Investing in the Private Layer

Transcript

Welcome. Thanks. Thanks, Amal. Hi everyone. I hope you enjoyed lunch and you're you have a full stomach ready to get some alpha from these investors. Um, so quick introductions. Uh, I'm Lisa. I'm the COO at Aztec. Uh I've been at the company now for four years, which makes me an OG and a dinosaur in crypto. Um and then in addition, I also am an investor uh with a fund that I run on the side called Credibly Neutral. Um we've invested over the past three years mostly in early stage companies in infrastructure and software in the crypto space.

Uh thanks for having me, Lisa. Um I'm Prrenit. I'm one of the the founding partners at Ethereal Ventures. Um which is a firm was formed by what constituted the former venture investment team at Consensus. Um so um our our thesis is again to um fundamentally back really strong domain experts and technical teams building um essentially what could be new paradigms for collaboration. Um and we've had the pleasure of um and also actually the fortune of having invested in Aztec uh through consensus through um through Ethereal and very very um stoked to see and support them on their journey.

Thanks for having me. Uh great great to be here. My name is Alex. I'm the founding partner at Inflection, an early stage venture firm operating out of the US uh and Europe. Um we are investing in the earliest stages preede and seed around a thesis built upon what we call sovereign computation. So that's basically all kinds of physical digital technologies that are allowing people to manage critical resources and um that spans a lot of uh different fields. We are interested in solving scaling issues um by investing into alternative compute methods or specialized silicon companies as an example.

Um we are interested in uh solving resilience issues with the compute stack and that includes distributed systems uh blockchain cryptography and the third one is what we call flow. So everything that enables or unlocks novel types of data sensing technologies data markets etc. Um yeah looking forward to an interesting discussion. Cool. And I just want to do a quick sound check before we get into it. How do you guys Do you guys hear us? We're talking into the mics. Okay, great. Um, yeah, if you're talking in the back, please. We have tons of space around, so just want to make sure that everyone can hear. Thank you. Um, okay, cool. So, we're going to talk a

lot about privacy. And privacy is not new. I know everyone here is excited about privacy. Maybe you're early on your journey. Maybe you've been on it for a while. Maybe you were an early user of Monero back in the day. There's, you know, lots of privacy projects that have emerged over the past almost, you know, 15 years in the crypto space. Basically, Bitcoin was, you know, talking about privacy very early. So, what's your take on kind of the vi what's your vision of where privacy will go in this space and where are we on that journey? would probably say that um the journey of privacy as such um somewhat mirrors what we've seen also in the crypto space as it fundamentally relates to the the origins and the mindsets from which

privacy kind of came about um how it was essentially um a political tool to start with um but but one that um essentially slowly started becoming mainstream in one way sheep and sense um and so there's is uh the it's it's obviously a a very um it's it's a topic that that can have um a lot of complex underpinnings but the the notion of privacy is is something that I I feel like as as humans we fundamentally inconce in all aspects of our life we we we choose to reveal specific facets of information to to other people and we we make this judgment innately and we we see that not only on a day-to-day basis but also in um in for instance the

workplace. Um, and so it it is something that uh we somewhat take for granted. But I think the the notion that privacy um as as a category um is is new is is is probably not not something that I would think about because privacy has been existent for a while. The question is whether investing in privacy and whether privacy is commercial um and has can and can have commercial success is the question and I think um we probably are at a point where we have a lot of the tooling available to to make it so. So cool. Cool. Yeah, for me um I don't see privacy as something static but rather evolving and and very cyclic.

Um if you look back at previous waves of uh technologies and in particular communications technologies was what happened you know between uh telegraphs uh telephones early internet was usually a period of uh implementation going on for a decade or a couple decades that was often framed as wild west um and didn't have any strong privacy or private privacy uh protections in place. Uh so wires uh phone wires were open very easy to eaves drop on um the internet was very vulnerable before uh or email uh PGP was invented um similar with uh with other layers in the stack and I think it won't be much different

uh in in cryptoland as a novel type of of database infrastructure compute platform however you you frame it um that this is lagging um but will also unlock a lot of uh like I think new uh markets in particular in the enterprise environment we might touch on that later. So yeah, it's lagging. Um the the trend is going up and to the right because it it will be a necessity. So that that's what I see for crypto uh only in the sense of uh the blockchain ecosystem.

