Andy Guzman and Vlad Costea - Fireside Chat // ECC#2 - Buenos Aires 2025

[applause] Hi there. So, first of all, thanks to everyone who decided to stay. I know it's late and there are other parties and events that you could be attending and I appreciate that you're still here. I'm gonna have a friendly conversation with Andy right now about the fact that I'm a Bitcoin maximalist. He works for the Ethereum Foundation.

And is there any common ground in this? It's interesting to find out. There's also fire. So that that's good. Need to stay true to the fire pit.

Um yeah, maybe Vlad, let's start. Uh so Mikol already said a presentation. Um you lead this podcast. You have interviewed a bunch of people. Let's start with your definition of privacy and where do you see Bitcoin be right now?

Like how is it going? So, you want me to define privacy or you want me to talk about my work in both?

I've interviewed a bunch of people. I don't want to talk too much about it because we only have 20 minutes, but I have a bunch of seven-hour interviews with Amir Taki and a bunch of other hardcore privacy people. Amir could not be here if he's watching this. Hi, Amir. And privacy in general is your choice to reveal whatever you want to the world.

It's about having the option to not give out information that you don't want to be exposed,

right? And the second question is, how is Bitcoin doing with privacy?

Not so great. But we like to brag about the lightning network being pretty private, even though it's not good enough. You don't have privacy against your LSP, which is your lightning service provider. You don't have privacy against your custodian if you're using that. If you do want to have privacy, you need to manage your own node and be able to basically open channels with only peers that you trust that are going to keep your privacy.

For a sender, it's pretty good because basically it's encrypted just like the tour onion layer with peers that route your transaction. And it's not that bad for receiver. It's kind of terrible because you expose information about your node or the custodian or the LSP that you're using for amount. It's also decent because there's not much liquidity, but you can sort of deduct how much you can send and receive from every node. So, it's not ideal if you want to use it for amounts privacy, but sort of works.

There's also liquid which only has confidential transactions and that means you can only hide the amounts. But I'm optimistic that we're going to get these ZK roll-ups on Bitcoin like Alpen and Cutraa. And it's very easy to basically fork Tornado Cash or Rail Gun on top of them. And that's where Bitcoin maximalism really happens.

It's interesting. Yeah. Learning from more projects that initially started on Ethereum, but then we might also learn from like projects started earlier uh on Bitcoin. I guess the second question is where do you think it's worst in terms of like the networking layer uh the transaction layer the I don't know uh all these financial layers or identity layer where do you see this big moonshot on the Bitcoin ecosystem

uh that's a hard question [laughter] you're not giving me an easy answer here but

I I thought this cut got cut off. Anyway, I do believe that Bitcoin is going to become money and we're going to make it work much better as money. It's just a matter of how long is this going to take because it's been a while since we decided to scale with layers and these layers have never been exactly what they set out to be or what they promised to be building. I know that Ethereum also has an issue with L2s which are not really decentralized. So the fact that the most liquid L2 on Ethereum is base and that one is sort of centralized and all of these ZK rollups they don't have like the trust minimized assumptions.

Some of them are just nihilistic about it and they're like let's just put out something that works.

So I I think the entire space is dealing with this attempt to try to minimize trust. But it's sort of interesting that after a while Ethereum was supposed according to some to scale on chain but it also decided that it's better to pursue L2s and let the free market figure out how this is going to happen and in Bitcoin we sort of agreed that lightning was going to be the one solution and then we realized that it's suboptimal

and right now we're just searching maybe it's going to be ZK roll-ups, maybe it's going to be drive chains, maybe we're going to have something that gets all the users and helps us become closer to the vision of peer-to-peer electronic cash.

Right. Right. And I'll say um most of CK rollups are not private. So they're not really CK. There are like you know uh fraud proof.

They just use ZK for compression.

Right. Right. Compression. Uh they are though um a few you know layer 2 rollups that are private or building privacy as a as a first glance citizen. And shout out to all these projects um which I have not seen yet at least on the on the Bitcoin ecosystem.

