Reuben Yap is the Project Steward of Firo (formerly Zcoin), which is a privacy-focused cryptocurrency.
The world moving toward cashless society. This means that 100% of transactions traced, surveilled and censored. Privacy of financial transactions will be more and more important and harder to achieve.
Reuben shares his knowledge on current state of privacy cryptocurrencies, why bitcoin is not private but steps to use Bitcoin more privately, updates from the Firo team and many other reasons for why people should care more about their privacy.
Reuben is incredibly knowledgeable about this topic. Enjoy!
0:00:00 Welcome and context
0:02:00 What is your background and how did you get into crypto?
0:05:30 Why is privacy so impart to you?
0:08:45 Why should average people care about privacy?
0:13:30 What do you tell to people that think Bitcoin is private?
0:16:01 Best practices for privacy of Bitcoin
0:21:00 What are the different privacy technologies?
0:25:10 Risks associated with implementing new privacy technologies
0:29:23 How do you think through regulations with privacy crypto?
0:36:31 What are the common mistakes people make with privacy coins?
0:39:09 Privacy as a feature of Bitcoin
0:44:31 What’s on the roadmap for Zcoin?
0:50:00 Where can people find out more about you?
Ben: [00:00:00] Welcome to the alt asset allocation podcast, exploring alternative investment opportunities available to the everyday investor. Here’s your host Ben Lakoff.
Hello and welcome to the all to asset allocation podcast. Today’s interview is with Reuben. Yap. Reuben is the co-founder of Z coin, which is a privacy focused cryptocurrency the world is moving towards cashless society. This means that a hundred percent of transactions will be traced, surveilled, and censored. Privacy of financial transactions will be more and more important and harder and harder to achieve. Reuben shares his knowledge on the current state of privacy, cryptocurrencies, why Bitcoin is not private, but steps to use Bitcoin more privately, some updates on Z coin and many other reasons for why people should care more about their privacy.
I’ve been converted from a, I have nothing to hide sort of person to thinking that privacy is very important and very much lacking in many of the things we do, especially online. Just read Edward Snowden’s book, permanent record. It’s really important before you listen, please don’t forget to like, or subscribe to the podcast or even better leave a review.
This really helps more people find the podcast and keeps the scene going. And it really, really helps. Thank you. Reuben is incredibly knowledgeable about this topic and I hope you really enjoy this episode.
Reuben, welcome to the asset allocation podcast. Glad to have you.
Reuben: [00:01:36] So, so happy to be on Ben. And it’s great to see you again.
Ben: [00:01:40] Likewise from the other side of the world. I’m in LA you’re in Malaysia right now, right? Yep. That’s right. So thanks for taking the time this early and we made it work. I’m super excited to have this conversation but I wanted to start for our users just a little bit about you, your background, how you got into crypto and, and privacy.
Reuben: [00:02:02] I don’t think I took a very traditional route into crypto prior to doing crypto cryptocurrencies, I was a corporate lawyer and I did actually also a lot of like government advisory work as to how to drop laws or the, for the state. So that was rather interesting. I did this for 10 years, was the partner of a law firm.
And I actually kind of started getting into cryptocurrency more as a hobby and a curiosity. And then about 2013 so quite early and I was I also ran a VPN service then I think it was one of the largest VPN services in the region during that time. And what had happened was VPN services were considered taboo for some reason, for the same reason.
Why privacy cryptocurrencies now like, Oh yeah, you know, it’d been illicit activity. Now, now it’s so commonplace, but that time we will cut off from many of our payment processes, you know, credit card companies didn’t want to. Step VPN payments and we’re doing a risky business. And of course, you know, with PayPal and all this stuff, that’s really high fees.
And they sometimes like froze your account for no reason. They just like freeze your account and like explain yourself. And it was a really horrible way to do business. So some of our users were like, look, you know, you’re about privacy ear about like, you know, being free from all this. Why don’t you take a look into back online?
Back then you know, I was like, what, what is this thing? You know, and I looked at the, it was like, well, can I convert it for cash? I mean, that, wasn’t my first question as a, as a business Alona. And I just decided to SAP it, as soon as I found someone to, to be able to regularly buy. Buy and convert it to, to my local currency.
