Company Name: Foundation Devices
Founders: Zach Herbert, Ken Carpenter and Jacob Johnston
Date Founded: March 2020
Location of Headquarters: Boston, MA and remote (worldwide)
Amount of Bitcoin Held in Treasury: Foundation holds bitcoin but didn’t disclose the amount
Number of Employees: 24 full-time employees
Website: https://foundation.xyz/
Public or Private? Private
Zach Herbert wants to make bitcoin self-custody accessible to everyone.
This is why the co-founder and CEO of Foundation Devices, a company that makes Bitcoin hardware and software wallets, has spent the last four years building Bitcoin technology that’s not only secure and open-source but also as usable as products made by Apple, a brand that Herbet loves (or at least loved — read on).
What sets apart Foundation’s flagship product, a hardware wallet called the Passport, from the competition is a “combination of design and user experience,” Herbert told Bitcoin Magazine.
He went on to share that Foundation also has “very strong principles we try to uphold around open-source, privacy and freedom.”
Foundation’s strength lies in how it balances staying true to its principles and crafting products that those new to Bitcoin can still use with relative ease.
“I think you just have to have those principles defined from day one and you have to really know why you’re doing what you’re doing,” said Herbert in regard to how he and his team strike such a balance.
“I don’t think it conflicts at all with the idea of wanting to build the best designed devices or products possible,” he added.
Foundation’s Products
Foundation is best known for its hardware wallet, the aforementioned Passport.
The device looks like an upscale version of a feature phone, but with a higher-resolution screen.
One of the Passport’s selling points is that it’s airgapped, which means it never has to be plugged into an internet-connected device, providing extra protection for the user’s private keys.
Regarding the private keys, Foundation has created a simplified way to back them up compared to the traditional method of writing them down. With the Passport, users can save their seed phrase to the industrial grade microSD card that comes with the device.
“We think that not having to go write down those 12 or 24 words helps you get onboarded faster,” said Herbert.
Signing transactions with the Passport is also notably less complicated than it is with most competitor devices. You can do so by simply scanning a QR code, using your Passport and mobile phone.
The Passport works most conveniently when used in conjunction with Foundation’s Envoy mobile app, which also serves as a stand-alone hot wallet.
Again, to make it easier to onboard users, Herbert and the Foundation team created a system that lets users securely start using the app almost instantaneously.
“We created something we call Magic Backups where we actually store the seed to your iCloud keychain or Android equivalent, which is only for the hot wallet on your phone,” explained Herbert.
“What’s amazing about Magic Backups is that you’re onboarded within 60 seconds of downloading the app for the first time, and so you can always go and import your own seed if you want to, or create and save your own seed instead,” he added.
“We try to obfuscate things that might be complicated, but we do things based on the industry standards.”
He acknowledged that this surely isn’t as secure as recording your seed phrase to a microSD card or writing it down because saving your seed phrase offline is safer than storing it online, and he shared that the hot wallet is only for minimal amounts of funds — the same dollar amounts you’d hold in your physical wallet in cash.
Another feature of Envoy is that you can purchase bitcoin via KYC-free P2P marketplaces like Hodl Hodl and Bisq within the app and then send those purchases directly to hot or cold storage.
? Start your Bitcoin journey right!
Avoid KYC hassles and take control with P2P Bitcoin platforms.
Within Envoy, you’ll discover the best P2P platforms to help you achieve a truly sovereign future.
We're building to support your journey every step of the way ? pic.twitter.com/hbCeAOCWZl
— FOUNDATION (@FOUNDATIONdvcs) July 8, 2024
Part of Foundation’s intention in building the Passport and Envoy the way it did was to keep all levels of bitcoin holders satisfied.
“We’re trying to make the products that the hardcore user will use and love but then will also feel comfortable recommending to their friends and family,” explained Herbert.
Why Wallets?
Herbert entered the Bitcoin space in 2013 — in the early days of hardware wallets.
“When I first got into Bitcoin, the hardware wallets were only just beginning to be a thing,” recounted Herbert.
He used to use a software wallet called Armory, which was challenging to use to say the least.
“The recommendation was to have Armory installed on an airgapped computer that you would ideally remove the Wi-Fi card from and purely use to run Armory,” said Herbert. In essence, the computer became the hardware wallet in this case.
Herbert explained that there were no seed phrases back then and that you’d have to print out the private key on different pieces of paper, creating something of a physical version of a Shamir backup system.
