State of Privacy in Web3: Where We Are, Where We're Going || panel discussion

Um let's start uh from that side to here. Uh short introduction. Who are you? Um what's your relation to web 3 and privacy specifically please?

Thank you.

Is this on? Yes.

Hello. I'm poly mutx. uh work on wallet beats which I'm ripping the nice shirt off. Uh we're trying to basically be a version of L2 beat but for wallets to create incentives for wallets to compete on things that market incentives alone don't converge on of which privacy is a very important one. And so we look at the various aspects of wallet privacy around um do they have private token transfers?

Do they keep the uh link between your public address and your personal information private? Those types of things. And I'm happy to talk your ear off about wallet privacy in general. Amazing. Hey guys, I'm Kimo.

I'm uh from Finland originally, but I've been traveling a lot like all the crypto nomads. So, I'm from Mass Network. I'm originally co-founder of Orb Orb.club. It's like a web3 social mobile app and uh I'm like we like I sold that company like a year plus ago and now I'm like still heading that as a head of product and I'm also heading like the lens protocol which is the decentralized like social media protocol which we like truly try to make the future of like Ethereum social and uh yeah been like invested heavily in both in building like something like userf facing But at the same time thinking about like uh how the infra works and the privacy is a big part of it like Satoshi started Bitcoin and like he's not he's a private person but still has a like online like a persona.

So I think uh like social like needs to like crypto is built for social but social is not yet built for crypto and like how can we how can we like build this like like world in like to a better place. So that's kind of like where I'm at. Hi everyone, my name is Marina and I'm leading the European Ethereum Institute. We are a policy organization, advocacy organization based in Brussels. We do work in the EU and the UK.

Uh there's a lot of advocacy that is happening on the level of different regulations and laws when it comes to uh crypto in general, but privacy as well. uh there's um quite few I think um interesting things coming from both of the jurisdictions that you heard about related to privacy and that's also part of our job to basically communicate to the regulators what are the things that the industry but also in general I would say um privacy advocates care about and uh basically create dialogue directly with regulators.

Thank you. Uh I'm Daniel. I work on the uh radical protocol. Radical is a uh sovereign code forge and we put a lot of attention uh into making it uh suitable for people who are seeking privacy and so um this is something that is quite core to the protocol and beyond that I also work on the IPFS project and uh previously worked on Aragon and some other stuff in this space.

Hey everyone, I'm Max. So I work for uh NIM. Uh we're a company that is building a mixnet. We have a mixet. Um I specifically work on our SDKs.

So um those are all very new, but the aim is to make it as seamless as possible for developers to not have to think about uh how a mixet works and just kind of use everything as they would normally. Otherwise, uh the company we also like have a product NVPN. So we kind of have a a decentralized VPN and a mixet. And um yeah, it's really kind of all focusing on protecting the network layer and kind of supporting basically every other app and every other project that's on this panel. So yeah, that's me.

You already have one?

Yeah, you already have one. Yeah. So my name is Eva. I'm my main focus is DeFi, especially DeFi systemic risks. And I have spent last like half a year building something similar to Labit, but for the DeFi risks.

So I know a lot about various like data pipelines and AI pipelines and that's why I was asked to work with the brief privacy now for the explorer to be some dashboard and pipelines for privacy project data updated. So we want to have like big repository of all privacy project up to date data how private they are work on methodology and stuff. So yeah.

Hi, I'm Connor and I'm a developer contributing to Zcash currently working on the Tachion shielded protocol and the Ragu proof system which uh are intended to make Zcash's shielded pool scalable enough for the entire world to use.

Awesome. Yes, thank you. Uh thank you all for the introductions of course. Um so if you read the description for this panel, it says that it's semistructured and um as I'm replacing the moderator for now, it's definitely going to be semi. I'm curious as we we you got people here from all let's say aspects within uh blockchain industry.

Uh be it communication, payments, identity, etc. Um just to start it off with in general um what would you see in terms of narrative changing the biggest um wins recently where are we heading in the direction of hope and where are we heading in the direction of cope as it is translated in the description of the talk who dares to throw the first stone. Okay, I mean someone has to um right in terms of the directions of hope then um kind of across the stack right I'm not talking purely at the network level even though that's like kind of what I mostly focus on but like across the stack then we are actually getting to a stage where there is a bunch of stuff that either exists already in the form of like modular SDKs you know we have people who are working on like decentralized storage infrastructure we have people who working, you know, kind of at every level there is stuff that's there, right? And it's kind of getting to a point where you um you feel like it's just kind of plugging it all together, right? Um the I think you can tell in terms of the way that the wind is shifting how much everyone's kind of the narrative is turning slightly away from privacy as like an anti-surveillance thing and more into a censorship resistant thing where you know I mean the the kind of the direction of kind of attack or like negativity is gone from passive to okay how do we actually make stuff that's like robust when someone tries to shut it down rather than when it's being passively kind of surveiled.

I think that's um an interesting like sea change that I've seen in the last year or so.

Also, we'd like this to be an interactive panel. So, if you wholeheartedly disagree with someone, please raise your hand.

Um like from my side like uh like first with the cope. So, I actually have like a Microsoft uh cap like in my bag. So like blockchain is like really like uh like are we like really going to scale like I think that's kind of like what's been like really like a for me the cope like are we just going to be like a Linux or a Microsoft or something that is like not really innovative not really like like a like we have great like crazy ideas like a lot of things but like how do we get like scale like how do we get like real users to use them and uh like me building social like now like five years like uh like it's not enough to build a like a decentralized Twitter like or like like really like or build anything like like just for the sake of decentralization or sake of privacy like we have to think about like what does the what is the actual innovation and like what does that innovation enable us and uh we have lot of like a crazy amount of like uh innovation been done and I think now the hope what where I'm like really excited about is that like we have the technology and we have the the like with AI als also like it's never been easier enough like this easy to build something for the user and like how that how that looks like in the next 5 years is I think what's like really excites me is that like now like from like building from idea to product has never been this easy and we have a lot of technology coming here so I'm like really excited about this.

Did you just uh use Microsoft as an example of a failed company with no users? Uh I meant more like uh like like like like are you like like are you using Microsoft as a like as your computer as your laptop?

