GRTiQ Podcast: 209 Arik Galansky

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Arik Galansky (00:13):

One of the things that constantly, I don’t know, even in this AI-oriented conversation that I’m thinking about is how do people discover or how agents, not necessarily even people discover what’s on the blockchain?

Nick (00:31):

Welcome to the GRTiQ Podcast. Today I’m speaking with Arik Galansky, Vice President of Technology at Fireblocks. Fireblocks provides critical infrastructure that enables companies to securely build and operate blockchain-based businesses. The platform offers a unique combination of self-custody technology and security features that allow organizations to maintain control of their digital assets while simplifying operations. Growing up in Israel, Arik developed an early passion for technology, beginning with programming games and solving computer problems. After serving eight years in the IDF, he went on to work in AI and machine learning, spending nearly a decade leading engineering teams at HiredScore before joining Fireblocks in 2021. During our conversation, Arik shares insights on the challenges of blockchain security, the delicate balance between user experience and decentralization, and his perspective on the intersection of AI and blockchain tech. He also discusses Fireblocks’ approach to self-custody and their role as invisible infrastructure enabling the next generation of blockchain businesses. I started the conversation with Arik by talking about his views on passkeys and the risks of centralization in blockchain authentication systems.

Arik Galansky (02:17):

Hi, it’s a real pleasure joining you. Thank you for having me. So I think this is part of a general conversation where sometimes it feels like we’re trying to achieve some things, but then we’re doing other things that are going exactly in the opposite direction. And there’s interesting dynamics in the blockchain ecosystem where you go back and forth on things like what do we care more about? Centralization or user experience? So I think passkeys is a very interesting technology. It’s not very new, but it’s quite new. It’s quite new in terms of the adoption it is gaining in general in the world, not just in crypto space. Until recently you did not have the ability to passkey log into your AWS, and over time you get more and more those capabilities.

Arik Galansky (03:00):

So totally understandable why we as an ecosystem would want to leverage the same things everybody else wants. Everybody has those keys on their mobile device and so we can use that because it’s keys and they’re already there. But the thing is that a lot of times passkeys are connected with a lot of other processes that relate to decentralization. So you have, for example, account abstraction, which I’m sure we’ll be talking about. A lot of times it’s passkeys plus account abstraction, great user experience and decentralization and I’m like, “Wait a sec, something here doesn’t connect well.” So passkey’s great for user experience, but in terms of decentralization, it’s a bit of a question of how do you use them. So passkey as a technology and we use a passkey because I think Apple invented the term. But I think there’s WebAuthn and there’s a product called Behind the Scenes, but I think passkey’s literally like a product name by Apple if I’m not mistaken.

Arik Galansky (04:00):

So the technology is general, it is used in Android and Apple, so obviously like competitive situation, but they’re using the same underlying technology. It is a technology that can be used in a centralized way. So you could hold a passkey in your own computer or in some enclave and use that passkey, but that is not what 99.999 people will do. What they’re going to do is they’re going to take their passkey from the mobile device and use it to do whatever we ask them to do with passkeys. Now those passkeys are basically controlled by the company that provides them. They’re limited to specific domains, they’re backed up by the provider, the provider allows you access to this key and the provider can deny you access from the key. So when we’re thinking about using passkeys that are generally used as a second way of authenticating into apps behind the password authentication, that’s the most common use case. You’ll have password authentication and then you’ll have passkey authentication for a better user experience on an ongoing basis.

Arik Galansky (05:10):

When we’re trying to move this all the way up to being your first level of access to a crypto wallet, to some extent we’re misusing the technology because what happens is now your self-custodial wallet is actually controlled by Apple. And if they decide to block you, passkeys cannot be exported. They can only be moved between devices, again, at least in the Apple ecosystem. So when you make that choice to make them the first signature mechanism in a wallet, you’re basically saying, “I’m going to give you a self-custodial wallet that Apple can block at any given time.” And I don’t think that’s what most people understand and I don’t think that’s what most apps publish when they choose this technology. They just really want the fast click, sign into my app, sign with your keys.

Arik Galansky (05:58):

Now I do know that some of the people I’ve talked to, some of the people that are behind the scenes and as soon as you challenge them on it, you talk to them about this, they’ll be like, “Yes, of course the right way to use passkeys is actually different, but baby steps. It is what it is. That’s going on right now.” So I think sometimes we kind of need to just make sure that people understand the technologies that are behind the scenes and how they’re used and how they impact what you want to achieve. I still think passkeys are exciting. I just think that we’re slightly abusing the technology and how we use it and how we talk about it in the ecosystem a lot of the time.

Nick (06:35):

Well, going back to something you said about account abstraction, you have also said that account abstraction gets a lot of attention, probably over-hyped, but it’s still necessary. Is that a contradiction? I mean how do you sort of balance that?

Arik Galansky (06:49):

I think this goes into exactly the same … Well in the area of the same category. Account abstraction first of all as an idea is a correct idea. One of the things that blockchains did early on is tied mathematically their private key and their public key. Something that started with Bitcoin continued in Ethereum and a lot of the other blockchains. Now this obviously has some advantages in how you can create the different addresses and things like that, but it does come with some shortcomings like the fact that if they’re so closely tied then you basically cannot change keys if you need to. And it’s harder to change cryptographic building blocks in your blockchain setup. So there could be different situations where you want to change cryptographic building blocks and obviously one of the longer term things that could cause this is the quantum computer. Now we’re not there right now, but I can understand people who are trying to prepare for the possible future that there will be a quantum computer.