And there was no exchanges available for us. Then I think it was really like, Oh yeah, I called this random guy and buy Bitcoin room in. I shouldn’t have kept it. I mean, I think it, it kind of was like 70, $80 then us should have just kept it off. But yeah, that’s kind of how I got into cryptocurrency. And then I went through the entire, the entire thing, mining.
You know, trading, losing money on exchange packs getting scammed. The, and I I also was really involved in, in privacy cryptocurrencies, especially in dash, then that was previously known as dark coin. So also familiar with Monero and I guess in 2016 there was this opportunity to join CZI coin as a part-time community manager.
And. I just said, I want, I’ve done all the whole, you know, OSHA bang. I just want to see what’s it’s like actually working for a cryptocurrency. And I just did this on my spare time. I was still a lawyer and that’s kind of how it all started.
Ben: [00:04:57] Nice. Yeah. And this is a, it’s a similar story for like WikiLeaks, right?
They were cut off from the financial system and Bitcoin provided another option to still receive payments from customers or collaborators and things like that. interesting that, that was kind of the way that you got, got hooked as well. having a VPN service and now working with one of the top privacy coins in the space.
why privacy, why is privacy so important to you that you have spent such a big portion of your career working in it?
Reuben: [00:05:31] I, a Khaleesi like privacy is one of those things that. Has kind of been eroded over the years, you know, like it’s all together with censorship, you know, the growing power of the state.
And I wouldn’t even call myself an innocuous or libertarian in that stuff, but it’s just, I believe that there should be a balance between the power of the individual and the state. And one of these things is basically the right to privacy, right? Like, If, if the government or authorities or even companies, right.
We’re giving all data way right now. And a lot of people don’t realize that this data especially can be used against you. Like, for example, like what’s happening in China right now, it’s not just a matter of monetizing the data. It’s about monitoring your behavior and seeing what is right. And what is wrong.
And I’ve kind of gone down the rabbit hole of looking at how. Governments use their power. And I mean, if anyone has had any run in with pecs authorities, especially in my area, sometimes they, they will try to get you on things that are legally. No, there’s totally, there’s no basis on Poland, but you know, they trying to maximize the amount of money too.
Trying to extract from me and they got all sorts of information. You have the answer, answer onsite at the time you just wear you down. And if you don’t have the sufficient legal and accounting resources, you just say, I’m going to pay this up. Right. And similarly, like, you know, in, in, in China, if you like offend somebody like a high ranking official, are you doing like, you know, what would they call like undesirable behavior?
You know, they can cut you off from the financial system using their social credit score. And this is all ties in into payments as well. So, I mean, yeah, I’m, I’m all about like in a financial payments bio. So think about privacy as, as a whole. And the idea is that. Like how, in our mind, we don’t tell everything that comes to our mind.
It’s not because that we are like evil people, all sorts of stuff come to our mind, but we have to have that ability to filter what we show to the world at our choosing. Right. I may have some, like, you know, like, like, like private parts that I don’t want other people to know. Not necessarily I’m a criminal or anything like that.
That’s kind of how I feel about privacy. Yeah.
Ben: [00:07:58] Yeah. that makes a lot of sense. the China social credit system is just total dystopian nightmare, right? Like you, spend too much on video games, it’s all tracked and you’re, you’re dropped a tear in the social credit system and have trouble getting it’s.
It’s it’s really. Playing out a number of trends that we see nowadays, like to the extreme and seeing how, how bad this could actually get. And for me, I mean, the world is moving toward that cashless society. digital currencies, whether they be. Cryptographically secured or just a digital version of cash.
The world is moving toward this. But the problem is that there are a hundred percent of these transactions are traced, surveilled, and potentially censored. Right. Which becomes a very, very big issue. I think the most common question with this, that I get a lot is, you know, I, I have nothing to hide.
I’m not doing any illicit transactions. Why should I care about privacy? What do you say to people like that? Do you use the private thought example? Or what do you say to them?
Reuben: [00:09:04] The private part is a good example, but at the same time, it’s you know, you say you have nothing to the person actually like kind of popularize, that phrase was actually intrusive gobbles.
So I think it was the other Nazi propaganda teeth. And it’s kind of shows you like, you know, you, you know, you know, nothing, you don’t, you have nothing to fear, nothing to hide. It’s it shows that. They are the ones that decide what, what you should height or whatnot, right? Like, I mean, that’s like, Oh, this type of thoughts are, are illegal.