I personally am not and uh you know I

like that's the analogy. So it's more like Micros Microsoft hasn't failed but it has more like become I think the the the win there is like the institution like it's only used by the institutions like not as a like a users and now crypto is again like going to this like a like a path towards institutions like a lot of talk about like how how do we legalize things in crypto and I think like we are like like this place is like a neo cipher funk so how does like like instit ions like for me like a big companies like that's not the way where where I want to go personally.

How do we bridge the gap between neo cipher punk individual contributions and institutional adoption

that that is the like the like for me a big question. And I think the way we do it is like really like try to like like really think about like how the world looks like in 5 years like where do you want to live and like how do you like like like in the future and I think the cope has been in the bad like we have like so much bad history like like with the politics everything is just like bad Europe sucks like uh like Europe as a European I can say that like it's it's we are coping as a Europe we are coping like I don't know like how do we scale like we don't have any like AI companies like how do we like become like big but I think with like by struggling like we also find like a new ideas how we like go forward so I'm like really bullish on like what what is going to happen in the next few years

okay

Kim is bullish you too Marina

so yeah like on the struggling part so what what's happening maybe on a more geopolitical point of view uh and how it is reflecting in the work we're doing and how it does reflect in the technical uh reality as well that we're using today. So we do know what happened a year ago, who was elected in the US. Uh at that time mo maybe less people know we also had a new commission in the EU and so the European Union has had a reactive policy to what's happening in the US and you have mostly also heard we're talking about Microsoft. Some of the uh basically I don't know governmental institutions they're not using uh Microsoft anymore. They might not be using so-called American software anymore.

So one way how Europe Europe is reacting to that is we are uh going to use our own self-s sovereign tech if we don't have it we should build it somehow there's um like legal um proposals laws etc around that they will go into procurement as well. So they will be very practical and very concrete. Um and then you know we can have a discussion if that is possible, if that is feasible, if this is something that we want but it is happening. So that that's a fact. Uh one part of like our advocacy is going into the direction of maybe having a European company is not enough.

We also need to look into how this tech is designed. What is the design uh features? How what are we deciding about? You know all these things that we care about sovereignty, privacy etc. is like not only European is the best or or will kind of save the situation uh that we're in.

And then uh besides that, besides like the software that we're using every day on a computer when it comes to payments and privacy on payments, there has been um I would say just like a lot of things that we might not have been used to in the past of like political interference with groups and also individuals when it comes to payments and their own ability to use the payments like the the I would say web two payment system. um that you know again it is uh it was and it is unprecedented. So what are we doing in the times where the like again the geopolitical system is changing? Um how do we react as like you know lawyers, advocacy people, how do you react as a builder? What can we do uh as a community and uh I think we all have different roles in these systems like everyone is uh contributing in in different ways and there's like not one right way to do it.

Um and and I think like kind of bringing everyone together and understanding that we're kind of building in the same goal but maybe we are you know dressed in a different way. We are in different rooms. We're talking to different people. Uh but at the same time the goal is important like looking back into how are humans being treated within this society like how are our rights that were by default there before we had tech before we had digitalization. privacy was just like a given and right now with like the every new technology AI whatever whatever we're using whatever we're seeing it's happening the surveillion is just getting by default there and stronger um and and then of course the connection to certain companies to to uh governmental officials and and governments so I think like this you know discussion and and also event is really giving us an opportunity to stop a little bit and see what's happening but u from our side when we really follow the advocacy part.

The last year has been really different from what we have done in the past and we're working on this uh topic for the last seven years. So we we really see the difference and it's the right time to talk about it and and act.

We had a question from the audience but first I want Connor have the opportunity to respond because you've been waiting for a while. I thought the impression.

Okay, then we go here. Yeah. uh you mentioned that uh we need to create European companies uh that actually have the tools to uh decide how they end up used um but isn't the problem really that most successful companies tech companies usually end up in the states because of well market structure capital structure because the money is there

yeah I'm I'm not proposing that European Union is proposing that and then we can have different [clears throat] opinions around this but I I'm just wanted to say that this is like one of the ways of how one of the strongest jurisdictions in the world is reacting to what's happening currently in the world. And so going back into protectionism and seeing okay can we succeed or not. Uh definitely we see that like as mentioned AI and other companies they're going to the US seeing more opportunities there. uh but that is again the the way of how the EU is thinking about react reacting to the to the uh what we have be beyond uh the kind of infrastructure uh that they're talking about the 28th regime and some other initiatives that are more around um entrepreneurship.

So my question would then be to steer it back to our niche here. Is it up to web3 to solve this?

And let please pass the mic around.

So I'll pull back a little bit. I think we're living through one of the most fundamental revolutions right now with software development with you know what we're seeing with AI and I think there's I mean as a software developer myself I think there's a lot of cope because you know we spent so many years having this asymmetric power as developers and suddenly we're seeing that being taken away from us or at least being commoditized and you know I always think about AI as as some kind of like a contrasting technology or as as being in dichotomy to cryptography because it has a natural tendency to uh centralize and and it requires a lot of resources in order to really deploy at scale. And so you need capital markets and you need a complex supply chain that you know involves the whole planet you know you know starting from the minerals that are needed in order to produce the machines that are then you know getting imported into Taiwan and you know that's the only place where they're really producing these chips. So I think that's like the AI side of it. And then on the crypto side, you know, you just have developers like a lot of the people who are at this conference today who just have this asymmetric capability and understanding that, you know, the right technology in uh the right moment can really I mean and I mean purely software really uh can have an as asymmetric aair sorry an asymmetric effect and uh in terms of like increasing user agency by elevating privacy and you know that is sort of the foundation for a lot of other aspects.

Um, given that you have this natural tension between AI and crypto, I think it's also worth recognizing that we just live through this crazy golden rush of crypto. And uh, you know, what tends to follow uh, Cambrian explosions, if you like, is mass extinctions. And I think what we're seeing is exactly that right now in crypto. So I mean we're seeing a lot of the like 5 years ago would have been if I had been on a panel I would have been saying like we really need to solve scalability and you know I wouldn't have been the wisest person in the room saying that there was a general consensus that we need to solve scalability and we magically solved it. You know it's kind of like we should also pat ourselves in the back sometimes.

But now we have this situation you know at least in the Ethereum ecosystem where it's just like you have all of these L2s but do you really need them? you know, especially when the gas prices on the base layer are so low, you don't really have this scalability problem anymore. And one just final thought on this because I think this is something that brings me a lot of hope. We're living through this age where like everything can be faked now by AI. And it's true.

