Building and Fighting for Tomorrow's Technology w/ Alan Scott (Railgun)

Transcript

[Music] thank you hello and welcome back to the fourth episode of The Strange water podcast thank you for joining us today's conversation is with raila luya AKA Alan one of the founders of the railgun protocol in this episode we go deep into Allen's background his journey to railgun and how railgun is providing some of the functionality needed to transform ethereum from a speculative investment into the financial rails of the 21st Century but the meat and potatoes of this

conversation is much less about founding a successful defy protocol and much more about building in an environment that is increasingly more hostile not only to a specific project but to this entire industry this is a conversation about fighting for the world you believe in about democracy and about change and about making things happen and this is a conversation with one of those special people that are called to action when they see something that needs fixing the type of person we should all hope to be one final note please don't take any Financial advice from this or any podcast

ethereum and decentralized finance will change the world but you can easily lose all of your money in the process alright let's get started welcome back and thank you so much for joining us today we have a conversation with a D5 co-founder probably one of my favorite protocols and that's both because of like what I understand what railgun and what Alan are doing in building but more importantly because I think that what railgun is building is actually relevant to like the core technology we're building and actually relevant to making crypto something usable in real life so super excited to

have this conversation super excited for you to join us um and Alan thank you so much for joining the strangewater podcast yeah yeah appreciate you having me uh looking forward to an interesting conversation thank you thank you before we get started would you just like to give a brief intro and background about yourself uh yeah yeah sure so um I'm Alan um one of the co-founders of the railgun privacy project um I guess my background is more or in like the traditional Finance space specifically in reinsurance so uh helping set up and maintain Insurance funds uh in like the Turks and Caicos and Cayman Islands and things like that I got my start in crypto in about 2017 it you know tangentially heard about it

from different friends in college and things like that uh well before and you know I thought they were kind of crazy uh but my background with crypto was really more on the trading side of things I was really interested in trading my own money and I was after more beta and came across crypto because the moves were pretty violent as we all know back in in 17. um okay yeah there's still there's still yeah chucking and driving uh but um yeah I ended up um going down the rabbit hole pretty aggressively found myself in a bunch of different like you know telegram groups and discords and things like that and uh was always really fascinated um

I guess about like the the teams that were like founding these projects and stuff and I can still remember like being in like protocol chats and being like Oh man like these are the guys that made this protocol and they're in here like answering my questions and uh it was always you know kind of like Star Struck I guess from that uh and um yeah I guess I finally got the opportunity to be part of founding a project and that's yeah that's railgun so um I guess my character Arc is you know uh Finance Turn full d-gen and um now co-founder of a protocol I think something that is not well appreciated by people that are entering crypto as their first industry or first career is how you actually can just get

in a group chat with like a co-founder of perhaps like the most important protocol or the most exciting protocol and really engage with them and for those of us who um like reinsurance is one of those like huge closed off kind of um you know faceless until you're behind closed doors businesses um the the true at scale beer business which is where I came from is exactly the same and you know for people like you and me this moment where you walk in you know you enter the Ave um Discord and you want to talk to like the core developer like they want to talk to you and that's something that's like really really you know treasured about this space and

um I I hope it just lasts forever yeah it's certainly it's it definitely comes with its challenges um you know um and uh yeah yeah for sure like it's it's it's definitely challenging you know because people will at you um at you know random times I guess it's kind of like um I don't know it's like building naked in front of a bunch of people uh you know like the open source technology thing um uh it's it's really really cool uh it's a very fascinating Pursuit um you get a bunch of people who'll come up and like want to contribute and I think that's really cool in itself you know so it has its advantages for sure but it's definitely uh it definitely comes with its own challenges um you know especially if things are you know difficult uh you know the whole

cliche like devs do something thing uh is always really uh it's it's difficult to to deal with um you know devs are always doing something I I guess if you will you know uh there's there's ever research happening and people writing code and contributors coming in and out of the ecosystem and so um it's it's certainly exciting and I think one of the things that's always been really weird about it for me is like you become like the oldest guy in the room like really quickly it feels like you know I'm in my mid you know mid-30s yeah yeah yeah yeah you know I mean like a pin I'm a pensioner in like the world of like crypto you know and some of these kids are you know really really young um which is which is really cool in its

own right um and so like yeah some people just come and have crypto as like their first job which is pretty oh it's pretty rad yeah I that word you said like it it can feel really naked it just is like bouncing around in my head because like that's that's absolutely true and and like the thing about being naked is it's like incredibly vulnerable and it's incredibly scary but it's also like the moment matters because people are looking at you and people aren't like care what you do and um I think that that is kind of like a dynamic and um something that's crushing to a lot of people but especially for those with the entrepreneurial streak and those who are really passionate about this space I

mean it it really just is opportunity and it's opportunity to sink and opportunity to swim but that's not something that really it's this out in the traditional world today and so like I think that's what's exciting for me uh yeah I mean it's it's the kind of thing where like you can yeah you could really kind of Blaze your own path I mean like with relgan it's been really exciting because like we're I mean we're building some pretty complicated Tech like it's before you jump into the tech um how did you get in from like most of us entered the Space Trading our own losing our own money but how did you get from there to like passion about privacy yeah I guess that's a great question so um yeah like I mentioned I was in a

bunch of telegram groups and uh if you're a real d-gen listening to this you'll know about um collab land bot and like uh token gated like telegram groups and things like this and um and so I I really wasn't big on privacy um before um you know I guess a particular event happened a bit of story time if you will and so um I was in a group and uh it's a bunch of people who like share Alpha right and you know everybody's like oh you know I'm getting in on this token deal or I'm getting allocation for for this token or like I heard this this new you know coin is coming up and it's gonna be cool and um people talk about like the interesting things that they're in and

