No Banks: Why AI Makes Zcash Inevitable

Transcript

So, my name is Josh. I'm the CEO of Zcash Open Development Lab or ZATL. Z- ZATL is the company formerly known as the Electric Coin Company or the team which was formerly known as the Zcash Company which launched Zcash back in 2016 10 years ago. So, now we do full stack development. So, we do continue to work on the protocol. Um but we also uh have a front-end wallet called ZATL uh which you can download from the app stores. And today we launched a product called ZATL Vault or we launched the beta. And if you're interested in that, you can go sign up and register on the site. But what I want to talk about this morning is not about all that stuff. I want to talk about why AI makes Zcash inevitable.

So, in The Dark Knight this movie was released. Batman or um created this machine. And this machine allowed him to find the Joker. What it did is it took everybody's cell phone and it used sonar to kind of triangulate so that he could see and hear everything that was happening across 30 million citizens in Gotham City. Lucius Fox, his IT guy, got freaked out. He said nobody should have this much power.

Not anyone. Not for good, not for bad, not for superheroes. This was 2008. Make no mistake. Everything you do is being watched. Every click on a website where your eyes go on your phone how you move Tencent, by the way, uses video games to get an understanding of how people click through the game to determine who might be actually uh like future drone pilots that they might be competing against.

Everything is being watched. So, this is me and my daughter. So, when she was growing up, we used to dance in the living room. After dinner, I would take her out in the living room and I'd put on some crazy music and I'd close the curtains cuz people were walking outside. They were walking their dogs outside our house. And we would be all goofy and laugh and have a great time. Just a couple years ago, my son got married, my oldest. And at his wedding, um we had the reception afterwards and I invited her out to dance with me on the dance floor and to be goofy like we always have been.

And she refused. She wouldn't do it. I tried to pull her up. And the reason that she wouldn't do it is because she was being watched. Because people would see how she moved. Fundamentally, when we are watched, our behavior changes. It conforms to the expectation of those who are are watching us or surveilling us. Privacy is really about who we are when nobody is watching. So, if you got up this morning, maybe you went to a barista and you got a cup of coffee, you purchased it, you got a receipt.

That's some data. You set it on the table, they made a cool design on the top. You took a picture, you posted it on Insta. Doesn't seem like much. Then you're like, "Ah, actually the phone that I took this with, like the camera is actually really cool." And so, I post a note on X that my camera is really cool. I really love the the new camera. That's a data point. In 2015, MIT did a study and they determined those three data points can be used to pick out all of the rest of your transactions or online activity

from a million other people. Three data points. Different platforms, different places, different data. All of that could be tracked. And that was before AI. And I when I saw that I wasn't surprised and the reason that I wasn't surprised is I built a system that did this. Before I got into Zcash, I built built an intelligence system for a government. We use satellite imagery, we use drones to take pictures of areas of interest. Could be an air base, could be a port.

We looked at airplanes, we could do edge detection and determine what the airplane was, how far it could fly, what its payload could be. We could determine who the pilot was. This was back in 2000. After that, my architect on that project started a company and I joined him and we started doing some ad tech stuff. And we started mining data. So within a short amount of time, we had using the same tools that we're using for surveillance for the military, we could we had very rich profiles of 30 30 million Americans with data aggregated from 26 different sites.

We knew who you were, where you lived, where you worked, who your kids were, how you like to vacation, how often you vacationed, what your tendencies were. We knew how much money you made. We knew if you were good at your job. This was before AI. Now AI has changed everything and the cost for us doing that was very high and when we had that when we determined that we had that much power, we actually shut that program down.

Like Lucius Fox, we said no group or person should have access to this much information. Little did we know what would happen with with AI. There was another study that was done in Zurich. This one just a couple years ago, 2023. And they looked at Reddit profiles, people posting anonymously on Reddit. And with 500 profiles, about a week's worth of work, about a 2500% $2500 cost, they were kind of manually just manually to dox those people. Not completely dox, but know their age, their sex, their location, often where they worked, other pieces of data.