I mean, AI is kind of astonishing almost to see the the artifacts that it produces. I mean, just take the example of the Will Smith video eating pasta and just seeing how that has progressed over the last 5 years. Um, so AI can fake a lot of things. Cryptography is not one of them. And I think that's something that plays in our favor.

So that's that's where I see the hope.

It's kind of funny to think about how the anthropic series B was funded by uh FTX who stole that money from crypto traders. So maybe they're more intertwined than we think. Also uh at uh at my team, we use AI to assist our development of new cryptography. Uh we can't it's not quite smart enough to just be like improve the proof system and then have it figure out new mathematics. But if we know a sort of direction to push it in, it can like help us with the research and it can even help us code it and and build it out and we've uh been able to iterate a lot faster because of it.

Also, you all probably read about how it like AI was used in the recent like security uh incident and the response as well. Uh so it's like they are intertwined in that way. Um and then also uh it makes me think about how like a data center cannot exist without permission of a state because like you have to get a bunch of property and fill it with uh this hardware and drive trucks and pump electricity to it. But a blockchain can and does and uh people run nodes in places where you're not supposed to run nodes and uh access VPNs in places where you're not supposed to use VPNs. So there the the relationships to power is very different in the two um tech movements.

Uh yeah, I wanted to add on that. So like for me last couple of weeks was about finding hope in crypto again and a lot of my friends like the smartest people I know left the crypto with the words like okay we have built all we needed to be built like infra defi and just went work for deep tech for AI startups and I kind of agree with them because we already have like fast ethereum like L2s we have a lot of defi institutional are here deploying money capital here but then like the second part of the equation internet itself have been built for already like 20 years and people in the volley were still nailing out the details so for now I think it's the stage where we will need to nail out a lot of details and with AI agents we could do it like quicker with smaller teams less capital and the question for me is who are whose people who will nail the details for example Example if it will be like selena guys who are about like you know digent stuff fun is it like base chain guys who are about like distribution mass adoption or is it will be like cyberpunk guys

so for me this is important and I don't have an answer yet

you hope

uh I honestly hope like for cyberpunk guys but I know them they won't they will just go and play with hardware so we need to somehow get people in, teach them our values without like doing it ourself. It's It's very complicated.

What you think is missing?

Yeah. Why Why not Why wouldn't we do it ourselves?

I mean because maybe we become lazy in in a way. I mean a lot of people were here like for a lot like high volatility.

We are not in the period of high volatility anymore. A lot of people have become rich, have successful companies, they just enjoying their life

and small smart builders, they already solved a lot of problems and they going to like uh ZK cryptography or just living. So we need another challenge. But now the challenge is like less technological and more human political related and developers are not very good at human communication like generally speaking. Okay, there was a question from the audience.

Yeah, I basically have um just been following the space for quite a while and I feel like we're heading into a future where you know you have um the ones that own their keys and the ones who do not. And I feel like one side are sovereign individualists and the other sides are basically social contractarians. So the um dystopian future would be like uh China social credits and I also feel that uh US corporations are lobbying government I feel in Europe. That's how I sense it. I don't know if it's really true but it feels like data privacy laws are are um sort of spreading in um in sovereign nations uh such as places in Europe that are not a part of the European Union.

That's where I came from today. And uh I wanted to like ask a question to all you guys because I feel um we like with AI and uh with decentralized physical infrastructure networks we could have a future where our inference basically the sovereign individualists uh could be with us because I feel like the the people who are actually social contractarians they might uh fall into the trap of uh being digested by uh you know in terms of evolutionary biology being digested by corporations and have entertainment for the rest of their lives while the mavericks which are the other one the count the the other movement which is here I guess um could could experience a future where we have inference such as through um through uh uh deepens that are m mainly maybe uh tow or other projects like that. So I wanted to know your opinions on storage on infrastructure and these kinds of things.

Yeah. So like building like a decentral social like the biggest hurdle is like where do you store that data like you cannot store that on chain even today because like you cannot like store like a video on chain it's like too big so like there are like like a providers like IPFS like we have our like our own wrapper like called grow that is also built on IPFS but it has like some permission control or access control there but uh in general like I believe that like the future will be kind of like like the future like for like speaking only about like how does the social aspect look like for now like like I see that like people like we are able to kind of like build something that is like a decentralized but at the end of the day it's like a like uh completely finalized on chain so like like all these like u like node provide like people like running their own nodes I think we will see that much more like Maybe like a you can have your own like a cloud or like a GPT running your own like node and like store your own data. You can serve that data however you want or choose who you want to serve that maybe like with privacy you can choose who who can actually see what part of that data. So

yeah I have a quick thought on that because that's actually exactly where I was going to go which is I think it ultimately comes down to the question of can you run this locally? If you can run this locally at home and you don't need anyone's permission to run it, then we're in a great place. But it seems like the hardware is still a couple of years out for that to be something that anyone can just buy the same way that you know you can probably afford a laptop. Uh when we get there and if we get there and if like the geopolitics of the world don't disrupt that progress from happening, I think that would be a great achievement. But having said all of that, my wife doesn't care.

you know, she's a social what was the term that you used?

Yeah, she she doesn't mind giving all of her data to Open AI, Google, Microsoft, you name it. You know, she's happy just using technology without really thinking about and she was here this morning and, you know, I can rant to her all day long about, you know, the cipher punk manifesto and the importance of cryptography and it just like flies right over her. Sorry, I have some perspective on this. Um, I'm not sure if people have seen the Fable and Memphis uh recent restrictions on non- US nationals. To me, this is like the starting shot for KYC for large language models that uh I see kind of as inevitably coming.

I think crypto's responsibility in this is to be the decentral the decentralizing force towards all of this. And to me that is one opportunity for having all this all the way make make its way all the way down to users. There are some like stepping stones before the run your own hardware type of route which are like the Venice type of service of the world. It's not perfect but at least you know there's no KYC. You can do payments on chain this sort of thing.

From the wallet perspective there's the integration piece. Like we've thought a lot about wallets as like the user doing payments for their own needs. But you can also think of wallets generically as clients towards onchain services. And so something like an LLM walletish which basically brings you all of the um the self-s sovereignty aspect of being able to use services like this. And the wallet is just a way to do this in a way that's fully self-costal.