And that, that, that is really at the crux of it. Right. And again, I don’t think about, again, it’s not about trying to hide it. It’s about the ability to choose what to keep private. I think that’s a very important distinction there. And. If everyone rec like, you know, I didn’t, I didn’t go around. I don’t want to live in a glass house.
Right. And half my neighbors see what I’m doing. It’s not because I just want to be myself. Right. And, and. We have to be able to let lose the two things and like, not be split the nice, it’s almost like, can you imagine having like someone that scrutinizes you every single moment of the day, what you pay, what you do, what, who you talk to, what you write and you can easily take any of this out of context.
I mean, we’ve seen all the, like, you know, how this political, so even the smallest thing can be blown out of proportion, taken out of context and used against you. In this era, you know, people are still not smart enough to, to, to, to distinguish, but in one than we seem to think that everyone’s perfect, we will not, we all have, we do mistakes and whatnot.
And the right to privacy is also the right to do mistakes and, and, you know, not have it like blown up every time in your face all the time. Right. You know, so I mean that that’s, that’s. That’s kind of why I would stay there. I mean like seriously. Okay. With, you know, everyone checking your, the whole world, checking your email, you wouldn’t right.
And this was like, if you have financial privacy, it’s like giving access to someone, anyone in the world, access to your bank account, all your financial statements. Is that right? Do you want to be a target? Like, Oh, I know you have like, you know, 500 Bitcoin. Do I want that inflammation out. It’s not necessarily I want to high, but I have that, that I have this much of network.
Right. I mean, those are really real concerns there. Yeah.
Ben: [00:11:41] Yeah. And the, the other thing for me, is just knowing how much companies know about you anyways, for marketing purposes and these sorts of things like the, my financial transactions, last little missing piece, because they’re in disparate places all over and sometimes with cash.
if you can somehow aggregate all of that, you get this really good profile of what I like, what I spend money on, what I would I impulse buy because I, Click on it and then instantly buy it. all of this becomes this very rich profile of who I am and then targeting. I mean, I’ll just buy everything on Instagram. Right.
Reuben: [00:12:17] And you said, realize that that problem, this profiles, I mean, Cambridge Analytica, Analytica has shown that if I know enough about you, I also know what will be most likely to influence you to do stuff. And this is like super targeted to the max. Like I know like all your fears. I know what, no, I cannot target a certain thing to feel content, to weigh your mind a certain way.
And that shouldn’t be possible. I mean, like that’s like really scary and this is all like freaking automated.
Ben: [00:12:50] Well, it’s already happening right in the most insidious way as possible. protecting at least a little bit of that would be helpful for sure. A common thing I normally see with people is like Bitcoin.
Oh, it’s super private. Obviously not accurate at all. Public transparent, permanent ledger, permanent ledger ledger. what do you, what do you hear? What do you do talk to you about people when you hear that they say, Oh, I just use Bitcoin. It’s private.
Reuben: [00:13:19] I may be a bit biased as, I mean, my son goes, I think people know that big guy, private for having new people, new people come in and they’re like, Oh yeah, you know, don’t you, when I have in the dress, you know, there’s no identity tied it.
So, you know, Bitcoin’s often classifies to Don the mess. Right. And the thing is that right now, I mean, yes, they all have are blockchain analysis companies, but there isn’t that level of. Yeah. Yeah. Like, you know, I mean, like Facebook was collecting so much data and no one really knew this whole thing standard blew up, but the same thing’s happening with like Bitcoin transactions.
Just that there’s no drama that blew up, you know, still today for, for people that care. But as you said, it’s, it’s basically like a Twitter for your bank account or your, for your, your Bitcoin account. Right. And. I mean, just for example, like with the way Bitcoin works, if I have, let’s say a hundred Bitcoin in one address, right.
And I go to someone and make a purchase immediately, he knows, I at least have a hundred Bitcoin. Right. And I’m like, why should I give that type of information the way and. And similarly if I do a little bit more on nurses, like, Oh, he got it from this exchange, you know, like I, I start to build a profile of you.
And again, that’s one of the beauties of cash where. I’m buying a piece of a coffee. Why should I give you any indication of what my net worth is? What my previous transaction history is, what my salary is. That’s none of your business. And I think that’s really important because like, some people are like, Oh, you know privacy we’re talking about.