so like um you know at the time I was really into like on-chain options my thesis at the time was like um you know crypto is gonna take over all rails of like finance and people are going to use like crypto for everything including hedging right and uh and so like we're all like sharing all these ideas and then I get a random uh DM from somebody in like the group and you know it's like something to the tune of like oh hey Rex like how did you get into uh token token X and um I was like that's that's really weird like I've not told anybody that like I'm in token X right I'm not in that position you know as far as the world knows and I'm like man

how'd you do that and you know of course you know ether scan was shared with me like this is your you know wallet right and uh and I'm like whoa you know so I guess I had like that second epiphany of like how I think you have like two big moments in crypto um you know I started out in the centralized exchange World um and you know we're trading on centralized exchanges um basically just doing uh a pretty boring trading strap um For Better or For Worse uh I didn't really I should have just held the tokens I was trading you know Ethan Bitcoin at the time I'd have made significantly more money than trying to buy buy up and down but but like yeah you know you have like this big moment where like you finally

hold your own keys to your crypto right um and that's a really really big moment and then I think like the second big moment is when like you go and like you look at your like address on etherscan and like you could just see like everything that you've done since like the beginning of of time and like um I had that happen to me not like me having that realization I was pretty dumb at that time admittedly uh but that's that's kind of where I really got aware of like how like um you know crypto didn't have a lot of privacy you know naturally there's things like Z cash Monero and things like that that existed at the time but um yeah like the the place that I was doing business if you will ether scan you know docs me pretty readily so

um yeah I think that's that's kind of the story there wow that's that's pretty cool um you know I think we've all had that similar story for me it was spending a year thinking I like was smarter than ether you know and like was maintaining these different identities well and this and that and then I'm actually at eat Denver last month one of my like very close friends who has like is an Anon and I met him in person and the first thing he says is you are so sloppy on chain and it was just that moment where it's like other people are watching you know and and whatever for whatever reason maybe they're like just trying to find Alpha maybe they're bored maybe they have

something against you specifically like it doesn't matter the point is that it's there and and more so than that that is not a bug that's a feature at least of ethereum and so um I think we've all had that moment but it's pretty incredible but you had that moment and your responses I need to do something about this yeah well it's like it's kind of like this weird Serendipity you know like it's so like the team getting together right uh you know of like the initial like core contributors if you will um you know there's naturally uh some some pretty um yeah some pretty smart people uh in that group of people um and um one of the things that they didn't really have was someone who had like

soft skills and so like uh I was basically approached and you know people were like hey you know you like talking it's like you should you should be on like the you know the soft the soft skills side of things you know so like you know kind of telling the story and you know giving the the why behind what we're doing and you know being that you know sort of you know liaison uh to to the outside world is really how I ended up getting on the team and it was like it was really quite funny because like initially whenever um you know this was all coming together you know I was I was you know being courted if you will to like quit my day job I was you know I had a baby on the way and everybody thought I was like

absolutely insane and um you know my mother especially is like what are you doing you know uh which is uh a bit of a classic story really but um yeah I guess the the thing that kind of like drove me to it was like that privacy from like a um just like a pragmatic standpoint of like will crypto make it um is is just super important just from like the pragmatic like business perspective you know if we've taken like we reframe like the crypto Wars and the whole like going dark problem and and all this around encryption like privacy just has to happen in crypto and then like the more I looked at like like the

ethos of the project and like how we were going to like you know I guess like contributors were going about it I was like yeah this is like the coolest way and like this is to me like what resonates with with like my ideals of like you know no LT like at the time I was like no l2s you know no side Chains No Roll-Ups ethonly you know uh really ride or die on ethereum and so um yeah I decided to quit my day job and and you know work full-time on like contributing to this open source project wow so before we really dig into railgun um can you just talk about like your personal Journey from being an employee at like one of the like most sleepy stable just like like when you talk

about reinsurance and and for anyone who's not familiar what reinsurance is is like when when insurance company insures against an event they don't want to hold all that risk so what they do is go get insurance against the event so um and Alan can give you much more reason about how that or much more information about how that actually works but the point is is that this whole construction comes out of like I don't know really out of like the age of Discovery in the 1500s and like long treasure voyages and and so it's like very developed and institutionalized and like that's what Alan said he was working on I don't know let's say 2015 and and now

eight years later you are as you like to say the chief janitor but is also like like a huge part of the heart and soul of this like super important um D5 protocol and like part of that it required you to take like a huge leap of faith in both the protocol and yourself and so um to sum that all up I just can you talk a little bit about your journey and how you were able to take that leap you know it got to the point you know it's like reinsurance is really interesting space um and it's it's very sophisticated like old school Financial engineering right like and uh you know the actuarials behind a lot of this stuff is really exciting and interesting um well okay maybe it's not exciting uh

but it is interesting to me you know like I really love statistics and um you know I really um yeah I found it to be really interesting right suffice to say uh but I've worked on it I've worked in the space for for many many years and kind of had run to I guess run into the highest Echelon that I felt like I was gonna get in that space right um and that that kind of comes with like a oh is that that's it you know like oh I've I've kind of like maxed out my career and in what I'm doing um which probably wasn't the case you know maybe you know I would have you know gone on and then you know who knows what but I had kind of grown like

um I I guess a little bit uh like disenfranchised with like working in that space and you know I've become like more and more interested in crypto uh I think it's we all do people who like go like full like heads Heads head long into the space you kind of grow like more and more interested and I started reading like more and more white papers and found myself like reading the boards about like various eips and and things like this and like was dedicating more of my time learning about this new like crypto thing that I was like it invested in learning about like controlled foreign companies and non-controlled foreign companies and so like my interests in reinsurance just kind of waned

