Episode 254: Matt Green on bringing ZK into the wild and the compliance debate

Transcript

[Music] welcome to zero knowledge I'm your host Anna Rose in this podcast we will be exploring the latest in zero knowledge research and the decentralized web as well as new paradigms that promise to change the way we interact and transact online [Music] this week Josh Cincinnati and I chat with Matt Greene a cryptographer and professor at Johns Hopkins University in this far-reaching conversation we cover his early ZK blockchain research the founding of zcash the growth in the ZK space and how the space is ready for

tangible real-world use cases we also talk about navigating the desire for anonymity and the existing regulatory bodies we talk about his new project sealants and then dive into his take on the tornado cache sanctions and what this means for development in the ZK space now before we start in I want to announce and invite you to join us for the upcoming ZK hack 3. a virtual multi-week event starting on November 22nd it's all online so you can join from wherever you are now ZK hack is a very special event It's a combination of a multi-week series of workshops from the best teams in ZK as well as a puzzle hacking competition happening at the same time so on the workshop front we have teams like Aztec risk zero aileo

anoma scroll Mina and more presenting these workshops are designed to onboard and show developers how they can start working with ckdsls platforms tools and the tech each Workshop is different so have a look at our schedule and sign up for the events that are most interesting for you now while the workshops are designed for all levels of learning including beginner and intermediate we also at the same time have something for the experts or the folks who really want to challenge themselves and that is the ZK puzzles every week we release one of these puzzles that is a broken ZK system or protocol if you find the bug submit an answer as quickly as you can you might rank on our leaderboard we will have three of these for this Edition and the top ranking

hackers will get prizes spotlights and lots and lots of cred within our community and even if you're not an expert you might want to give it a shot so keep your eye on Twitter and our Discord and I'm going to add links to our first kickoff event in the show notes so I hope to see you there now Tanya will share a little bit about this week's sponsor today's episode is sponsored by Ave Ave grants is a community-led grants program focused on growing a thriving ecosystem of contributors within Ave by funding ideas projects and events that benefit the protocol and the surrounding ecosystem ave's latest deployment V3 was launched on six networks and introduces new features like isolation mode efficiency mode and portals a decentralized collateral backstable coin

native to Ave called gho has also been announced look out for more details on the test net and release coming soon you can explore the protocol at ave.com and if you're building in the ecosystem apply for a grant through avegrants.org that's avegrants.org so thanks again Ave and now here's our episode foreign Josh Cincinnati and I are here with Matt Greene a cryptographer and professor at Johns Hopkins University he works in the fields of wireless payment and content protection with a strong focus on privacy welcome to the show Matt thanks for having me um so my hope with this episode is that we get to know a little bit more about

your work and check in with you about like the state of ZK it's changed a lot over the last few years and the rate of change is accelerating there's always been concerns about the regulatory response to this technology and the summer we actually saw you know it happening with the tornado cash sanctions by ofek so yeah it's a great time to speak to you and I'm really excited to dive into it but before we do that Josh you're going to be co-hosting with me I know you've been on the show a number of times but I feel like we do need to hear a little bit of an update from you yeah because it's been a minute yeah since I've been last time wait was the last time you were on actually like New Year's yeah yeah it's been it's been 2022 is almost over which

doesn't make any sense yeah but well I'm very glad that you're back on and yeah do tell us like what have you been up to what's new yeah the biggest news for me is that I am I am back full time in the cryptocurrency industry I've started another organization called uh radiant Commons which is focused actually on a project whose founder you had on a an episode a little while back project is penumbra and uh the founders Henry de valence uh he and I actually met through our work in zcash and so I'm really excited about it it's uh another opportunity to contribute to the Privacy space and cryptocurrency which as as Matt knows is definitely something that is near and dear to my heart as well as

his uh so yeah I'm really I'm really excited about that that's that's a big passion in what what draws me to this space but you know my my side hobby of posting got a bit of a boost uh because I finally have a a personal newsletter uh this is just through RSS and my own website that I'm hosting but I do I do a little bit of narrating some fun articles that I write actually the last thing I did was a little different I interviewed my dad and tried to explain cryptocurrency and penumbra to him and I failed but it was it was a fun time it's Josh's dumb voice over coming back that's sort of I think that's the spiritual successor to change okay cool yeah it's like it you know Josh has done

voiced the Extended Cut fantastic Josh thanks so much for that and congrats thanks yeah yeah it's great it's great to be back and everyone should be looking out for radiant radiant yeah and then my you know my little newsletter thing is called bit banter nice cool so Matt I am so excited that you're actually on the show I don't know if you know this I've tried to get you on the show through like a number of different channels and this is the first time that it worked so I'm really excited to hear about all of your work and I'm excited too because you know Matt and I used to talk much more frequently when I was at the you know Z cash foundation and it's really been a minute since I've had an opportunity to hear what he's been up to

so it's really cool too yeah every every few months I've been like hey maybe Josh is going to come back in and do something and here's this thing you could do and I talked to him and he's like not quite yet not quite yet so I'm glad that you're back back in the world okay thanks so Matt I want to kind of start since it's the first time we're meeting I want to hear a little bit about what got you first excited about cryptography yeah I um I have a weird background I actually started out uh way back in college I actually got a music degree in electronic music and uh you know like I I did I wanted to do anything but be a computer scientist and like electronic music is you know electronic music is still computer science so like it's not that far away but I desperately wanted

to be a composer and uh you know it turned out that I wasn't talented so what I learned is that you know I I kind of computers drew me yeah no it's okay um computers drew me back in and uh I actually ended up for you know a few years working on this kind of perfect job at at T Labs where I was working on basically selling music over the internet and the part of selling the music over the Internet that got me really excited was this whole part where the music had to be encrypted and we had to make it so that you know you could keep people from buying the same song Twice which you know when you look at DRM do you remember little little fun fact Matt I actually did a minor in music technology that was like my the only technology actually I ever studied