Arik Galansky (07:54):

And other than that there’s just different signature schemes. So Ethereum started with a signature scheme using ECDSA and it’s not necessarily the best signature scheme forever. We know it’s not. There’s other signature schemes that are more efficient, that are simpler, that are simpler to MPC for example, and are more efficient in MPC. There’s different advantages to different signature schemes. The fact you’re kind of tied to one because that’s how the entire blockchain is defined is not great. So the concept of account abstraction is very interesting and promising because allowing different layers above the blockchain to decide on the cryptography that will be used to sign and authorize is an idea with a lot of design space. Now you can think about other signature schemes. Some of them might be quantum resistant, some of them might be just more efficient, some of them might be more efficient for aggregation versus other are more efficient for verification. You can start doing authentication with zero knowledge proofs instead of signatures. So you can start doing a lot of different things once you have that freedom to do, and there’s an entire design space here.

Arik Galansky (09:05):

So as a concept, very interesting, a lot of options, a lot of value can be created and for example, you can sign with passkeys. When that technology suddenly becomes available, that can be used to sign.

Arik Galansky (09:16):

Now the thing is there’s account abstraction as a concept and then there’s the specific implementations of account abstraction and the specific implementation of account abstraction, there’s a long history in Ethereum talking about account abstraction. Well actually there’s a very long history of talking about account abstraction to get to any level of consensus. And then there’s the first attempts that actually passed some threshold of applicability. 4337 was probably the first version, ERC 4337 was the first version that people were like, “Okay, we can build on top of this.” And some people started building on it, but there’s a level of difference between how people announce things and how they actually happen and happens in a lot of places. But it also happens specifically in this area, we had announcements like account abstraction is here and that announcement went out when the first entry point contract was deployed as a production entry point contract on Ethereum.

Arik Galansky (10:22):

But since then, first of all, there were multiple new versions of this entry point, so it was still an evolving technology. And back then for example, there was no public mempool for transactions on 4337, which has been actually recently added. But there was a lot of missing pieces. But the announcement was that account abstraction is here and the buzz that it created was probably more than was useful. So it was enough to be useful to create an ecosystem of people building, but it was more than the useful amount because basically people were like, “Okay, so we have account abstraction.” I looked at some stats I think maybe a year and a half later, and I saw that the amount of usage of account abstraction on Ethereum mainnet was minuscule. I think it was maybe 100 transactions a day or something. And the number of wallets that were using this was like 0.001% of the wallets or something like that. So it was very, very small amounts, but in terms of everybody’s perception, it was like account abstraction is here. It felt like everybody’s building account abstraction, everybody’s using account abstraction. That’s the entire thing.

Arik Galansky (11:37):

But then I was on a panel with a bunch of account abstraction people and I was like the only one coming from a different kind of wallet. And then somebody asked, “So who still uses their EOA?” And everybody raised their hand. Not just me. Everybody. Everybody was using their EOA. They were not using just, I’m sure they were playing around with account abstraction wallet, but they were not literally just using abstraction wallet. They were preferring their EOA for a lot of things, I just think that to some extent it was very uncool to say EOA has advantages. It’s actually better at some things. I prefer EOA for some things. And it was more cool to say account abstraction is everything. Account abstraction is going to replace everything. Account abstraction is the only thing that exists.

Arik Galansky (12:23):

So that’s where I think it is over-hyped, doesn’t mean that there is no promise, doesn’t mean that there is no future in using account abstraction, but there’s still a lot of things broken in the way account abstraction wallets work or in the way they’re being used or how they can be used. So there’s a lot of things that haven’t been solved and I think sometimes just being bullish as an ecosystem is great, but sometimes we also need to do reality checks and say, “Okay, okay, we understand. We did 20% of the work, not 90% of the work. There’s still 80% left.” I think this is an important conversation to be had.

Nick (13:02):

Arik, I want to go back in time and kind of talk about your backstory here, sort of how you got to where you are today working on Fireblocks and let’s start with just this question about where you’re from. So what can you tell us about where you’re from and when you first became interested in technology?

Arik Galansky (13:19):

So I grew up in Israel and I’ve been playing with computers ever since I remember myself. Probably like a lot of people that have these stories, I had my first computer with the green screen and I was writing games in DOS, very simplistic programs. My father used to be a programmer as well, but he actually programmed the mainframes and the huge room computers. So as soon as we had a computer, it was fun for us to do this together. So it was like quality time and my first experience developing. But I actually think maybe I learned more not from just the development, developing those little games or programs that I did, but actually just from getting my computer to work, I’m like now it was harder.

Arik Galansky (14:10):

You had games that were not working and then you needed to solve different things in the registry and then you needed to solve things in the host file and then you go a little deeper and you go a little deeper and you go a little deeper and then you find yourself tweaking things that not necessarily you’re supposed to tweak. But if you break things then you have to fix them and you don’t have all of the answers in a ready-made easy on the internet, everything is solved. So it takes a lot of time. The more you do those kind of things, you just learn and I was fascinated with it and I wanted to solve my problem, so every time I needed to learn something, I eventually learned it. And when I needed to fix the hardware, I would play with the hardware.