um and it just it got to the point where I'd realized that I was more into it or I guess more into crypto than I was into my actual day job and you know I know I'd known some people who were in the space you know working full-time and it kind of was just a I guess I won't like yeah I really won't yeah I won't really rule out like how much Serendipity was at play there it was just like weird timing and like I was a bit of an opportunist and I was thinking why not you know why not do something different um the the the challenge with it is is like

it's a totally different like it's a totally different business um you know you're you're working in telegram with a lot of different people dispersed around the world like you're on you know Discord you know chatting with people uh who have like you know really weird names you know like it's a I don't I don't really know how to like it's really ineffable like the Stark differences in between like working you know structuring pretty sophisticated you know reinsurance positions for people uh you know versus being on the Internet working on a dgn protocol but um suffice it to say it comes with its own challenges but it's really exciting I find you got to be like honey I can't help with the baby squiggle butt needs

to talk yeah parents were always like really giving me a hard time about like you know I've just I'm pretty boring person you know if you have a mortgage a lease and things like this and so like um you know I got I got a lot of like funny pokes at me like oh you're not gonna be able to pay your mortgage in um you know fill in the blank satirical token name so um you know I guess it's it's kind of a classic story isn't it you know it's it's someone you know I I think everybody who like leaves finance and goes and works in like magical internet money land uh gets a little bit of uh that that jab but uh I for one have always been a bit of a counter cultural you know counterculture

type where you know going against the grain has been more interesting than the the path of um you know the well-traveled path well um I've only known you for what a little under a year now and uh the idea that you're boring is laughable to me but what let's let's move on and let's talk about railgun so um just for the folks at home it would be great if you could just give like a super brief elevator pitch on what railgun is yeah I think um yeah for sure uh I would totally wreck you know suggest having like a hyper technical guest getting to the weeds of like uh evm and like how the computation and all of that works but you know suffice it to say you have the ethereum virtual machine and you pay in

uh ether for people to do computation on your behalf like in this decentralized virtual machine now the the problem with that is so you have a a decentralized public Ledger of like all transactions that happen on ethereum and we could view this um at least as plebeians I'm sure you know some people call and you know view the blockchain directly on their laptop or something like this but you can go on etherscan and you know arbitrarily look at everything that's happening uh on that public Ledger and it's pseudonymous in the sense that it's all like zero X addresses happening um happening to be doing these things

but um you know as we all know we fast forward to today uh ethereum is being used pretty regularly and pretty aggressively by a bunch of different actors uh to do a whole bunch of different things you know whether it's uh simple swapping of assets sending tokens back and forth to each other uh all the fun uh DJ activities that we enjoy and we kind of have created an ironic perfect surveillance machine um and I think that that comes with its own challenges right um like I can go and look at Ave a lending protocol and verify that the loan to value of like the contract is what I expect it to be

um and that the collateralized nature of uh you know a back stable coin like I can go and look on chain and verify that yep you know there's the eth it's backing it it's in the contract that I'm expecting it or it's not only that you can look it up it's that is the cool Incredible different thing about ethereum like we can't have these Bank runs um that are happening in tradfi on ethereum because like there's no Panic created by this like shadowy assets or whatever it's all on chain it's all audible yeah yeah but this comes at like a so there's like this severe disadvantage to that and that there's like wholly transparent like insight into your individual uh interactions

with these and ultimately your balance of tokens right so you can think of this as like a um you know so for example if you were to uh you and I were to make a transaction um like let's say that you and I we go out for drinks or something and or we go out for a dinner and you're like yeah no problem we can split the bill I swipe my card and then you send me tokens on eth for you know maybe I'm you know cool just pay me an ether die or usdc uh whatever it is right uh I could then go uh it's not I could then go uh I will then go to etherscan and proceed to judge you off like on all of your transactions you know like oh okay yeah he's into this uh man you know he holds

these tokens and there's a lot of the ladies isn't it yeah yeah exactly you definitely do I I don't do you I certainly do that anytime I do a transaction with another individual I can't help myself but like peruse their transactions and like Snoop honestly true that like everything especially when I find out are real life friends like etherscan or ens like I I go back you know and I figure out like how sophisticated they are how much they're worth and you know like that's everything from a privacy like embarrassing problem too like a real life safety issue right exactly you know which creates a whole like it's encryption is security right um and without it you know when you have

like wholly transparent access to somebody's bank account because that's effectively what your ethereum address is is a bank account you store value there uh when you have like whole like transparent auditability of that there's there's a lot of inherent risk involved um you know you have a lot of like even when it gets to like the sophisticated part not like you know oh man Rex has a lot of money I'm gonna Rob him for his crypto kitties um you know something something uh like Financial engineering side you know like being able to look and see that someone has a loan um and know exactly you know where they're going to get liquidated and try to push the price uh against them like this kind of thing happens um it's a there's certainly a lot of challenges

involved when you have like um yeah wallet side transparency and so I I guess like if you think about it just for like an overarching ethos um of of privacy the the point or like the pain point that railgun is trying to solve is a really kind of like tough balance because like we want to be able to provide like wallet side privacy for crypto users but also like maintain that like third-party auditability of different dapps that exist on the ecosystem because that's that's really important like the auditability of like money supply if you will like this is this is really really important like can I go and look and verify that Ave is acting as it should can I go and verify

that when I want to swap my tokens um on uni swap like that they're gonna they're gonna happen it's gonna happen in the way that I expect like this sort of thing like so being able to maintain like that dap transparency along with like wall outside privacy uh it's definitely really a really difficult battle but that's ultimately what railgun is trying to to to do which is you know build wallet side privacy incredible so that's a perfect segue so can you just um like briefly talk about like just real Basics like what is railgun how does it work how does like a user interact with it and then maybe with a special focus on how is railgun built to um provide privacy but also maintain the like transparency and audit ability at