Uh another interesting thing is like even though we have built these um systems even though there might be some of them centralized they cannot rockpool you and I think that is an important property uh and it's like good compliment. Um I guess maybe I'll I'll throw like one or two more spicy questions. Please also throw some spicy questions to me is about Ccash. [laughter] So Ccash is Yeah. basically a Bitcoin fork added privacy and until recently, you know, not many people had heard of and now kind of like exploded and took over by surprise all the crypto ecosystem and I'm ex extremely happy because it's like very smart uh people have been working this for years and now in a sense is challenging some of the narrative of Bitcoin as a store of value um or is trying to you know rob Bitcoin's like uh leadership on on like yeah fixed amount but also at the same time private.

So, how do you feel with Zcash? Uh,

I love Zcash.

Okay, [laughter] so Zcash is basically what I wish Bitcoin was right now because 2013 was the most interesting year in the history of Bitcoin. On one hand, we had no so we had the bull market which took the price to $1,000 which led to a lot of people becoming interested. On one side, you had the finance people who wanted smart contracts and that's what led to the Bitcoin 2.0 O proposals of which Ethereum is the most successful right now. And I also believe that Ethereum right now is the biggest side chain to Bitcoin, which is something that Vitalik also admitted on my podcast as there's like a 100,000 BTC that's wrapped on Ethereum,

right?

And on the other hand, you had the cipher punks who realized that they can use zero knowledge proofs to improve the privacy of Bitcoin. You had two papers that came out that year. The first one was zero coin. The second was zero cash. Basically, zeroache was supposed to improve the privacy of Bitcoin with zero knowledge proofs.

It was not popular enough. It did not get traction, which led to the creation of Zcash as an altcoin. And I think that Ethereum has a similar story and it was supposed to launch as a protocol sort of like counterparty on Bitcoin, but the upper return size was too small to for it to do everything. So, first it launched on Primecoin and then it became an altcoin of its own because of these limitations. So it's it's sort of unfortunate that we have to go through these cycles of trying to refine technology in altcoins, but it's also beautiful because the stuff that Ethereum and Zcash were able to do over the last decade is really remarkable and is something that maybe could not be done if they were just side chains or something that was built on Bitcoin.

Maybe that they would inherit that conservatism. Whereas Ethereum and Zcash were able to take some risks in terms of design choices that maybe Bitcoin developers would not approve of. At the same time, I'm optimistic that, for example, Zcash is sort of the standard for privacy in the industry. Thanks to the ZK Snarks libraries, you're able to have tornado cache and rail gun on Ethereum. And on Bitcoin, we have some proposals like shielded CSV, which stands for client side validation.

There's a paper that got published last year on this topic and I do hope that maybe we're gonna get Zerocoin at some point in the future, like the latest version of it. I'm not going to hold my breath for it, but I'm happy that Zcash is successful because this proves that the technology is sound and makes a lot of sense to use and more people will wake up and realize, wait, this could have been Bitcoin. Maybe we should pay more attention to these ZK Snarks.

Right. Right. Yeah. And if somebody can, you know, hack it, crack it, then yeah, this is just like I think there's like the critique, right, that there's a back door, whatnot. And I think like one of the challenges that the Bitcoin community might have is this oification mentality of not touching, not adding, you know, all these ordinals, all these like spam like um uh even like this uh civil war that is going on with core and and no.

So I think that's a challenge that the Bitcoin community will have to to navigate and that's why basically all these ecosystems started. Uh I will still resist to call Ethereum a side chain or an alcoin. I I definitely think it's much bigger than that now. But like okay uh semantics I guess. Um do you have any spicy questions for me about the path that Ethereum is taken or privacy?

I mean, I'm trying to stay away from the lowhanging fruit, which is like, oh, how come Ethereum says it's Cippy Punk when it has a foundation which sells E and funds developers arbitrarily? I mean, I'm let let's not get there. Let's talk about privacy, which is sort of the topic,

but I think the account system that Ethereum uses is a lot more difficult to make private. So,

yes,

how do you think this is going to happen with all the good technology that you guys are willing to use? it's still more challenging to get privacy on Ethereum. So, how do you envision this is going to happen?