Arik Galansky (14:53):

So I think just spending a lot of time at the computer, enjoying and wasting time all the time, but then solving things when I need to and building things when I wanted it created a situation where I felt at home on a computer at a time where I don’t think a lot of people felt at home on their computer. I’m definitely not the only one, but we were a minority today. A lot of people have that feeling, but back then it was a bit more unique. So yeah, so then I kind of progressed from that and so I joined a more technological unit in the army, so did a lot of work around software and computers in there and then StartupNation, kind of a regular, obviously as soon as I left, I just joined startups because that was the most exciting thing to do, to go and build things.

Nick (15:48):

You mentioned there that sort of your first touch point or professional application I guess of your interest in tech was in the army. You worked in the IDF’s, I don’t know how to pronounce it, is it the OFEC unit?

Arik Galansky (15:59):

Yeah. In the Air Force computer unit?

Nick (16:02):

What was that first touch point like with you? I mean did you sort of have this experience as a hobbyist going into the professional world and being like, “Hey, yes, this is everything I hoped it would be,” or was it different and a little bit more constrained or too starchy to be interesting? I presume you fell even more in love with it.

Arik Galansky (16:21):

Yeah, so you do some training course or whatever similar to whatever course you would do outside, and then you think you know a lot of things because you studied the latest and greatest technology out there. And then you go to the real world, you’re like, “I know nothing. Everybody knows more than me.” And that was a shocker. And so it was a great experience of, okay, so this is more real world than I’ve seen so far because until then you basically only use your own code. Again, it’s not like today, lots of open source everywhere and you can touch other people’s code and read other people’s code. Until I started working with other people, I was just writing my own code and reading my own code. There was no more interaction. And then I came into a place where a bunch of smart people wrote a bunch of code for a very long period of time, and some of it was extremely complex. That was a humbling experience and then you start learning and you start evolving and you become better.

Arik Galansky (17:25):

So it was really awesome, first of all, to have a lot of people to learn from and collaborate with and start understanding what it is, building useful things that people want to use. And sometimes building not useful things and learning how it feels when you spent a very long amount of time building something and nobody actually wants to use it because you made bad decisions on what to build or you or your, I don’t know, managers or whatever, it doesn’t matter because you kind of fall in love with anything you built and then you’re like, “Oh, wait a sec, nobody’s using it now. Why? What’s this about?” Yeah.

Nick (18:00):

Well you spent eight years working in the army and doing a lot of the tech that you just described there. You’ve had a lot of different roles during that time, culminating in R&D integration architect. I think the question I want to ask here is in your work now working in web3, working on Fireblocks, do you use a lot of the stuff you learned there? I mean, are there paradigms or ways of working that still you leverage from your time working at the IDF?

Arik Galansky (18:26):

Definitely. One of the things that happened over my time there is I moved different roles and as part of that journey I basically joined the team that had some of the best engineers around, like handpicked engineers and I joined to lead that team. I learned basically what it means to work with and manage extremely smart people and it was a great experience for me because I loved being the stupidest person in the room as much as I can make that happen, that’s my dream. I know a lot of people say they love managing smart people. Most people don’t like managing smart people or they do until they try it for the first time because it’s complex. It’s a humbling experience at times, it creates interesting conversations but also hard conversations and I enjoy it a lot because I want to be always involved in creating the most advanced, most interesting, most complex thing possible that eventually drives value. But I always want to be there in the frontier.

Arik Galansky (19:32):

This was kind of my first journey into that and I think I basically started building out my framework for how to build teams with very smart people, overachievers, extremely strong in some parts of their job, not always all parts of their job because sometimes it comes with trade-offs and how to take this different competence that you can have to deliver something holistic, that is extraordinary. And I’ve been on this journey ever since. So in different roles that I’ve taken, I’ve taken roles that have more management in them and roles that have more research in them, or engineering in them, but I’ve been going back and forth and a lot of my journey eventually was around building those very strong individual teams that can make a meaningful shift in outcome, and not just kind of iterative advancements. So I know both are important, but I kind of really like that part, so I spent quite a lot on it.

Nick (20:36):

You mentioned sort of building a framework, and of course this can vary to the degrees of formality. It could just be some mental construct you have to an actual blueprint, an actual framework, but whatever that is, what would you say is the number one thing, the place you start when you have a team of highly driven, highly intelligent individuals with different levels of competency? You’ve built these teams, that’s one of the things you learned. Where do you start? What’s the first thing you got to do to sort of build that team?

Arik Galansky (21:08):

Yeah. So eventually a lot of it comes down to the individuals. It’s usually not one person to build this kind of a team that drives something unique. It’s being able to combine multiple people each having their expertise, each bringing their unique contribution to be able to do something together. People that are very good at their job, first of all, they will not spend their time in a place that does not bring any challenge, that does not bring anything interesting, that does not give the kind of goals that they can aim for and build for. That’s one thing is how do you make sure you set up those directions that keep challenging the individual, but also how do you create the interactions? They’re not necessarily constant. It’s not that you always have everybody in the team working together on everything. Eventually they’re like, “We’re not doing this for fun. There’s the specific things that we want to build. There’s specific things we want to achieve.”