I mean I think it might be around the same era are you talking like early 2000s early 2000s yes DRM technology I remember this it was the cool I mean like okay DRM itself is awful and you know I've dealt with it for years and it's like a dead area it's stupid but it was the the technology itself I I just kind of fell in love with it and it wasn't so much the DRM Tech it was the fact that you could do all these amazing things with cryptography that would allow you to do all kinds of stuff like for example transact online in ways that didn't require you to trust people or didn't require you to tell people what you were doing and who you were doing it with and I thought that was amazing and it just kind of like addicted me and

from that moment on I knew that was what I wanted to do for kind of the rest of my life and uh I I kind of eventually had the chance to go back to grad school and study that and the rest is uh a very very long story but that's pretty much pretty much the end of the the simple part so you're a professor at Johns Hopkins are you a professor of cryptography now I am I'm uh well I'm a professor of computer science I work in the information security Institute and I work on applied cryptography and you know I like to say I work on applied cryptography and computer security because I think that you know cryptography is a field of making computers do things securely it's not just Theory and so I really really I don't like to give up that part of it

but you know that that is what I do yes from that time of studying have you always stayed in Academia or have you kind of like ventured in and out no it's pretty weird so in grad school I mean it's a long story but in grad school I actually dropped out for a little while I took a leave of absence and I founded a company and we went to work uh basically we did security evaluation for a whole bunch of like Fortune 100 companies and and we went and you know hired a bunch of hackers I worked with this guy Charlie Miller who's a pretty famous iPhone hacker and we did the first you know vulnerability in the iPhone and we worked for all these different DRM companies and some other really interesting kind of stuff that I can't talk about and um you know uh I I

really love that like I loved learning about product I love learning about how real systems worked in the world and I like that part almost as much as I like doing research but the thing that excited me was kind of tying that research work where we could do new things to this real world of like actual stuff that human beings can use and so that ended up kind of driving the research that I did instead of writing like Theory papers is which you know honestly I wouldn't have been the best at anyway I found that I had this Niche where you know figuring out how to make real things do new stuff was what got me excited and so then I went back to eventually took a teaching job a few years later and wound up where I am now but they're with a few different

different interludes along the way how did that evolve into finding Bitcoin and then the work on zerocoin and zero cash that that led to us working together actually yeah so I think it was about 2011 and uh colleague of mine Steve Weiss wrote me and said hey there's this new thing called Bitcoin have you heard of this and I did some research on it I said there's no way this could possibly work and you know after like spending two weeks kind of looking at the design and the white paper and the code I kind of grudgingly accepted that yes it seemed to work and I couldn't find a problem with it but the problem I found with it I mean not just me but the problem I saw was it had no privacy right this idea

that you're going to write every single transaction you make onto a public Ledger that's shared by everybody else and sure you're not using your name you're using a wallet address or a pseudonym but that's nonsense and everybody who studied studied this area of transaction anonymity knows that that does not work and you know now they're multi-billion dollar companies today proving to us that it doesn't work but back then you know you had to kind of make that argument and so anyway um along with my grad students uh Christina Garman and Ian Myers we spent a bunch of time thinking about how do we fix this problem and I remember you know as actually Ian who had a kind of big insight and we went and we wrote this paper called zerocoin which in retrospect is kind of a stupid name but

uh basically it was the first yeah it was the first academic you know private currency and then later we we met up with some other really smart people who were uh you know working at MIT at that time and we basically put together this project to do this thing called zero cash which became zcash and ultimately I I think is kind of the basis of a lot of these modern privacy systems like Aztec and tornado cash and you know I think even penumbra a lot of different things that you know is really exciting to get them to just build that and deploy it was this the first time that you had zero knowledge proofs in blockchain in a single kind of paper yeah I think so I mean this is way back this is like 2013 which you know I guess doesn't seem like that long ago but like

in blockchain land was really really long ago I mean ethereum wasn't even a thing back then so it was uh it was a really people did not believe it could work and that zero knowledge proof technology these things called ZK snarks were just kind of coming along and you know the paper that was the paper that we kind of based some of the zero knowledge technology on was called nearly practical zero knowledge argument so like just to give you a sense like even the cryptographers didn't believe it and it was practical and I think that was this huge Watershed where like wait a second for the first time this crazy Advanced cryptography this Moon math is actually being used by like real people out in the world and that you know it doesn't happen every day in crypto so it was really fun to do that that's so cool

so like had you been super aware of the zero knowledge proof work or was it actually for this project that it was kind of like brought to your attention oh no I mean I I have been aware of this I worked on privacy preserving protocols all the way through since grad school I worked on really boring stuff like how do you download files without people knowing what files you download so you have to develop zero knowledge proofs for that I've like been in love with ecash although I didn't really have any like great new ideas on ecas because it seemed like before Bitcoin ecash was kind of a dead area because it was very centralized and you had to get a bank to do it so um you know like zero knowledge proofs were a huge huge thing for me there was this new technology that was

much smaller and faster called ZK snarks and you know the idea that we could just plop these things together and like for me and I'm just just to be a boring you know scientist thing the area that I work in was not necessarily making better zero knowledge proofs like for me the area that I work on is building protocols that use zero knowledge and like the analogy here is imagine your uh car manufacturer right and there's a company that builds awesome fuel injection systems or great you know power windows right I don't want to like dismiss serenologist just being that but for me the exciting part is building the car and like the underlying Technologies and figuring out how to put them all together to me that's very exciting there are other people who are brilliant at you know kicking forward the exact design of new zero knowledge proof

systems that's not the area that I usually specialize in that's interesting you say that because like I I mean having now been interviewing people on this topic for many many years for me like I'm so excited that we're getting into that space of use cases because that's where I can be like I can start to brainstorm I can be a bit more creative before that it's been just understanding what like researchers who are super super deep in it are doing to have you you also feel like it's just taken a while before we can even have those ideas and have those brainstorm like or do you think the ideas have already been created just theoretically no I think we're just on the verge of like a huge kind of revolution in the number of ideas I mean the analogy that I would give is like right now the most

boring thing in computer science is like microprocessors right like you don't think about the chip that's inside your computer you don't think about the arm chip or the Intel chip or whatever it is because like there's a whole industry that just sits around all day and makes better and faster chips every year every 18 months your Chip's gonna get faster and you're gonna buy a new Macbook if you can afford it or every few years or whatever you don't think about that but now what people are excited about is like writing software that does stuff and building social networks and doing all that stuff on top of those chips and that's good like it's healthy the minute like zero knowledge becomes boring that's when we can start to do stuff that's exciting nice so I want to go back to where we were in this in your

story zerocoin zero cash what did you do with that what happened after that point so we wrote an academic paper uh it was with a group of cartographers great folks um Ellie Benson is is the um you know founder of stockware so he's gone on to do a bunch of stuff around trommer um you know other folks having to start naming everyone here um we wrote this paper and it was an academic paper but we made a decision that we wanted to see it deployed we wanted to see people actually use this technology and not just have it be like an academic project that gets dropped so a lot of different things happened I spent like a few minutes trying to convince people that we should put it into Dogecoin and like it was actually like my dream that we would like

convince the Doge cut now we have this idea like that there was like this very clear moment when like I would have done this but uh nobody nobody bought that idea so ultimately we um we wanted to do it but you know we're academics we're professors we're busy and we didn't really have anyone who could do the hard work of like let's build a company let's convince people this is not a crazy idea and I had previously known this guy named Zuko uh Wilcox o'hern and we've been you know friends or look you know at least we've known each other a little bit um and we started talking and he was interested he's very excited about Bitcoin but he thought Bitcoin had some problems and I tried to convince him like this is the direction you want to