So, I think the best thing that Ethereum can do is it's it's programmable and it's much more expressive than Bitcoin and that is been the advantage to just like simulate UTXO transactions in both all of these like um yeah privacy protocols pools and that has in itself even layer 2's constructions that in itself makes it a lot more capable of experimenting exploring different approaches. Um I do see a multi-state appro approach in privacy technology with Ethereum. One is uh the privacy that we can get at the application layer and we have seen you know successful 1 billion valuations even more you know for example tornado cache but there are like 7 10 20 more uh forks and improvements of of tornado cache. The other one will be all the um privacy focused layer twos and yeah just to mention a few ones right uh um AIC miden um now inmax is is exploring and and I know all the layer 2s that are more generalized are also adding privacy protocol so I I think it's just like extremely more scalable um and then the other one is the privacy that we can embed at the core protocol layer and there are several proposals uh including like proof of burn or CK wormholes and a few other ones that have a solid chance to just need and and improve at the core layer. So I'll say like perhaps uh Bitcoin um pursue first more like the security oification decentralization in u exchange of programmability extensibility and scalability and Ethereum actually tried to prioritize decentralization with programmability and now it's pursuing this privacy.

So I think it's I don't know much easier path for us in some ways even though it has this account accountbased model versus UTXOs which is definitely helps. Uh so yeah we'll we'll see.

Also you sort of grilled me about Zcash becoming a pretty good store of value because it makes sense to hold the coins in the shielded pool as you get better privacy over time. So, I do have to grill you about the fact that Zcash, even though it was friendly to Ethereum, is integrating DeFi protocols from Salana right now. And it seems like Salana devs are more friendly to Zcash. And how come this is happening? Like you guys had a head start with the ZK tech and now Salana are integrating this with their markets,

right? I'll say like two things. one uh Ccash can be trustlessly bridged to Ethereum now and can land directly into uh some privacy protocols. So actually the DeFi composibility and liquidity that exists on Ethereum is much much larger still. Um there is though of course like um K and some leaders trying to from other ecosystems including Sena just you know getting to rub with with who was the major winner of this like privacy cycle.

So again I I think it's still great. I do remember though um collaborating with many CCash foundations, engineers, electric people um both on Halo 2 forks that we that we um initially at least in the foundation leverage from and many other techniques that I I I would challenge that there is no collaboration. I think this ecosystem and people are great. Uh so yeah um I guess it's just like free market. They can collaborate with whatever ecosystem they want.

Um I do think though that it's easier for us to add um privacy now that we have DeFi and liquidity very much developed versus uh an ecosystem who has privacy but wants to add DeFi and liquidity. That's that's much harder to break. That that'll be my my my argument.

Yeah. I'm also curious for those listening here. Does anyone hold Zcash? Like like I've seen that it has a resurgence. Like raise your hand if you own Zcash.

I see like 10 people, but most of you guys are Zideline. That's what we call it. Check it out. It's pretty cool technology. Maybe push your favorite developer to integrate that into Ethereum.

So, is it my turn to ask questions or is it yours?

Okay, maybe you do one and then I'll do another one.

Okay. So in terms of privacy on Ethereum, it seems guys. So something that I respect is that you you fight for the cause of tornado cash.

Yeah.

And something that I wish I saw in Bitcoin when they arrested the Samurai wallet developers

as we just shrugged it off and we're like h it was maybe bound to happen. It was inevitable. That's what what we like to say. But the question is, how can you guarantee that future developers who come up with new and exciting ways to get privacy are not going to follow the same pattern of getting arrested and having to fund raise money from the community and going through this phase of because obviously it when Trump became president, we're hoping that he's going to be more friendly to crypto in general, but it seems like he's only friendly to ICOs and methods of raising money. but he doesn't like privacy.

Like he's no different from Biden in this regard,

right? Um I'll say like one like the privacy fight is is is a fight for every ecosystem together. So yeah, um I do sympathize and got very sad about the the news for the samurai wallets and I'll say like it it caused chilling effects, right? Like I would say like the tornado cash um situation put the privacy ecosystem like two years almost on halt. like a lot of chilling effects and we are seeing just now I think the sentiment has changed radically in the last few months.

