He challenges that idea of knowledge because with his evil-demon theory, there is no such thing as "self-thought". Everything we think is a sense experience by our bodies is only a predetermined thought implanted by an evil demon that controls your mind. Descartes challenges all that has to do with the mind; thoughts, dreams, experiences, everything, but he is not quite sure what to think about the body. Meaning he isn't quite sure whether we have bodies and the demon only taps into our brains or if us as a whole is just an imaginary idea. That we are only this brains sitting in a pool of goo with hundreds of thousands of wires connected to us it make our brain think that we are actually feeling something with our hand when actually we don't have that hand. Descartes leaves himself and us with this challenge against knowledge.
After being overwhelmed with these thoughts for a while, Descartes begins to challenge his own thoughts. If the mind or the body does not exist then shouldn't it be true that "I", as a whole, does not exist? He believed that this idea couldn't possibly be true. There for Descartes believes that if he thinks that he is something that he has to be that something. "Cogito, ergo sum" I think, therefore I am. He proposes that all the basis of "I" is thinking. He realizes that knowledge of one's self is not based upon embodiments, but is rather based upon the thought of those same embodiments. Basically, that if he ceases to think then he ceases to exist. To help us understand the "I", we think of, he uses the "I" we see and touch to explain his hypothesis. Because it is hard for Descartes to use a body in his case to explain the true meaning behind his thoughts he uses a piece of wax to explain it. He examines the wax in its normal state. It is a certain shape, smell, color, sound. He then puts it close to the fire and changes it. The wax changes shape, color, smell, sound, but yet we still identify it as wax.