go make it private and he came back to me and he said I thought about it there's no way I'm doing that private Bitcoin no that's a terrible idea and so I thought that was over and then he came back a couple days later he said I've been thinking about this and you know the issue for me is not privacy it's fungibility like I don't like this idea that I'm gonna have some Bitcoin that I'm allowed to spend because it's good good Bitcoin I'm gonna have other Bitcoin that's like bad Bitcoin you know and we know this already is a thing that exists in the world right because it's not fungible you can trace all these currencies and so once a criminal has touched it or if it's mined cleanly you know it all is different he said I want to have a currency where that's not

possible and I think that this zero cash thing is the way to do it and so you know many years of effort there was a company founded there's ultimately a foundation that Josh ran for a while and you know the currency was launched I don't remember the year but um it it you know was an actual thing it went out to the world it was a crazy time 2016 2017 2016. I think 2016 too yeah that makes sense yeah but there was a lot of time before that oh yeah and it was the first actually I don't know if it was the actual first zero knowledge protocol it's definitely the first to make waves that people know about it's sort of a tie because there's a you know the thing that ultimately became Monero uh which is called bytecoin was out there also and it like kind of uses your knowledge

different kind of zero knowledge so like you know it but it was the first one that you was like the really Advanced CK Tech and I think it was uh yeah kind of program because of that and it's been a catalyst for all these other protocols and ideas that now use the sort of ZK snarks successors of snarks in the case of starks or other proving systems but I I find it you know for something that I'm very you know very much interested in is sort of seeing that Evolution into you know I think zcash proved that you could do it with a sort of simple peer-to-peer payment protocol that mirrored Bitcoin but now you see folks like Aztec a Leo and penumbra and you know all these all these other protocols coming out where it's actually tied to

different kinds of economic activity and what I'm what I'm curious about Matt is you know from your perspective like what what seems to be the most fruitful path for these new protocols working with these new proving systems so you know there's kind of uh the the starting point for all these blockchains was payments right Bitcoin is about payments how do we do payments but once you have payments you know the next thing you start asking about is how do I make this programmable and then you get ethereum and you get smart contracts and initially the idea of smart contracts is still kind of payments right it's payments but maybe payments with new tokens and new rules and you know new escrow types and D5 and then eventually you start to think hey there's all kinds of other stuff I can do with these chains but you know is even more

powerful maybe I can you know make sure that people are correctly auditing their data or I can do Federated machine learning where I have people putting lots of data in we're not quite there even before we get to zero knowledge because that Tech isn't quite ready but it's getting there and like this idea that we can have these trustworthy peer-to-peer networks of people you know who can do computation for us take it out of our hands so that if I'm a company or a person I don't have to like do it all on my own premises or have Amazon do it like there are these outsourced people who can do it that's what that's what smart contracts are about so I see that as kind of being the next generation of this is how do I do really interesting outsourced computation with people that I don't

have to necessarily trust and when you have multiple people who are sharing data together and want to pool their data and I think that's where we're going to see the big applications and I think it's going to be machine learning again which is kind of a big deal um it's going to be it's going to be ml yeah the KML is coming and you know as weird as it sounds right like it's you know putting these Technologies together but it's coming it's going to happen and there's going to be a lot of I think usage of this but still the financial applications are very important right um you know payments and to not just privacy right but like and I should just full disclosure I'm involved in a company that's trying to do Regulatory Compliance uh using ZK so what we're doing is it's still just payments but on

top of that you you fold in this idea that like I can prove that I'm you know obeying some regulatory policy but I don't have to just go out and like give you know the government all of my data I can just prove this without them sort of seeing all my transactions so I think that there are other cool things we can do as well totally I actually want to just bring up a recent tweet I think it was like two days ago that you sent out like something about ZK research being fantastic but what you're looking for are more like doing exciting things with ZK this kind of goes back to what we were saying before where like maybe focusing Less on just like the cool new update to a snark like under the hood but rather like now that you have these things they're getting more efficient

they're actually becoming usable what could you do with them did you get anything back from that did you get people actually giving you any ideas you didn't know before not really I got a lot of people saying well what are your ideas what are your ideas I was like when tokens you know I mean so the I mean the main use cases that I feel like are super and we talk about it all the time on the show but it's like ZK for privacy ZK for scaling you're talking ZK for compliance the very new one is zkml which is ZK it's computation in a zero knowledge environment I had someone on the show recently you talked about fhe who said that maybe it would be better in an fhe environment maybe there's a battle to be had there about that but yeah what do you think

well first of all I think one of the things that you know tech people and cryptographers get too specific about these Technologies like oh they're ZK and then there's multi-party competition and then there's fhe and like these are three different things like forget all that like one of the things I actually like about the blockchain world and particularly the kind of like VC side of the blockchain world is when they say zero knowledge they don't really care whether they're talking about or ZK like they're not hung up on these technical distinctions what they mean is look there's data and we want to compute on that data in a way that's scalable and private and that's it like I don't care if you have to use to do part of it like that's just a tool like for them and I mean them in a very broad

sense I mean ZK means this idea of computation without revealing your data and without having to give out all the computation and so that's huge so great I I do think that we need other technology like fhe is a very powerful Tech and like we should be integrating that one CK blockchains and a multi-party computation lets a whole bunch of people compute on data without any individual knowing you know the other people's inputs so we need that too these things all have to be plugged together so that's kind of the like the the tech stack that is not yet in existence that has to be built once that text that comes into existence and it's going to happen over the next five years what are we going to do with it and there are a lot of things that we can't even think about right like there are a

lot of processes in your life where like you get audited by the IRS and you have no idea how they picked you and we learned recently that like sometimes the way they pick you may be a little suspicious so you know now we can prove that that that auditing was done correctly we can prove that all kinds of randomized processes were done honestly and and processes you know like lottery winner choice and so on we can do all those things in honest ways and it doesn't have to be just weird Financial stuff it can be all kinds of different things that we do in our lives that can be done now honestly and verifiably yeah you know that each of these things when I list them it's like oh that's a little thing but they add up and when you start piling these Technologies on top of each

other it ends up being just a whole different way of kind of thinking about the way we interact with you know computers and and Technology I want to throw one more use case out there which is like zkid but it also zkid so it's like somehow having a private identity online using their notification reputation but also keeping a lot of it private but one of the things that always comes up when you talk about zkid is this fat the fact that you still are engaging with like real world data like especially if you wanted it to be like a government-issued zkid someone still is probably gonna like give you the license that's used in the first place or the you know driver's license or certificate or whatever it is that connection point between the real world and the cryptography world are you

