Key takeaways

• The future of crypto may mirror the decline of the Linux movement, benefiting a few corporations while leaving most unempowered.
• The crypto movement has not fully succeeded in achieving its original goals.
• Crypto has significantly funded advancements in cryptographic technologies like zero-knowledge proofs.
• Recent developments in crypto may not align with the original cypherpunk vision but represent progress in adoption.
• The cypherpunk dream failed due to its focus on creating tools for a specific user base rather than the general public.
• Achieving a user base of at least 100 million is seen as a strategy to mitigate regulatory risks.
• User experience (UX) is crucial for onboarding new users to crypto technologies.
• Decentralization can extend beyond crypto to areas like AI, storage, and social communication.
• The advantages of traditional tech companies in user engagement may overshadow privacy-focused products.
• The success of crypto can lead traditional finance and web2 companies to adopt valuable crypto utilities.
• AI will enhance the ability of non-technical users to adopt complex systems like Linux by 2026 or 2027.
• The advertising business model has significantly contributed to internet problems.
• Zcash’s development fund is a strategic advantage for long-term sustainability.
• Privacy in crypto can only be achieved when value is at rest, not in flight.
• The sophistication of AI in pattern recognition has increased the need for privacy in digital lives.

Guest intro

Zooko Wilcox-O’Hearn serves as Chief Product Officer at Shielded Labs. He founded Zcash, the privacy-focused crypto often called “encrypted Bitcoin,” and was an early Bitcoin advocate who wrote the first blog post about it in 2009. He previously founded the Electric Coin Company to develop Zcash and Least Authority, a security auditing firm.

The future of crypto and its challenges

• “The future of crypto could mirror the decline of the Linux movement, benefiting only a few corporations.” – Zooko Wilcox-O’Hearn
• Crypto’s potential decline is compared to the Linux movement, highlighting concerns about centralization.
• “Crypto could be like that you know ten fifteen years from now.” – Zooko Wilcox-O’Hearn
• The crypto movement has not fully succeeded in achieving its goals.
• “No jeez that’s a leading question you didn’t expect any positive answer to that.” – Zooko Wilcox-O’Hearn
• Understanding the historical context of the Linux movement is crucial for assessing crypto’s future.
• Concerns about centralization and user benefit are prevalent in the crypto space.
• The original goals of the crypto movement are perceived to be unmet by some industry veterans.
• “It makes me kind of depressed and negative.” – Zooko Wilcox-O’Hearn
• The potential for crypto to empower users is questioned in light of historical tech movements.

Technological advancements and funding in crypto

• Crypto has significantly funded advancements in cryptographic technologies like zero-knowledge proofs.
• “What I most love about crypto so far is that it’s funded a whole bunch of really good technology.” – Zooko Wilcox-O’Hearn
• The advancements in cryptography over the last decade would not have occurred without crypto.
• “They wouldn’t have developed any of that in the last ten years without crypto.” – Zooko Wilcox-O’Hearn
• Funding plays a crucial role in technological advancements within the crypto space.
• The unique role of the crypto ecosystem in fostering technological progress is emphasized.
• Zero-knowledge proofs are highlighted as a key benefit of crypto funding.
• The impact of crypto funding on technological innovation showcases a key industry benefit.
• Crypto’s influence on technological advancements is compared to traditional institutions.
• The role of funding sources in the development of cryptographic technologies is crucial.
• The technological progress achieved in the crypto space is attributed to its unique funding model.
• The last decade’s cryptographic advancements are linked to the influence of crypto.