Not just privacy from the government. It’s just privacy from everyone, anyone, you know, even your merchants. And I think that’s a really important distinction to make as well. Yeah.
Ben: [00:15:11] This the thing, right? Blockchain is a privacy nightmare, really? Because like you said, it’d be like going and buying a coffee and they see, Oh, you actually have this much money, which is your, basically your net worth.
They came from this source and that source. And you also transfer it to this address and it’s synonymous, but it’s a. Yeah, it’s very, very transparent. I’m curious. Bitcoin, when used correctly with some privacy, best practices can be. Somewhat private. what kind of privacy best practices do you do here?
Or do you follow when using something like Bitcoin doesn’t have to be what you’re using because none of us actually have Bitcoin, right? If, if we did, when we lost it in a boating accident or something, but if one were to use Bitcoin, what privacy best practices would one use to ensure that you are following up privacy, best practices.
Reuben: [00:16:05] So, so this, I think illustrates kind of like a problem with trying to be private on Bitcoin. Because when you start trying to do private practices, you stand out. Like okay. I mean, I guess the most basic idea of, of like Bitcoin privacy is use a new address every time you turn to receive money, which one’s okay until like, you know, let’s say you received 0.1 0.1, Oh, all in different addresses, but now you want to send one Bitcoin, you need to combine all of the zero point once in one transaction, send it out.
Now I’ve just tied all this addresses together. So the moment I do that, the privacies. Obviously loss. Right? So that obviously is a great model. Obviously, our more advanced ways, like such as using what we call mixes like a coin joined based mixes effectiveness. I think the most popular ones are like Sabi wall and samurai.
But there’s been cases where if you mix it and you, and you tried to deposit this you know, mixed funds into an exchange, even though you’ve done nothing wrong, they were like, peace month, a coin join. These funds have been private. I’m going to lock you down. You explain to me what, what, what has gone.
Yeah. And then they’re like, well, this kind of like, it’s additional headache. Right. And that, see if you’re mixing, you could absolutely mix with someone who has done illicit activity. And it’s only, you just like caught into this. Like, because the mixing rounds, they’re not very big. Like you’re mixing people.
I don’t know. Three people, five people, 10 people. The moment that like, you know, you get caught, it’s like, Oh, I know this address was like involved in the drug deal with that money gets something mix. If you’re suddenly you kind of like potentially implicate that now you’re like, Oh yeah, you know, this funds are potentially the end to end.
The idea is that money should not. It’s definitely have to have all this black lists or painting and whatnot, because I’m an innocent person. This is the fricking nightmare to, to manage, you know, like, like, look, you know, if we did that to the U S dollar, like 99% of dollars have like traces of cocaine on them, we’re not going to everyone.
Like, do you do hugging? Do you do, do you do cocaine? That’s the point? Right? It’s like, It’s all about like I guess the fungibility, the, you know, the coins all the money should be indistinguishable from each other, rather than each of them having like a unique history, a unique identity, which makes them different from another, I think that’s really important.
Ben: [00:18:36] Yeah. Yeah. fungibility is, is a very important thing. at the worst case scenario, like Essentially, it would be these, these coins have been mixed, so they’re blacklisted and you can’t get out of them and they’re tracked because it basically puts a huge target on you as a user for having these elicit blacklisted coins.
Reuben: [00:19:01] Right. Yeah, this is going to happen. Like, you know what I mean? Even financing, but you see like all the regulator Binance exchanges, they have this type of issues as well, you know, because they want to play nice with regulators and the moment something goes through a coin, they’re like, Oh, it’s in, must be.
It must be illegal. You know, there must be something that’s different about this and even eat. And even this privacy mechanism, isn’t that good probabilistic between like a small amount of people, right? You really have to be so careful. Don’t mix the funds deal with like, make sure that this funds don’t mix with the other funds.
It’s a, you want to do privacy correctly. It’s a fricking nightmare. I was looking through like the, the so-called procedures that day on Bitcoin. You’re like, why bother, you know, the better things to use voted?
Ben: [00:19:50] Yeah. So maybe a good segue. So there’s a lot of different privacy coins out there. A lot of these privacy coins are actually implementing proposals that have been proposed to the Bitcoin code, but you know, there’s not enough history or, or research to support them that it’s, you know, Bitcoins.