Taking another step back, I'm very like concerned about a like bigger cycle. So if you look at privacy as a a tool for distributing power amongst individuals, what we've also seen is that in periods of conflict, be it uh World War I, World War II, throughout the the Cold War, 9/11, uh as an example, you know, may maybe Ukraine, usually whenever you have these kinds of existential threats uh to countries or societies, uh privacy erodess and the the state becomes more powerful, implements stronger surveillance and uh censorship uh mechanisms um and at the same time is

increasing its own uh secrecy uh uh to to stay safe so to speak. So that's a a counter trend I'm seeing more in a multi-deade time horizon. Um very curious to discuss this also with anyone in the audience who's interested. I was also just thinking right now that um it's it's pro possibly even the the bandwidth of information um uh dissemination and um and about that as as being a particular feature for um essentially um having privacy. So the the thinking that I had was um it it was probably easier to remain private when it was harder to disseminate information as such. But now that we do have the

bandwidth available to actually make information more broadly available, there's very limited mechanisms for for us to actually truly own um the information that that we do contain. And it becomes extremely easy for for um third parties to essentially capture this at which point it it is probably important to actually have um privacy as as a core um substrate for for the technology stagger that we operate with. Um it's very much a like a tragedy of the commons almost where if an individual gives up on uh privacy to get some convenience or service for free or so doesn't have much of an effect but as long as enterprises have an incentive to capture that information and as long as

most individuals give up their or the more individuals give up privacy the more the effects compound on a on the collective level and erodess it for the entire group. So yeah, that's a bit the status quo unfortunately. Well, you started talking about like the communication stack and I was thinking through like analogies made between just crypto in general and the internet and kind of like where we are in that cycle. It's encouraging to hear it's like usually a decadesl long cycle because sometimes it feels like we've been doing this for a while. Um, but one of the things that uh I think is helpful is to think about like analogies for what privacy or encryption could unlock and for the internet like SSL certificates,

encryption for payments like that unlocked e-commerce. And so that's like a much more positive framing for like it's not just privacy for privacy's sake. It's like you need it. And I think about Aztec really similarly. It's like how could we imagine bringing our replacing the financial rails of the existing system if we don't have privacy? Like that sounds so dystopian to me. I like sometimes I I've told my teammates before, but like it like energizes me. Like I if I'm thinking about the world without Aztec, I'm like that shouldn't exist. Like that's impossible. And so I'm just curious if there's any other analogies that you look to. you like kind of me mentioned some historical references that you think about when you think about how like privacy might come to the space and

what it could unlock. Um I could probably just say that uh blockchains are a medium for changing the trust paradigm and the way we think about trusting one another. um it is fundamentally harder to do that um on on digital substrates, but with the notion of cryptographic tools that do um enable us to um verify the veracity of the statements we are making to each other um and the the the acts that that we are performing which is essentially verifiable computation but but still having the ability to um to selectively disclose um parts that that make sense.

I think um it it essentially is to your point unlocking a new form of commerce but without um without resorting to um an Orwellian I guess dis or dystopian world um where where things are very very monopolized or we we end up resorting to a surveillance state. It's really like a a third path almost like historically um you rather had two options. Either you're very transparent that's that makes it easy to trust you, right? If I'm revealing everything uh to everybody um it's easy to trust me because you have all that context and uh might see my agenda publicly. Um if I'm completely in stealth um it's very very

hard uh to trust me or any other counterparty. And now we for the first time really have the opportunity to have both uh like have privacy and trust um through verifications of of different sorts. Um that is that is fundamentally interesting and uh yeah I think will will find its way into the the mainstream technology stack. Cool. Um so let's make it we were talking a lot about the macro and kind of like privacy generally. let's make it more tangible in terms of like your personal experience with privacy and investing in the space. Um tell us a little bit more about like investments that you've made and maybe how your thesis has evolved over time.