Arik Galansky (22:10):

But you do want to create those collaborations that can spark magic. Also, sometimes not even in a planned way, but just people bouncing off of each other after they’ve been connected and they’ve had their shared experiences and they started to appreciate each other and they started understanding what each one of them brings to the table. And as you create different interactions and different situations, things arise. So it’s both a planned thing and an unplanned thing and you have to combine between those. There’s a bit more of a structured framework for how to build this kind of a team that I have in mind, but I think to some extent it’s what am I trying to achieve in this organization? What are the areas of expertise that we will want to have in order to build this thing? And bringing those right people into this, and then what kind of projects do we want to go into?

Arik Galansky (23:08):

And there’s an important aspect of how do you select those projects over time? Because it’s not a one-time thing. It’s usually not that you just have one thing you want to do, you do that thing and then you disperse a team. Most of the time it’s more like there’s longer-term projects, like big audacious goals and things you want to do, and then there’s smaller things that you want to do as time goes by because you want to bring value also if you don’t have yet the big unlock for the big thing that you want. So you kind of mix and match, going long-term, going short-term, providing more value to the engineering team, the more immediate things versus going longer outside to explore an area that hasn’t been explored where you can bring a contribution. It’s very dynamic in that sense.

Nick (23:57):

As I said, you left the IDF around 2011, and then we’re talking today because you joined Fireblocks in 2021. So there’s about a 10-year period here where after the IDF, you went into the private sector and did some work. How would you sort of capsulate what you did during that decade and what types of things you were working on?

Arik Galansky (24:16):

So I initially joined Shaker was like an attempt to do an online real-time Facebook, a very hot thing at the time. Everything was about social. They were very much hyped and it was very interesting. It was a very interesting experience first of all because it was going to a company that was very innovative. We were doing lean startup at like 2011 or 2012. It was very early, adopting new paradigms, doing feature teams and A/B testing and things that are the norm today. But when you look 15 years ago, it was pretty new. So it was a lot of exploration. It was learning how a team innovates, not just on the technology but also on everything around how to build a company. And it was just a lot of really great individuals. So I spent some time in there and at some point I was like, “Okay, this is too big for me. This is 30 people. I want something smaller.”

Arik Galansky (25:19):

And I joined HiredScore basically very early on and we were building the very early version of AI. So this is 2013. Nobody was really talking about AI. I think the biggest term used back then was big data as sort of a comparison to what we refer today as AI. We just built there. I’ve been there for eight, nine years as well. We were basically building AI for matching people to jobs in different ways. We were attacking this problem with different angles, whether if it’s active applicants applying to jobs or passive candidates that have already applied to jobs previously and you want to source them, internal applicants for jobs inside the organization. So we’re kind of going all over the place in terms of wherever you can optimize the process of recruiting and finding the right person for the job.

Arik Galansky (26:15):

And as technology evolved, we evolved with it. So starting really with the big data and NLP and moving to machine learning and deep learning and eventually generative AI and transformers when they came out. So we were really going through all of the cycles as this technology evolved, adopting new things, building them into the process. I personally did a few roles in there over time, starting with just being an early engineer, and then leading the team, eventually leading the entire engineering organization for the company and a few other organizations inside it. And eventually taking a more similar role to what I’m doing today at Fireblocks, which is leading more the technology innovation.

Arik Galansky (27:00):

Again, kind of going back to the roots of what I talked about earlier of maybe going back and forth between managing more traditional engineering, like the actual engineering force versus going to more of a SWAT team, building new things, new technologies and disrupting internally the things that we have already working because I believe sometimes we can do better. Those paradigm shifts are things that I’m constantly looking for. I’m interested in rethinking problems. So that was kind of my experience over there. And over time, again, my preference changed and at some point I was really looking for a hyperscaler. The entire blockchain space was very interesting, and Fireblocks as an opportunity came up and I was like, “This looks so amazing. I really want to explore this area.” I kind of fell in love with that technology, so it was hard for me to not work on it in some way.

Nick (27:59):

Arik, what’s the back story then for how you sort of came across Fireblocks in 2021 and went to work on the team?

Arik Galansky (28:07):

So I was meeting different teams, different people in the Israeli startup ecosystems, and a friend connected me with one of the founders at Fireblocks, Idan Ofrat, the CPL for Fireblocks, and we talked for an hour. I remember the conversation. I was actually outside sitting in a garden talking to him, and I think we were planning to have a half an hour conversation. I think it went to an hour and a half maybe. And I was fascinated as he was talking about all of the things they’re building, everything that the company was doing, the company was much smaller than it is today, but it kind of already … Just the basic idea, I was not very much in the blockchain world. I touched on it a bit before going into Fireblocks, but it always felt like an interesting area to me in the time that I did explore it.

Arik Galansky (29:03):

As I was talking to Idan and he was describing basically how this ecosystem was broken for the use case of companies, how it was just not like … People were losing money all the time, hacks all the time, lost keys all the time. And this combination of the blockchain ecosystem as an ecosystem and all of the technology of blockchain, the cyber angle of it, of protecting money, protecting funds, providing security for this, when it meets also the fintech angle of how do we enable … It wasn’t just about the security, it was about enablement. How do we enable really good experience for the companies that will run actual businesses on the blockchain, whether if it’s financial businesses or retail facing businesses, other businesses? There’s a lot of different options, but they need enablement there because technology is complex. So how do we make it both secure and easy?