It’s too risky, I guess, to implement for the Bitcoin code coin or code. walk me through the different privacy technologies that are out there. And kind of what you’re using as a Z coin,
Reuben: [00:20:23] I guess, on the road, a high level, I guess they can be. Differentiator into two very large, very large Catholic categories, one, which is basically mixing, which is kind of like hiding in a crowd ish you know lemons, you know, mixing with other people and the other would be cause something like that.
Ben: [00:20:43] And I love your, I love your metaphor for the mixing. I say it all the time. Whenever I’m talking to people, I’d say I attribute you. Don’t worry.
Reuben: [00:20:53] So the other mechanism is more like zero knowledge proofs to prove that a transaction has happened w a valid transactions happened without giving details of the transactions.
There’s this really like, really crazy stuff. And this based on mathematics got zero knowledge proofs. So I guess with mixing you know, stuff like Monero stuff, my member Wimber’s, stuff like that. They all work in slightly different ways, but. In general, they’re grabbing you know, the basically creating decoys around their transaction.
Right. And I’ll guess I’ll use the Lyft analogic because it’s just so easy to understand. And, and the lift analoging is like, okay, you know, I want to, I want to possibly know when the letter of fought in a lift, right. And with Bitcoin, I go into the lift. I let out a fart. It’s me, it’s this undeniably me, you know, I know this address did this transaction.
Similarly, I’m the one who ended the lift. I made that fart. Now with mixing technologies some kind of find everyone who wants to fart at the same time, times, time in the lift, and they all fought at the same time. So, yeah, well, yeah. I know all of these people have fought that, but I don’t know whose fault is who’s.
I mean, that’s one, one way to deal with it. Other mechanisms are like, okay, I won the fight. I’m going to drag like 10 other innocent people into the lift of me and I’m going to let her afar. And I’m like, well, this one could have come from one of 11. Right. So there’s like a lot of like plausible deniability, right.
Well approach us like with Z coin with a Z hash, especially is kind of more of like, I go into Lyft, I fought and I just make it disappear. Like it just disappears completely. And then at any time in the future, I can redeem this font or make it appear at any time. And now my plausible deniability is not just me.
People in the lift. Right. Which is limited by the size of the lift. And whatnot is basically with everyone who ever entered that lift. Right. So obviously that mechanism’s a lot better. And, and with, with our needle technology, you can even ask the right to be deemed at fault to someone else. So it was like, yeah, you know, I fought that.
I’m not going to make it appear. I’m going to pass this right. To to you, Ben, and you can redeem that apart suddenly that just like adds this layer of, you know, office Cajun. That is just so difficult, right? It’s like you’re anonymous. The set is not, does it every, everyone who, who was in the lift, it could be someone else who never even enter the lift because I couldn’t pass that right.
To redeem to someone else. So I think that’s a great way to, to, to view privacy technology. So
Ben: [00:23:44] it’s a great way. And it’s unfortunate that it has to be talking about farts to compare it to something like cryptology, photography and privacy, but it, it works. It makes it so clear in my mind. And these are the, these are the main categories that exist.
where I want to go next is actually the risks. when you have this upfit station a lot of times, you know, these are untested technologies and, and cryptography. you have sole supply auto, but auditability issues and a number of things because it’s a rather. Great next gen breakthrough cryptography.
talk to me though, to the risks of implementing kind of these newer technologies like this.
Reuben: [00:24:28] I mean, with privacy often you lose what we call auditability, right? Because. You know, with Bitcoin, you can always say like, Oh yeah, this X number of coins, I can track the history of every single coin.
I know where this has been. I know this isn’t created often now, just for the record. Actually suffered two inflation butts in the history. And what inflation bar is, is the coins are created out of thin air. And, and, you know, from a bug or, you know, from a, from like a fail check, and this has already happened two times one, which was actually exploited.
The second one was patch before it actually did that. Someone took advantage of it. So it kind of shows how difficult it is, but with Bitcoin and leads, you can see all right. Yeah. You know something. Can go wrong, but we know where, you know, we know what happened, we know how to stop it when we can see it happening immediately.