I would uh I would probably say that um the the investments we have made in in privacy have been um related to um privacy um l infrastructure that that could essentially create the primitives for people to collaborate um privately because that is something that has not existed um broadly and at scale. Um so um was that like what's in terms of time frames like when did you start thinking about privacy as a place to even in or something to even invest in and then like how where are we where is that relative to today? So I think it it fundamentally again boils down to who requires privacy as part of the

workflows. And so when and and the the natural answer is institutions and institutional workflows like we we natively adopt different levels of privacy when we are choosing to collaborate within an organization or with other organizations. And so when you think about enterprises looking to work with blockchains and blockchain stacks um they would at some point recognize the need to have this this embedded in in their workflows. And so I guess this this was back in the day when when Aztec was working on a very different proposition called creditment which was essentially a platform for financial institutions to interact with each other in in a mechanism that actually required privacy. But um uh it

was back in the day that um Aztec had had realized that there there were no primitives and and it was thanks to the the pioneer pioneering work of of Zach and um and a lot of the team at Aztec that we've actually managed to um create a lot of these under these these underpinning primitives that enable us to start even thinking about um constructing something that that that could be um construed as as um private from a software standpoint. And and so when when we think about privacy today, I think we we feel that um there's a few of these uh building blocks that that have been put in place. There might be space for a few more. But um now that we are actually seeing um taking a step

back again that institutions are actively interested in in utilizing blockchains for asset issuance, for for settlement. Um it it is very important for for them to actually have um stacks that that can um fulfill their their requirements. And this is something that that we see um as as an actual demand that is coming from institutions. And so um it it pro for us I think this this is this could not be better time to to actually start um looking at at founders who are building um for meeting the requirements of these institutions and and actually um fulfilling their needs as such.

Is there anything oh do you want to add? Yeah, I think the last point is is very very critical. Um the the needs uh of the organization. So it's always contextual, right? You you try to solve a particular problem for a uh for a particular group of people. I think a a mistake the ecosystem made uh through the years was building very horizontal kind of generalist uh platforms where it was unclear what the exact circumstances of the users are. So was somehow detached from uh from products and use cases. Uh we can we can touch deeper on that. Um yeah and my my own journey uh I think began with a misunderstanding. Um

I was um I was spending some time with uh Adam Straddling. I don't know if people know him here. He co-founded uh Tradill one of the first bitcoin exchanges in 2011 uh and Eric Vorhees uh later on. and um they uh they both agreed that Bitcoin actually was not as anonymous as as I was thinking at at that time. So I made the assumption that pseudonymous means uh anonymous um until the first like deanonymization services came out and that has an effect on the properties of money like fungeibility uh especially like if one bitcoin or one uh monetary unit is uh somehow labeled uh as you know to criminal activity or

whatever. Um we've seen it in in mining as well. lots of problems around ETF launches uh with with fungeability if these coins were tainted in a way. So that was the the start into the problem and then I yeah looked deep into like Zcash and and Monero early on Grin rings a bell. Um yeah but it's uh it has been evolving a lot and I think today the ecosystem is approaching it in a in a different more increasingly pragmatic uh way. M was there any thesis that you had that you know didn't play out or things that played out differently than you expected?

Certainly. I wonder what actually played out the way I I thought at the time. Um the I think one big shift is um yeah moving away from these like very abstracted generalist uh infrastructures especially like old layer ones um that simply didn't find the the adoption. I don't know about the like wallet address counts or or transaction volumes etc. If you just look at market cap, I think the privacy preserving L1's currently have 1% of the market cap in uh in crypto assets. What is what is tiny?

Um and yeah, I think there will be much more abstraction in the background through things like uh whatever like Zama or an equivalent of what Privy was doing for for wallet architecture that is uh abstracting away the complexity and is integrated into a service that does something uh totally unrelated to to privacy. I think one thing that comes to mind um personally is I think we were spurred um by the success of Aztec which which has been around for a while but I think we we were broadly of the opinion that um um since it's Aztec is essentially building the tools for um enabling um enabling private state that there could

be extensions to the same and um fundamentally in the process which could enable multiple parties to collaborate with each other in in a privacy preserving manner. And so I think we I think we invested in um essentially a provider that that was basically doing um secure multi-party um computation primarily for for auctions um and trying to basically say like hey this is something that um financial institutions who are running dark pools could um utilize and this this was back in the day I think we we invested in um late 2019 but um I guess the the fundamental issue was that financial institutions were very happy to essentially be the trusted intermediaries who were actually

um operating these dark pools. So they they trust um to run these stock pools and they were also I guess in a position where they were benefiting from from the same uh from um a monetary standpoint and also a trust standpoint. And so there was really no incentive for them to give up this privileged position. Um and so even though the technology was was something that was really powerful and actually could achieve um some notion of latency that that people required um for for these transactions to process, it was still um the the the distribution and the incentives for for people to pick up this this um technology was was very misaligned if one might call it. So this is company had to repivot and they're they're doing something different now. But I I I see that as as as a fundamental gap in