paying attention to that like are there any new tools maybe even that you're like starting to learn about in that in that space yeah no it's a really good question so I mean first of all this idea of zkid is not a web three thing right it's already happening in web 2 is Google is deploying this thing called the Privacy sandbox um and this privacy pass so the idea that Google has is they're being told by governments you can't put cookies on people's browsers anymore if you want to advertise them you have to stop doing that and so they're trying to use your knowledge like very simple zero knowledge things called Anonymous credentials to make it so that they can like you know categorize who you are but without knowing who you are but if you think about Google right like their their identity is already assigned to

you right the reason that Google sells you for free Gmail is not because like they're doing you a favor and it's not they do make some money on business customers they're doing it because all those emails that I've gotten over the last you know 12 or whatever years are proof that I'm a real person and not some click fraud person and that to them is the value so they want to tie that valuable identity that I've built up that reputation I've built up they want to tie it to this identifier they can use for advertising but they've been told at the same time time they can't do any of that so this is you know billions and billions and billions of dollars of of advertising Revenue at stake for them so they're building out these ekid systems so to answer your question what's the interface there between real

world IDs and zero knowledge well the interface isn't always as simple as like my driver's license DMV issuer I mean IDs can be these things that you aggregate over time right I didn't when I started my Gmail account I was just a person who started a Gmail account but 10 years later I'm a person who started a Gmail account and has sent you know 10 million messages or whatever it is and so that makes me a different person it has proven that you're a person in a way not a bot yeah I have this reputation and my reputation might be tied to my Netflix account and the other 50 accounts that are all tied to that and these things are what makes me I mean as weird as it is that's what makes my ID so a lot of these things are not as simple as just like do we trust the

government to give you an ID although you know most of the time I do trust the government to give me a driver's license it's this kind of complicated aggregation of of reputation and credentials that all have to be mushed together and reasoned over in interesting ways and like that's where the hard technology problems come in is mushing and reasoning not just in like take simple ID and turn into ZK credential and go this is a bit of a crazy loaded question maybe but when thinking about that kind of Technology development for companies and ecosystems that basically survive on massive surveillance individuals online and and thinking like oh there's there can be we can figure out some way to anonymize the individual

while preserving that business model of like some degree of sort of massive batched surveillance do you think I mean do you think that's both possible and compatible with like a free Society sorry it started to just dump the mass up no no no no no no I mean now you're asking that like a really hard question I have a lot of skepticism I could go off on a long tangent about how I have a lot of skepticism about the way that big corporations are using privacy preserving Technologies not so much as a way to actually make their customers more private but as a way to like loosen up and get around legal requirements so they can get at their data so I'm a little afraid of that that works I end

up with these you know credible models that basically allow corporations to predict everything about what you do and the way we're going to do it is by using quote unquote privacy preserving Technologies to get there so that scares me that doesn't mean that there is not a path that uses these privacy preserving Technologies like CK to get to a good place it just means we have to not be stupid we have to make sure that like when we say we want privacy we have our eyes on the prize of like actually the goal should really be privacy it should not just be like letting companies get around regulation and that's where human beings fall down a lot of the time and the technology isn't at fault it's our use of it that's at fault it's so funny because I always thought of like ZK privacy Tech kind of positioned on the

opposite side of like the big data stuff like it was the antithesis to it or the reaction to it right and it's interesting to hear that it's it's actually yeah under the hood those things are already melding and and it could lead to some better privacy in a way or maybe some protections but it could also lead to some yeah I don't know getting around regulations that are you know barely holding and holding our privacy at Bay yeah and I think we need to understand that better and I wish that more researchers were thinking more researchers and people who are not computer science researchers knew about this and were thinking about it it's like this big thing that's about to happen to us and we're just watching it happen and not realizing I do want to

also bring up the term ZK like you just said that VCC at all in the same bucket the amount of projects that have a Sprinkle of ZK in them at this point is crazy you just see it like project that had nothing to do with it three months ago have now hired a z a person to at least do research into that direction I think at the recent Devcon in Bogota there was like I I'm kind of this is very anecdotal but like I think like half the talks had some ZK mention and not to say that all of them are ZK talks or ZK projects but do you do you think that it might like one of the fears I have is it becomes like blockchain in 2017

like you're like failing startups which is like sprinkle some blockchain to like get some attention I hope that's not happening blockchain CK I mean it probably is gonna happen but like all it takes is one all it takes is one company to come through it and be really successful for it all to be fine but yeah there's definitely gonna be there's definitely gonna be like a ZK backlash and it's gonna happen soon and then it's gonna we're gonna get through that and then we'll see what actually happens cool um I want to talk about your new project and then I do want to talk a little bit about the tornado cash stuff but before I actually do either of those like I think where we stopped in your story was Z cash was founded you were part of the org right you were part of the

foundation I was I was part of the uh electric Coin Company the zero zero coin electric Coin Company was the original name of it and part of it means that I was like you know on the slack and doing some stuff and helping out and uh then ultimately ultimately Zuko said hey would you join this New Foundation that I'm starting and I said sure that sounds great and then uh that was that okay and you were there until just recently I was I just left the foundation board I've been there for many years and uh you know it needs some new blood I think and and also like I'm just slammed so I think it's really good that the more people are gonna be able to be there how has the zcash community been like the trajectory of it like it was the first but now there are a lot a lot of ZK

projects so I'm just curious like how that developed so you know one of the I think the things I would praise the zcash community for and also what people criticize it for is it's a very polite science-focused Community right like we care a lot about doing ZK right doing security right doing this right and not you know Shilling and worrying too much about the price and that I've always loved I think that's a great thing about the community but obviously a lot of people would see all of those things as criticisms they think that the whole point of the community is to you know pump the price pump the price who cares about this technology so that's always been kind of a split and there's just not just the personality of the community the upshot of all that is that things have come out of the Z cash

community that have had huge I think disproportionate influence on everything else right so tornado cash is not exactly Z cash but you know it's basically a fork of like the zcash over uh ethereum idea that some of the Z cash folks like did the hackathon not a fork it's just kind of a re-implementation and like tornado Nova is basically the gas sapling and you know now there's a whole bunch of new proof techniques based on Halo and I've been talking to some ZK startups and they're like yeah we're using Halo or Halo Plus that also came out of like ECC and zcash so I think that there's been a huge influence on the world even if you know the value of zcash hasn't you know pumped every possible dollar out of the world and obviously people who are very unhappy

