The future with privacy preserving protocols

Transcript

[Music] Oh, one two one two. Okay, great. It's working. Hello everybody. Today I will present to you the future with privacy preserving protocols. I'm Paul Henry Cashvaz. I'm head of developer relations at Miden. We have a major problem in crypto and this problem is that blockchains are fully public and this basically means that we have all these scans like eter scan base scan soul scan etc. And what happens because

of that? It means that every single action that you take on the blockchain today leads to a permanent trace that is available to anyone to see forever. And just imagine what I could do with one single query like with more and more performant AI models. I could just pass your address to one of these models and I could correlate onchain information, off-chain information, Twitter, LinkedIn. In one single second, I could know everything about you. Where you live, what you do, where your kids go to school, what you ate. Like, I could know literally everything.

And this is not really a world I want to live in because this really, really seems like a dystopia. And I think that is just a lot of risk, onchain risk. But the problem is it not only leads to onchain risk, but it also leads to real life risk. I'm from Paris originally. Uh I'm French. Bonjour. Merci. Thank you for being in my country. Very honored. Glad to have you all of you here. But in the last few months, the crypto community in France has been in shambles. We've seen dozens of attacks on crypto people, crypto founders across

France and across different countries. So we have this and this and this and this and this and this like it just continues and it will continue if we don't provide privacy. This is just reality. Gangsters now understand that there's people with large amounts of money on chain that they can target. They didn't understand it fully before, but they fully understand it now. So, it's just do you want to put yourself, your family, your friends in danger. And to be honest, sometimes myself, I'm scared. And so, this is why I also work on privacy. I believe that it's something that is paramount for humans.

And so it's there's a real need. But also I want to make the argument that without privacy mass adoption of crypto is not possible. It's impossible on public blockchains. And the reason for that um is very clear. So there's a survey paradigm that was done on more than 300 professionals. So it ranges from asset managers, retail banks, corporate banks. So it's like big big big players, big institution, big companies like you can picture in your mind like people like Black Rockck, Citadel, Stripe, Visa, Mastercard and others. And they asked them like what factors are holding you back like why aren't you using crypto? And there's three main factors. The top three are

perceived risks, regulatory uncertainty, and the lack of privacy. The reality is that the two last are 150 and 155. So they're pretty much tied. But then this was done before we had the Genius Act and before we're starting to get all this regulation. So most likely this number would be reduced which means that privacy is actually the second one now. And then in terms of perceptive risks, it's it's mostly we're we're doing the best we can like we have more and more auditors. We're having less and less uh actual hacks. We're having protocols that are formerly verified. I have incredible researchers even in this room that work for different companies

that are working in all these things which means that the security the brisket risks are going to dwindle and it's most uh it's mostly a question of what we call the Lindy effect it's like how long and how resilient did the thing go through time so like the more companies will come on chain and the longer the chain will exist the more secure it would be perceived which means that the last thing in the top three that we're actually not really focusing on and in my opinion is the most important thing everybody should focus on in crypto right now is privacy. And it's really clear like this is the size of the crypto market compared to traditional markets. We are microscopic.

We're 1.3%. Which means that basically we shouldn't be focusing on crypto users. This is not where we bring mass adoption. This is not how we bring this gold that is the blockchain, all the incredible things that we all together are building to the masses. This is not how we realize our vision. How we realize our vision is to make our technology attractive to all these big companies like Stripe, like Google, like OpenAI, like um Black Rockck, like Citadel, like all these big players that actually have the money and actually have the capabilities to actually build the applications that the users would use. You don't want users using your chain. This makes no sense.

It's like saying a users would use HTTP. No, a user uses a website and the website builds on top of HTTP. Now, it's like a company builds an application and the application builds on top of the blockchain and the user uses the application. It just makes a lot more sense. So, let's make applications uh let's make the blockchains attractive for the big players. And the main thing that we need to do is to bring privacy. So I talk about privacy but I didn't really say what it is. So to me there's different levels of privacy on chain. A chain is not that complex. Basically a blockchain is there's different accounts

that transact. Um and basically when they transact they will update the ledger and in this ledger when they update it or they can update it directly or they can activate functions what we call smart contracts. They can execute code. And so there's these three components. There's accounts that transact and that sometimes activate functions. And so you can have privacy at all these different levels. So or you can have privacy at the account level which means we don't see what you have in your account. Or you can have privacy at the transaction level. So it's like a public transaction like we have on Solana or Ethereum today is like the sender, the asset, the amount and the recipient are fully public. But then you can have anonymity which is the sender

and the receiver are private and then the asset and the amount are public. Or you can have confidentiality which is the sender and the receiver are public but then the amount and the asset are private. And then the last thing is actual function privacy. So you're going to execute a smart contract and nobody's going to be able to know what you actually executed. I'm going to say a big thank you to we die um which I kind of borrowed these slides from uh because I think it was really really well made. Um so thank you very much. Um and so this is basically onchain privacy on one slide and all these things are actually composable. So if you think about it this is the endgame. You just don't see

anything like the sender, the receiver, the asset, the amount, everything's private. And so when you have that you get onion privacy. So this is the goal we should all strive for. And I want to talk about the different flavors of privacy too. So we talked about the levels but there's also different flavors. There's many players. There's one goal which is privacy but there's millions of rows that lead to Rome. And so you can do it in different ways. We are doing it with ZK client side execution and client side proving.