thinking that even though a technology is something that that can replace um the the way we collaborate, there still has to be buy in from people who are using um this technology um and and actually see that um and see a feasible path for for them to actually adopt this. Um yeah, very interesting example. I have a somewhat of a counter example almost. So we um we're working with a company in Switzerland um out of ETH that is called Tuninside and is building at the core a data marketplace for health uh data using multi-party homorphic encryption. So they allow the participating actors in their ecosystem

to run computations on fully encrypted data um at rest. And it's yeah pretty much like a federated learning uh related uh setup. But the problem this solves isn't just the uh the privacy and security aspects of it. the the problem it primarily solves is to avoid um regulation around GDPR because typically as soon as you need to move data from A to B, you're in the um like the GDPR framework applies and you have to deal with all these complex data sharing agreements creating six-digit uh legal costs. Um and this this is a very concrete uh monetizable um value

proposition that they that they figured out and there must be examples in other industries uh where this this is similar. It's like the classic unintended consequences like I don't think when GDPR was created that they were like oh we're going to strengthen decentralized privacy but actually that might solve the problem for these companies. So to your point, like it's very expensive to set up all the infrastructure to handle this sensitive data and like be compliant with GDPR and so they have the incentive now to look to alternatives where they're actually not holding on to the sensitive data and um being able to do these powerful things while the users are still controlling their data.

Um, so I guess in terms of your analysis or the way that you approach new investments, is there anything you do differently for privacy investments or ZK investments? Like do you kind of approach it or do you have a bias in any direction or do you like do different focus on different things during your diligence process? Uh I mean having hindsight and the ability to thing change things in the past is always amazing. But um at the at at the very least I think um the the focus we have is um essentially getting to a notion of privacy that that is um acceptable and is also enough to um

satisfy the requirements of customers who will be using these these products and services. So, so for instance, we're working with one of our portfolio companies which is creating um essentially like a stablecoin payments network of sorts and the idea is um enterprise customers definitely require privacy when when it comes to payments but um uh if if you can start thinking about tweaking say um this is probably going into details but if if you can fundamentally change the way you um deal with the the the data model or the state model for for Ethereum And if you can essentially use a notion of permissioning um at at um at at at at specific points in the network to ensure

that um people are not able to access state of um accounts that they're not authenticated to access. um it ends up becoming a reasonably viable solution that that people would be happy to utilize as opposed to um going down the full-blown route of actually having um you know like like a properly functional privacy pool. um that that that could essentially function in in in all of the the beautiful ways that cryptography is supposed to um enable um privacy at at every and and confidentiality at at every level of the stack. So I think it's it's approaching privacy um in a manner which which is firstly easily

implementable to the point that it actually requires and meets um customer requirements and and and then thinking about a path forward um as to how this this can um this can be changed and how this can be rearchitected uh once once you do have um adoption and once you actually do get to the point where um what whatever you have put together is simply not not functional. Yeah, in our case, yeah. Yeah, there's a long uh long history of uh of investing in that space. So, we've been first investors in in modulus labs in uh fabric cryptography. So, they're all operating on on very different layers of the of the stack and are having also

very different kind of end end customers. But yes, taking a step back, I I think what was the biggest mistake that our firm made at least was uh to be too obsessed with fancy new technologies and not enough obsessed with the uh with the underlying problem that we're solving and identifying exactly who we are solving it for and what the what the form factors might be. Um so yeah, up until today like struggling with that a little bit. The temporary framework we try to use is to look at areas that are very very sensitive mainly in a security context. So health is one um military applications uh are are another one

where this is really uh yeah existential literally um to to work out and uh leaving aside more consumerry uh applications maybe enterprise finance is is another area. Um, so yeah, that is that is something where we where we learned a bunch of lessons. So I think people in this room could probably relate to being obsessed with fancy technology. Like that's probably what brought a lot of people here today. Um, and what do you think um is still missing? like what are some of the things that make it maybe not viable from an infrastructure perspective or from a user experience perspective to really have this in the hands of users

and solving some of the problems in the verticals that you mentioned. Is there anything that comes to mind that you think would make a big difference in adoption? Uh the launch of Aztec mainet but too close to home. No, but no, generally speaking, I think um it's it's honestly very interesting to see the way people have been utilizing uh zero knowledge primitives um to to essentially solve the problems of um solve the problems of increasing operating margins and essentially taking away from the pricing power that um centralized intermediaries have. Uh