While Herbert is well-aware that wallets have gotten significantly easier to use than they were in 2013, he still finds most hardware wallets unnecessarily challenging to operate. He said that some hardware wallet manufacturers seem to even pride themselves on making products that are difficult to use, claiming that learning how to use these wallets is akin to a “rite of passage.”
With Foundation, Herbert wanted to create technology that’s more “approachable and thoughtful.”
A Love/Hate Relationship With Apple
Herbert’s vision for Foundation includes building more products that sync together the way that the Passport and Envoy do.
“We want to be something like the Apple of the industry,” said Herbert. “[We want to build] hardware, software, and services that are all tightly intertwined and work seamlessly together.”
Herbert shared that Foundation is planning to launch “potentially a new category of product” by year end.
Could it be the Bitcoin-centric phone about which he has asked his followers on X?
What features would you want in a Bitcoin centric smartphone? https://t.co/8dIon71apI
— Zach Herbert (@zachherbert) May 18, 2024
Don’t hold your breath.
A few things stand in the way of such a device coming to market. Ironically, one of them is Apple.
“A phone is definitely up there,” said Herbert of projects he’d like to work on, “but I just think it’s more of a further into the decade project, because I think we would need to be further along as a company, and I also think that the industry needs to be further along, too.”
The other issue is that Apple has been hampering the adoption of decentralized technology, according to Herbet, who wrote a series of blog posts about this issue called “Falling out of Love with Apple” in 2020.
“[Apple’s] app restrictions are very bad for the [Bitcoin] space,” said Herbert.
“I think that a really basic and simple example is NFC payments on iPhone. There’s a reason why Bitcoin wallets can’t do Tap to Pay with NFC, and that’s because Apple does not allow it. You’re only allowed to use NFC for Apple Pay,” he added.
Herbert also shared that Apple even hinders the design of Bitcoin mobile wallets, which affects not only the quality of Bitcoin mobile wallets for Apple users but for Android users, as well.
“More than half of your users are going to be iOS users, and you usually don’t want to ship a completely separate Android experience,” explained Herbert. “Whatever Apple ends up doing, even if Android enables more, you end up just deciding to go along with the restrictions that Apple sets.”
So, for Foundation to continue on its quest to become the Apple of the Bitcoin industry, it will need to get Apple out of its way.
What’s Next For Foundation?
Aside from the idea of making a mobile phone on the distant horizon, Foundation is also looking at implementing and developing other technologies.
Herbert said that Foundation is considering incorporating Taproot Multisig within the next few months.
“When it gets to the point where there’s actual users that are actively using it, we’ll add support,” said Herbert, who also pointed out that the Passport already provides an excellent multisig experience.
On another front, Foundation will be keeping its Samourai Whirlpool Postmix extension live on Passport, which allows Passport users to connect to Sparrow Wallet to coinjoin their bitcoin directly into cold storage with the click of a button.
We are not removing the Whirlpool Postmix extension on Passport?
We eagerly await the return of Whirlpool and Samourai once their names are cleared and charges are dismissed.#FreeSamourai pic.twitter.com/SltJpDThFv
— FOUNDATION (@FOUNDATIONdvcs) May 9, 2024
While Sparrow has suspended this service in the wake of the arrest of the Samourai Wallet developers, Herbert and the team at Foundation believe that the wallet will reinstate the service once the Samourai developers are found not guilty.
“We believe that the Samourai team has not broken any laws,” said Herbert. “We donated half a bitcoin to their legal defense.”
Herbert also noted that Foundation was on the verge of adding the Whirlpool feature to the Envoy mobile app before the news of the arrest of the Samourai developers broke.
And, finally, Foundation is planning to bring Lightning to Envoy to make sending and receiving bitcoin as fast and cheap as possible.
“When we have Lightning in Envoy, we can provide the best possible user experience,” said Herbert.
“We can obfuscate a lot of complicated stuff happening behind the scenes and have an easy transfer flow from Lightning to cold storage or from your hot wallet to cold storage. You’ll just be able to tap the transfer button in the app, just like how you would do a transfer from your checking account to savings account in an online banking interface,” he added.
It’s clear that Herbert and the team at Foundation are not short on ideas nor vision.
Given how much they’ve delivered since the company’s founding just four years ago, it’s easy to imagine that future iterations of their hardware and software — as well as whatever new products they create — will only get easier to use and more dynamic from here.
“We’ve barely scratched the surface for what Bitcoin wallets can even do,” concluded Herbert. “There’s going to be so much rapid progress over the coming years.”