That is a powerful thing and I think that is where crypto has a responsibility to operate. Uh and I would like to see that this is a bit beyond like the privacy angle. The privacy angle is more about avoiding KYC. In the meantime, you know, uh all we can do is shout for people to run their models. I run Gwen 3.

6 at home. Uh not everyone can afford to unfortunately. But you know that there are a lot of startups in China and across the world to uh create on the burn models and the more people do it and the more people help others run it, the better we are.

Yeah. I I love the part about social contractors and the mavericks like there's a whole spectrum of people within this uh two parts and so when it comes to let's say law or tech um where there's you mentioned the doitos uh access um one other thing is like the legal part so if something gets prohibited or illegal there's going to be many more social contractors than mavericks in this specific point there are some things that we have regulated in crypto already and so there's like a decision in which direction you go. There are some things that have not been regulated. Maybe they shouldn't but there is a discussion of uh you know they might be like I don't know DeFi is uh opening up in in European Union right now. Should we do that?

It can go very deep into uh a lot of like deeper technical stuff uh and in deeper layers. It can go into maybe smart contracts. So all the stuff that we're discussing here like if the regulation goes too far it might bring many more like social contractors and and not really mavericks into uh the domain of the tech that we're building today. So in a way like both exists but uh I think like the legal part is important here and then you know you kind of decide on your own do you want do do you want to be like part of the thing that is like kind of uh compliant but then still you don't want to go into something that is not necessary and you don't you know log into Tik Tok or something but [laughter] and

[snorts]

um yeah those are just like one of the things that are worth mentioning

I think in the same way that there's the there is a gradient between those two things in terms of like the legal enforcement how you engage with them as apps as well then I think as from the builder's perspective right I think until relatively recently we've always been talking about kind of privacy in like a very in a very big but like amorphous way right whereas actually this conversation and like the you know the instance of like right are you actually being censored from accessing a cloud LLM back end right as like an example of this shows is that actually when we're moving forward in like developing these solutions, we have to think you have to actually at this point now think in a very concrete way of what are you actually trying to make private and why are you coming from the perspective as a builder of like I want to avoid um essentially kind of censorship I'm not able to reach this backend do this thing because of whatever illegal situation where I am in the world whatever like that or you know what am I trying to not reveal and you have to think about. I think now we have to think about that in like super concrete terms as opposed to just being like we need private everything because especially in when when there is this tendency for more and more stuff to be going more and more cloud-based as well. There is a fundamental kind of tension between remaining kind of private or like not leaking whatever on the network level and the amount of data that you're actually moving around. Right? We're moving towards this assumption of the internet as being ever faster and like ever more kind of infinite bandwidth models, right?

Which are kind of at odds with privacy infrastructure. So we have to think very tactically about how it is we're actually trying to build the thing to do it rather than just kind of all privacy all the time, you know, and I think that kind of change of approach will actually lead us to be able to like move towards solutions even if it's maybe slightly more patchwork or peace meal. Yeah, that's actually a scope question which I was wondering is web 3 as an industry let's say as a vertical the non KYC savior for messaging payments storage identity and should it should it take up that role um I mean [laughter] that's that's up to you right but it's kind of there's I mean even within that question right there's a difference between okay I as a user can I interact with this thing without doing my own personal KYC and telling people about it or you know there's obviously like these kind of ZK solutions and whatever but then the other side is um as the infrastructure provider do you then have to right like those two things are actually also separate and should be thought of and dealt with separately because the interaction patterns and like what they actually need are also different as a user I can like tunnel an RPC request through like you know nim then tour then a VPN that I run on a boat on a satellite somewhere because it's a very small piece of information right whereas you can't meaningfully do the same if you're um talking about like I don't know validators that are running like a super fast consensus mechanism you know what I mean like that and obviously they're polls apart but I think that kind of illustrates the the difference in approach that we have to take for each thing that we're talking about

it's true that there are a lot of people who don't care about this stuff and Uh, you can rant to them about the Cippher Punk Manifesto and they won't immediately resonate with it, but it's not like there will always be this conflict between mavericks and social contraarians. We don't read things like the Cipher Punk Manifesto and Crypto Anarchist Manifesto as sci-fi for entertainment. We read them because it's real and it actually it actually does matter. and people not caring about it is uh you know makes it harder to do this. But we we do this uh not just for our own nerdy um self-satisfaction.

Uh we do it because the current way that things are going is completely unsustainable. uh the amount that we're sharing um increasingly especially considering now all your AI uh searches go to these custodians who can then learn everything about your entire life from uh everything that you're asking is going to lead to a catastrophe and the amount of financial data uh that is leaked when you transact with legacy fintech is is similarly completely unsustainable and uh we're on track to some kind of disaster. Uh so like this this isn't just uh like self-indulgent nerd uh stuff. This is seriously important and uh we do it whether people care about it or not.

Yeah.

Just to add like one extra tiny point on that as well. Um I think you know we've been seeing lots of legislation in various European countries recently and and Australia and stuff about like you know uh age verification for social media as an example right and what happens when you do that uh all the Google searches for VPNs and VPN usage goes crazy right and it's like the tools the tools were already there and they were already built and then suddenly there are a load of people who were you know kind of stalwart social contra contra contractarians difficult word to say um it's always a good challenge. Um and then suddenly they were like, "Oh, well actually, you know, on the kind of the gradient between total autonomous and total social contractarian, they shifted a bit that way and they shifted a bit that way and then started looking for this tech and it was like people are looking for VPNs. The VPN was already there so they started using it." Right?

It's kind of a it's this kind of privacy as a future proofing thing is also like building this stuff is also you have to build it before it's necessary and then people can start when people suddenly realize oh actually maybe I do need to take this I do need to use this even if it's to do something to like get around age verification on social media it's a kind of a glib example but like it was already there and then people started using it. So I think we also have to kind of take that perspective of at some point when stuff does keep getting like worse and worse and worse, people will want different options and we can't build it after the fact. It just kind of has to sit there to an extent.

Question the audience.