the application layer effectively Rogue gun is a suite of smart contracts that exist directly on chain um that are designed to allow users to deposit assets into a private address and then transact those uh arbitrarily in defy so if I want to take and swap tokens if I want to um uh stake tokens or buy nfts whatever it is you can perform arbitrary actions in D5 using this private balance of tokens and so the the way it works just from like a high non-technical view if you want to learn more technically about it you know go at Kai and you know the

different people contributing to the code but um from a high level what you do is you deposit funds into the uh the railgun smart contract uh those can then be transacted um by generating a snark roof and you basically verify anonymously that you own these tokens and have the right to spend them and you could have additional transaction steps on top of that so you could generate a snark proof that I own these tokens and I want to transact them in this certain way the smart contract verifies your snark proof is true and then you can and then those are uh you know transacted in D5 how you desire so for example if I want to send tokens from my private balance to

urex I can I could do that you know so I can generate a snark proof that I own at least 100 die and then I could send that to you uh privately and so the cool thing about that is it's like uh railgun effectively so another smart contract sees it's just another smart contract on ethereum right so we don't like hide like that there's someone swapping tokens on uh you know uni swap let's say it just hides who the actor is and so you could verify that like there wasn't some sort of like malicious attack like it doesn't like make that transaction um you know private you could see that if a hundred die goes in 100 usdc comes out and you know the the transaction happened as it was supposed to right so you still have that

auditability of the DAP uh but you just don't know who the end actor was and I think that that's a really really cool thing um and I think the other thing that's really interesting about railgun is that you have like the the third party auditability of your transactions if you so choose uh it's all just encrypted um to your private key you can take and uh you know docs those to people if you so choose right and that's that's really where the ethos is of the project like giving people like self-sovereignty over their transaction data yeah and so just to like walk through what it actually looks like on chain like let's say that Allen and me and you know um let's say Tetra node are all interacting with a railgun contract right and Alan puts in

one eth I put in um 100 usdc and Tetra node puts in a thousand each and a thousand usdc so From on-chain perspective you'll see one smart contract or maybe a sweeter smart contracts that contains one thousand uh one eth and 1100 usdc um Alan you will be able to send in a snark which is really just a digital signature that says I own this one eth I want that one eth to be sent to this address and the railgun contract will verify that and then send your one eth and now like your balance according to railgun is zero but um that cannot be like understood or or figured out by

anyone on chain all they can see is that the master railgun smart contract dropped one eighth is that yeah exactly yeah exactly right so railgun effectively is a um you can think of it as like a multi-actor uh smart contract wallet uh so very similar to how like um let's say something like a no so safe right this is effectively a smart contract wallet you know where you have like a special uh program where people can do a multi-sig right so we can take an all sign to do transactions um well this is a very similar concept yeah so maybe if like in in our future world where D5 is like Finance maybe um like a gnosis would be a type of like

special institution that is about um creating like coordination at the wallet level where railgun is like a similar kind of institution but is focused on creating privacy at that level exactly right yeah just to follow up on your comment about how you can share your private keys if you want I think one of the things that a couple months ago I reached out to you and to ask you about is that you've created something um akin to like accountant or like viewer keys where you can share like read only Keys into your smart contract so that you know people like accountants um or like financial institutions or the government who needs to be able to

verify what you have can do that securely without leaking all your information or giving them access to your assets is that correct yeah yeah exactly right giving them to the right to transact which would be really bad right so yeah uh yeah in the code base there's a thing known as a view key that you can take and distribute to people uh which is a uh it and it's an immutable right to view the transactions so like you said for example uh maybe you want to give your accountant uh or you know the right to view your transactions or maybe you have like um let's say you're a fund and you want to trade privately you you can give it to your risk team and they can monitor the transactions and making sure that you're and make sure that you're gonna you know you're trading uh appropriately

not too dgn for for their liking um but we're going a little bit more sophisticated than that actually a lot of the contributors have been working on uh like compliance is a pretty big Focus uh for the protocol uh so making sure that people can because ultimately what we're after is like a real world adoption you know institutions and you know businesses and um you know real people wanting to use this and you know so real people for example want to take and file their taxes right um this is a pretty important thing that people do and so um we're going to be releasing pretty soon a export functionality uh which will take and Export a CSV to coinly for you to be able to take and just do your

taxes like you you normally do um and yeah we're also working on some pretty cool um you know we just broke ground on a scope of a recursive snark uh based compliance tool where you can arbitrarily prove your balance against like um like different accumulators of addresses so let's say that there's a particular naughty list uh that you want to prove that you're not a part of uh you can do that with this like new um tool um there's a there's a lot of things that you can do in privacy uh that I think people um probably under appreciate right I think that like there's this like straw

man uh assembled against privacy where it's like Bad actors are out to use it but I think you can really have your cake and eat it too and you know have like compliance functionalities and things that like prove that you're a good actor um and like know that your transaction isn't from um you know some sort of like sanctioned body um I think it's just a matter of like you know building those tools and like giving people the capabilities yeah well and I think I think even on the flip side like this doesn't only have to be a hey I'm not a terrorist it can be hey I have past kyc I am in this part of institutionalized or accredited investors and because of this I can have access to these kinds of opportunities

without doxing myself and so yeah I mean I think it's I think there's a lot of um really important things to do in compliance like partially because of the risk to um you know the builders and the Dow and the team and all that kind of stuff but also because that's like where the real business opportunity is and like that's where the real challenges are today and so um I I want to move the conversation on into that realm but before we pivot is there anything else you want to just talk about railgun implementation just kind of like details to make sure that we've covered the bases um I mean I think that's I mean I've I've probably talked until I'm uh probably too much uh on a whole Myriad