Arik Galansky (30:08):

That entire domain felt to me like this is just too good to be true. The fact that this was not a solved problem yet. We’re talking about 2021, 2022, so it’s not like a very early blockchain, but the problem was just not solved yet. And Fireblocks was really and is today at the frontier of solving this problem for companies. How do you build on chain in a way that’s secure but easy? And how do you fulfill your goals as an organization doing that? Yeah, that just caught me very strong as a domain.

Arik Galansky (30:44):

After that conversation, I went digging. We finished the conversation, we went into the process of defining exactly what I’ll be doing and the role and the entire process of joining. But I was already in, I was already sold on this entire thing. I was already starting to learn. I was going much deeper, reading through old forums, conversations from the start of Ethereum. I like the different founders talking to each other. It was pretty crazy. You can find their conversations on Twitter and forums and stuff like that because everything was very open and just seeing the depth of thinking that they had about a lot of those problems. So yeah, I just went into the rabbit hole. I think that there’s two kinds of people. There’s the kind of people in this domain that they’re just here for a job and there are people that really are fascinated with this. So yeah, I definitely went into that bucket pretty quickly.

Nick (31:41):

You’ve mentioned that Fireblocks represents or operates as like the invisible infrastructure. For listeners that are non-technical, aren’t familiar with what Fireblocks presently does and sort of the vision, can you describe it to us?

Arik Galansky (31:54):

So basically there’s an organization and that organization can be a lot of different companies. So it can be a bank that wants to provide custody on crypto, it can be a fintech company that allows regular users to invest in crypto, it can be a lot of other financial institutions, the people that move money around in the ecosystem. It can be brands that want to launch things, it can be an app that wants to provide user with any kind of value, it can be a game on the blockchain. Eventually, it doesn’t matter what kind of a business. We believe that every business will have a blockchain aspect to it over time, just like every business has an internet aspect to it. Well almost every business.

Arik Galansky (32:36):

It’s not reasonable to have all of those people understand blockchain. They definitely need to have a layer of separation between them. It’s definitely not reasonable for us to expect all of those users to be able to secure their operations to the level that you need to secure our operations when they’re on chain. There’s a lot of good things about how on chain works, but there’s a lot of problematic things about it. There’s a lot of edge cases. There are a lot of nuances. And the problem is that if you make a mistake in any small edge case, you will lose 100% of the [inaudible 00:33:16] because unlike in other older traditional systems, the distance between a problem and a full-blown exploit [inaudible 00:33:25], everything’s gone is all public. So it is so easy to some extent to compromise businesses that it’s obvious they need something that they can use that abstracts a lot of those things, abstracts them for security, abstracts them for usability. Eventually, they might be trying to do something specific like issuing a stable coin.

Arik Galansky (33:50):

That does not mean they need to learn 50 different blockchains, which they might deploy their stable coin to. Eventually, they need to choose the initial ones, they need to write the contracts for those blockchains, they need to write the operations for those blockchains, the management systems for the people running the operation on each one of those blockchains and the permissions for each one of them. And there’s an endless list of things that they would need to take care of. A lot of it is repetitive or similar between even different use cases, but definitely within the same use case. We’re there to do that for them. We want to be there so that they want to build their business or their part of their business that touches the chain, and we’re going to make it very easy for them to do that, as easy as possible. And we’re not going to make it not secure just because we made it easy.

Arik Galansky (34:46):

And I think part of the big unlock that Fireblocks had is that the initial companies that were trying to make blockchains secure for businesses were doing it by basically pushing people to be in cold wallets. So this was the paradigm. You want to push people as cold as possible, put it on a paper, put it in a safe. There’s all those paradigms of how much … There was that company that took bunkers in Switzerland and had a person come to them once a month to do your transactions for you with a piece of paper that they carry from place to place or something of that sort. And that could be very secure, but very unusable. And it’s not even that secure because then once you go down the rabbit hole, you understand all of the problems in that process. And Fireblocks was really smart in unlocking, we’re going to make it very secure, but hot wallets or warm wallets or there’s different paradigms.

Arik Galansky (35:49):

We also have a cold wallet, but you can actually create an operation, a financial operation because financial operations require you to make actions to move money around. And that was the big unlock, make it extremely secure, but still usable for operations. And that is that layer, that is that layer where our clients can do very sophisticated blockchain operations. And some of our clients are the most sophisticated operators on the blockchain. And on the other side, they don’t have to. They can be pretty agnostic, pretty unknowledgeable about things [inaudible 00:36:27] underneath and this without giving up their custody. And that’s another thing that Fireblocks is very strong at is still giving them the custody aspect of it.

Nick (36:38):

So how then do you sort of dance around or balance this delicate thing between custodial and non-custodial? Because as you said, you’re trying to lighten the load and simplify, but there is in this industry as it presently exists, [inaudible 00:36:58] around custodial, non-custodial, and a lot of people have strong feelings on that. How do you sort of balance that?

