different flow with the new device. And then people who are, you know, brand new to BitKey, what we've found is whenever they're using the device, they go straight for And so we paid a little bit of attention in our design process to what it looks like to upgrade from our first BitKey to the second BitKey. And so there's a whole flow dedicated to that that kind of walks you through how to do that safely, especially if you're holding a lot of Bitcoin on BitKey.

[6:33] Marty Bent: Yeah, well, speaking of new BitKey owners, that's actually one thing I'm curious to get some insight in from you is with the old BitKey even, I mean, again, radical changes to the traditional approach to hardware wallets, no seed phrase, You've got this collaborative custody between the hardware wallet, the mobile app, and Block's server in the cloud. And a lot of Bitcoiners that have been around for a while, like, oh, this is completely new, this is completely foreign. But based off of all the user research that you've done and interviews that you've done, how, like, people that have gone from never having a hardware wallet to going straight to BitKey, what are some of, like, the main—

[7:13] Max Guise: Yeah.

[7:14] Marty Bent: responses they give when you ask why BitKey?

[7:16] Max Guise: Yeah, I think by far and away the first thing I'd highlight is the onboarding time. So the time from unboxing BitKey, either this one or the first BitKey, is very short. And, you know, minutes, minutes from opening the box to making your first Bitcoin transaction. And that's something that we thought needed to be a core part of this. The door into self-custody should be incredibly easy. And so, we spent a lot of time optimizing that in the first BitKey. And I think what we saw is that process alone brought a lot of new people into self-custody. We saw people choosing it because now is the time for them to take the plunge.

[9:05] Marty Bent: What are some of the non-obvious pitfalls, edge cases, or design decisions that most people are probably unaware of when it comes to designing a hardware wallet, let alone one like the one that you guys are putting out?

[9:20] Max Guise: I think the thing I'd highlight here is that the set of things that can happen to people when they're self-custodying their coins is unbelievably large. Like, maybe you lose your phone, you lose— and you lose your hardware. I'll use that as an example. So, you lose both. That one's not unintuitive, but a lot of people, when they're first looking at BitKey, they wonder, what happens if I lose my phone? Or, what happens if I lose my hardware? And there are very easy answers to those questions in our system. But then they start to get to things like, what if I lose both? And we have a recovery contact solution for that.

[9:51] Marty Bent: Yes.

[10:46] Marty Bent: I mean, this is but one ingredient to everything you guys are doing across the whole Block family of companies dedicated to— I mean, every company within Block is dedicated to Bitcoin one way or another now. This is something I talked about with Miles in November during the Cash App launch, but like the pace at which you guys have been shipping, whether it's at Square, Cash App, now with BitKey, the new BitKey Proto, obviously with the rig, It's been astonishing. And as an outsider looking in, going back to this conference last year, actually, when Miles was on stage talking about the progression of Bitcoin within the Block ecosystem, there seems to be a sense of urgency behind what you guys are building in an attempt to get these tools into individuals' hands so they can actually leverage Bitcoin the right way. Is that sort of vibe that I'm getting from the outside looking in correct? Absolutely.

[11:36] Max Guise: Absolutely. So, there's a phrase that I use a lot internally, and lots of us use internally, which is, every day matters. And it's one of these things that sounds obvious on its face. Like, of course, every day matters. Why wouldn't it? But the difference between teams and people that operate like every day truly matters and any other mode of operation is radically different. And I think the thing that's really interesting is with that sense of urgency, with acting with urgency, is sort of front of mind for us. We're also suddenly more focused. We have an incredible amount of AI tools at our fingertips that we've been leveraging to move faster, move more correctly, move more robustly.

[13:03] Marty Bent: Yeah. I mean, you can see like a day in the life of a Square merchant going about their business, accepting payments, maybe it's fiat to Bitcoin. And then at the end of the day, they want to take some off the platform and into self-custody, it could easily integrate with this. And it's, uh, it's an urgency that I've again recognized, but I really appreciate because I do think, uh, for the longest time we're at the Bitcoin conference and there's a lot of, uh, well, name particulars, there's a lot of, um, sort of themes that have emerged in recent years where it's focused on Bitcoin as this digital reserve asset This digital gold that never moves.