of podcasts on like you know what role gun is and how it works but you know the the the short and skinny is we basically built smart contract tracks that mimic zcash in in ethereum and other evm compatible chains it allows you to transact privately I mean like uh there's hours and hours of content on on like what railgun is and how it works for sure um and you know we're pretty easy people to get a hold of so we can always get in the weeds uh in my DMs for sure cool for yeah and I'm a big believer and it's like X for y um and and I think that you put it perfectly right it's like gnosis safe but for privacy and um I think that's very clean so let's move the

conversation into something a little more interesting and I think that is like around compliance and more specifically around the uh conversation the regulatory conversation we're having um I think that the second in this industry because we're like such TSD babies the second you hear anything about privacy on chain and transaction level privacy people's minds go to tornado cash and like if something looks like tornado cache we are going to have a problem and so uh personally before you say whatever you say I think that's kind of like a small brain take and I think that

um there's like a lot of like nuanced things that happen with tornado cash that are worth digging into but um before I just like let myself go off I would be like super curious to hear your take on what do you think are the big takeaways of what happened this summer with tornado cash and how are you taking those lessons and making sure that railgun doesn't suffer you know the similar fate to um you know and equally as impressive and important project yeah and I think it's really um I think it's really tough um what happened with uh tornado cash right um it's really um it's it's really kind of unfortunate because it's a it's a bit of a bad take

um I'm really interested in following the um like there's been a couple of uh interesting like uh legal uh what's the word I'm looking for here like suits if you will people are you know out there in the world uh suing on this uh you know so you have like bankless uh there's a really interesting um legal action taken by coinbase uh of all things you know like uh I think they should change their name to like coin based because they're they're really they're really pivoting pretty aggressively against like the man if you will uh which I think is really cool but then you also have like the the coin Center actions um and I think it's really kind of a it's a really tough tough tough question right um because we kind of have a um you know

if we look at like the president you know the the rules are pretty clear you know code is Free Speech uh people can take and talk about uh encryption and talk about it in an open source way and you know this this was decided uh in the early 2000s right there was The Bernstein case and you know fundamentally you know they decided that code is free speech and you know just because you write something down does it make it bad um you know you can talk about mathematics with whomever you like and uh now we kind of have like the uh yeah and now you have like this [Laughter] yeah yeah yeah uh don't don't multiply together two complicated of numbers right you'll get in trouble so

no I mean I'll find these aside you know it's a pretty serious topic you know and I think I think that the the overarching you know like if we zoom out from like tornado cash like we're having a different we're having a really big moment in terms of encryption um and it's kind of been bubbling up for about 20 years uh you know we have if not just like tornado cash like we had like uh yeah you remember that case where like the feds were like saying to Apple like hey you need to you know um decrypt this phone for us uh so we can like Snoop on this guy's files um and so we have like a really big question being asked about our right to encryption like can we use encryption like we've totally we've established that it's fine to talk about it and now we're content on like

this next um this next question which is like yeah okay we can talk about this really complex and cool Moon math but can we use it and now it's getting even trickier uh because this question's Gone without being addressed um you know initially like a lot of it was based around like hey can we force these third parties to decrypt the you know the information that's on the you know the phones that they um they build and now it's peer-to-peer I mean like never before like have we been where we are right now which is like we can spin up really strong encryption as individuals like really really good encryption uh zero knowledge is is

mighty fine and so I think it's a really tough question right and so um I'm very fascinated to see like where this goes uh like does it go all the way to the Supreme Court I know that law takes a lot to sort out but I'm very fascinated to see like do we have a right to use encryption uh especially in peer-to-peer um uh you know crypto I think the answer is yes uh I believe like you know as a you know a sovereign individual if you will like a free individual like we can you know transact and do things privately uh that's not to say that we should be up to no good but we should also you know have the have the right to privacy

um and so like how do we think about this like on a protocol level um you know like like I think we just talked about you know we built um you know we built in like view Keys uh we built in uh different ways for people to export text files and you know contributors are continuing to build on different like compliance tools uh the one that I'm most interested in is this really cool recursive zero knowledge technology that allows you to prove things about your private balance and do so uh without doxing yourself so like taking it like blindly proving that you're not a bad actor um and I'm very I'm very curious to see like where where the Dow goes and like

whether you know the Dow wants to you know you know build other Tech around that that allows people to further approve other things so um I guess to answer your question you know like we're we're after the like individual ability to docs what they choose and and what they and keep private what they want to keep private and I think that that's that's like the normal and rational state of PRI of of Finance right I think that's what people actually desire in like their financial lives it's just um kind of been you know demonized in crypto yeah I think in crypto we're dealing with a lot of problems

um and in this particular conversation I think the biggest problem we have is that the people who make the rules are not only like entirely uneducated about what we're doing but the only people that have showed up to educate are the ones who are like screaming about how um how are all scammers and like honestly they've got a point um like I it's hard to not recognize that they have a point after SPF and after 3ac and after like the whole Genesis like scam you know and I think that um the the unfortunate reality is that like our industry creates some Extremely Loud

