Why Your Passwords, Banks, and Bitcoin Could All Be Gone Overnight | Ep. 258 with Eric Dresdale Founder of Entrokey Labs

0:00Today's episode is sponsored by PipeDrive, the number one CRM tool for small to medium businesses. I am excited to share more about them later in the episode.

0:36But we're not really talking about what does it mean with quantum computing? And I know we'll get into that. But first, what does quantum computing like? What is this that we need to know about for the near future? Right. So first, the best visual I've ever seen, and I don't know if you've ever seen it, is how people solve a maze versus how quantum computing solves a maze. So when a classical computer, we go to solve a maze, we go one path and then the next path and then the next path until we find the correct path. Quantum computing will run all different paths simultaneously to get to that answer.

1:15So whereas our current encryption has been wonderful to date, it would take tens of thousands of years with classical computers that we have today to break our current encryption. Quantum computing will be able to do that in minutes, if not seconds. And so all of the encryption we have today that protects this video chat, our email, our text messaging, every form of communication and data protection we have will get decimated in seconds when quantum computing is fully realized. It's a really scary concept to think that, you know, we say it, we're in an arms race right now. Right now, quantum computing is primarily being funded by nation states.

1:58So that means it is a weapon first and foremost. Quantum computing will do many amazing things to our lives and society, but its first application is a weapon. And so that is why you're seeing all the money being spent by nation states. It is a arms race to see who gets a crypto realized quantum computing ready first, which means they figured out error correction. They figured out all the things that are preventing it from going forward. And they have enough qubits to run what's called Shor's algorithm. And that algorithm, Shor's algorithm, is what will decimate all of our current encryption. What is Shoros algorithm?

2:40I've never heard that before. And does this relate to the fact of being able to figure out like the key to get into your crypto wallet? Or is that like something too small? Are they looking more institutional? No, no, no. I don't think it's looking too small on anything. I think, you know, are they going to maybe target my crypto wallet? Maybe not. Will they target all of Coinbase's crypto wallets or all of Binance's crypto wallets? And that's what we say as it relates to Bitcoin, right? Because there's this constant argument about, well, SHA-256, which is the hashing algorithm that Bitcoin uses.

3:18and everyone should be worried about the banks first and foremost. And they're not wrong. But what we say is you don't necessarily need to break the Bitcoin chain to create panic, right? You can break a bunch of wallets and completely drain those. And there's enough that will send the markets into a tailspin, right? We saw when Google Willow was announced, I think it was two to the power of 25 that they broke through. Right now, what was really interesting was earlier in the year, somebody wrote a blog post and said, oh, our 12 word seed phrases are fine for a long time. Our greatest high performance computing wouldn't be able to break that for a while because it's two to the power of 17.

4:07Well, Google just did two to the power of 25. So our 12 word seed phrases are already potentially vulnerable. So when quantum becomes fully realized, everything goes away. And then you brought it up earlier on, when you combine that with AI, it's completely game over, right? And so we talk a lot about quantum, but AI is a huge threat as well, right? David, one of my co-founders puts it really well. Quantum is a sledgehammer, right? It will just break everything. AI is more insidious. It's like a scalpel. It'll get in there and pick it apart. I mean, if I'm sure I could figure out a lot of my passwords, right?

4:47Because I think that you, I guess humans were very predictable. I probably need to start allowing the computer. You know, when your computer says suggested password and it makes absolutely no sense and I'll never remember it. Maybe I need to start using that because everything, you know, I'm sure there's patterns to all the things that I'm doing. So what is Q-Day and how far out in the future are these threats possible? So Q-Day is when they believe they'll have what they're calling a cryptographically realized quantum computer, which means it has enough qubits to run, as I mentioned, Shor's algorithm, which was this algorithm the scientist with the last name Shor's created.

5:28Right. And this is when it is run and a fully realized quantum computer, that's what will break encryption. Now, there is we've made a lot of acceleration on the quantum front. There's still a while to go. There's still a lot of things that need to be figured out. However, you know, if you ask people three years ago when the threat of quantum would be, they would have said, I don't know, 2040, 2045. and then it reduced to 2035. And now you're seeing IBM, you're seeing Google, you're seeing IonQ and some other quantum companies saying that they believe they're going to have this by 2029. In some cases, they're even claiming 2027, right?

6:11And so the big thing that we're trying to get to people, you said a lot of people aren't even aware of this, right? The problem is even the ones that are aware of it aren't being proactive enough. I won't say reactive. They're going to put themselves in a reactive position. One of the biggest game changers I've seen for founders isn't another pitch deck, another tool, or even another investor. It's how you manage sales. And I'll be real. When we first started, we were getting leads, we were getting business, but the pipeline was so messy. Leads were falling through the cracks. We weren't following up.