[14:28] Max Guise: Yeah.

[14:30] Marty Bent: And it's— do you think it will be everyday money? I do.

[14:33] Max Guise: I do. And I think you can see the pieces coming together to make that happen. So, one of the things I really like to illustrate this with is actually the Square use case. So, a merchant accepting Bitcoin is the type of thing that I think to lots of folks might sound like a science project. And, you know, obviously not at this conference, but when you look at sellers broadly, like, their problems are about operating their business, they're about margins. If a seller is already a Bitcoiner, they're interested in this. But I think what we see is that people are getting interested in it because of what it can mean for their business.

[15:08] Marty Bent: Right.

[15:09] Max Guise: So when a seller uses fiat, accepts fiat payments, there's a 3% fee taken by the networks. And on the consumer side, you typically see that, you know, maybe on a receipt, you are like upset about the fee that you got charged, or maybe you see a sign at a merchant, you know, tacking on a fee, or maybe occasionally on a larger ticket thing, you might change, you know, the payment method you use and that sort of thing. And most people on the consumer side, it's an annoying couple of percent. But the thing I like to bring this back to is that for a business that maybe on a great day makes 15% margin, and maybe on a medium day is a 10% margin, and maybe has some bad days, 3%— we just talked about 20 to 30% of their profits.

[15:52] Marty Bent: Yeah.

[15:53] Max Guise: That 3% is computed on the ticket size, not their profits. And so, it's huge for them. And so, you know, the interest that we're seeing from sellers, some of it's from Bitcoiners, but some of it is from people that just want to get around the fact that they're getting eaten alive by this sort of thing. And so, that's not a block fee, that's not a Square fee, those are network fees. And so, we want to enable Square seller businesses with that. And I think those types of things, like, those are— that's the beginning of really making Bitcoin everyday money is having those exact benefits to bring people in, even if it's not on their radar yet. Yeah.

[16:28] Marty Bent: I mean, sticking on the sellers, because that's the one thing I've been curious about since you guys launched it in November. How's that been going in terms of the reaction of sellers that were maybe not even Bitcoin curious, but just realized like, oh, this thing's here?

[16:45] Max Guise: I'm probably not the right person to talk through the whole of that, but the one thing that I'll highlight is that it's incredible how much Bitcoiners have come out to support that activation. Sellers get a bunch of influx of people coming around realizing that Bitcoin's accepted there. The Bitcoin Map put a lot of sellers in front of local Bitcoiners and so on.

[17:07] Marty Bent: Right.

[17:08] Max Guise: And we've seen a lot more people turning it on. And starting to get the benefits. So yeah, a lot of momentum and I think you're going to see a lot more from us in that area.

[17:17] Marty Bent: So, freaks, this rip of TFTC was brought to you by our good friends at BitKey. BitKey makes Bitcoin easy to use and hard to lose. It is a hardware wallet that natively embeds into a 2-of-3 multisig. You have one key on the hardware wallet, one key on your mobile device, and Block stores a key in the cloud for you. This is an incredible Hardware device for your friends and family, or maybe yourself, who have Bitcoin on exchanges and have for a long time, but haven't taken the step to self-custody because they're worried about the complications of setting up a private-public key pair, securing that seed phrase, setting up a PIN, setting up a passphrase.

[20:18] Max Guise: Yeah, the core property of requiring hardware for critical actions, like that signature happens entirely on the device and you see exactly what's happening, you know exactly what's going on at every moment during the process. I do think that that adds to peace of mind for customers. I think we, you know, we started off with kind of focusing a lot on kind of the onboarding process and the speed of that. I think what we found is once we were able to really optimize those things, the next step beyond that is we can give even more peace of mind beyond like—

[20:47] Marty Bent: Yeah.

[20:47] Max Guise: the weight and the beauty of the hardware and the ease of the software, like by showing people along the way, you know, exactly what they're confirming. I think people really get a lot out of that.