Now with privacy coins is a lot trickier because. You can hide the sauce. I mean, like, you know, when I’m redeeming the FOBT, I’m hiding who, who made this is like what we call hiding the sender. Right. But also another important elements to hide the mounts, which is basically you know, the amounts office skater.
I don’t know how much you’re transacting with and the moment you start hiding amounts of they are, they are protected by. By a certain mathematic approves and through that, okay. You know, a, to B there’s no coins being created out of thin air, you know, that Mr. Bitcoin, like a balance proof, that means the proof that both sides of the equation balance, and as something, what we call range proof to make sure, like there’s no negative numbers, there’s no infinity numbers to make sure that the equation makes sense.
Right. But if there’s a failure in one of those proofs or, you know, and, and it has felt before, like, True. Very complex reasons why points can be created opt-in and you can be very, very hard to spot because the amounts are hidden. So you know, especially a lot of this new techniques the use like pretty experimental typography, which hasn’t really stood the test of time.
So it’s really hard to like, like the, the rate of development of cryptography in the past. In this, like, you know, five years is probably worth like 20, 30 years. No cryptocurrency, he was around. Right. And just a huge rate of development. And obviously time is needed to basically break these things, you know, reinvent them and make sure this also, I think the technology is starting to get a lot more mature, but.
Again, the technologies are moving a lot. So I guess the idea is that you’re sacrificing auditability. And again, you’re using much more complex mathematics, some which may be unproven this privacy stuff, because you have to realize blockchain is all about transparency and verifiability, and you want to add privacy on top of it.
It’s kind of like opposite stuff. And yet you kind of had to make it all work. It’s pretty amazing stuff.
Ben: [00:27:38] It’s mind boggling. These experimental technologies being used. it goes from public transparent, permanent. This chain is always linked to that one, too. Yep. This guy, Senate. You don’t know how much he has.
You don’t know how much he saying you don’t know who he sent it to, and you don’t know any, any of this at all. But it’s still in incorporating a blockchain somehow. I mean, it’s, it’s, it’s really tough to wrap your head around. That’s for sure. But the clear thing that I see with something like this is regulations.
Why on earth would any government allow something like this to be developed that you can, you know Bitcoin, USD, tether all of these things are being used to evade currency controls and, and, and, you know, small amounts of money laundry. Yes, no it’s infant decimal compared to like the amounts that are growing through.
Actual cash, but it is, it is what it is it’s being used for those sorts of things. with something like this, it’s the perfect tool. It’s a digital cash. with cash, I’m limited to the amount of cash I can fit into the back of a semi-truck and mail over to somebody’s house or whatever. But with this, you know, it’s it’s transmitted across the internet and untraceable.
How do you think three regulations with something like this?
Reuben: [00:29:00] People may actually argue? I mean, to me, this is a, I think it’s only a part solution to the argument, which is like, yeah. When I’m doing business, I want to comply with GDPR. You know, when I’m doing transactions of the blockchain, I can not review my customer information and if I don’t encrypt it or, you know, make it private in some Harvard I’m transacting over Bitcoin, I’m potentially exposing my client’s data.
Okay. All right. I mean, there’s one way to interpret it in the, say that if I’m doing stuff on a blockchain, which is. Public the area one and you know, I’m dealing you know, I’m potentially revealing information about my customer. I may need to make this information private. Okay. Yeah. That’s one argument, but I think the other thing, so first of all, like, look, you know, cash actually still exists.
You know, like Cassius anonymous as you sit, it’s limited by the amount you can carry. But these, the monster is still very, very significant, right? Like, and. If you take a look at money laundering today it’s being done through banks and just through different mechanisms, like. Based money laundering where you, you know, send goods, but you inflict the price.
You can do money laundering like that. And it’s incredibly hard to track because who’s going to go and track every single you know, item and say, what, you know, you seem like, Oh, this bananas costs you’re overpricing. These bananas like that, that kind of granularity is really hard. So yeah. If you want to do money laundering through the regular system, you know, this, this is still being done.
I mean, like, you know, we don’t even have to look far like the whole, like send the law drug cartel was done by HSBC. And I mean, every single bank has been involved with money laundering and most of the time is knowingly what has happened to them for every litter. Right. So if you’re really like serious about stopping crime, why haven’t the bank execs been punished?