secondly, utilizing these primitives to essentially achieve regulatory arbitrage and essentially choose to bypass some of the very ownorous at at times meaningless requirements that um regulators impose but but still comply in spirit with what regulators want and use that as a mechanism to onboard users very quickly. So I think we've we've we have been seeing a lot of this in um I think in a place that blockchains have been very good at which is um in disintermediating financial stacks and access to financial instruments. But this applies not just um to I guess um products that that we think about when we think about playing with magic internet money. But this actually is

applicable to real world payments to to real world um um lending like wagebacked loans. um and and and the like. And we're actually seeing a lot of these companies that are utilizing privacy primitives that have been put forth um by by companies like Aztec and create very tailored solutions that are addressing the problems that that people face in on a day-to-day basis. But utilizing these primitives to essentially achieve much better pricing capabilities and and scaling capabilities. And this this is awesome to see like this this is what um fundamentally blockchain technology enables. And so we're we're we're happy to see more of these and we want to see like builders using these and and building point solutions to address

these these problems. Yeah, similar similar vein on on my end. I think cost cost performance trade-offs are are still somewhat limiting and um hardware acceleration at scale is is probably part of the part of the solution. um and uh will unlock the like Jevans paradox basically saying that whenever a a resource uh gets cheaper to achieve a certain output then demand for such resource is uh not decreasing as one would expect but increasing because it becomes economically feasible to use the same uh resource for more use cases that was developed in the like

industrial age for oil demand and in the light of like more efficient combust combustion engines and I think it will be very very similar here. So in the beginning it might be just the like private holding uh of an asset uh that that has the the highest value for people. Down the road it might be very high value transactions all the way to low value transactions and then maybe even non-financial use cases in like longer time horizon once the um the costs are are coming down significantly enough. And the other one I think is still UX panit. You're probably much closer to the to the deaf ecosystem and my my knowledge is a bit outdated here.

But uh what I've been hearing is that many uh like more generalist uh developers are are still struggling to make sense of of ZK circuits and the risk uh profiles and tradeoffs. It's very fragmented ecosystem still uh with somewhat esoteric uh programming languages uh makes it incredibly difficult for anybody to implement this stuff. Um yeah, unless it's very very critical for the application, it's unlikely to happen. Most people don't know about Noir then. [Music] Um I think actually what something that's been encouraging is ZK has historically been used for infrastructure and to your point building these like general platforms used for scaling, but more and more we're seeing it being integrated into

applications and things that actually users are going to be using to you know with these with these general backends. Um, and our hackathon recently, Noir Hack, which Prena was one of the judges, was a really good example of how ZK can actually be uh really cool in in the user experience flow and can unlock new um new opportunities for um designing new experiences for users. Um yeah, did you want to say anything about like your experience with Noir Hack and kind of your observations from that? Yeah, I think um again it's it's always a question of maturity when it when it comes to um using a particular tool chain uh using a particular set of um um

I guess languages and infrastructure that that you can kind of think about um in in one way shape and sense I think um Noir is is making incredible progress towards towards fulfilling these gaps and like some of what we've seen um in the hackathon was was um extremely interesting. like um we even as as an institution we we've got requirements as it relates to um holding assets in a specific manner in a compliant manner and that there were teams who were essentially utilizing um some of these primitives that that Noir was presenting to actually put forth um really good solutions that that were that that could probably actually um replace hopefully at some point the the centralized

intermediaries that that we have to use today to essentially fulfill these these requirements when the compliance side but also on the privacy side like let's let's be honest I think we we we have to use centralized venues um because we we need to make sure that um we we have a a good way of mixing funds if if anything um that's that's something that that we care about not just because not not because we're we're um criminals but but just because we care um what information we are disclosing. Um, so there's there's there's a lot of these workflows, but but also a lot of workflows on the hiring side, on the the lending um on on the lending marketplace on on on identities that that were really very very interesting unlocks that that we could actually see um

happening at these hackathons. Now the question here in is whether these builders have I guess the the resources and the grit to to kind of take this forward and actually build companies from from these propositions because from from what I see um that there is a little bit of difficulty involved with the tooling but I think as a founder if you have the grit and the the capability to take it uh take it ahead I think the tooling is at a good enough place that that you can actually start building very very um sustainable and viable companies and venturebackable companies.