[20:58] Marty Bent: Yeah. And speaking of the screen, what was the hardest part about incorporating this? Because I know with the old BitKey, you guys designed it and said, we're not going to do a screen, it's a little too much work. Like, what convinced you? Gave you the confidence to build a screen into this specifically?

[21:15] Max Guise: On the convinced part, our customers. So listening to customers, understanding, you know, what they want to see from us and why. As we went through that, we realized that, you know, while maintaining the same great properties of Bicke, we could add this. And I think that's something that as we saw more usage, understood what people loved and wanted changed about Bicke, just fell out naturally. in a way that, you know, I'm glad we're delivering on. And then on the confidence part, I mean, the team's great and the team's built very complicated hardware, you know, across the Square portfolio. But this type of development's never easy.

[22:45] Marty Bent: You mentioned it briefly earlier too, but I think it's important, like, particularly if you're cycling either wallets or you're changing an email address or contact information on the back end, Like, there's, there's a whole process that goes into that as well.

[22:58] Max Guise: Yeah, so with a lot of devices, if you're using a hardware device just as a signing device, and maybe that's the entirety of a product is to provide a signing device, and then maybe over here you have systems that folks build that the product is that system. It's, you know, maybe you integrate other third-party hardware with it and so on. BitKey has all of these problems. BitKey does both of those things, and therefore we have all of the problems to solve in self-custody. And as a result, we end up with a system that includes things like a recovery email that we let you know if something is happening with your wallet. And it's actually an account-critical, security-critical action to change that. And so, we want you to confirm that on hardware. With the first BitKey, you tap. With the second BitKey, you actually can directly confirm what the email's being changed to.

[23:43] Marty Bent: Yeah. No, I mean, especially in today's day and age, you're like, all the phishing attacks and $5 wrench attacks that are going on, having to confirm on the hardware is something I'm becoming more confident will be a prerequisite for interacting with wallets in the future. I guess you need to physically see it here, especially in the world of AI and all this, and bringing it back to the atoms of it, which is like that you need the thing physically in your hand to change anything, I think gives me incredible peace of mind.

[24:20] Max Guise: Well, since you mentioned the atoms of it, you know, I'm sort of glossing over all the difficult parts. Like developing hardware is never easy. And, you know, the team spent a lot of time doing extensive reliability testing, dropping it from different heights, you know, accelerated aging and and those sorts of tests, salt mist, things like this. And we, you know, we wanna make sure that, you know, whenever we add a component like a display, like that doesn't come for free. That comes with very intentional choices about the design and the quality and the implementation. And really there's a whole journey involved in bringing that into the system and starting to rethink how we, you know, can protect even more of the system with this addition.

[25:04] Marty Bent: What's up, freaks? This rip is brought to you by our good friends at CrowdHealth. I've been a happy CrowdHealth member for almost 5 years now. My wife and I have had 2 children while we've been on CrowdHealth, and I actually just got the last bill for our 3rd child funded. Uh, it was $6,157. CrowdHealth negotiated down to $2,309, and we only paid $500. The rest was crowdfunded by the CrowdHealth network. If you're sick of health insurance premiums and having to pay deductibles and Getting ripped off at the hospital, join CrowdHealth. It's an alternative way to pay for your healthcare. It's not health insurance, it's crowdfunded healthcare.

[27:38] Max Guise: Yeah, I think this really comes back to the sort hardest problems in self-custody list. And this is one of the next ones. So, you know, you mentioned Bitki hasn't solved it today, and I wouldn't claim that we have. In fact, I think nobody's solved it. I think it's an industry problem. And I think we see that with both the attacks that we've seen in France and also lots of the attacks we've started to see in the United States. Feels like there's an acceleration. I think it's pretty clear there is one. And Jameson Lopp's chronicling of all of these, of course, can help put some numbers behind that. And it's something that I think is on lots of Bitcoiners' minds.

[28:16] Marty Bent: Yeah.

[28:17] Max Guise: And I think lots of the solutions that people ideate about today, it's often things like a duress wallet. It's things that make an assumption that during a really horrible violent attack, that certain things are going to hold true that in our thinking through this problem space, we question. We think that even if you're holding a lot of Bitcoin, most people, there's a lot more important things in life that are— if they're suddenly threatened, like—

[28:49] Marty Bent: I see.