about that I understand that too I remember even early on you know the electric Coin Company offered up you know time and resources to the ethereum foundation just to bootstrap their understanding of zero knowledge systems really early on that I think also I mean that they really don't get enough I think credit and praise for doing that and being that open with the research they were working on there there's a snark verifier there's a there's a pre-compile in ethereum that verifies uh zero knowledge proofs and that basically was just like hey we want to be able to validate Z gas transactions and that's why AI tornado gas work that's why you know all of these different systems work because that was sort of lifted directly

from Z cash I guess like getting vitalik interest I don't I mean I don't know if it was the cash itself but definitely the scientists around Z cash got vitalik interested quite early and then he prepared that series of intro to ZK snarks which was incredibly influential like I know this in my community because it's constantly site it's like one of the first things cited when people join they're always they always want to see those blog posts first and that you know obviously was incredibly influential in ethereum so like the community would have known about it from that point forward yep he was really enthusiastic I mean Metallica he is an advisor to uh I think ECC and he's been involved in this community from the start and he's excited about it and I think that you know that influence made a big deal also

the the you know the the connection with Ellie uh being part of zcash and then also being part of starkware and starkware being you know tightly tied to ethereum and like all the stark stuff you know spawning other businesses like there is a direct lineage there like I don't know that we can say hey we take credit for it all but um there's a lineage it's not just random stuff that happened so let's talk about sea Lance am I saying that right sealants okay um so I guess I'm just curious we we kind of teased it it's using zero knowledge proofs but it's compliance related tell us a little bit about what it is what's the purpose of this project yeah so for years I mean I started back in like 2016 you know one of the things

I was I I've been super excited about privacy and I'm kind of in the like cypherpunk side of privacy like my view is privacy should just be like privacy and we should not you know worry about governments we should just do what we want and whatever and I'm very unhappy with the way that computers are really taken away privacy and payments and all sorts of other areas so I'm very much a Cypher Punk person but I also recognized and I think we recognize this way back when in like 2013 that there is a threat that you know we may end up with a world where we get either maximal privacy or we get like no privacy at all like every payment you make is recorded by the government and you know if we force people to choose particularly if we force governments to choose between

those two worlds we may end up in the worst possible world and so one of the things we thought about was is there a compromise is there a way that we can have compliance based systems where we get the Privacy that you would get from cash transactions like small value transactions are totally private but also somebody money launderers you know 200 million dollars like North Korea recently did uh got tornado cash in trouble like there is something we can do about that we can enforce some sort of compliance or I'm not saying like hunt them down necessarily although maybe for North Korea that would be good but I'm saying like there we could prevent those kind of events from taking place and so we've spent some time thinking about that did some research ultimately that research we decided and we is by the way my partners Iran

drummer and Scott drummer we founded this company and we said let's take this commercial let's build these systems and actually launch them and so that that became sealants and you know like I've always been a little nervous I'm afraid that somebody is going to accuse me of being a shill for like big regulation and you know maybe maybe to some extent they're right um but I do believe that these systems are going to exist and you know somebody should do them in a way that's compatible with privacy rather than having chain analysis or somebody else no offense stitching analysis build them all and make them and make them look like something much much worse and so that's that's been the project I've been involved in for two three years now and it sounds also like time spent in the

industry and sort of learnings that have led you to want to build this particular product it speaks to what we want to talk about next which is the tornado cash sanctions in a way like the industry the ZK industry I've you know I definitely I see a lot of different teams that kind of they they run the gamut from being very very compliance oriented to extremely anti-government don't want anything to do with anything compliance um and tornado I believe lived a little bit closer to that second Pole um do you still think that there is a place for those projects that are not compliance given that you've made sort of a decision of where you want to sit and work on it do those projects still have a place the ones that go really far

out or will they just kind of create basically animosity from the governments that'll come down with us with a strong fist on them and potentially kind of wreck our industry yeah okay that's that's like three different really good questions um train of thought there yeah no but you're asking like the right question so so first of all hey we're not in mainstream adoption phase right now right like there are only a few hundred thousand people you know actively using ethereum right now so this is like early early days right when we get to you know 100 million people you actively using ethereum every day and we get to a billion people actively using ethereum that's the mainstream adoption case you know the fact that tornado cash exists in you know this relatively small space

right now does not mean that you know it's going to be the same when we're into the world where you know ethereum is like Facebook and we have that many people using it so you can have systems like tornado cash exist and at the same time you can say well look the mainstream systems the ones that you know everybody and their brother is using those systems might not have as many tornado caches so like they these can be just two different worlds the mainstream and the niche things where Tornado cash flows continue to exist and I like that and I hope that is the case uh the second question you ask the other question is you know like is tornado cash gonna bring down the big hammer of government well not even tornado cash but like things like tornado cash or things that maybe even push that that

ethos further away from the main I'm very very curious to hear this response yeah I mean I I could like go on a lot and say a lot of things here but like the answer is yeah you know like this is this thing that we're doing and it's not just tornado cash it's not just privacy this thing that we're doing where we are building you know Financial systems or payment systems that are not centralized and tightly controlled by government Regulators is a really inevitable thing it's a thing that has been held back and I I the thing I really wish I could convince people of I say this thing and it's so obvious to everybody and it sounds stupid when I say it but it's true which is that like computers are

really good at doing certain things they're really good at you know drawing Graphics they're really good at making music and like they're really good at browsing the web these are natural things for computers to do and one of the things that computers are really good at doing is sending you know exchanging value back and forth making payments they're just naturally built for this task And yet when you look at the last you know uh 22 years or so there has just been this emptiness when it you look for companies that make it actually easy to send real pay payments like cash type payments there's been nothing before Bitcoin there were a few centralized companies they got their doors kicked in by government regulators and by the FBI because there were a lot of regular people who did not want that kind of business to exist and so we had

like what PayPal and we had maybe venmo like that this is not a natural world yeah but like it's not just uh like there are a million different companies have tried to do social media there are a million different companies have made games there are like two companies who have been successful maybe three at doing like peer-to-peer payments like that's not normal that's an artificial situation and the problem is that it that artificial situation is not tenable you can't keep that situation going for much longer and when you try to stop those companies that you know people from using computers to do things they're very good at you end up with decentralized systems that work around the you know those regulations and you end up with Bitcoin and you end up with you know ethereum indeed whatever and so anyway I'm gonna stop talking a lot but

what I'm trying to say is like these systems are hard to control and stop and they will proliferate and it's like trying to stop I don't want to use a bad analogy here it's like trying to stop people from like buying drugs right like you can put a lot of restrictions and make it hard and make it expensive but you're never going to get it to zero and so those systems can't go away um at the same time you know we don't like drug dealers uh in our neighborhoods and governments don't like drug dealers there are a lot of people in jail and I would say arguably our country is a lot worse off because of things like the drug war and what do you do about it like I can't stop the tornado caches of the world from existing I'm not sure I would want to