Cypherpunk vision and crypto’s evolution

• The recent developments in crypto may not align with the original cypherpunk vision.
• “I think lately there have been a lot of themes around crypto or blockchain’s ability to kind of transform wall street.” – Zooko Wilcox-O’Hearn
• The cypherpunk dream failed by focusing on tools for a specific user base rather than the general public.
• “He said the program the method of the cyberpunks was like step one we’ll make tools that work well for us.” – Zooko Wilcox-O’Hearn
• The current developments in crypto have not yet improved the lives of people meaningfully.
• “It would be good if it was actually improving the lives of people in a way that I care about.” – Zooko Wilcox-O’Hearn
• The cypherpunk vision in crypto should extend beyond just financial applications.
• “I hope it goes all the way because… there are others that still believe in this cypherpunk expansive universe.” – Zooko Wilcox-O’Hearn
• The original goals of the cypherpunk movement are not fully realized in current crypto developments.
• The need for broader decentralized applications beyond finance is emphasized.
• The societal impact of crypto technologies and their intended benefits are questioned.
• The focus on creating tools for the general public is highlighted as a shift needed for broader adoption.

User experience and adoption in crypto

• User experience (UX) is crucial for onboarding new users to crypto technologies.
• “What I mainly think of it following moxie again is it’s all about ux it’s all about onboarding.” – Zooko Wilcox-O’Hearn
• Achieving a user base of at least 100 million is seen as a strategy to mitigate regulatory risks.
• “He said have at least a 100,000,000 users that was his strategy to solve regulatory risk.” – Zooko Wilcox-O’Hearn
• The user experience of a chat app should reflect the reality of its security features.
• “The whole idea of signal is that the ux should reflect the underlying reality.” – Zooko Wilcox-O’Hearn
• User experience should be prioritized over technology in secure communication tools.
• “There’s something about the moxie marlinspike approach to really appreciate which is start from the user.” – Zooko Wilcox-O’Hearn
• The importance of simplifying the experience for new users is emphasized.
• The challenges faced by new users in adopting crypto technologies are highlighted.
• The significance of user-centric design in technology is underscored.
• The impact of UX design on the perception and effectiveness of security is crucial.

Decentralization beyond crypto

• Decentralization can extend beyond crypto to areas like AI, storage, and social communication.
• “Can we have can crypto become decentralized ai and storage and communication and news and social.” – Zooko Wilcox-O’Hearn
• The potential for decentralization to impact various sectors beyond crypto is explored.
• User interfaces can be designed to accurately reflect who is involved in a communication.
• “An accurate ux that tells the user what’s really going on shows all these other parties listening in.” – Zooko Wilcox-O’Hearn
• The broader implications of decentralization in technology and social platforms are considered.
• The need for transparency in user interfaces is highlighted as crucial for trust.
• The role of decentralization in enhancing transparency and user trust is emphasized.
• The competitive landscape between traditional tech companies and privacy-focused products is examined.
• The potential for crypto innovations to influence and improve traditional systems is explored.
• The strategic viewpoint on industry evolution through decentralization is presented.
• The importance of user experience and competition for growth in the crypto space is underscored.

Privacy and security in crypto

• Privacy in crypto can only be achieved when value is at rest, not in flight.
• “You can’t get privacy from value in flight you can only get privacy from value at rest.” – Zooko Wilcox-O’Hearn
• Many people mistakenly believe that using privacy coins like Zcash can effectively anonymize transactions.
• “The reason why a lot of people assume that that use case is valid is because quite frankly they need that use case.” – Zooko Wilcox-O’Hearn
• The common paradigm for privacy in crypto transactions is fundamentally flawed.
• “A lot of people out there think of something which is totally wrong technically.” – Zooko Wilcox-O’Hearn
• The traditional method of breaking the link between transactions is a 100% fail.
• “This way is like a 100% fail and they’re still doing it like they’ve been doing it since before zcash.” – Zooko Wilcox-O’Hearn
• The limitations of current privacy practices in crypto are highlighted.
• The need for a paradigm shift in how privacy is approached in crypto transactions is emphasized.
• The misconceptions surrounding the use of privacy coins in crypto transactions are addressed.
• The critical misunderstanding in the crypto community regarding privacy is underscored.

