The creator of the iPod, Tony Fadell, designed a new hardware wallet for people to store their cryptocurrency.
The product, created by French crypto asset security firm Ledger, launched at the company’s annual Ledger Op3n event Tuesday. Its launch comes at a time when trust in centralized crypto platforms is fading as a result of the collapse of Sam Bankman-Fried’s FTX.
It’s called Ledger Stax and resembles a small smartphone or credit card reader. Measuring 85 millimeters long and 54 millimeters wide, it’s roughly the same size as a credit card. It is also about 45 grams, weighing less than an iPhone. Users can deposit or exchange a range of tokens, including bitcoin, ether, cardano, solana and nonfungible tokens, or NFTs.
The Ledger Stax sports a black-and-white E-ink display, similar to that of Amazon’s Kindle e-readers. It also includes magnets, so that multiple devices can be stacked on top of each other, like a pile of books or cash — hence the name Stax. Users can connect it to their laptop through a USB cable or their phone via Bluetooth.
“Many Ledger owners have multiple devices, some store their NFTs, some store different crypto, some have multiple because they have different clients that they store for,” Fadell told CNBC in an interview.
The display also has a spine that curves around the edge, “so you can see what’s on each one, just like an old CD or cassette tape or book,” he said.
The iPod for crypto?
Initially, Fadell turned down working with the Ledger team on Stax. “This was not something I wanted to do,” he said. “When they first approached me I’m like, ‘I don’t want to do it. No thank you.’ I was interested in crypto, I had crypto at the time but I’ve basically got a lot of other things to do.”
Fadell later went on to purchase a few older Ledger devices. He found that, like MP3 players in 1999, people didn’t know what to make of the devices.
They were also difficult to use, he said. “It didn’t feel like it was ready for mass consumer, or at least early adopter consumer markets,” said Fadell. “Not just business to geeks, we had to go to business to consumer.”
The tech design guru — who previously co-founded the Nest smart thermostat before it was acquired by Google in 2014 — then decided to help the Ledger team.
“This reminds me a lot of the iPod,” he said.
The Ledger Stax, which retails at $279, is available for preorder starting Tuesday and will start shipping in the first quarter of 2023, Ledger said.
It’s not the first time a company has tried launching a smartphone focused on blockchain and cryptocurrencies.
In 2018, during the last so-called “crypto winter,” HTC launched the Exodus 1, a mid-range phone with a crypto wallet included. Swiss startup Sirin Labs launched its own phone with a “cold” wallet, called Finney. And blockchain platform Solana this year debuted its own Android phone for “Web3,” named Saga.
Such devices have largely struggled to gain any traction with consumers.
Ian Rogers, Ledger’s chief experience officer and a former executive at Apple and LVMH, said he’s confident about the mass market potential.
“There’s no question about the need for security and there’s no question that we lead increasingly online lives,” he told CNBC. “Instagram, Nike, Starbucks, Amazon — many companies are finding real life use cases for digital assets. And so I think that we will grow with that.”
Not your keys, not your crypto
After the recent collapse of FTX into insolvency, crypto holders have sought alternative means of storing their digital assets. One is via cold storage, where a user’s private key — the code they need to access their account — is kept on a device that’s not connected to the internet.
Since these wallets are offline, they’re less susceptible to hacks or failures. Ledger says that, to date, none of its devices have been hacked.
Ledger has seen a boost in sales as a result of fears around the contagion from the FTX collapse. Last week, BlockFi, a crypto lender, entered bankruptcy after revealing Alameda Research, Bankman-Fried’s trading firm, defaulted on $680 million worth of loans from the company.
November “will be our all-time high biggest month ever,” Pascal Gauthier, Ledger’s CEO, told CNBC. “All the news that you’ve seen since the beginning of the year, from Celsius all the way to FTX, has really pushed a lot of users towards self custody.”
Ledger has sold more than 5 million devices to date.
However, a sharp downturn in digital asset prices could spell trouble for the company with retail investors becoming more wary. Only 21% of Americans feel comfortable investing in cryptocurrency, according to Bankrate’s September survey. That’s down from 35% in 2021.
The Ledger Stax will compete with a slew of consumer gadgets this holiday shopping season, including Apple’s new iPhone 14, at a time when budgets are being constrained by rising inflation.