Yeah. Um I want to build on a couple of things that have been said and also advertise a little bit the workshop that we have at four where basically we're discussing how to or which battle actually in the f in the future are we supposed to uh fight. So um I've been involved in this uh book that Pierre Giorgio has uh presented and I wrote a chapter on that on the politics of privacy and um Marina said a number of very interesting things indeed what is happening now in in Europe. Now from my experience and that includes a lot the public sector um it's a fake discussion in a way to look at geopolitics and say that oh there's a problem with America there's a problem with China there's a problem with Russia let's make this European and stick the European flag on it. If the same mentality applies and to a large extent it does it doesn't help anything and um what I observe is basically that we have three different vast communities that hardly connect with each other.

We discussed that here uh before one is us sitting here and knowing the stuff and building the stuff. Um, the second one is a large part of the population and I'm always amazed how big they actually are that are basically thrown out of the system through a succession of crisis in society that we've seen over the last at least 10 or 20 years also in in Europe people that have lost their job during COVID because they didn't want to get vaccinated. people that get debanked and deplatformed also in Germany also in Austria to a massive extent now uh because their views are not uh accepted even family and friends of those people and we have the concrete cases getting debanked because they have some connection with these people and they're all very desperate but they're not connected with each other and then you have a third group which I engage a lot with which is basically industry and that is fascinating because one might see that industry is somewhere in the legacy system and is a a in a way the enemy which is it not. It was very interesting to see with the metaverse 2 three years ago when a lot of people also in Europe were proposing these extended reality glasses and um it has never been taken up in industrial metaverse and why has it never been taken up because basically you get business secrets out for free on YouTube or whatever the moment that you start filming things. So it's a lot about privacy and the right notion of privacy.

And my question to you is because I also struggle a lot with that. If we take the three groups together, I think we're not only the majority, we're not only the power through what is also from from industrial and financial interests that doesn't want to be transparent to be traced by competitors and everyone, but also uh those that are able to build but with all due respect uh sometimes lack the social understanding of actually uh where's the demand side out of there, how can you get these three groups together, how can you really create a power base because and then I stop and that's also what we try to discuss in the book. This is not about a flag. This is not about actually attitude as such. This is a power struggle of people that have power and that want to defend power against those that have no power.

And that's the same with religion or politics etc. So I think we need to define the problem better and we have actually to see what communication or what platform can we use or build in order to use the massive distributed power that is in our societies.

Thank you. Yeah, very simple question. I will just tackle one part which is we talked about crypto a lot and you know Ethereum and other u blockchains. So um like I think the funding part is something that is pretty important. We exist and we are here at least some of us because there were uh public token offerings [laughter] years ago and they were not led by VCs and they were not led by specific groups but they were really like the biggest crowdfunding we have seen in the history and um because of that because of like the abundance that it has created of course like the outcomes are different and there are different blockchains so they're focusing on different things but part of that is also why we are here if you look at the sponsors for example example um and and that might have changed over the years and I think like this efforts now with like uh again like developing big companies uh specific new new technologies etc.

They need even more funding. They need more coordination. Coordination costs is not just us sitting in our rooms like again you know writing smart contracts or or any other parts of the tech but is when it comes to the social coordination there needs to be so many people that need to work on these things and we know how hard it is even when you do uh only advocacy. If you want to go even further and and wider like everyone organizing this event here has put months of effort into bringing us here like having this opportunity creating the space for dialogue and there has been so much money and times put into that. So I think that that is also quite important.

I can add a little bit on how we expend the funding part. Uh the fact that the matter is that I think most projects in crypto have been mostly like circularly founded between crypto projects for a long time. It's been quite of a bubble and to grow the power base I think we need to look beyond that. I think uh just a few weeks ago like web free privacy and uh funding the commons and the tour project all banded together for fundraising for tour adjacent projects and to me this is like the beginning of this and I would add that like the more of these that we see the more I think that we know we are on the right track to expand the bubble because it's a it's a sign that the bubble is growing beyond crypto itself as an as an insular bubble. So that at least expands the power base to the non-crypto adjacent but still very cippher punk ethos based type of the power base.

The way that we expand further beyond that bubble you mentioned the institutional side for example is we try to make proposals that cover the interests of all of them at once. One of the things I don't see for example yet on privacy is ways to have private onchain payments that preserve the aspect of plausible deniability. If we have plausible deniability meaning you cannot distinguish between a private transfer and a non-private transfer then suddenly the question of regulation for example becomes almost a moot because as long as you have that that princ mechanism then you don't there's not really a question about how do you regulate it or not it is a mechanism that exists you can use it and no one can tell if it's a private transfer or not. This way you both get the cippher punk eos and you get the the regulation question basically goes away. I would like to try to see if we can align those principles in a way that makes sense.

There's another way that personally I'm not a fan of but that uh also has a lot of u legs behind it which is you know like the uh prove vdk proof that you're not part of a bad actor set. That's another way to like align incentives in such a way that you can show to regulator that you can comply with their requirements in a way that still aligns with your interest to some extent. Yeah, I I'm very much in agreement with what you said, but it seems like it's at odds with uh what you said before about you can't just do everything private because mixets are inherently going to add hops and you know so so you're going to pay like you're going to make a deliberate choice about what you want private sort of in the case of mixnets

and that seems to be at odds because to have privacy

you need to have many people using it. It needs to be the default. Um I'm curious like how do you think about that or Connor because I mean you know you're working on shielded pools and you know you do have this question right uh Zcash by default is not uh shielded and you sort of have to make that deliberate choice. I'm not sure where the tooling is today in terms of being compliant. Um, can you actually uh produce sort of cryptographic uh reports using your own keys about uh not interacting with say banned addresses or uh sanctioned addresses?

I'd like to also expand this question before answering Connor. Uh I'm a fan of the EIP7503 um the wormhole the ZK wormhole EIP because it has this notion of um plausible deniability at least on the deposit end. It doesn't have it on the withdrawal end, but I think it could be added in such a way, for example, when new ETH gets minted from staking rewards, for example, you could have the creation of that look indistinguishable from a ZK proof that you're either taking from the EIP 7503 pool or you're taking from the staking contract. I'm curious if Zcash is planning to move in that direction as well because I think it's way better positioned as a project in terms of Ephos to to get to a place like this whereas that EIP has as far as I know mostly stagnated on the E side.

Um Zcash is not private by default is not entirely accurate. It's uh there is no default. It's a switch. You can use it either way. It's it's possible to use Zcash without ever having a transparent address.