AI and its impact on privacy

• AI can analyze and predict human behavior in ways that often surpass human capabilities.
• “K ais can read your mind they can figure out what you’re doing better than you can figure out what you’re doing.” – Zooko Wilcox-O’Hearn
• Most people will not outsmart AI when it comes to obfuscating their financial transactions.
• “For 99% of the people the ai is better at that than you are humans emit patterns and ais read patterns.” – Zooko Wilcox-O’Hearn
• The sophistication of AI in pattern recognition has increased the need for privacy in digital lives.
• “This is why we need privacy more than ever… we’ve gotten away in crypto and just like in our digital life in general.” – Zooko Wilcox-O’Hearn
• The current landscape of AI poses significant challenges for privacy and safety in crypto transactions.
• “99% of people the ai is going to attract them 99% of the time I’m pretty sure.” – Zooko Wilcox-O’Hearn
• The level of expertise required to navigate the risks associated with crypto privacy is significant.
• Achieving safety in crypto transactions may require extensive knowledge and skills akin to ‘spy school’.
• The implications of AI advancements on privacy and data security in the crypto space are critical.
• The challenges individuals face when trying to maintain privacy against sophisticated AI tools are emphasized.

Zcash’s development and governance

• Zcash’s development fund is a strategic advantage for long-term sustainability.
• “Labs only focuses on zcash and we think the dev fund is great and important.” – Zooko Wilcox-O’Hearn
• The Zcash dev fund receives a significant portion of newly created coins, increasing in value as the price rises.
• “In zcash 80 percent of the newly created coins go to the miner who might not block and 20% of them go to this dev fund.” – Zooko Wilcox-O’Hearn
• The inclusion of a sunset clause in the funding structure was a wise decision.
• “What I was saying I was proud of is we baked a sunset clause into the initial rules.” – Zooko Wilcox-O’Hearn
• The governance structure of Zcash has evolved through different phases to enhance decision-making and funding.
• “We’re trying a committee and a token holder vote that are independent separate like houses.” – Zooko Wilcox-O’Hearn
• The funding structure for Zcash has evolved to include a dev fund that adjusts every four years.
• “The new one that’s now in effect there’s no organizations that receive any direct funding.” – Zooko Wilcox-O’Hearn
• The Zcash community treats the development fund as a social contract.
• “The zcash community has gotten used to it and treats it as a social contract.” – Zooko Wilcox-O’Hearn
• The importance of governance mechanisms in crypto is highlighted as crucial for sustainability.

Privacy features and user experience in Zcash

• Holding Zcash indefinitely can provide privacy by preventing AI from tracking future transactions.
• “If you had an intention so I’m telling you ryan right now if you just decide you want to hold zek.” – Zooko Wilcox-O’Hearn
• To achieve strong privacy in crypto transactions, users must utilize shielded wallets.
• “A great great thing about zashi and the other like top quality modern zcash wallets.” – Zooko Wilcox-O’Hearn
• The user experience of the Zashi wallet is crucial for adoption, integrating multiple functionalities into a single app.
• “It has to be in the same app like if the number of apps you use is greater than one forget about it.” – Zooko Wilcox-O’Hearn
• Privacy mechanisms can be nuanced and complex, as illustrated by personal experiences with account management.
• “There’s a really interesting really subtle nuance thing about how privacy works.” – Zooko Wilcox-O’Hearn
• The lack of native privacy on major crypto is driving a social movement towards privacy solutions.
• “I think there’s a huge movement towards that kind of a social movement realizing oh my god bitcoin even ethereum.” – Zooko Wilcox-O’Hearn
• Near intents allow users to swap shielded Zcash for other assets natively across chains.
• “Near intents for people who have not used it is a way where users can essentially swap shielded zcash.” – Zooko Wilcox-O’Hearn
• The strategic advantage of using Zcash for privacy is emphasized, suggesting a unique perspective on managing digital assets.