Noises and the people who make the rules have no idea what's going on and like that is a recipe for disaster disaster every single time and you know I don't know what to say to people when they say like well was tornado cash used by North Korea to hide the money that they've stolen because like the answer is yes the answer is like undoubtedly like that did happen and I don't think that I'm not like proud that the technology that I've dedicated in my life in my career to is like a huge part of that but um that I don't think that means you throw the baby out with the bathwater and I think the answer is you build tools that um solve these same problems but like still can achieve the goals that we

needed to and that's that's why I'm so like bullish on railgun and so bullish on you guys is because I think the answer to that is building tools with compliance and opt-in levels of um you build like tools with perfect privacy and then opt-in like layers that people can peel away based on like the actual real world requirements in that moment and then yeah so I can totally see a world where it's like you have railgun the the government or or your your bank or whatever like might force you to reveal your assets and you can choose to and then things move forward or you can choose not to and then maybe you don't get the loan or you go to jail

or whatever but like I can finally see which I couldn't see with tornado cash a construction that allows privacy to exist on chain yeah I mean like if you've I guess you kind of gotta appreciate from like the the tech standpoint of things like um you know like railgun and like tornado cash are pretty vastly different um and like not only like the the architecture but like their use case um you know so like you know suffice it to say you know like if if you've used tornado cash before you know like that it's basically a get you know a one-off get in get your secret and then like claim your tokens on the other side and like discard the the secret right and

you know it's very clear in at least in my opinion that like railgun's not built for this and um you're you're not gonna have like the same like um like the same architecture it's it's just not efficient if you're trying to to do that kind of thing like generating a bunch of different wallets and uh you don't have that same like excuse of like oh um you know yeah I you know deleted my old railgun wallet and I do this like every day um like because that just doesn't add up at all right you can have like this private eoa and like live in it and like create like this long-term record of like your transactions and I think yeah you're absolutely right um like some people need to see that

um and some people don't you know so for example like you just think about like the areas where you need kyc and you don't need kyc right so like if I am just paying my you know I don't know the dude mowing my lawn like he doesn't need to have like you know full purview of like my entire Financial history you know he just wants to get paid the money associated with mowing the grass um if uh I want to get in on a particular you know high profile investment deal um there's there's certain different rigors involved with that and so like creating like nuanced privacy is really really difficult but that's kind of like the aim that we're after like this

really flexible um you know Tech stack that allows people to uh you know prove various levels of um yeah of like credential I guess is kind of like the the ultimate like uh perfect dream futurescape if you will of railgun super cool um one of the things I wanted to talk to you about is and I guess this is kind of a two-track question but um I do know that uh during the tornado cache Saga that one of the things that you did was like got your butt out to Washington DC and I know that because like we talked a little bit about strategy and um I was able to like at least put you in contact

with somebody who does this kind of work for traditional business but um so my my two track question is like one as you like kind of engage with the process to make sure that the values that we care about and the the things that we're building are protected and whatever capacity you can what are the takeaways that you have of like actually affecting change and two how do you think about doing these things when railgun is not a company in the way that we think of a company but is this like decentralized Dao and at the end of the day you're a contributor of yeah yeah like so like I don't I don't control like there is no like railgun

team there's no like control like there's no admin or whatever like it's just a bunch of people who are you know evangelists contributing to like this open source Tech um and albeit I don't contribute in code I do like you said contribute in other ways and one of the other ways that I contribute was um you know whatever the whole tornado catch thing happened and you know there was a lot of noise around like privacy and like um you know like on chain privacy is it good is it bad um I I felt kind of compelled you know to to get involved and so um I messaged some people that I know at you know the blockchain association um I talked to the guys at coin Center which uh both of those organizations are

very friendly people um and you know they're always willing to you know try to engage and educate uh and that's really really exciting it's uh um yeah I ended up going to DC to talk with a bunch of people I talked with um Hill staffers I've talked with Senator types I talked with uh you know some people who worked at the office of foreign asset controls and people who worked at Vincent and the the key takeaway I will say is that you know we very frequently see these people as like adversaries you know like in this very like head-butting kind of way and so like frequently the conversations are like talking past each other and I don't think that's any good um I don't think you win anything by doing that like

talking at someone right you know this is this is a very big problem I think in like our um just like broader ecosystems engagement with people um you know so I think that Riles them up you know and that's why like I think uh am I going crazy that I see like on Twitter that like Elizabeth Warren is creating an Army against crypto or something I have to say because this um episode will be out in like two or three weeks but what my understanding is that she put out the ad that said that she was doing an army of anti-crypto people and then took it down and now has a new one out that's a little less aggro but yeah yeah um definitely uh but it's kind of um it

expresses like the tensions in between like this ecosystem who people are really passionate about crypto right um and I don't think that like I'm very much so not of the mind that like people who work in Washington are like uh the the I guess I don't know what what I'm looking for here is like the enemy right you know I very much see them as uh you know people who need to be engaged and educated uh because whenever you go and whatever at least in my experience when I went and talked with these people they were quite friendly willing to listen you know wanted to try to understand what crypto is about what we're doing why we're doing it how we're doing it all these different things

um and I think that we've kind of like rested on our Laurels as a community and so like as a just a broad core value call out of of crypto like I don't know that like it's there's certainly people involved and I don't want to like take anything away from the people who are working really diligently in like in you know DC to you know talk about crypto in a good light but like we've also broadly speaking kind of rested on our Laurels and let people like I don't know at SBF and Alex machinski like talk about like crypto and be like the the dudes in Washington and so um yeah I don't I don't really know where

my story is going so like um but like that's very much resonate with what you're saying and I I am a huge believer that this industry looked at the story of Facebook and the story of Google and like took away that what happened was these kids created technology that changed the world and then it took over the world and then it got so big so fast that the government just kind of had to accept it and now it doesn't really matter what the government thinks because they're not going anywhere and like anything that happens that's on the margins right I think that's the takeaway that our industry took and I think that is such a childish incorrect takeaway of

what actually happened and I think that people who have been in reinsurance or been in you know like beer conglomerates like understand that laws are set because like people play ground game and what that ground game is is at just the very table Stakes level is the type of work that you were doing which is like you show up you show up and you explain to people what is happening and why it's important and why whatever they're hearing is maybe not quite and you help educate them but if you're super serious about like making sure that the government isn't coming after you you we have to remember that this is America and like real people in our roots and like what you actually do is