and they are going to exist and the government is going to overreact and everybody's going to suffer in a whole bunch of different ways and I'm not sure whose fault it is but it's just the situation we're going to wind up in and what you said there though that is this inevitability like the things we've built the internet the computers that we use and now maybe like decentralized ledgers there is sort of like a way that they're developing whether we kind of try to slow it down or control it or stomp some out like it will still happen but I guess do do you think we philosophically need to like be at a different place as a society or something is that what we're waiting for or do we have to wait for the nation-states to just sort of crumble enough that it like doesn't matter

anymore like I mean I think by the time they crumble that much like we're going to be all in a much worse place so I'm not sure I want to look forward to that world but um I I I do think that you know like it isn't natural like right there's always been a world where it was easier to send money around and we did that right like there was always you know not that long ago when we could just send cash to people and nobody cared about it or we could like you know not every transaction you made was tightly monitored and the financial regulation wasn't quite as strict and so it's possible to live in a world with privacy and some Financial privacy and the world didn't end then and it won't end now um and it's not like all these regulations are stopping you know all

the drug money laundering in the world from happening all the time so I think that we could be in a much more private World on the other hand do I think we're going to live in a world where like there is no government regulation trying to control the flow funds no I don't think that world's going to happen in my lifetime let's fully move on to the tornado cash topic I know we've just been kind of like heading there so it happened in August I'm really curious to hear from you like you've been in this space for a long time and that very much in like the the Privacy Focus part of the industry what did it mean for you when you saw this did you were you kind of like oh yeah we knew that was coming or were you actually surprised with how

it went down you could know that something's coming and also be surprised when it goes down okay right it's it's a little bit of both um you know it actually surprised me it took so long for this to happen and it surprised me that we got away with being so LAX around adding privacy to protocols for so many years right our whole thesis in starting zcash was this is the way or at least doing the research was actually when we started zero cash like you know we thought that this Bitcoin would we naively thought Bitcoin would add it to their protocol like that was back in the days when people thought Bitcoin would update their protocol more often and you know it was only later that this whole idea of alt coins was a thing so anyway you know the idea that all of these new

systems like ethereum and other things popped up with no built-in privacy was really shocking to me and yet like the world didn't end right did we we said governments are going to take advantage of this and they're going to filter and censor transactions and the fact that that didn't happen for a whole you know eight years from the launch of ethereum was pretty impressive unfortunately if you look right now at ethereum's um proof of stake block production uh it is now I think yesterday up to somewhere between 62 and 64 of all blocks produced are sanctions compliant meaning that they are filtering specifically for sanctions you know type transactions and that's a um that's a real like again I'm

not saying that tornado cash transactions are good or bad I'm not trying to apply a value judgment here but you can't have a censorship resistant protocol in that environment and when you've gotten there like something terrible has happened and it's not good for you I mean in a lot of ways that just demonstrated the impact that a government can still have whether it be for privacy technology or not right it could be just for anything if there's a way that they if there's addresses that they don't want to be included now we can see that there is a way to get companies that have sort of a quite a bit of power to comply yeah and I think in in the proof of stake case we've done now two episodes where we talked about this but it's like the Mev this it's like at a different place in the stack

even where that compliance can actually happen I think we always thought it would be like validators miners right but now it's like oh no wait there's like all these other actors kind of emerging who can also do it and so much of that is that oh those pieces are public and transparent to the world right it like makes this whole thing kind of makes me thinks like you know was in the in the eight years that eight year interregnum where we were sort of left alone was was actually creating this complacency around the Privacy piece right where we all like it was almost you know it almost works I mean I don't know I'm not gonna put my tinfoil hat on here but it's it seems like you know it kind of works to the

government's favor that all of a sudden there are you know maybe not millions or tens of millions or 100 million but hundreds of thousands of very active people that are now reliant on a system that doesn't have privacy baked in when your adversary is screwing up you know don't step in and remind them that they're making a mistake and I think that's what the government you know whether they're doing consciously or it was just laziness like that's that's what they were doing and um yeah it's it's a very effective thing let people get locked into a system that is you know at a deep fundamental level broken and the scary thing about it right is ethereum strategy for adding privacy is something like tornado cash right they said we'll have privacy it's going to be inside of some smart contract but you know what what ofax sanctions exposed is

that they can get you right there and they can filter those transactions and uh if you don't bake it into the protocol and actively think about censorship resistance than your toast I think I asked this on the last episode I did with Martin where we also talked about tornado do you think in a weird way that it was kind of like good for the ZK Community to have this happen when it did and obviously I just want to say something here like anyone who worked on the tornado cash project I'm obviously it's not good in a good sense but I just mean like for the the health of the ZK industry is it good that it happened yes I think it's really helpful I think

people you know you can only say hey the bad thing's gonna happen to you so many times and not have the bad thing happen and uh you know people people stop taking you seriously and so just seeing the bad thing happen exactly as predicted is really really important uh but this doesn't mean that people are going to pay attention right they're going to be people who may be rightly say well you know tornado did have a lot of crime and whatever on it maybe we don't care about that use case maybe it's just one as long as ofac and treasury are just you know doing these very isolated kinds of bands it's okay I think the danger there is that the same complacency um you know you could wish for things to be all right but once people have figured out how to explore the system

they're going to keep exploiting it more and more and I think um exploit by the way I I work with people who talk to a lot of regulators and I'm sure that this is going to make a lot of people mad I just want to use the word exploit like a security researcher like trying to make a system work the way you want doesn't it a value judgment about what's happening but it's definitely an exploit exploit of the system kind of going back to where at least on this particular case this moment that 62 percent you mentioned a lot of that the fact that they can make like a multi-billion dollar Network ofac compliant even though it's decentralized you know a lot of it comes down to Mev and the tools that are used to extract Mev

have you paid attention to that space the Mev space and the cryptography that they're because there is there are some like cryptographic solutions that have been proposed there yeah just just a little bit I'm aware of some I know penumbra is doing some of the stuff and there are other people who are working on it too uh yeah it's it's a hard ugly problem but like it does come down to a combination of probably some cryptography and some encryption maybe zero knowledge and um and also just like honesty right if everybody in the system wants to censor then no crypto in the world was going to save you but uh as long as there's some percentage of people who aren't what you can do is you can leverage cryptography to make it very expensive and very kind of difficult for people to censor and I