Arik Galansky (37:04):

Yeah, so the easiest way to solve most problems is just being the custodian of your client. If there’s something I learned is a lot of times when we have a hard problem, the easiest way to solve it is to just say, “You know what? If we’ll just be the custodian, we’re going to hold your money, we can block your money, we can move your money. That’s an easy solution.” That’s not the solution we took. So Fireblocks actually took the harder path of providing direct self-custody technology to our clients, which means they hold the control, we cannot take their money, we cannot take their money on a bad faith act, we cannot take their money on a good faith. So even if it’s just to provide them better service, we cannot take their money because our clients hold part of the key. So Fireblocks was built on this MPC technology where we basically hold some shares of the key and our clients hold some shares of the key. And this all runs within secure enclaves and a lot of other layers of technology. We have a lot of layers of security in the process.

Arik Galansky (38:12):

But at the base of it is we do not have the entire key, but we really secure the part we have. So even if the client was not as good as they should be in securing their keys, they have another layer of protections because we are, and we will apply the policies that they need to apply and we will apply the restrictions that they need to apply that they defined on their behalf. So we’re basically serving them with a technology that allows them to be as secure as they want to be for their operations. And some of our clients will choose a place where they’re more restrictive because they want to be a bit more on the safer side. And some of our clients will be very aggressive in being risky in their operations, but they can set very strong limits on what can happen, what cannot happen in the system. So a hedge fund can still operate on Fireblocks and a lot of them do. They will do the newest things in crypto, but they’ll be able to balance it with very good operations of security and management on top of it.

Arik Galansky (39:14):

Now, it does mean that because of that choice of self custody, we basically had to build a lot of technology. So we had to build a lot of technology. MPC is just the first example of how we enabled this technology. But every time we had a problem, we had to build a technology that allows us to do this in a way that preserves the custodial aspect of our users. And I think that was actually good for us. I think it still is good for us because it means we’re not just solving everything the way the old world was solving it. We’re solving it in a more aligned way with the ecosystem we’re a part of. And I don’t think we’re always good at telling that story. I don’t think a lot of people when they think about Fireblocks, say, “Oh, Fireblocks, that’s like the most aligned custody technology with this ecosystem.”

Arik Galansky (40:00):

But to a meaningful extent we are because we kind of built ourselves on the value side aligned with the ecosystem, and that sets a lot of things right. And actually a lot of our competitors are just custodians. And on the other side, a lot of custodians will use Fireblocks because they understand, and this I think is a very important part of the Fireblocks business, is we’re happy to serve custodians. So we’re not a custodian, but a lot of our clients are custodians of their clients, and we give them that self-custody technology to do that. But then sometimes their client wants custody and they will provide that to them. And sometimes it’s more institutional clients that they have, and sometimes a lot of times it’s retail clients.

Arik Galansky (40:46):

So a lot of times when people use a product that they really like that’s custodial underneath the surface, there’s Fireblocks protecting them, invisible infrastructure as you mentioned. But on top of it, there’s a provider that provides them custody and they trust that provider with their money, and that’s okay. They don’t need to trust Fireblocks to that level because we’re not custodying the funds, but we just provide that layer of infrastructure for them. So actually we provide technologies while our own technology is more self-custodial, we provide all of the breadth of options for our clients. So our clients can provide self-custodial offerings to their users, fully self-custodial, all the way to the end user, and they can provide custodial interface to users. And we have a lot of both. So a lot of our clients will provide embedded wallets kind of technology where the end user gets to actually participate in the signature. And a lot of our clients will just provide their clients with a custodial offering that allows them to invest in crypto or use crypto in a way that has all the benefits of custody that they’ll provide to.

Nick (42:03):

And it doesn’t seem like I can have conversations like this recently on the podcast with builders working on really cool projects and really important projects like Fireblocks, without asking this question about AI. But how then does AI sort of shift the value and the operations and all the things you’re working on at Fireblocks? Does it?

Arik Galansky (42:22):

I think it’s interesting because the question of how AI and crypto meet has been around for some time. I’m not sure, the end last answer that we have is AI meme coins, which is basically what’s been going on recently. So at least I hope this is not the final answer. I think there’s a few levels to think about AI. The first level is how can Fireblocks become a better company with AI? How can we provide better offering? How can we provide a better product for our users? And to some extent, the answers to that are similar to the way most companies go through this. We can embed AI in a lot of the different things we do. We will be doing this over time. Obviously, it’s not as risk-free as it is in some other systems because eventually our clients are doing financial operations, and you cannot just have hallucinations when you, I don’t know, tell them how to do things or something like that.

Arik Galansky (43:21):

So we are to some extent, risk averse in some of those aspects, introducing them because we want to make sure that we provide our clients with things that do not add risk, where you’re just like doctors. Do no harm. We don’t want to do any harm first, and then we want to provide comfort and we want to provide better [inaudible 00:43:42]. But definitely we can improve the product with AI. But I think that then there’s the two places. I like to separate them between how AI can help blockchain and how blockchain can help AI. So there’s probably going to be a lot of improvements in the blockchain user experience thanks to AI, because any place that is complex, like the blockchain world, the blockchain ecosystem, AI can bring a lot of benefits and can make the experience for people a lot easier. I’m not sure if it’s going to be chat-based experience or something else, but definitely we’re going to see the usage of blockchain become much simpler with AI over time.