Well, I think that's one of the powerful things about Noir, right? It's not just a programming language for Aztec, which would be like a very kind of specific group of people working on the tooling. Noir is this like universal programming language that can be used across any EVM chain. And then there's verifiers in like various states of development across Solano and Sooie and Aptos. And we just have like a huge developer community now that can contribute to improving the language. So, I think it's just like so cool that the Aztec builder experience will just be influenced and made better by all these folks coming together and, you know, building the tooling. If they see something that's missing, they could just like put it out there. I think that's a great thing about crypto in general, but even more so for Noir because we've taken this

approach of making it kind of backend agnostic. Um, yeah. Do you want to add something? Yeah. Maybe one other area I I personally find very interesting is like more industrial applications and particularly around data centers. So um yeah it seems that a lot of people are are very concerned about keeping uh model weights secure and also uh preventing external actors to mess around uh with uh like poisonous code injections uh manipulating the uh the data sets or or model weights in uh in any way. um and uh yeah cryptography obviously is a is a solution uh to that.

So that is a a real very immediate um problem with large uh economic value. So if any anyone is interested in that problem space or working on solutions very uh very eager to explore. Yeah I was actually going to see if you had any other verticals that you are thinking about. I mean, you can go on if there's others that come to mind, but like types of apps or verticals that are using ZK or even just like cryptography generally that you'd want to invest in. I mean, we've we've made a broader bet on applications that are leveraging um I guess the underlying infrastructure of what you might call TLS notary or ZKTLS.

Um if I I probably not like to call it ZKTLS, but but whatever. I mean the again this this just basically um is um is a reiteration of the the points that I was making earlier that that you can essentially have rails that you can utilize to prove actions that you have done in the real world or attributes that you have in the real world and and use that as a mechanism to um verify that on a decentralized network like Ethereum. And what that actually brings you is the ability to bypass a lot of the centralized intermediaries like the IDV providers or um a lot of the the underlying banking infrastructure providers and um some of

the non-banking financial institutions and some of the um the ownorous cost structures that that they impose. Um, and you can use the the fact that you can verifiably represent information on chain and replica a lot of the flows that that that you have in in the real world. And we've made investments in this category. We are extremely bullish on applications that that can um leverage blockchain rails to help um bypass the the hurdles that that um people face when they are looking to build companies in this in in in in these sectors. And so um that that is something that that we will want to keep continuing to invest in. Um um and and I guess to to Alex's point, I think, um

cryptography is is a very fundamental tool. Um and as we see more um utilization of of AI um in in multiple spaces, I think um uh the question that that we are grappling with is um making sure that you have people who can actually pay for using the cryptography and you can create products that the people will be very happy to utilize and as as long as we are putting um these techniques to use in in building products and and ultimately companies that that people will value that that is something that that we'd be very very happy to explore.

Yeah, I'd be very very happy to see this being built. I'd uh probably not invest in something that makes this their core value proposition. I'd rather like to see this integrated in some kind of a a high utility uh service. So that there are a lot of problems to be solved around um agentto agent communication, payments, orchestration uh delegation uh basically. So we've seen a bunch of projects uh building infrastructure in that area. Uh yeah, but but didn't invest because we think it's more feature than than a business and probably needs to be integrated um by either one of the like AI incumbents or somebody who's building marketplaces

for these things and offering uh such utility on the side. But I'm very happy to be convinced of the uh of the contrary. Um taking very serendipous approach in general. Um, another thing that came up is compliance. Obviously, that's something that, you know, folks have to think about a lot with privacy. Um, just because it's kind of the wild west, like there aren't really things that they can look to and reliably have guidance, um, from regulators at the moment. Are there things that you're watching out for like headwinds or tailwinds that are informing the way that you approach the space? I mean, it was encouraging even just, you know, seeing in the US there's a lot of progress now with stable coins.