Uh it's possible to mine coins directly into the shielded pool. Um oa occ occasionally um coins do get mined directly into the shielded pool. The zodal wallet, the most popular wallet that exists is transparent. It's private by default. Uh the Zcash community is divided on whether or not to even keep the transparent pool.

Uh a lot of very influential voices want to sunset it uh someday. Um, so like yeah, a 7503 style deniable way to shield is possible. That would be really cool. But I think it would be personally I think it would be cooler to just sunset the transparent pool altogether. Um, I guess if if the transparent pool is being sunset, you still it still would be nice to have that deniable way to shield um from the transparent pool.

Uh and then two other interesting things that were brought up were um like is compliance possible? Um yes. So it it's it's actually I don't know of any way to do private cryptocurrency where it is not possible. So even Monero you could you you can create off-chain ZK proofs of the provenence of coins and then uh disclose them to whoever you want. Same with Zcash shielded.

It's possible to do that. Uh, no one has built it as far as I know. Um, I think it would be cool to do that like if we were going to sunset the transparent pool to have that as an alternative. Um, it would be interesting to think about if there's a way to do privacy where that's not possible. Like what if you had some kind of shielded payment protocol where it's like not possible to make provenence proofs?

I I I've thought about it a little bit and I haven't come up with anything, but that'd be crazy.

We have a question from the audience. Um hi I have a question connecting what you were saying um Connor about impeding catastrophe and you were also mentioning that uh or couple of um of you were mentioning that we can't build everything and you know everything cannot be done at the same time and my question is uh how would you prioritize then taking into account that the goal really is to normalize privacy and are there any lessons We can learn from the trajectory that for example encryption went through and the encryption wars and also the evolution of kind of normalization of tour in a way. So from this prohibition contestation to re normalization phase and uh to achieve that what do you think we should focus on building or which layer of the stack or which tooling and one more kind of context to that especially with the encryption wars history where that um sort of moved from the in the the individual choice to use encryption to this being part of the infrastructure. ructure and therefore no longer an an in choice of an individual. Um, can we achieve that with privacy and what to focus on to achieve that and to basically prevent that catastrophe that you were mentioning that is impeding but also normalize privacy because we talk a lot about this individual tools, individual decisions but how we move that choice tool basically this becoming an infrastructure.

What needs to be done In my opinion, the best way to push towards normalization is to just decrease the cost of using private systems. So imagine if everyone had a switch on their phone that was just the make everything private switch and switching it doesn't change anything. You just get privacy for free. Everything is still fast. Everything still costs the same.

Nothing is different. It's everything you know and love. It's just now it's privacy. Everyone would turn the switch on. Uh the reason why not everyone does that now is because uh things are slow, things are a little bit more expensive and the way we fix that is by continuing to develop the technology.

Uh if we improve the scalability of shielded payment protocols, uh then we can make it just as quick and snappy and cheap as everything else people are familiar with using. uh if people continue to research and develop mixn nets and uh onion routing and stuff like that and um come up with breakthroughs in that kind of tech they can decrease the cost of of using those more and uh um same goes with everything else.

I'd like to add another dimension of cost which is implementation complexity. Uh I don't think that wallets which I look at a lot uh the the reason that they don't implement private payments by default isn't one of uh really because they want all the users to have transparent payments. It's just because it's way harder to implement. There's initiatives like Kohaku to make this easier. For Zcash that's not really as much of a concern because privacy is the point.

So wallets do make the effort but for ecosystems like Ethereum where that's not currently the default and we need to make that easy. And the other thing I would like to see is basically once you do have the switch, why do we need the switch? Why can't we just remove the transparent part which goes, you know, is the same direction as removing the transparent pool from Zcash? That's total normalization. And if I had my way, that would have been the way they was built from the beginning.

You know, we're not in that world, but you know, we can do what we can. I'm part of Wallet Beat and one of the things that we push wallets to do is to have primate payments by default. We actually don't give you points in quote unquote if your wallet doesn't have them by default. It's not enough to just make them available. They have to be the default option because the public option is unsafe, right?

Like you get wrench attack risk. You get the fact that you're not contributing to the onset. You get the fact that you don't create the normalization that we want to see in the world.

Yeah, we just like uh like heard already like about Tik Tok like users don't care about like sharing their data. So I think the only way to go about this is like making like killing the the switch and making things like uh so that like users don't have to continue caring but the infra like needs to go private by default to that.

So I I just want to push back a little bit on this idea that we're going to make everything private by default. This is a conference. This is a public space. I think we still want to keep public spaces. Um the way that we're thinking about this when building Radical because Radical I mean it really is a sovereign it's a tool for sovereign code collaboration we have private repositories and we have public repositories and there's clearly a case to be made for public source code.

I mean open source is built on this idea that you know everything is public. Um that's sort of how we make that delineation. So it's it's on a repository level and you know you can decide if your repository is private then you pick the keys that you want to collaborate with and no one else can no one else can view that. Um, so I think there's there's a couple of ways to view it, right? Like on the one hand, it's kind of how to normalize it is also like having a plurality of people using it for various reasons, right?

And I think like that's what like what you can see with tour, right? Like lots of people use tour around the world just because they're I don't know, maybe they're in like a centered region, but they actually just want to get on Facebook to like talk to their relatives who are like somewhere else across the world or whatever, right? Um but I think all of the stuff that we've kind of been talking about this broadly you could think of that in the kind of um let's say like privacy is the in the defensive form right like um stuff is being leaked this kind of this like negative cast of it um and I think maybe possibly like one of the kind of I don't know big unlocks so to speak right to that leads to this normalization is if you think about you know if you think about like TLS right you have this cryptographic security in your web browser that you are talking to the website that you think you're talking to. On the one hand, the defensive posture of that was, okay, cool. People can't get scammed.

But the the kind of the kind of uh the new thing that that then unlocked was, oh my god, you can do like cheap e-commerce. You know what I mean? Like, oh my god, I can actually you can you can do a thing where I can safely like transact money online and, you know, put my credit card in and like I know that it's actually the person that I'm sending that money to, right? Obviously there's different scams and stuff, but at least that little unlock there, you know, also like enabled a bunch of stuff. And so the question is also like it's a framing thing, but it's also what's what's the privacy unlock that's not actually just a a constantly defensive posture, you know?