[28:50] Max Guise: It doesn't matter what kind of practicing you did with lying about your balance or hoping an attacker hadn't done their research beforehand. And so, I think this is an unsolved problem, and the team has spent some time thinking about and kind of designing a solution that we think is interesting. It's not something that, you know, it's not in Bitki today. It's actually something that we're kind of at the stage where we'd love community feedback and engagement. But basically, our line of thinking is that we need to combine a couple of elements. What we really want is to set up situation where the Bitcoin just can't actually move right away.

[31:15] Marty Bent: Right on.

[31:16] Max Guise: That policy of biometric check, delay, biometric check resolves, and you can just move your funds in the same way you can today with BitKey when you have the hardware and phone in your hand. And then we said, okay, well, there's still a problem there. What if the attacker runs off with your keys and they just wait for that timelock to expire? So they show up at your house, they take your BitKey and your phone, or your hardware wallet and your phone, and they leave. And that's where we started to realize that, okay, actually, you know, we can do even better than that with what we call an ejection destination.

[32:38] Marty Bent: I mean, off the bat, I'm hearing this for the first time. Wait a minute, just hearing this for the first time. Yeah, I think it's a really creative solution, right? Because particularly, The time delay, 'cause that's the biggest thing. It's like, okay, somebody comes to your house, move it now, move it now. Okay, I care about my life, I'm gonna move it. Okay, I'm gonna initiate the move. Now you have to wait a month. Okay, good luck.

[33:07] Max Guise: Yeah.

[33:08] Marty Bent: Get outta my house. No, it's a shame that we have to worry about this though. I agree. And it's one of the hardest, One of the hardest things to design around. Yeah.

[33:20] Max Guise: Well, and actually on that topic, one thing we realized while we were looking at this is that BitKey might be uniquely suited to design for it. And the reason for that is actually one that I think is a little bit controversial, which is that BitKey doesn't use seed phrases. And the reason it's uniquely suited to rent-to-tax is because in that setting, seed phrases are a vulnerability. They're too instant. They're too portable. Like, somebody can take and leave with this, and it's very hard to protect it. And really, you know, what we want to rely on here is Bitcoin transactions for moving money between wallets. And that's kind of the core primitive.

[34:13] Marty Bent: I gotta hold your feet to the fire and talk about potential protocol upgrades that could enable something like OpVault or a covenants proposal make this easier for you guys? Or personally as an engineer, are they something—

[34:27] Max Guise: Potentially. Potentially. I mean, I think the thing that's interesting is it's not required for us. And that's largely because when you have something like the BitKey server involved, you can rely on it for policy enforcement.

[34:42] Marty Bent: It doesn't need to be enforced by the protocol.

[34:45] Max Guise: Right. So you can basically lean on, and, you know, we could talk about the trust assumptions in this, but you can lean on BitKey servers to enforce that time delay. And, you know, the underlying protocol usage can use existing timelock mechanisms, Without further upgrades to implement something like I was describing. Now, are there proposals that could potentially allow for different properties of reg attack solutions? Yeah, absolutely. But then you get into lots of other trade-offs that probably be a whole nother episode.

[35:18] Marty Bent: Well, I think Chaincode delegation is like a great example of weighing or designing something to increase privacy in a way that is enabled by the protocol in combination with your servers at Square.

[35:33] Max Guise: Yeah.

[35:34] Marty Bent: Afshin Ardaout just launched SigBash, which is this similar blinded server, blinded signing server, which I think that's one thing I'm passionate about is exploring the design landscape of Bitcoin as it exists today, even if in involves bringing in some trade-offs, because in a lot of cases the trade-offs are worthwhile and something I personally can stomach. I won't speak for everybody, but if I look at chaincode delegation or something like SigBash, I'm like, yeah, these trade-offs actually make sense to me.

[36:07] Max Guise: Yeah. And honestly, that's kind of how Bitkeys started, right? There was a privacy trade-off when we first introduced it. You know, using the 2-of-3 multisig that we began with has a privacy trade-off.