No. I mean that, that’s another argument, right? Like you really need to do that now. It’s so if you realize this, you realize that the battle of privacy, it’s not so much about preventing crime, preventing money, laundry, all that stuff is all about. Retaining control. And that’s what is truly about, you know, like a lot of this stuff, like even, even in us as what’s happening now, like, you know, the ban on lawful encryption act, which is about basically banning a Christian, unless the government allows it and allowing back doors into the encryption so that they can read.
What do you think is necessary and whatnot? It’s they, they say that, Oh, it’s to protect, you know, against child pornography is to protect against you know sex like sex workers and stuff like that, which. Hasn’t really pan out or like, you know, even like terrorist activity, like how much of this is a Venus has actually helped.
I think that’s actually a question that, that hasn’t really been answered. It’s not that we against all these things. Of course we were against about it’s all about proportionality, right? Like, okay. Like, yes, when I go to the toilet, there’s a chance that I’m going to slip down and hit my head. And, and die.
Yep. What’s the proportion that responds well. Yeah. You know, safety standards in the toilet, the answer. Yeah. I could have maybe someone follow you every time they go to the top and watch every moment of you so that you don’t fall down to the toilet, but does that proportionally, I mean, obviously not.
Privacy is about proportional at the end. I think the way to see it is that you can still regulate it. And the way to do it is to regulate the conversion of VR into cryptocurrencies. So even if it’s a private secret book currency or whatnot, it doesn’t really matter because if you deposit thing, a large amount of cryptocurrency there exchange are moving away, you do your KYC, you do your AML.
You still going have a hundred percent compliant, especially if the, the existing FATR travel rule. It doesn’t matter. It’s also, it was meant to deal with cash as well. So I don’t think that’s a necessary I don’t think there’s a net. I mean, obviously there’s some criminal risk, but that it’s with the existing financial system as well.
Right. And I think that even if it governments go ahead and ban it, I think that they’re going to do the. Wrong thing, because first of all, by banning it, there are a lot of technologies to go around there. I mean like, look at the rise of decentralized exchanges right now. Are you going to stop it?
Right? It’s so difficult to stop at these centralized exchange. That’s basically just caught in the net and like, people can access it, right? Unless you start censoring the internet and stuff like that. So if you, if you ban it, if you ban it. Predominant actually loses more control because it just calls completely dark.
All the liquidity, the decentralized exchanges, all this sort of stuff. There’s no way control it whatsoever. But if you do right regulated at the exchange level at the Fiat conversion level, yeah. All the liquid is still going to be there because of the convenience and people feel more secure. But now you at least have that level of control because you can see the conversion into money, but then if you’re just going to do it in a decentralized exchange is fricking going to be a nightmare to, to even control.
So I hope regulators realize that that by banning it, you actually lose more control. Yeah.
Ben: [00:34:29] Yeah, that makes sense. it’s certainly a headwind. I mean, if you cut out the cutoff, the legs, all these fit Henri on and off ramps it makes it difficult, but yeah, like you said, there’ll be some decentralized.
Zero knowledge, atomic swaps exchange that exists and people will be able to swap it. Or you always have the meta data in the back of a Starbucks with a sack full of Kalish sort of situation, which still happens. Right. with privacy coins, I mean, obviously one of the biggest blunders you can probably make is.
Purchasing it from a KYC exchange and then thinking that you have a privacy coin and everything’s going to be great. What other common blunders do you see? Well, I guess the other big one would be a lot of these aren’t privacy, like default. So you’re sending transactions and they’re not, they’re not private at all.
It’s the same. what are the common blenders you see when people. Think or use privacy coins for the first time.
Reuben: [00:35:31] Well, first of all, I, I don’t think there’s anything wrong with buying it from a KYC exchange, you know, it’s they know that, okay. Yeah. You bought this a exchange Sanford. Once you have it in your possession, you can transact privately, right?
There’s not necessarily a disconnect there. Right. I may be okay with, with nothing to exchange and I got this market of the currency, but now from then on, you know, my, my transactions are private with it. I think that’s, that’s, that’s. I don’t think that’s necessarily a mistake because if you want like ultimate levels of privacy, you don’t do that.