think that's the direction that we need to go I know one proposal is also this idea of just like you can kind of like the Mev as it lives today with the agents that exist today you can kind of use cryptography to break that up but I know there is a counter argument to that that says you can break it up but you'll they'll find Mev somewhere else like there can still will be these centralizing points just like further away from the validators or something I don't believe it like I I I don't know I'm on the fence right I mean as an engineer like when you see a problem like this the Instinct that I have is we have to be able to find a solution we have to be able to not necessarily stop it but make it so expensive to do Mev

and by the way I I see Med and censorship resistance as two two sides of the same coin right one is one is removing transactions and one is changing the order of transactions and they're both based on looking at the transactions and having thoughts about whether you want them so they're just the same thing and so if we solve the hard one we solve the other one obviously there's some slight subtleties in those Solutions but um you know to me right like this problem is we're really good at doing things using technology where we make things exponentially more expensive for people to run attacks and I can't swear but my instinct my intuition tells me there's something we can do where we do it like with five times as much resources that makes it

you know two five times as hard or maybe some smaller exponential to to run these attacks were more costly so we'll never stop it but I think we can make it much more expensive and I think we can do it in a way where the the differential between the resources we have to throw at the problem and the expense of somebody overcoming it ends up being pretty asymmetric and pretty different but I'm just spitballing so yeah do you think that that asymmetry will be enough with state level actors though because that's like what I wonder about if it's if you have a world where ethereum is like a trillion multi-trillion dollar ecosystem right and then the value derived from censorship at that scale is so much higher like maybe maybe the you know various governments would be

willing to attack what is fundamentally like an asymmetric cost problem yeah and I think that the much more likely outcome is what happens is that you know maybe ethereum tries too hard to be decentralized to be censorship resistant you know then instead like think of think of uh ethereum like Usenet right like they were a decentralized system like for doing messages and then Facebook you know years later Facebook is totally centralized system and Facebook you know complies with all the regulations so maybe the outcome is not so much like ethereum fails or succeeds or gets attacked but rather that ethereum gets forked or the version of ethereum that is the future the version of whatever that is the future is not just just strips out those protections because you

know the value they the incentives that the government can offer just to people who are willing to not transact that way is high and that could be the answer so I don't know what the policy feature is I just think at the protocol level we can individually defend protocols I do think that idea of at this stage going in and changing ethereum's model is going to be really challenging there's a lot of vested interest in the system that exists today continuing but there are a number of other networks that are out there and gaining some mind share even I know like there was all this this battle over the L ones like the other L ones are gonna like eat you know take over ethereum and I think that

narrative definitely was knocked out for a while and I don't think it will be like an L1 like ethereum taking ethereum but yeah right now it seems pretty entrenched in a weird way like the Mev and I know there's a lot of conversation about this there are other groups that are trying to come on I actually believe that 62 you just shared might actually be down from what it was before good so I know that there is an effort to sort of reduce it I still wonder though like there's so much vested interest the Mev ecosystem is booming like apparently the other biggest talks at you know in Bogota I wasn't there but the other most common theme in the talks was Mev and so yeah like it is it's exciting to people people want to be in there it's like

there's brain share it's really it pains me so much because it sort of feels like nihilistic distraction well well you know what it feels like to me it's like um when chinalysis first started and again no offense to maybe a little bit of offense to any blockchain analytics company I don't care uh but but like you know when they started there was excitement around that and to me Mev is almost like and again I haven't spent much time or or space looking into it very deeply but so much of it seems like the same kind of negative externality that the blockchain analytics space like kind of engorged itself into uh early on in like Bitcoins bitcoin's life and I

just sort of see like this is the ethereum Arc of that same kind of behavior they're wonderful people that like obviously like I think that the flashbots team in particular like has very good intentions and everything that I've heard about the way that they're approaching it is like you know they they have they have a deep sense of mission and purpose about why they're doing the things that they're doing but it's still like on a conceptual level it almost feels like like this is you know ethereum's genalysis Arc or something interesting yeah I don't know I mean I don't know what's gonna happen I really really don't know the future but I do think that you know if trust and systems can provide better value without Mev like trusted centralized type systems then

decentralized systems where nav is running rampant it's going to be a bad thing for the decentralized systems and maybe there's some economic reason why that'll happen but I'd like to believe that you know smart people will see the danger there and we'll steer away from it and just just to address what you just said about you know the entrenched ecosystem I agree but like we've had entrenched ecosystems before right we had I don't want to say Bitcoin has gone away but I think a lot of the energy in the world has shifted away from Bitcoin towards these newer towards ethereum right ethereum is the new hot thing but that doesn't mean that we're done right there's always room for entrenched systems to become too entrenched and kind of lose relevance so we'll see yeah I think we've talked a little bit about

some of the impacts of tornado cash but as it happened you're surprised that that week I'm curious what your take was on the reaction of your peers and like when it happened people felt a lot Twitter was a bit on fire a lot of people had very quick hot takes um there was some like misunderstanding misinformation also going around people made assumptions about certain things that weren't completely clear yet yeah what was your take at that time like on what people actually how they reacted wow okay so the the good news was that most people were sort of like this is bad I like that this is bad there were different Arguments for why this is bad

I didn't feel like there was you know outrage right like this was a very Niche issue that like people who are really into ZK and privacy and blockchain cared a lot about and the rest of the world was kind of like meh right some North you know North Korean money launderer got shut down and I so that was one thing that I noticed um I'm not sure what it would take to kick this kind of stuff out into the world but it was a little bit less of a massive issue um the other thing that I would say is wow I was surprised so I I got involved in one aspect of this which was the code I was very very worried and sad that like GitHub took down tornado Cash's coat and my view has always been really simple like you could argue whether

tornado cash is good or bad that's a great argument go have it but the tornado cast code is just code it's protected in my opinion by the First Amendment and it's valuable like my students needed I need it like that code should exist and I thought here's the uncontroversial part so I'll just Lop off the uncontroversial part which is that we'll just protect that code and it got taken down by the sanctions but we'll make a mirror of it whatever and I actually gotten like a certain amount of trouble um uh yeah not so much trouble I just I heard third hand that some people were unhappy with me about that and I was a little bit shocked I think it was just um you know I was surprised I thought everybody from treasury on down would basically say look you know we didn't

mean to like take down the code of course like the sanctions on the on the Chain maybe we meant that and and and I think it just I I accidentally without meaning to made some people like embarrassed or looked bad and it was um it was surprising to me and I guess maybe I need to grow up a little and learn that but um so that was one of the reactions I I heard that I was I was sad about I'm not sure what else to say like I think that you know people have a lot of thoughts about tornado cash and on-chain privacy should be a right and they're gonna take a lawsuit and they're gonna do it I I'm I'm a little pessimistic you know I'm not saying they're wrong I'm just saying that I'm pessimistic that that's going to work out for everybody