So I'll say um there's no guarantee and no yeah basically for sure nothing will happen to people in this room sadly but I think that's why it's so important to one I think that's like the collaboration solidarity is like understanding that privacy devs getting you know trial uh does affect everyone right even if they are not on quoteunquote your ecosystem the other one is it's that's why it's so much important to do reach out do understand that um how do you say this like uh these uh advocacy groups are well funded and are supported. So I would say like just in the last couple years there was like a massive change and awareness from the crypto industry that this is how you win your battles and this is how it becomes normalized privacy right so I'll say like advocacy groups is great and the other one is privacy funds for privacy for legal defense um so I will say like there are some there are there is intention for many of the privacy projects here and I will say we just need to pull and organize even more how can we have a very strong uh legal defense fund that can help and support this this because otherwise people would just be fearful about trying to fight by themselves all these you know massive uh state mandates. So I'll say like we're still not there yet. There's still a lot you know open cases Roman Alex a and probably others um some wallets and there's still some chilling effect but I do see it's changing. So I guess like maybe let's try to advocate within your ecosystems to donate money for all privacy devs even though they might have not been a protocol within your ecosystem because it makes sense.

Would you say that this fighting is owed to the fact that you have a foundation which is able to coordinate because the way that I see it in any open source project the purpose of a foundation is kind of to make itself obsolete over time.

Yes. to build protocols and then just leave that in the hands of the community. But if we're going to have a situation where building stuff leads you into a legal battle, then I guess the foundation is going to become more of a legal arm which tries to defend the builders within the project. So would you say that the fact that governments are hostile to privacy which Ethereum is pursuing is prolonging like the life and the purpose of the foundation?

I wouldn't say so. I would say every organization in an ecosystem has um a duty to do protect and offer and support privacy builders especially if those organizations are privacy organizations because they start you know um government overreach starts with privacy but that it continues to every aspect of your ecosystem chain right so yeah even in bitcoin even if there's no foundation like privacy builders on bitcoin should create a privacy defense fund right so that is one the other one is um specifically about the Ethereum Foundation. It's just like um how do you say this like approaches and strategies to how to foster a very strong and healthy ecosystem. So sometimes yeah I will u directly donate to these causes and sometimes it will be through like long-term thinking advocacy groups that can can can help and prevent this to happen even even from the start. So there is no relationship I will say necessarily with the time that the foundation can live and survive.

I think that's there are other factors in it. It's more of the this is a new this is a new challenge a new responsibility that that now they have just based on the ecosystem and and environment that we live in.

We were informed that we only have two minutes. So you can ask me a question I guess we can take a question from the audience if there's any.

Right. Let's say what would be your final message for um the Ethereum ecosystem trying to support more privacy tools and what can we learn from the Bitcoin ecosystem? What you can learn from the Bitcoin ecosystem is that it it's not a good idea to cheer when big money comes in and you get ETFs because that sort of leads to a situation where maybe it's a nonpopular opinion, but I think that you don't need to make Bitcoin proof of stake to control it like a proof ofstake system. Meaning that one of the arguments that gets presented sometimes is we should not do this because this will lead some investors to sell their coins and they will lose trust in the project. So therefore some institution that's very close to the money printer is able to politically keep the project hostage from growing just because they bought a lot of the coin.

And I I think this is an attack vector. It's sort of an advice that I have for the Ethereum people to not get too excited when big money comes in and you get ETFs and suits

who decide that your coin has value. But in regards to privacy, like I think you're on the right track, at least compared to Bitcoin and there is more emphasis on it. There are conferences about it. I don't think there was any Bitcoin conference that was specifically about privacy. And to most Bitcoiners, they're like, "Yeah, just coin join.

That's sort of enough." And it's like a decentralized mixer. It only sort of creates a black box in between transactions which chain analysis has become very good at singling out and saying okay we don't care about this. Let's see how much money goes in how much of it goes out and then make some connections. And with AI I think right now blockchain an analysis is much more precise than before.

So yeah, I don't think I have any sort of advice because you're kind of on the right path for the project to get privacy.

And for Bitcoin, I would say like uh similar. It's like you have uh solid institutions and big companies and and and like a lot of mind share. And I think if there's like enough uh attention put into privacy, it'll be a huge win for everyone. Uh just starting from the privacy defense fund, but just like collaborating even more. There are like good ideas coming up from this side of the channel going to this other one.

um just learning and collaborating will be will be much much better.

Okay, I I guess this was our time. Thank you very much for listening.

Appreciate it. [applause]