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8:06so you know what i think we're going to what's going to happen is a lot of you know oh no moments and people are going to get caught on their heels because they're not taking it seriously enough is is really the scary part so i know entry key labs you know i've read and i've heard some of your interviews talking about the world's first software only quantum resistant key generation. So is that what you see as a solution and what you all are working on? Yeah, I believe it's really, and we say it, and I'll put even bias aside as much as I can, it's the only viable way forward to do this at global scale.

8:47You know, we actually, Cambridge University just did a paper, a case study on us. And it was really interesting that they even put in their paper that software only is really the only solution here. Hardware has so many different issues, right? It's, first of all, it's complicated. You have supply chain issues. There's additional threat vectors. When you bring it down to the core, which is the entropy generation, if you're using hardware there, it's impacted by ambient noise. It's impacted by temperature changes. It's impacted by all of these things. Doing it as software only allows us, first of all, we don't have any of those vulnerabilities.

9:31Secondly, the size of our software is really small. I mean, number one, the generator for creating entropy and quantum-resistant keys, it's 160 megabytes. But what we did is we also took it one step further because what people don't realize is the importance of entropy to your cybersecurity stack. Think of it as a house. It is really the foundation of your house. So you could have the nicest house in the world, but if it's built on sand, it's going to crumble. So just being able to produce entropy at scale is one piece. Being able to produce provable, high-quality entropy, such as we do, which is, you know, on IID, on what's called the NIST 890 series of tasks, right?

10:16That's where they create the standards. You know, most companies under perfect conditions are doing 0.84 out of 1. one being perfect entropy, perfect randomness, right? We actually are at 0.997 consistently on that. And the other interesting thing is that, you know, we created this really novel calculator, right? So if you look at how they score entropy on those standards, as I mentioned through NIST, it's a statistical analysis. They use a few vectors. They're looking at the distribution of the ones and zeros, right? But that doesn't tell the whole story. you were talking about it perfectly with creating these randomized passwords, right?

10:56Now, you said AI will be able to guess my passwords. Well, guess what? If you don't have good entropy, AI is going to be able to find the patterns in the data that you're inserting in your keys. And so what we've been able to solve is not just great entropy, but we can score that entropy down to a key. We can now with an AI find the hidden patterns and hidden patterns within patterns and remove them before we insert them in the key. What that leaves you is something that is nearly impossible to hack because the AI won't be able to find the patterns to exploit them. I hear a lot about entropy, but I have no idea what that means.

11:35Can you explain it? Yeah, entropy is just chaos, right? So it's not hard to create randomness, right? People can move their mouse all over the place and that's randomness, right? But that's not creating chaos, right? So they will, an AI will be able to find the randomness, you know, just like as if you continuously shuffle a deck of cards, eventually a pattern forms, whether you realize it or not. And so entropy makes that harder to find the pattern of. Now, what we do is even in great entropy situations, you still might find patterns. You know what hiring feels like? Like searching for a needle in a haystack.

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13:00The needle in the haystack. four out of five employers who post on ZipRecruiter get a quality candidate within the first day. Try it free at ziprecruiter.com slash work. One more time, ziprecruiter.com slash work. ZipRecruiter, the smartest way to hire. We're able to find those patterns and the hidden patterns within those patterns and completely remove them. So there is nothing for the AI to exploit. So it sounds like it sounds like what you're saying, though, Eric, is that my AI will be able to solve every magician you talk about the cards i could i've always wanted to be a magician when i was a kid now i could be a magician and solve all those problems but no i mean i'm tropes aside it is it's almost scary like you said nation states uh i think we've seen every technological advance there's of course the positives we already know that but we've always seen the also greatest threats and negatives.

13:59There was a recent hacking that just happened, I think, in the government in the US, and they just trace that back to a different country. And it seems like this is a common story. Going back to, let's think about going back in the past or recent past, what happened in your life? I know you also have a co-founder. What happened where you or you both were like, you know what, we need to solve this. Yeah. So, you know, the the original concept behind this came from my previous tech company and my co-founder there, who is part of this as well. Richard Kane, he's an AI and high performance computing researcher and just one of the beautiful minds, similar to our chief scientist as well for this company.

14:47But we were doing biometric digital identity. And he came to me in 2018 and he goes, I have a really crazy idea. I'm just going to throw it out there. What if we create the most secure identity solution in outer space? And so this was before Starlink got birds into the sky. And I was like, sure, let's go for it. So it was just like, yeah, that's a crazy idea. We'll get down with that. We filed that patent. And then you forget about it, you go about life. We did have some conversations with Starlink early on, but again, they were just getting their first satellites up there. It was too early for both of our companies.