And that's like a I mean that's a massive question, right? But I think that's maybe there's like two modalities of thinking about it. That's actually a really good example because uh TLS was really pushed forward by uh you know like online commerce giants who wanted to be able to credit yeah I mean credit card companies and so on and I mean that's been a huge bo for everyone I mean we and I mean if you look at initiatives like let's encrypt you know they basically reduce the cost of say TLS certificates to zero. Uh I think we need to move I mean if we take that as the example I think we need to move even beyond what let's encrypt did and move into a world where we have just sort of self uh sovereign keys that we don't really because I mean like the way that let's encrypt works is they're a recognized certificate authority and they're recognized because your operating system trusts their sort of fruit certificate. Um, and so basically we have the internet overlords who are trying to do a good job.

I don't I'm not like trying to dis their worth, but they're sort of acting as these uh uh mediators of who is worthy and who's not worthy of a certificate. And I think we need to move more into a model where anyone can issue a certificate and that's accepted um by the browser by default. I realize that that's sort of like there's like many challenges and yeah, you know, you can probably go on about that, but I think that's definitely [snorts] uh it's partially a technological problem.

Do you think

yes, I mean I will not say not to that. I think it's always uh a matter of some standardization.

You have a question for the audience. So I just wanted to circle back to this idea of making privacy the default option. And I wonder whether we are going to run into issues of whether this might uh um in infringe upon the the ideas of privacy being uh a right rather than something that should be enforced on on everyone as a blanket hole. So uh whether this this would mean that uh people should or users should have the choice to be able to opt out of the privacy and uh to be able to say I'd like to be able to uh make my sphere public. Uh because this doesn't seem very democratic to me at all.

I mean it's I mean you could I mean what like a quick answer to that is like I suppose yeah it's by default but it's selective disclosure, right? it's like privacy by default and then you choose what you want to share is the so you know it's not like enforcing the blanket on it because also it just wouldn't work. Um but yeah, it's more like you start from the base assumption that it's all it's your choice. Yeah,

sharing is great. People should share. Uh it's like the the find my friends thing is is really fun. I I use it. Uh, but I'm really glad that it's not just showing my location to the entire world by default.

That would be crazy.

I mean, actually, just having a chat is selective disclosure, right? Like you just you just choose what to share with different people around you and it's it's if anything it's actually like you can talk about it in like very very abstract terms, but I think actually selective disclosure itself as a principle is actually a superhuman and like so it's the fundamental rubric of like social life, right? And I think we can which is maybe kind of a I don't know like a a messaging aspect of it that maybe we've focused too much on the you know the the abstraction as opposed to well actually this is just like the norm the social you know

yeah that's the design I'm thinking about maybe rules in terms of GDPR and stuff like that which we think that you know they brought privacy you cannot really opt out uh of that and that's also an interesting concept of like really thinking about can you opt out of of something and what is it like it's a tech design or it's like a rule or it's just like a softer law that uh you can define these groups uh and then they can choose from from their own um in way interest. Uh the question is like like you said human right can you opt out of human rights or do you have it by default as a human

and the room fell silent. Yes.

Okay. I was like restraining myself for a really long time but I want to be like a bad guy here. So privacy cost money more than without privacy and my question is who will pay for it? Because if you're talking about privacy by default we need much more money to pay for default option defy privacy option. I'm not talking about like clever tricks how to incorporate privacy like for free like really like signal proton.

Let's talk about this organization which are not crypto native. look at their balance sheets. They're really like donations mostly. In crypto, we in a better situation because a lot of organizations are funded by old ICOs basically like free money which we were really really lucky to get somewhere in the past. But now I don't think we will have such a big volatility to do another like ICO again.

So we are more in like conscript money situation. So who are going to pay for it? This an open question. If somebody have an answer

there actually is a talk later on about business models and privacy as a suggestion for the audience.

Yeah. uh like I think like if like let's say we would have like privacy by default and like with the TLS example like we had like companies willing to invest a lot of money to the research and like I think if we have the option of like me selling my own data or like disclosing like making my data public then there's like new ways how like other people can make money and I think that way we can bring new money to the as an investment to the ecosystem like maybe like I think that's a I can see this is like totally happening But like I agree with you completely like like privacy is super like expensive now because like we haven't really done that much work on that compared to other parts of the like crypto.

I hope so.

I mean like a quick example is collo subscription like $100 everybody is paying for it because without it you're literally for privacy. Oh let's do some free proton subscriptions for several emails and I will be good. So this is question about how important it is is it for people right now to use this service and with privacy it's was you will need to like advocate for it but it's not like really a necessity in a sense if you're not an activist or repressed community minority individual it's hard to sell privacy as a necessity so compared to AI it's really highlighted right What do you think about it? [clears throat]

Yeah. Yeah. I mean like my question is like why do you think that privacy is expensive but I I think it's actually the it's it's you know it really benefits from like zero marginal cost economics.

Yeah, it's a good one. Um yes phones could do encryption but to develop this encryption you will like you needed money for do it in the past and privacy will have like more challenges in the future. So it's like an ongoing battle of throwing money to one side versus like authoritarian regimes and other sides.

Yeah.

Uh I wasn't going to talk about Zcash. Uh, I was going to say like, yeah, I mean, we we saw like a lot of uh private cryptocurrency infrastructure companies raise like in the billions. If you look into all like the 2021 peak bull market uh hysteria, uh it actually adds up to like billions for all various CK thing companies and adjacent infrastructures. But they were they're all spending like on crazy stuff that isn't really necessary. So it makes it look more expensive than it really is.

Uh if there wasn't the the uh like billions spent on uh like massively inflated valuation uh crypto privacy infra startups, it wouldn't seem like as expensive of a field. I don't think

so. But no, you you are you are right like um like someone has to pay cryptographer researchers to figure out new ciphers and uh pay auditors and cryp analysts and stuff. It but it just doesn't add up to so much that it's like a devastating uh leak leaky hole to that is in need of immediate plugging in my opinion. you mentioned uh activists and such that have a need for privacy and I think that we're not even getting money from them even though they would be more than willing to give it if we were actually trying to help them. I recall last year there was um a report called something like um financial confid confidentiality in the age of digital surveillance by the fight for the future organization in which there was a line that struck me that said something like um for friends and strangers in defy we have fought for you when will you build for us uh this uh is because they have been supporting uh anti-censorship um internet regulation and crypto regulation for a Well, and the crypto community in the meantime, you know, it's doing memecoins and gambling and they're not really building privacy.