[36:19] Marty Bent: offer.

[36:20] Max Guise: We, on the backend, have a descriptor for the wallet that would allow BitBlock servers to know about your balance, for example. And with chaincode delegation, we wanted to take a huge step, really, for BitKey, but also for the industry, in terms of that type of trade-off. We wanted it to be possible to get the benefits of leaning on somebody to hold a third key for you, all the recovery and safety benefits while not having the same privacy downsides. And so, chaincode delegation uses some relatively deep cryptographic magic that I won't go into extreme detail here so I don't bore everybody, basically to make it so that BitKey servers aren't sitting there with that output or with that descriptor of the wallet, knowing the balance, knowing the history. And excited that the team formulated that into a BIP proposal, BIP 89, and also look forward to feedback on that.

[37:20] Marty Bent: Yeah, so we were talking about it in Georgia at the Proto event. You were teasing it. And again, going back to the pace of shipping, I think it was less than a month later you guys had it live and in the wild. So that was cool to see. All right. Before we wrap up here, what is your What is your biggest hope for this new BitKey launch? What reaction are you hoping Bitcoiners have when they see this at the market?

[37:45] Max Guise: I'd love to bring more people into BitKey who haven't taken the plunge yet. So we had a lot of people come by the booth when we were selling in person last year. We're doing the same at the conference here. So if you're around in Vegas, I hope that we get to see you. But I think bringing even more folks onto BitKey and getting this safety benefits, getting the security benefits, getting the privacy benefits, and finally having something that's really easy to use that gives you all 3 of those.

[38:12] Marty Bent: Okay, well, Max, I know you're a very busy man. You guys are setting up, you're getting ready for a big week here at the conference. So thank you for taking some time to sit down with me, and honestly, congrats and thank you. This is a beautiful piece of hardware, and I think a lot of Bitcoin winners are going to love this product and share it. That's the one thing you were saying earlier. People love buying BitKeys to share with people. We've been doing BitKey giveaways for, I think, over a year now at TFTC, and that is the number one use case the winner uses it for. They say, hey, I've got one already, I'm going to give it to my, my dad or uncle who hasn't moved it off the exchange yet. I love it. It's a great gift. Easy to use, hard to lose, and now even easier to use, more intuitive with the screen.

[38:56] Max Guise: Congrats.

[38:56] Marty Bent: Thank you. Thank you, Max.

[38:57] Max Guise: Thanks for having me on.

[38:58] Marty Bent: Peace and love, freaks. Okay. All right, so we just finished recording. Before we came in here, Max set me up with my new BitKey. We funded it with 50,000 sats worth of Bitcoin, $39.18. Sats are cheap right now. We're gonna complete the circle. It's confirmed on-chain, so we can send from this wallet. And so I'm gonna send back to another wallet that I control. The glare of the light in here. Boop, boop, boop. I'm gonna send $36. I'm gonna send 45,000 sats back. I'm gonna continue. Just slow. Loading the transaction on the phone. I'm gonna review on BitKey. Hold it here. Okay, address.

[39:44] Max Guise: PCYQ.

[39:45] Marty Bent: All right, looks good. I'm going to confirm here. The address is good. I'm going to confirm the amount. That looks right. Signing on the device.

[40:00] Max Guise: Yeah.

[40:02] Marty Bent: Thank you. Initiating transaction. Boom, done, sent.

[40:20] Max Guise: All right, that worked well. Congratulations.

[40:23] Marty Bent: Thank you.

[40:24] Max Guise: First transaction on the newest BitKey.

[40:26] Marty Bent: Is it?

[40:27] Max Guise: Love that for you.

[40:28] Marty Bent: For me? Hell yeah. Congrats, man.

[40:31] Max Guise: This is awesome. Thanks.

[40:32] Marty Bent: Thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad-free, make sure you download the Fountain podcasting app. You can go to fountain.fm to find that. $5 a month gets you every episode a day early, ad-free. Helps the show, gives you incredible value. So please consider subscribing via Fountain as well. Thank you for your time, and until next time.