Arik Galansky (44:25):

The thing I’m more excited about is what blockchain can do for AI. It takes time to understand the inherent problems that are embedded in the AI space, the risks of centralizations that are embedded. Some of those risks are based around the algorithm. Some of those risks are based around the hardware. So there’s a lot of different areas in AI that have centralization risks. Blockchains are great at solving centralization risks. That’s what they were kind of built for. So there’s definitely going to be a lot of interesting aspects in that.

Arik Galansky (44:58):

Another thing is authenticity. So AI makes a lot of things questionably authentic. They look real, but are they really real? Is it? And I think again, blockchain has evolved as this place where you can do things that are more deterministic and you can basically verify a lot of things. Like the entire verified domain, a lot of is around ZK, but also other things has really exploded in the blockchain ecosystem. Hasn’t been very interesting in other places. I don’t see a lot of ZK technology evolving in 100 different domains. A lot of it is really based in our domain. So I think that’s going to be another interesting area.

Arik Galansky (45:40):

But more than that, I just think the economic of AI agents and AI usage, there’s really good fit between the blockchain characteristics and the requirements of an AI driven economy. So something around the permissionless access to the blockchain, something around the availability 24/7. There’s different places where there’s just a good intersection, and I think we’re going to be surprised as to how this manifests. But for some time now, I think that we’re probably going to be a minority in blockchain usage as humans. Maybe we still are the majority, but it’s definitely not going to last for long. So yeah, so I think the entire ecosystem to some extent, they started to think about what does it look like when the AI economy starts to happen on chain, because that’s where it probably will happen. And we’ve seen the first sparks of it, but right now it’s more blockchain companies building AI agents. I think over time it’s going to be AI agents or AI companies building blockchain integrations.

Nick (46:53):

Arik, a lot of my listeners are enthusiastic about the future of The Graph and web3 data and some of the things you sort referenced there about how blockchain unlocks new use cases. You’ve been around for a while. Do you have sort of an opinion or perspective on The Graph and sort of the role it plays in web3?

Arik Galansky (47:12):

Yeah, so I think data access is very, very important. I did say this earlier, but I’m a data person. I love data. I think the access to data, understanding data, understanding actually what’s happening is much harder than people think. Anybody who’s been trying to understand how things work, so in layman terms, it’s like, “Oh, it’s on the blockchain, it’s just transparent. Everybody can see everything.” But whenever you actually try to see things, you understand how complex it is. I think we’ve seen over time that the companies or organizations that are able to leverage data to the full extent of it are really powerful. I don’t know where The Graph fits into this eventually at the end result, but a company that invests a lot of time in the data of a domain that becomes very important, there’s a lot of potential there to create a lot of value.

Arik Galansky (48:13):

The most extreme example we’ve seen so far is Google, where they basically understood that just being the ones that are able to understand the internet data puts them in a very unique position, and they’ve been extremely good at leveraging that unique position. I think understanding blockchain data deeply and having all of the tools to do what’s needed to process this data, I think that’s going to be a very interesting area.

Arik Galansky (48:43):

One of the things that constantly, I don’t know, even in this AI oriented conversation that I’m thinking about is how do people discover or how agents, not necessarily even people, discover what’s on the blockchain. We’ve spent a lot of time as an ecosystem on building things to be on the blockchain, but we’ve spent very little time on discovery. How do you know which DEX there is? How do you know where that DEX is accessible? How do you know everything around it? There’s a lot of things that you need to understand that we kind of just take from Twitter or something like that. But there must be mechanisms that are more data driven, that are more data oriented to do a lot of those things both in discovery, both in analytics, in everything. It’s a very interesting domain.

Nick (49:30):

Arik, now we’ve reached a point in the podcast where I’m going to ask you the GRTiQ 10. These are 10 questions I ask each guest of the podcast every week. As my longtime listeners know, I do it because I want to introduce listeners to new ideas to get them to try something different or potentially achieve more in their own life. And of course, a byproduct of these questions as we get to know you a little bit more on the personal side. Arik, are you ready for the GRTiQ 10?

Arik Galansky (49:53):

I am ready.

What book or article has had the most impact on your life?

Arik Galansky (50:09):

I think that the biggest idea is The Innovator’s Dilemma. Kind of blew my mind, and to some extent, I think set the stage for the kind of roles that I really am passionate about, is constantly trying to play around this area of the innovator’s dilemma, either as an innovator coming up or as how do you protect yourself from innovator’s dilemma? How do you look at innovator’s dilemma? So I think that’s definitely a book first of all, I recommend to everybody.

Arik Galansky (50:39):

Another one that I really love is The Courage to Be Disliked. First of all, I think it’s an amazing title, but it’s a bit more philosophical, psychological oriented. It’s basically looking at the Adler teaching, but in a nice way that’s not pushy and basically allows you a bit of a reflection on your life, how to be the kind of person that just does what he kind of believes in or aims to be versus just what people tell him to do or expect them to do. So I think that’s also a really good one.

Nick (51:13):

Is there a movie or a TV show that you would recommend everybody should watch?

Arik Galansky (51:17):

I’m not sure I have any unique recommendations. I’m just about to see Severance, the second season. I haven’t yet. I love the first one, so maybe that’s a good recommendation. I don’t know. But yeah, I don’t have anything special here.