like I'll pick on someone frax should just go create real jobs in a real constituency and have those real people call their real representative you know like we should be showing like our Representatives not by like creating like more and more spectacular threads but like by actually showing them that their constituents want this technology because it'll improve their lives but like just going out and doing it and I don't I I think that you know it's the nature of our industry we're all incredibly online and I don't really have a problem with that but it is incredibly frustrating to watch the conversation around government and technology and like regulation and and

also then watch that nobody is showing up to play yeah you just it's it's actually not as and I don't I'm I'm a nobody perfectly Frankly Speaking you know like I don't have like tons of money I'm not like paying Senators off or anything crazy like that you know I'm just a guy who lives in America who wanted to go and like uh you know get involved and I think that's really really important is like if we don't like show that like this is something that we're passionate about and care about then like yeah like the like the The Narrative that like the government will push all these jobs offshore is is totally true you know we're either like a victim of circumstance or like a

master of our Destinies and I just want to choose to be the latter so so um you know I'll go and talk to these people you know um myself and see what happens you know is Will something good come of it who knows but I'm not gonna try anyway and something you said earlier really struck me that uh your comment was that coinbase should be called coin based but I can't stop thinking about it because but are there actually any other crypto companies that went public genuine question I'm not sure I mean like we get the weeds of that like there's you know microstrategy and things like this you know but like we're we're yeah where do we want to draw a line on that but like the one company that did go public

and like while they built their business on crypto like really chose to embrace like America and corporate like the the corporate structures that have like created this system is like now in this moment of Crisis literally the only actor that is positioned to like throw like elbows you know and I I think that there's like something profound in some sort of lesson in that where it's like by choosing to dissociate ourselves from the system and reject the system and like by like embracing Dallas it's like that's so incredible for decentralization and it's like a really good liability shield for those who care

about it but like we've also given up our seat at the table um yeah well I don't think that's the case right you know like individuals still vote right you know like we could you know I think we can kind of as you know General individuals go and um you know kind of just I I find it's just important to go and be engaged um like talk talk to these people write them letters and call their offices and leave voicemails and um you know it doesn't really take a lot of time uh it's not like you have to like pound the pavement like 24 7 and like give up your day job but uh I think it's it's definitely worthy to like and

that's just like crypto right whatever like it doesn't have to be like just crypto like what other things do you care about in life you know like just broadly speaking in politics like you should remember that like these people are public servants like they are there to serve you no I I appreciate the push back and I'll take it at the point that I was just trying to make was that um we don't really have a corporate presence and I think that is um is felt in our lack of like presence on the hill but I think you're totally right you know like that's how do you judge how many people are on GitHub like I mean yeah there's metrics and stuff like this but like you know how do you even you know judge how many people are working on a particular open

source project and things like this you know it's it's really quite difficult you know because um you look at like GitHub commits that gets squashed and things like this so it's like oh who's actually you know like sometimes you'll see like different projects where it's like there's you know uh you look at the GitHub and it's like oh there's like four people um you know pushing commits but like rest assured there's not like four people writing that code like there's ten tens and tens and you know if not hundreds of people contributing to them no for sure and I mean I I mean even on like you can hit this on two levels and like one is like let's pick maker dower any of the the protocols that are you know over a billion dollars right and it's

by the time a traditional company would reach that scale like they would have government relations people especially in a new industry that needs and so like that's I think something we're lacking but what you keep bringing me back to which is right is that that like ultimately the power lies in the individual people and it's about like choosing to use your voice and and honest to God I would probably roll my eyes at you a couple weeks ago but I'm currently going through this thing at my um I live in like a very large um Condo building and they're just like making really questionable decisions at the HOA and like what I'm realizing is that no one has called them on their

ship for years you know and and I'm sitting around and everyone is like around like the free cookies and pizza complaining about how stupid is and it's just so clear to me that no matter how upset everyone is like nobody actually wants to get involved and I think that um do you think it's like apathy or like difficult difficulty to like sway opinion which by the way defund the HOA um I don't have one of my neck of the woods yeah yeah I mean HOA I have less of a problem with for like actual apartment buildings because like I don't want to have to worry about my sewer but um uh but yeah I I think that I think that especially in America we

have this this Frame that democracy is the ideal and like everyone participating and voting is the ideal and honestly I believe that I truly believe that but like there's this huge huge gap between [Music] a democracy where everyone participates and engaged and like the real way the world actually works and like whether or not it's at the country level or like these people that live in my building genuinely care because the stupid thing that it started this whole thing is going to result in all of us getting this huge assessment that we shouldn't have to pay for so like they definitely care but also they don't want to get involved like they barely are willing to

vote for me and that's after I said like fine like I guess I'll run for the board you know and I just I think that the democracy without engagement like might be like the worst kind of government and that is like kind of what we have yeah maybe you're right that's true yeah I hadn't really considered it that way but it does it does seem to be that way you know there's there's definitely people who are engaged but like you know maybe it's like apathy maybe it's you know well the real problem is like the people that are engaged got engaged because they got mad you know and that's why I'm getting engaged because I'm mad but but

what does that result in that the only people that are there to make the rules have an agenda that's fueled by Rage or they're just straight up like taking money you know and I um I don't like a lot of the dysfunction in this like society makes sense to me well yeah we've just had like we've just solved it right there that was that that's the actual truth right there oh listen man identifying is easy solving is a whole other challenge yeah people get uh that needs to be a thread on Twitter or something yeah so um definitely kind of want to wrap this up I'm a huge believer in keeping podcasts tight but um before we we play ourselves out um just like kind of