15:26And at the end of 2023, you know, that startup had sort of ran its course. And now all of a sudden I got this patent awarded, fully uncontested. Now, over the past three years, I had become very close with David Harding, one of my co-founders on Entropy, who is a, you know, also brilliant engineer, mathematician, cybersecurity guy. And I called him up and I was like, there's something here. You know, I'm not the technologist, but there's something here. Will you take a look at this patent? You know, I'm thinking about selling it. and I nudged him for about two to three weeks, and he calls me up, and he's like, you're not selling that patent.

16:08And I was like, okay, go on. And David was able to do something I found out that most people of that caliber in engineering can't do, which is he was able to distill it down to its most simple and elegant form. And he said, you don't need to do this complexity of just trying to do it for protecting identities. We can just generate keys. And I was like, oh, okay. And so that started where we were just buzzing. And again, this was, this started off doing this in outer space, pulling in cosmic radiation, which is, you know, if not the most, one of the most entropic or chaotic natural phenomenons in the universe.

16:50And so we start up there and we're buzzing. We call up Richard and we're like, hey, cool outer space, but really expensive. Can we do this terrestrially on Earth? And he's like, oh, yeah, you could do it this way, but we could use these cheap pieces of hardware. And then it just kept evolving. And I think we both knew very quickly to answer your question. That we had stumbled upon something that was going to be big, but David and I talk about this all the time. You know, once we brought in Scott, our chief scientist, and he figured out how to remove the hardware and to make this a software only solution, I don't think either of us could have predicted how important and how big what we are creating truly is, because this is societal shifting what we are undertaking and what we have built and solved.

17:49I do not say that egoically. I don't say it, you know, delusionally. You know, even as a founder, I'm aware of my rosy colored glasses. This one, you know, it is a paradigm shift, what we have created. And what we are doing as supported by that Cambridge paper, I said, you know, is potentially reducing the time and cost on this transition, again, that they're claiming to be north of one trillion over 10 years by 90%. 90%. So you could take that 10 years and shrink that down to one, right? And so on and so forth. So we knew pretty quickly we had something big. I don't think either of us, though, could have prepared for what this evolved into and what the inventions that came out of this were and are.

18:39I mean, changing the world, right? I think every founder, at least most would say, what is my mission? My goal is to impact the world. This is why we work 24-7, grind, do all the things we need to do to ensure that we leave this. This could be essentially an enormous legacy for you all beyond the actual positive impacts it has. I'm curious though, because I haven't heard a lot about this before, so I obviously don't think a lot of people know about it. So how or even understand like how big of the thread and then how, you know, obviously without your solution, the other solutions, how do you convince people that they need to protect themselves against something that, you know, you can't see it yet.

19:30You don't know if it exists yet. So that's a great question. I think right now, I think, you know, some of it is is just meeting people where they're currently at. Right. I mean, there's only so much pushing and selling and nudging you can do, you know, if these boards are like, well, we have 101 priorities over here that we need to handle today. And that's, you know, in our mind, but five, 10 years out, we're going to deal with these 101 things first. Right. And I get that. I truly do. Right. But they meant what we have learned from talking to the CISOs, the chief information security officers, There's a lot of major Fortune 100, 500 companies, right, is because this is so big, they're kind of defaulting to the government and the standards bodies to guide them on that process.

20:24Right. This is going to be, in our opinion, really government led in terms of adoption. Right. We're going to start at the most critical place and the most critical infrastructure and keeping our nation's secrets and military safe. And then once we feel comfortable with that, we're going to start mandating this first will come regulated industry. You're going to see right financial services, banking, health care, transportation, logistics, telco. So these are the areas that you're going to see immediately fall in government where they're going to say, hey, you need to get on this by X date because this is the cutoff time.

21:09Right. I mean, you're and you're starting to see shifting landscapes around the world. Right. Everyone said RSA encryption needed to be downgraded by 2030 and completely removed from your tech stack by 2035. And Australia jumped out in front and said, you need to get RSA completely out by 2030. And so you're seeing now more and more attention being paid to this at the government level. And then that's going to drive more attention at the enterprise private industry level. And so it'll be really interesting. What we're experiencing is certainly a more accelerated pace in terms of exploration around these new technologies like what we've created and others in the post-quantum space, because the government truly understands how critical this is.

