0/ Really enjoyed @laurashin ’s recent podcast with @zcashco founder @zooko. They discussed $ZEC and his views on privacy (spoiler: it’s not all about dark web purchases). It was interesting discussion of technology and the philosophy of crypto / privacy. Here’s a recap thread:
1/ We hear a little bit on Wilcox’s history. Prior to starting Zcash, he worked on a distributed, cryptographically secure filesystem (Tahoe-LAFS bit.ly/2GRzgPJ). He got interested in digital money after reading the work of David Chaum (bit.ly/2pWqgiM)
2/ Wilcox’s interest in digital money is highlighted by his worldview: “humanity’s best resource [is everyone else] who can help you out.” We aren’t able to take advantage of this resource because of national borders and the like
3/ Moreover, “privacy is essential to decentralization . . . reason for decentralization is censorship resistance.” Oppressors don’t intercept shipments of those books. They just threaten those who want to read it. Censorship resistance and encryption go hand in hand.
4/ Q: What’s Zcash? It’s a clone of the bitcoin protocol with encryption. There are shielded (private-like) addresses and transparent (bitcoin-like) addresses which allow for unknowable and knowable txns. Shielded addresses prevents a third party from knowing about a transaction.
5/ Shielded addresses encrypt txns for participants. Laura and Zooko look at a txn with shielded inputs: bit.ly/2uG12d7 We can see invisible inputs and t-addresses as outputs, compared to something like bit.ly/2GwsJqr which is more like bitcoin.
6/ Zooko postulates that the first txn could be an example of miners, who run a pool, which has gotten a mining reward and then sending to the miners. Laura has an interesting point here - that it’s still possible to do a bit of sleuthing, and she likens it to Sudoku.
7/ Laura asks about privacy and its relationship to illegal use. Zooko takes issue with Laura’s framing of her question. He argues that there are important, and entirely legal reasons to require privacy:
8/ REASON 1: You, as a miner, are concerned that you might be extorted by people who know about you and take your coins
9/ REASON 2: If you are a law abiding crypto user in the US, the biggest threat are thieves tracking you down, impersonating you, stealing your phone number so they can steal your coins. This is why you wouldn’t want details of your transactions posted to a public blockchain.
10/ REASON 3: Non-profits accept donations in ZEC because donors prefer privacy when donating.
11/ REASON 4: If a business wanted to use crypto for business transactions, they would be require privacy (why would they broadcast all their txns to the world?)
12/ Zooko gets into an interest concept of threat models after Laura asks him about NSA tracking of Bitcoin users. The idea here is that everyone’s threat. model is different. Your use case determines your threat model.
13/ You are a company doing business over the internet. Your threat model is thieves, foreign armies, third party vulnerabilities, and competitors tracking your shipments, inventories or payments. Even if the NSA tracks you, you benefit from privacy to defend against your threat.
14/ “You can’t depend on your competitors being honest.” You need privacy and privacy technology. Zooko suggests we move away from the oversimplified “NSA vs. the People” model, which is important, but not everyone’s threat model.
15/ Laura brings the conversation back to technology. She asks why shielded transaction usage isn’t higher (while at 14%). Zooko explains that exchanges and services like ShapeShift don’t support shielded transactions because of CPU usage. Shielding txns is CPU intensive.
16/ They’re currently working on an improved protocol to make it more efficient, which will thereby improve shielded txn support. Zooko thinks that we’ll also have to make privacy easier to use for people to care about it more.
17/ He also points out that privacy is a social value, which you want everyone in your community to have. A very important point here. Rather than being an individual value, “you want everyone in society to know that they can communicate their opinions freely to one another.”
18/ “Privacy is all about consent.” Privacy should be considered in terms of selective disclosure. You get to share what you want to share, and don’t have to broadcast your life to the entire world.
19/ Zooko postulates on the future of ZEC and BTC. Makes an analogy of open protocols (BTC, ZEC, TCP/IP). Thinks companies will start businesses on top of ZEC/BTC, like how they did on top of TCP/IP.
20/ Laura asks an interesting question here. If courts can force unblinding, does that defeat the notion of privacy. Zooko’s response is interesting here. He sees both third parties like Coinbase that control keys and people running their own nodes with their own keys.
21/ If a court orders it, these parties that control keys can reveal them or pay the consequences in the eyes of the legal system.
22/ Zooko on ZEC: “I feel very sure that . . . if we empower billions of humans they will use it much much more for good . . . do for each other through economic exchange what they have been doing over the internet.”
23/ Loved the discussion between @laurashin and @zooko, especially around non-illegal privacy use cases. Would have liked to hear more about applications that should be built on ZEC and upcoming protocol changes.
Listen to the whole podcast here: bit.ly/2pZJ94m
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Listen to the whole podcast here: bit.ly/2pZJ94m
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