Um, Aztec is doing it with ZK2 differently with snarks and circuits. Alio is doing it differently. There's also companies like Encoder are using tees. There's Tacio that uses MPC. There's Zama that uses FHE. There's many many different ways to achieve privacy. Um, and so it's interesting and maybe even others that I didn't show here, but I think it's interesting to think about. And so I think there's quite a natural evolution of the different protocols that we've had. We started in 2008 with Bitcoin and we created this this ledger and it was quite incredible and it quite changed the world today. And I think we can all agree that it's not here to leave like it's going to stay. And so we

were like, okay, Bitcoin's great. That's a great asset, but then there's a lack of programmability. So we created Ethereum. Uh so now we have programmability but then the researchers were like okay but we don't have privacy like like that's actually a problem if we didn't have mass adoption. This is not a new thing like people knew it for many many many years and many people have tried to build things even before Ethereum actually got built. We had different coins like Bitecoin and stuff like that that were actually like privacy preserving protocols on top of Bitcoin and stuff like that. And so researchers were like, "Okay, let's try to build privacy preserving protocols."

So they built things like Zcash or Monero. But the problem with that is that at the time we didn't really have the tools to be able to make them programmable. It was really hard. It was really inefficient. And so you got privacy, but then you lost programmability. And so that was a very very very strong trade-off that you had to do. Um and then people were like okay then what we could do if not building uh these standalone ecosystems we could actually use Ethereum and on top of that use its programmability to build privacy preserving protocols and we've had to cache rail gun privacy pools and others and I think they're incredible. I've used all of them. I'm a privacy super

user. I love them and I have a lot of respect for you guys and thank you for all everything that you guys are doing. But I can confidently say um that the user experience is just not the best. If you guys have tried um it's quite hard to understand. There's a very steep learning curve. You maybe need to migrate so to use a new wallet. Do you use a new front end? You need to um go through these compliance checks. Maybe wait for a week to be able to deposit. You have fixed amounts that you can put in these protocols. It's it's just sometimes really really non-trivial to use. So it's not a like a seamless experience. It's not like privacy was embedded in the chain and was imagined from the ground up. And so that's a

little bit what people are trying to do now. What Aztec and Maiden and other protocols are trying to build. We're trying to think how can we go from the ground up and build these privacy preserving protocols with privacy at the core. And so this is what we're building at Maiden. I'm going to talk very slightly about Miden because the most important for me is to talk about privacy, but we're doing something beautiful and great I believe at Maiden. And so I want to talk to you a little bit about it. How do we bring programmability, incredible UX, but also privacy embedded in chain.

So at the start we had Bitcoin as I said and then I believe that we had basically this vertical of high performance. So we added programmability and then high performance what we called scalability right. So Ethereum Solana Sui Aptos all the rollups Megat uh Monad like all this research around scalability and then on the other side you basically had other people building privacy preserving protocols like Zcash, Monero, Alio, Aztec but these were not focused on performance but were focused on privacy.

And so what we're trying to build at Maiden is like how can you make all these two verticals that kind of never converged converge. So that's what we're building a chain that is extremely fast, extremely cheap, extremely secure but also fully private where you can do public and private transactions. Let's go. And so this is basically what we want to do. As I was saying, without privacy, you don't have these big players that will come on chain. So without privacy, you can't unlock realworld use cases.

Um, and so with privacy, you can do them. You can have dark pools. So, private trading, private OTC, private asset management, private stable coin payments, private lending markets, um, RWAs, private payroll. Like, imagine all these things that we can actually unlock just because they're not possible today. Just imagine a company coming on chain today. Do you think that they can pay all their employees on chain like this publicly? No, it's not. It's not possible. Most likely, it's not legal. They cannot do their strategic investments. They would leak all their onchain trading strategies for a government on chain or for an institution on chain. Imagine them posting your identification documents on chain using it as a database. It would

leak all their people's information. So, it's just not realistic and it's just not possible to think that it's usable today blockchains as a public ledger. So with private blockchains, we're unlocking incredible use cases and I think that's really really exciting because this will bring crypto mass adoption. And so one of the few last things I want to end on is basically I want to really really really emphasize on that. I want to remove this vision of people privacy is for the bad. Like you want to do illicit things like money laundering or terrorism financing or illicit

activities like it's something dark or it's something a little bit unclean. No, it's definitely not what it is. And it's definitely not what it is today. What privacy is for is for protecting democracy. It's for human sovereignty. It's for protecting your loved ones. You want to protect yourself and you want to protect others. And if you want to do that, you need privacy. And so that's basically something around compliance, right? What we want to do, we don't want to fight against the governments. That's definitely not what we want to do. What we want to do is make sure that people can stay safe, that they can stay sovereigns, that they can keep their privacy while still being compliant. So that's what we call uh

private compliance. So now with different technologies and for us zero knowledge you can execute something you can do something and you can keep it private but you can prove that you did it correctly. So you could prove to the government that you traded on a deck that the government doesn't know anything about your trade about who you are about anything but you can prove that you did it following the rules um of the compliance. And so that is extremely important and I really think that this is something that is really futuristic and that we need to build and this is why I'm really excited to build miden.

And so this is the choice that you can make modern man make your choice. Do you want to see a world quite dystopian where you don't have any privacy where all your information is leaked on chain every single time you do something? or do you want to see a world where you and your loved ones are protected um by different types of technologies? I know what choice I'm making. I'm definitely choosing this one. Um and this is why every single day I'm working really hard to become a privacy expert, but also just working on building um the future of privacy preserving protocols.

So remember without privacy there is no crypto mass adoption. Let's build the future. Thank you. We're out of time. Thank you.