That has changed since, but to me, this is like a reflection of even the pools of money that are Ephos aligned and that would be willing to give us money like we're not even meeting them. So, I think we should start there. We have a question. Hi, I like the point about TS like um for me it feels like it's um when the interests are aligned between the like a people and the company like whoever have the money and uh in this case it's more chances that it can go like uh further and u at the same time like we are like humans going like less resistance in many ways and people like when they don't care about privacy maybe they just don't get this like boiling point for example At one point we it going to be some huge leak of charts and uh then it will be disappoint. Uh this is one thing and the other thing is that when the companies some companies when they don't earn money out of your data they actually it's not their interest to like to have this data plain text on their servers.

it's actually they want to have opposite but uh developing the uh to make it private it's very very complicated uh thing to do uh so in some ways I think like in the future we have like maybe meta will be not in a good shape uh in a way that um it will be more alternatives uh for people to choose also with the I think it's going to democratize or the way how we can build this like some local social networks some other things. So how do you think like where this alignment of interests uh can happen?

So um I think it also actually it so it actually goes further as well, right? Because it's not just uh yeah like your data. I mean, yes, there are lots of companies that sell that that sell your personal data, and that is a um that is a way that they make money, but it also costs a lot of money to like hold all of this data, right? Because you have to pay the people who are managing your systems or you have to pay an external company who are like managing the personal data in a secure way. You maybe have like insurance in case you get hacked.

And yeah, I think that at the moment one kind of uh possible future is there's lots of like let's say maybe uh like buckets of personal data that may be held with like slightly flabby security measures and you know I mean there's been so many hacks across so many pieces of infrastructure in the last six months alone and I only think it's going to get like more insane that actually the kind of the uh the business case almost for those companies is like okay cool so you actually you don't hold you don't hold passwords even hashed Right? So there's nothing that can leak because maybe instead for login there's some kind of a you know there's an there's a there's a verifiable but anonymous credentiing scheme that's being used and you know you can kind of expand that into like loads of different areas. Um so I think yeah that could be actually the business case of actually you could be super lean because it just becomes an anonymous access control layer. Is this person is this this entity that's trying to interact with me now have they kind of paid for this service in some way? Yes.

Great. don't need to have any personal data and then that's not this like toxic waste that's being held. Um, which is maybe maybe would be difficult to sell to existing companies that do make money out of selling your personal data, but maybe it could also enable like kind of different ways of doing stuff. you know that yeah when the inevitable kind of chat GPT log dump happens and everyone panics then these again these entities will be around to kind of you know siphon off the people that do have this movement away from social contractarianism.

Okay, we have one final question from the audience. Uh thanks I got interested by talk about TLS and let's encrypt. Uh I'm personally not sure if uh I'm okay with the statement that uh we sacri sacrifice somehow uh self-hosting ability or some decentralization in favor of encryption by default. Are you okay with uh centralized solutions like let's encrypt uh being in place just just because they provide something for free that's like by default even though they centralized things actually. Thanks.

So so actually my point was that we need to move to a different model beyond what let's encrypt is doing but I think that's the intermediate step that we need. Um, broadly speaking, I would love to live in a world where, you know, we have uh the tooling to do this without sort of going through some authority. But I also I also want to say that I think we tend to fetishize the dissolution of institutions. I think we need to better think of it in terms of functional and dysfunctional institutions and whose interests are they protecting. If you look at say the tour project, I would say that it's been pretty well governed and as an institute even like the signal foundation or the uh organization behind uh signal the secure messaging app I would say that's a functional instit institution that is providing a great public good and yes they're somewhat centralized.

Um I I don't know if we can fully eliminate institutions. Um again that's you know something the jury is still out on this. we're building all of these technologies. I would like things to be self-certifying and you know permissionless. Um but I don't know if we can make everything that

we um have a following uh panel coming up. Um but as a last note at as we are all here and a lot of builders are here as well and people are um working on privacy in the space. I'd like to ask each of you short. What currently excites you in improvements of privacy in this uh in this industry right now? What what do you see coming up?

I'll start

beyond your own projects. I add

Kohaku. Wallet Bit is not affiliated with Kohaku. However, it is very much Ephos aligned. It is about decreasing the cost of adding privacy to wallets and it is things like private token transfers, but it's also network level privacy for wallets. It's also about popularizing the notion of abstracting what an Ethereum account is beyond addresses and to be more about like a set of addresses, how to manage them, how to isolate apps between them, how to make sure you're not tracked across uh DeFi applications on these sort of things that uh that does make me excited.

This was not in the conversation at all even two three years ago and so I'm excited to have this uh creek tech shape.

Uh for me it's like local building local. I'm I'm really excited about building local and I think that's like a like maybe we don't need that much like a privacy for many things if we can a like we are able to do that locally if we can run the AI model locally we don't share that data with the company so really excited about that

yeah I would mention kohhaku as well but also maybe some other solutions that are being built I think more and more on different layers and different applications uh for different use cases u mostly in Ethereum that's what I know about mo Uh I would uh say uh I think the the Zcash team is doing great work. Um that's that's not I'm not shilling here.

Yeah. Um yeah. Second uh all of the Zcash developments that are going on and then also the ability now to do anonymous client side like kind of recovery of keys using SDKs like the unforgettable SDK. Um, that kind of stuff I think is going to remove one of the really big weird alien pain points to a lot of people which was kind of like endemic of the holding of your own keys of what is this magical 24 words that I have to keep so sacrosant um otherwise I lose everything you know. Yeah.

Yeah. Definitely Zcash, but also destroy social which is controversial because like on FTC I did a talk called destroy social and embracing too much holding too little which is basically was like run and dro from my side but centralized social have become so bad that we will need to pull it through now or like never.

Uh love Nim, love Ethereum. love the uh the push for crops culturally in ETH. Uh and then there's a technology that is really interesting called private information retrieval which has been uh made um there have been like papers with recent breakthroughs and then um practic very practical scalable implementations uh that are being built. Um DCETS are also having a little bit of a moment. Uh, Flashbots has been researching DCNETs and figuring out how to like use anonymous broadcasts in interesting ways related to like the MEV supply chain.

Uh, so that is I find that pretty exciting as well. [snorts]

Awesome. Um, thank you all for joining today. I'd like to give you a big applause for our speakers today. [applause]