about the code I mean so I remember that tweet I remember you saying that you were going to do that later when the FAQs came out they did actually kind of say that the code was okay to use in educational things do you think your tweets had something to do with that being included yeah I think so okay wow I I mean I don't know maybe maybe not maybe I'm over emphasizing it but like I think getting it out there was important and I think that people have to do that and like the one thing I could do as a professor who has a Twitter account that you know some people follow is I can like make a big stink about that I'm really happy that you know I have the you know a large enough Twitter microphone to make us think about things like that that I think are important

even if I can't fix all the other problems yeah I'm I'm grateful for that and frankly Nick I also think that whoever felt embarrassed about you posting the code should have felt embarrassed because it's you know it's a free speech issue right and it's yeah it's crazy to me that like again I actually like there's a there's a friend of mine who you know uh brilliant like law minded person lawyer type who does Think Tank style stuff in DC and you know he tried to walk through why he thinks a lot of these you know a lot of like the lawsuit is a no-go why there's like a sufficient amount of leeway in the way that you know ofac can actually like there's there's apparently an

argument to be made that that ofac can in fact sanction you know I I intuitively feel like it's terrible but apparently the way the law is written suggests otherwise but I think even even he would admit that like the code itself is still something that should be permissible to publish in post you know yeah I think these are the kind of values that like we should all just sort of say like nobody should disagree about this it is definitely protected the code is protected it's valuable and maybe maybe it was just more a question of like the implementation nobody had the intention of taking down the code the implementation just kind of went crazy and uh and people are a little embarrassed about that nobody is necessarily disagreeing with that but um but yeah like we have to be more careful and you know a lot of these sanctions

laws the laws that enable the sanctions have specific you know uh riders that basically say hey there are these exceptions and they're designed to protect things like bookshops and publication and they exist because we as a country value our first amendment and our ability to you know for people to speak and software is no different and that's a place where I think we need to draw a line yep did you learn a lot about how treasury works when this happened I did I'm not American but I learned a lot about all of the different administrative units we also did a show about that where the like Treasury and ofac and the cftc yeah yep and the SEC and like how they all relate or don't but yeah did you did you already know

all this or was it like did it actually shed some light into how they work for you I didn't know as much about ofac as I did I do now but I wouldn't say I'm an expert like one of the things I'm very happy about is not being I'm not I'm not deeply attracted to being a you know an expert on this there are people who are great at this I work with some of them you know like Peter Van valkenberg who I'm sure you've all met he's great he's a coin Center he knows all the stuff by heart and he can talk to me for hours but um for me I like you know I feel like if I know too much about that it's going to curse me and I'm gonna like forget how to do like you know attack or something well it's gonna make you worried about

every single decision you're trying to make because yeah possibilities but I have had a bunch of meetings with Regulators I'm going to say this um you know I had a meeting with um some folks at fincen I've had meetings with Folks at Treasury and they're you know kind of their digital I guess Innovation departments and all of these people are super nice super intelligent well informed about all of these areas they're not like bad guys I just really want to make it clear that like it's not just a bunch of people going around and you know even when I talk to some of the folks who are in the National Security side and I've talked to some of them like in like the administration you know they have strong feelings about this and they really really really probably with good reason do not like the idea that North Korea

has 500 million or 600 million or got maybe didn't get it all and like for them this is a matter of like you know U.S cities not blowing up in mushroom clouds and it's very hard for me to tell those people they're wrong so um they're they're not totally on the wrong side there my sense when this happened on Twitter at least there's almost this attitude that like ofac is coming to take away your fun like they want to hurt you like that was sort of the feeling at least that people were reacting with sort of like everything we're doing they're against us it took me doing that interview where with a few lawyers who could help me navigate what was happening that like there there's like a mission a goal and this is one of the tools they're using

to get that goal it's not necessarily to shut down the blockchain industry yeah if they wanted to shut down the blockchain industry right like this was this was a scalp this was a scalpel and not a ax they could have used an ax and that would have been stupid but they used a scalpel although not perfectly no but like you know no surgery ever goes perfect sure it could have been 100 times worse easily yeah what do you think comes out of this I mean we talked a little bit about what we hope but going forward what's the takeaway what do you want to see on the horizon from the ZK Community when you talked use cases I mean I think once you start to explore use cases there's so many kinds of use cases which will hopefully continue to be like I

guess I hope that it doesn't stop the ability for us to brainstorm all these great use cases that we get stuck on this one use case that isn't executed correctly yet yeah okay so I want to see like zero knowledge get baked in at the lowest level of these systems right it has to be there it has to be part of the system and that's going to mean payment privacy and it's going to mean payment privacy is going to have to have you know some of these features that you know again not not chilling my own thing but like Regulatory Compliance is going to end up being more and more important to people especially as privacy is out there so that that's a thing I want all that to exist I want that that not just privacy technology the zero knowledge technology to start to find new applications and I

think we're starting to see some of those I really do believe like D5 is not stupid right A lot of people look at D5 they're like oh this is a clown show and I I know people like people sorry the people I talk to in the academic Community are like D5 is just a bunch of people like pumping and you know doing all this it's not I think D5 is going to be really really really important and I think there's a really compelling argument to make the defy will actually be a lot more efficient than centralized Financial systems but I accept that I may be wrong about all that and without privacy without zero knowledge none of that technology is going to ever ever be able to go into the real world use cases because like you can't have Mev all over the place you can't have everyone

monitoring your transactions it's ridiculous and so for that stuff to grow up these technologies have to become mature but once you get outside the obvious stuff yeah there is the big question like there is this huge Green Field for how are we going to do more exciting applications how are we going to make it so that like the Googles of the world can do that identity stuff and like you know in a way that's private how can we make it so that you know we can we can handle all this data our phones are generating in a way that lets us do useful things but is hopefully not abusive and is also private and all of those things are going to need infrastructure to grow up on and I think one of the big things we're not seeing is we're not seeing very much of that

stuff deployed because every time somebody wants to deploy a technology like that it requires a Google to talk to a Mastercard or something like that and though that makes this much harder once it becomes a platform that's available like AWS which could be a few years away then we're going to see applications we haven't even thought of that are going to do huge things with data but I can't tell you exactly what they are any more than I could have told you exactly what was going to happen with the internet back you know in the early days things things surprised me very cool Matt thank you so much for coming on the show and sharing with us your background the work you did and the work you're doing today and also talking to us about the tornado cash ofac sanction the impact what this could mean

for our industry yeah we covered a lot thanks for coming on yeah thank you for having me it's great I want to say a big thank you to the podcast team Tanya Rachel and Henrik and to our listeners thanks for listening