Nick (51:30):

And how about this one? If you could listen to only one music album for the rest of your life, which one would you choose?

Arik Galansky (51:35):

So probably my favorite one is the Dark Side of the Moon, because it is so, I don’t know, disruptive, so unique and different, and every time I listen to it, I feel something. And on the other side, probably I listen the most to Lofi Girl nowadays, which is just the kind of music that helps me work better. In terms of number of hours, it’s probably the second one, not the most fancy music, but it’s really helpful.

Nick (52:05):

What’s the best advice someone’s ever given to you?

Arik Galansky (52:09):

If you have privilege, and it’s important to say if you have that privilege, you should work on things you’re passionate about. If you don’t, just do whatever you need to do. I’m really a person that believes you should do what you need to do. But if you do have that privilege that some of us have in this ecosystem and in general, you should work on something you’re passionate about because life is just so much better.

Nick (52:31):

What’s one thing you’ve learned in your life, Arik, that you don’t think most other people have learned or know quite yet?

Arik Galansky (52:37):

I’m not sure it’s most people, but a lot of the good traits that people have can be learned. First of all, it’s an optimistic thing to think. So that by itself is good. Positive thinking, for example, like looking at life in a positive way, even when things that are not great happen to you, you can learn that. It’s not just some people are optimistic, some are not. You can actually teach yourself to look at things more positively.

Nick (53:02):

What’s the best life hack you’ve discovered for yourself?

Arik Galansky (53:06):

First of all, I’ve been listening to a lot of ebooks. I love Audible. I’ve started reading, sort of reading much more since I discovered ebooks. So that by itself is a hack. But what I noticed is that when I listen to something that really clicks with me, my mind starts to wander in the middle. I’m listening, and then suddenly I’m thinking about my problem that relates to the thing that they’re talking about. And initially I would stop and I would, like, “Okay, back to the book, I’m going to miss things.” And at some point I understood I should just let it go. So I have the audio of the book continue in the background, and I’m thinking about a totally different thing sometimes for half an hour. And then I’m like, “Okay, I think I’m done with it.” And I’ll scroll back the book to the place where I stopped because I just feel like if this got the juices flowing, I should just let it go because some really interesting insights happen because of this correlation between the thought I have and the book talking, something that is interesting and happening.

Arik Galansky (54:09):

And a lot of times it’ll happen when I’m learning something after I already experienced something in that domain. If you’re hearing a book about something you never learned about, it’s very new to you, it’s not going to happen a lot. It’s going to happen more when the book context has some correlation with things you experience. So even listening to books a second time could be useful. And sometimes it’s just about the timing when you listen to the book, that can be really impactful.

Nick (54:35):

Then Arik, based on your own life experiences and observations, what’s the one habit or characteristic that you think best explains how people find success in life?

Arik Galansky (54:44):

So I think it’s a combination of two things. One is finding an area where people are just willing to invest unproportionally their mindshare, their time, their passion. If you find that area where you just have unproportional will to invest, I think that’s a big driver. And then having unique point of view or a different way of thinking is very useful. Even if you’re willing to invest heavily, but everybody is rowing in the same direction, you’re not likely to find unproportional success. That comes when you have something slightly different than others.

Nick (55:25):

And then the final three questions, Arik, are complete the sentence type questions. The first one is, the thing that most excites me about the future of web3 is …

Arik Galansky (55:33):

People owning things. I think we’ve been very ownerless in the web world. I always tell the joke that I’ve been on the web for 20 plus years now, and all I own is a domain because everything else is rented. It’s rented from Facebook, it’s rented from Twitter, it’s rented from a bunch of different places. It’s all rental. They can take it anytime they want, and I don’t actually have any right on it. And all I have is this domain that is mine in the DNS. So I really am waiting for the time that people can own things online.

Nick (56:11):

And how about this one? If you’re on X or Twitter, whatever people prefer to call it, you should be following …

Arik Galansky (56:17):

Me. No, like I mentioned, I like following people that give opinions that are off the path. So Jon [inaudible 00:56:28], I think maybe that’s the name from DBA. Always annoying the ecosystem with unique opinions or Udi annoying everybody, Udi Wertheimer with his opinions, like people that are willing to think differently, but also Vitalik because he just invests so much in his writing. He just brings so much value in what he writes that it’s useful. I will read anything he writes.

Nick (56:53):

And then the final question, Arik. I’m happiest when …

Arik Galansky (56:57):

Either when I’m laughing with people I like. I love laughing. I just feel alive. Or when I’m learning something new that is really interesting.

Nick (57:14):

Arik, thank you so much for joining the The GRTiQ Podcast. It was a lot of fun to learn about your backstory and get some really deep insights today on the things that Fireblocks is working on and the way it approaches the value it provides and creates for its users. I’ll put links in the show notes for listeners that want to dive deeper into Fireblocks and learn more about what the team is working on. If listeners want to follow you, stay in touch with the things you’re working on, and some of the things that are coming down the pike for Fireblocks, what’s the best way for them to stay in touch?

Arik Galansky (57:43):

Arik_G on Twitter. Feel free to reach out also, if you’re building interesting things, I’m always looking to learn new things that are being built on chains. Thank you very much for having me.