Just by mining it with AI, The Economist says they could do it for 20 bucks in a half an hour. You're not saying who you are. You're just writing. You're just responding to messages. All of that data is mined and they can tell just the words that you use, they can tell who you are, where you live, your gender, and so on. Think about means money is your most ultimate Ultimately, it's your most intimate form of communication. Like you can post stuff on social media and it's the message that you want everybody to see. I had this great family vacation. My family's all happy.

They love each other. You know, we're sitting on the beach. It doesn't tell the whole story, right? But your money tells a story. It may not seem like it with individual things, but it knows your habits and routines. It knows where you go, when you go there, who you interact with, what you care about. If you're in good financial health, your money tells a story. So we need a different mechanism. We need a different mechanism for shielding ourselves against this kind of data mining so that we don't disclose a story unless we want to disclose a story. Now, Bitcoin attempted to solve this as well as it relates to banks. So, banks create

capture a lot of information. We've all seen like all the KYC stuff. All of that stuff gets hacked. If the data sits in a database, it will be hacked. But, what did we do? We created Bitcoin and we said, "Okay, no bank. We're just going to put it on a public database. So, everybody can see it. Everybody can validate it. Right? We need this kind of openness. But, everybody can see this data for all time. It can never be deleted. And it can be mined. And all of that data when we were mining um data back in the day, we had 26 different data sources where we pulled data from. Bitcoin or any kind of transparent ledger becomes another data source that can be

aggregated to tell a story about you. So, cash, who sees it? The merchant sees it. Maybe the people standing in line behind you while you're waiting for that coffee see it, but it's very ephemeral. Maybe there's a video camera. But, it's not that interesting. The bank the bank sees it, which means the state sees it. All of those transactions. With the transparent chain the bank sees it. The government sees it. A foreign government sees it. A hacker sees it.

Somebody that might want to rob you sees it. Somebody that might in the future make a decision about whether you get a job So, we need an option that allows you to disclose who sees what and for how long. And that's why Zcash was built. The way that it works is that it uses something called zero-knowledge proofs. So, it proves something that is valid and is true, that a transaction is true and valid, without disclosing any information about you.

It doesn't disclose who paid. It doesn't disclose who received. It doesn't disclose how much. Now, you can choose to like give it to an accountant or give it to your attorney or give it to your spouse. You can choose, but that's the point. You get to choose where and how your data is used. Like how do we do this? People will say like, well, like the governments are too big. Surveillance is too big. We can never break this. It's too powerful.

When I was in my early 20s, I spent summers in the Czech Republic teaching English. And they told they told me my students told me about something called the Velvet Velvet Revolution. So, at the time it was Czecho-Slova- Czechoslovakia un- under communist control. Everybody was being watched. Everybody was being surveilled. They could They couldn't move around. They couldn't read certain books. They couldn't watch Western movies. So, there were a couple options. One was to like try to fight.

But the powers were too powerful. They had big guns. How do you fight people with guns? So, there was a paper published in 1978 by Václav Benda, and he talked about creating a parallel society. And so, bit by bit they uh created a society that allowed people that was adjacent to the existing system, but not within the system to opt in to something new. And person by church person chose to join in. And they shared books. They shared ideas. They shared music. They had their own commerce.

And so, then over the course of the 10 years when the wall finally fell in Eastern Europe, they had created a parallel society, the parallel polis. And when that fell, they had a new society to replace to supplant the old society. And that's what we're doing here. We're building a new financial system to replace the existing financial system, which is fundamentally broken. Which is fundamentally about surveillance and control. To create something new and fresh. So my challenge to you is close the curtains.

Not to overthrow the powers, but to stand up with the rebel yell and try to fight the people with a big guns. But to create a new society. Give people the option. They don't have power the option. Um. Uh in. So if you're interested that QR code goes to Dotal. You can download a wallet. You can get some Zcash. And try it. What I've heard time and time again is people really don't get it. Until they send a transaction a private transaction to somebody and then they try to look for it on a block explorer.

Do that with Bitcoin, you can see what you can see. Try that with Zcash, you're going to not see anything. All right, thank you for your time.