How far out are we from having regulation on onchain privacy? Yeah, it's I think it's a totally mixed bag. Um on the one hand, what's going on in the US is basically a rolling back of previous uh regulation through enforcement, right? So most of this have been SEC or other uh authority actions, not that much legislation in either direction. Even until today we are basically getting a pause from the harassment that the industry has been seeing from the from the US government but it's not clear yet that there will be more friendly and sustainable legislation be be taken. So that that's still a question mark and if we're unlucky in 3 years the the next uh

government is coming in uh into existence we might get some headwinds again. The other piece is that's more subtle I would say and less discussed in media but especially in Europe uh very surprisingly we had the GDPR and overall high sensitivity for privacy also given lots of experience with authoritarian systems um being in being in Berlin now um yeah there's a long history and people are aware and more sensitive than than many other people in the world however um there is a tendency already in in the UK and on a European level to roll back some of these uh uh rights basically. I forgot what the act was called, but in

the UK there's a new surveillance law in place that basically forces companies to screen any kind of communications and content for illegal uh uh yeah illegal content. Um that's basically a backdoor uh justifying um mass scale uh so and I think there are similar tendencies on uh on European level. So yeah, as as I said in the beginning, like the more you get in a in an era of more geopolitical tensions and conflict, the more control I think the um governments in general are are trying to to get over their populations and that's not not a good thing. Yeah, that's particularly tough as a UK based cryptography company to

see. There's a, you can imagine, a lot of opinions about that internally at Aztec. And it's just ironic for a country that's like celebrated cryptographers in its history to kind of have such a whipl not a whiplash, but I guess the pendulum swings over time that to your point going from one extreme to the other. And I think we're unfortunately on the other side right now. I'm hoping that um the more wides the the widespread proliferation of AI might um get people to recognize that privacy is is something that that they have to take into account and take into account very seriously. Um especially now that you do see that a lot of these

organizations are fundamentally scrambling in a war to gain and gain access to as many resources that are broadly available about ourselves um across across different domains across different um forums online so to speak. So um it's it's it's helpful for instance that um companies like Apple have made their stance on privacy a lot more public which gets people to recognize that um uh and hopefully that that what what they're holding on to um like that their information their workflows are are things that are broadly of value to a lot of these companies. And so, um, with with with more AI pervading our lives, I'm I'm I'm

assuming or I'm I'm hopeful that the the the the the narrative around privacy will will take a turn for for the better and people will actually choose to recognize that as a fundamental right. Yeah. That's ultimately learning through pain, right? So now that the the costs of uh attacking a large group of of people with AI tools is is dropping so drastically, there will that there will be a lot of people getting hurt uh and that might be a wakeup call uh to improve the the entire fabric uh of of coms and and transactional system. Yeah, that's a good point.

So we're nearing the end of our time. Um before we close out, do you have any advice for folks in the company uh in the crowd that are thinking about starting a company um and might be thinking about how to approach their investors and folks that um they want to pitch for what they're building? I guess would probably say if there there is there is a mechanism for for you to actually um incorporate privacy in a manner that makes sense for um your end users. I think that that is something that that you have to hone in on and highlight very much as part of what what you're looking to build. um unless you're a deep tech company or

essentially doing um research on on paradigms that are enabling a whole new um point on the trust envelope. Um building deep tech companies is not for the faint of heart. I think it it takes a lot of time, a lot of effort and um in in general I think that there has to be more or less a congruence in terms of the the broader um tailwinds and the narrative um and the technology to all come together um which which is going to be extremely important for for you to um focus on as as a more researchoriented company. But as as long as you see um a feasible timeline in terms of um actually utilizing the the underlying

techn technological primitives that that you are building to address customer needs in a manner that that clicks for them and um will will essentially ensure that this is the paradigm that that people would want to use. Um that that is something that that you need to have a very clear idea in mind about. Yeah. Um my only comment would be be problem obsessed and know what problem you solve for whom uh as early as possible. Um do as many interviews with potential ar uh target groups as possible before touching any code doing anything. There's this fallacy of uh somebody called uh founder ears. So

that's a way of uh being um being exposed to like feedback from those potential customers and always interpreting it in the most positive way. A trait you need to have as a as a founder being irrationally optimistic. But in that uh circumstance um yeah it should be maximally realistic and uh and truthful. Um yeah and then also like focus on on areas where it's existential uh to have privacy and not not a nice to have. Yeah. I think my reflection is just things take longer than you expect and not to chase the shiny object because I think a lot of the people that are having success in things that are hot today have actually been working on it

for a very long time. Especially when you're talking about novel cryptography and technology. It's just it's just a journey. So enjoy it and pick something that you're really obsessed about. All right. Well, I think that we're going to move on to the rest of the programming. So, thanks everyone for listening and thanks you guys for joining. Thank you so much for [Applause] Sweet.