21:58So, Eric, thank you for sharing that. I mean, like my head is about to explode because beginning of this, I was super scared for the future. It also kind of reminded me of how like when I think back to generative AI and they were talking about AGI is like 30 years, 50 years. I feel like every three months they're like, oh, no, AGI is like next week. Yeah, that's it. That's with all technologies. Right. You hit a tipping point. Exactly. And then it's just full bore. Right. And then the speed of unlock and acceleration is just crazy. And we're seeing it with quantum now, too. And it's only going to accelerate further.

22:37So it just it just makes me laugh because it's like every two weeks it moves back like five years until it's like tomorrow. Right. Exactly. But I'm glad you shared today. And I really hope a lot of people watch this just because it is it is so crazy how we are not talking about this every day. Although I know it's tough to think about these things sometimes, but corporations need to know about this. Businesses need to know about this. They need to get in touch with you. And if they want to, because they should, how can they do so? Yeah, go to HTTPS, entrykeylabs.com. There's a place to buttons on there to get in touch with us through there.

23:17You can always email me directly at eric at entrykeylabs.com. or reach out to any of us on LinkedIn, which is typically where we're posting. A few of us are on X. But yeah, listen, I mean, this is something everyone should be aware of. This should be carried with the same weight we did going into Y2K, right? The difference is with Y2K, we had a date certain of when that was coming. With this, we don't. And that's why companies and people, not that people have the control because they're going to rely on the companies that is products they're using or services. But this is where companies can't be lackadaisical about it.

23:58They can't procrastinate. They need to start looking at their entire cryptographic library, auditing what they have, find the weaknesses, and then start putting things into place that will help them create the right cyber posture for what is coming. Because yes, we can talk about quantum to the day ends, but what we and what we touched on a little bit and what people also need to be aware of is AI is already here. AI is already breaking encryption. We have that on good authority. And so if nothing else, people need to start improving their cyber posture for that reason alone. But, you know, nobody should find themselves a year from now just starting to think about how they're going to handle the transition.

24:43Because in my opinion, I'm just speaking for myself, that is far too late. So yeah, please get in touch. We've built something really novel. Again, I like to call it a paradigm shift delivered as a configuration change because what we do requires zero rip and replace. It requires no infrastructure change. It works with all the existing and what's coming hardware and software infrastructure. And nobody else has been able to figure out how to do that. And thankfully, we now have the IP moat to defend that. But this truly is a history making invention and company. And again, not saying that egoically, it is just fact of where we are.

25:26We like to say we are and will be the most important cybersecurity company over the next 10 to 15 years. Well, in that 10 to 15 years, you're going to look back and people are going to be like, Eric, you are right. In August, the August 14th of 2025, you made this claim, you said this. and they're going to look back and say, you know what? I took action and thank you for that because this could save a lot. I mean, this is, like you said, it's history making, it's legacy making, and hopefully millions and if not billions of people will be positively impacted with what EntraKey Labs is doing. And thank you for joining us today and sharing everything.

26:05You've got to come back in a few months because we already know technology in a few months from now, who knows what it'll be then. And, you know, it'll be 2026 and a half at that. That's exactly right. And I'll just say one last thing before we fully sign off, because we talked a little bit before the show about this. Right. Like, what could what could this look like if Q Day happens and the world doesn't have a solution in place or preparedness? I'll liken it to a zombie apocalypse. I mean, you know, when when two countries go to war. Right. And this is, again, just my view. they start dropping bombs on each other.

26:42Historically, that creates nationalism, right? The country is like, yeah, we're here for it. Go America. Look at how we were in World War II, right? Everyone comes together to get behind the nation. With quantum computing, that could take out electrical grids, hospital systems, create absolute chaos. And so as opposed to other wars, when you enter into this digital warfare, it will actually create more dissension, more separation, because it will devolve into people just trying to protect themselves instead of a country coming together united, right? I mean, as part of one of our studies, you know, just the economic impact alone, should Q-Day arrive, would be$500 billion a day in losses.

27:33that's many countries GDP so imagine on a map this country's GDP next day this country's GDP this country's GDP that is how serious this could be and I can't imagine our cars are driving themselves if you could hack that our homes are connected you hack that and then on top of that you could wow yeah i mean i'm picturing this like a movie where you have ai creating uh different false narratives of videos and such saying it's this country doing it or that country fate like you said it's tearing people apart that's exactly everything around us is being torn apart at the same time our bank accounts are being depleted and then on social media but no this has been great eric i had a great time i learned a lot here you clarified a lot of things I had I so confusing I had no idea about a lot of these things and I know a lot of my friends have no clue so uh when I bring it up they're like huh I don't understand this really simplified it so thank you for that and man I'm excited for the future I'm a negative person but this is turning me into a positive person if people take action so thank you for this thank you appreciate you Dan