wanted to get your like takeaway and your key thoughts on like where we are in terms of um this society and like the regulatory Maelstrom that is coming towards us and and like what we should be doing right now whether that's like we as like participants or leaders of a Dao or whether that's like we as just like pers like Traders with like money in this space or us as like ethereum Zeal it's like what should we be doing I think we first have to like appreciate like why like why we want privacy like transacting and I think I think the the most important thing to me is like making people understand like that privacy is totally normal it's like the

most normal thing like if we just still it like forget about my like dark pools of like of stocks being traded or like the other sophisticated like um you know Financial machinations like just like think about a simple debit card transaction right whenever you swipe your card the person looks at the little engine you know ingenico terminal and they say approved yep here's your coffee right and you go about your way right they don't learn everything about you you don't learn everything about them or their store right this is like privacy like 101 in finance and that's like the most important like thing right it's that we have like this firewall in between our

wallets and um I guess our bank accounts if you will in traditional finance and so like first like understanding that like privacy is a normal State of Affairs uh and is you know expected by rational actors and finances it's like the the first thing that like I just want to always stress whenever I meet people it's totally normal you should have it you deserve it um and then I think if we look at like the broader landscape of privacy um I think um it's certainly not black or white it's very much so gray uh because the state of privacy is really bullish when it comes to the tech um like never before has it been easier to like build really great uh privacy

infrastructure um like there's all sorts of really cool new and interesting zero knowledge technology that exists there's you know Halo 2 that just came out so now we don't have to have trusted setups we have uh all the I don't know the myriads of plaque variants that exist out there like the tech stack is great uh but I think that the um I don't want to sound like too tin foily on the way out here but I definitely I guess I will but like I think that like the the the State of the Union around like privacy and like just generally um yeah like the the State of the Union around like

surveillance if you will in like modern society is really bad right it's um really hard to argue uh against the attack on privacy because it's Justified under the guise of going out and getting the bad guy and like this sounds like a really great thing until like you're deemed to be the bad guy um and I guess people don't really appreciate that like surveillance isn't about making the world a better place right it's about making sure that people who have you know I guess it's not really about like making the world a safer place it's it's probably more at least in my opinion like making sure that others aren't doing things

that you don't want them to do while you're the one that has the stick and um people frequently say that like they don't have anything to hide um uh which I think is really bad too um like um I think that that's like saying like I don't believe in free speech because I don't have anything intelligent to say um or perhaps like more accurately is like saying uh I don't have a single thought uh or have never said a single thing that might be misinterpreted in the future and put me in a weird spot later down the line um and I think that it's I don't know a lot of the arguments against privacy are pretty vapid uh and pretty privileged

um and so like I would I would tell people to like appreciate that like all of the societal values that you know they take for granted uh and like as like obviously true um could be deemed an eccentric threat to the the powers that be and so like we should be fighting pretty aggressively for like our right to privacy especially when it comes to financial privacy because I think back to um the American Revolution if we had this perfect surveillance machine um where people's transactions could be tracked pretty uh accurately in real time we'd probably still have the queen on our money and so like we should you know we should work really aggressively

to like maintain Financial privacy because it's um I think it's really inherently important to a modern and free Society I man you said a lot of really good things and like important reasons to [ __ ] man you said some good [ __ ] hold on I need to think of what I'm about to let's just think I I like okay so think about it this way right like we have to look at the the broader ecosystem right the world right the the real world like all the things that we say are like true about the world and like are obvious and are the correct way of thinking aren't all weren't always the case like um uh women's right to vote wasn't

always the thing right uh like do you wanna you know like people have the right to be gay like not everywhere in the world like you want to have pre-marital sex not if you're in Southeast Asia you know so like uh we kind of got to take it all with a grain of salt and understand that like every societal value that we take for granted in a free Society can can change very quickly for sure for sure everything you say could not be more just on point and I think I think that the deeper that I get into this industry and the older I get and just like the more life punches me in the face the more I realize that like the American Experience is like a very

unique one and like unique and good ways unique in bad ways but so much of what is like incredibly powerful and important about crypto is like just not relevant to the American experience and the best examples until recently right were inflation protection and um like privacy or or protection against a government that has like gone crazy gone Rogue right and I think that um in on on January 6 2021 I happen to be on the phone with um Wells Fargo as like

talking to them about moving some money over on the like Investment Management side and I was watching the Capital be overrun and I just remember saying look this is before I found crypto and I said I am only going to move over with you if you can help me get at least 10 of my net worth outside of this country before the next election was it buying property in France like I don't care I just like I need to know I have an escape plan and like for me that was because like I recognize that this country is changing so fast and so volatile that like the things that I used to count on like don't um that aren't like we can't count on them anymore and I think that this like whole privacy thing is is just one of

those things where it's like you have to sit here and say smart things like with with comparisons to the First Amendment and stuff to like really grind it into an American's head but like what what railgun is doing and what you Allen are doing like on behalf of railgun and on behalf of our industry and making this case for in front of the government is like is God's work it's like what we need because that is the point of crypto and if we don't do this then um we're just as much risk as like the Russians were when like that situation unfolded as the Iranians are as the North Koreans are as anything and if we don't have privacy like what are we

doing here I agree well said we should have it you deserve it well and that is why I'm so thankful and so honored that you Alan and the railgun team are bringing it to us so uh won't take up any more of your time I so much appreciate the time and the conversation and the learnings and just everything so Alan thank you so much um and uh you want to tell the people like where they can find you where they can find railgun anything like that uh yeah I mean of course we have a great telegram group uh it's called The Church of railgun um it's uh I guess a bit sacrilegious but all in good fun uh we have uh you know Twitter um yeah you can follow railgun projects you can find me on Twitter uh as well

we're we're uh pretty easy to find uh I guess you know we're pretty heavily doxed uh building privacy tools so um you don't have to all right Alan thank you so much once again just super appreciated and yeah thank you yeah thank you foreign