But I think for the regular Joe, that’s not wrong. One of the things that people don’t realize is that yeah, you have your blockchain level of privacy, but there’s also the network layer of privacy as well, where if you make a transaction and you can be all using all these kinds of mechanisms and whatnot, but if I can tie an IP address to your transaction, well, there there goes your privacy.
So if you want to do it, do a VPN use tall or use a privacy cryptocurrency that does protect. Network layer network layer. That means it prevents your IP address from being linked to your transaction. So Z coin does it green, does it Monero just recently does that, so that that’s one way to deal with it.
I think the other thing is to actually use the privacy transactions correctly, which is. A lot harder than people think it is. So for example, with our mint and redeem mechanism, or even with like in Z cash on Z coin, when you anonymize your coins, it’s best to wait some time before you immediately spend it, because you can have all this fancy stuff, but they quite like temporal analysis where the time is like, if you.
Anonymize it immediately span it, even though I don’t know, for certain I have like a good chance to say, like, this is probably the same person and that’s, you know, there’s this pattern that that’s happening. So try to like, when you anonymize your funds, let it sit for a while, you know, a few hours, a few days.
Okay. And only then spend it, I guess, keep your funds anonymous even before you need to use it. And. Rather than I need anonymous, anonymized it now to use it. I think that’s a really easy way to improve privacy a lot. I think those are like some of the simple ways to, to deal with it. Yeah.
Ben: [00:37:52] Yeah. a risk to all of these privacy coins, is that right?
Bitcoin just implements some privacy best practices, and suddenly you can send Bitcoin in a completely private anonymous way. perhaps talk a bit about privacy as a feature versus, you know, privacy as a product with something like a sequence.
Reuben: [00:38:15] I mean, like, I think multi coin capita recently wrote a post about like how you know, privacy should not be a product.
It should be just merely a feature. And, and indeed the, if, if Bitcoin does achieve like very good privacy, then, well, we should ask ourselves that, well, what’s the point of all this privacy focused cryptocurrency is like three points, but there’s the more privacy always has trade offs. You’re going to have.
First of all, you know, the loss of auditability, which I don’t think Bitcoin will ever accept. Right. You know and you also have a lot more computation like resources to be able to do all this fancy mathematics. So that’s also sacrificing scalability as well. Right? So I don’t think Bitcoin because of his nature of like being very conservative and, you know, not, not introducing any things that, that may, you know, seem experimental in nature or like just losing the ability to.
I mean, they couldn’t even agree on the freaking block size. What, what more supply being able to check the amount of supply. Right. And even then, like, even if you hide the months, I think, which is also very unlikely for them to implement then. You know, you still need to do so many other things too, to make privacy.
What it doesn’t really look like Bitcoin anymore. So I guess it’s my point of view is that because it’s a privacy focused cryptocurrency, we can kind of our, our tree towards the privacy element while trying to balance scalability. But because we, we, we design it as privacy in mind, rather than there’s a attack on, because privacy is not just about.
This and this and this, this is all, but like a holistic experience in the network layer, the addressing system, the sauce, the receiver. You really have to have a complete system that design around this design for privacy, rather than just tacked on a certain system on top. Like, for example, like with a tearoom, you have stuff like two NATO cash, which uses the same technology, like the cash.
But the problem is that in its current version you know, there’s not many people using it, right. Because it’s like an opt-in system, it’s like a separate contracts it, and then you run into the problems of like coin join, you know, like, Oh yeah. You know, you’re flagging yourself. Cause you came from this contract.
So that means a lot of people and for the all Ethereum, isn’t like, you know, if, if anyone is transacted in a team room right now, you know how expensive it is to do it, like, you know, $5, $10 a transaction. And now you have this additional computations that are not really like. Like a TV room. Wasn’t really designed with it specifically in mind, you can do certain optimizations.
It’s going to cost even more. So it becomes like a very premium feature, which again, it’s going to hit a doctor and as well, and at the same time, you still don’t have the network layer protection with the current iteration of, of, of the native cash light. Because you still have to pay a premium fees that can also expose you as well, because you hide your funds, but you know, you can see where the fuck the fees are coming from.
That that, that I think is being addressed, but it kind of shows how difficult it is to just tack on privacy. Cause you have to solve all these problems and to do like a lot of jump through a lot of hoops to do it. So rather than do that, you know, that still has a lot of leakages and still a lot of problems.
Let’s just focus all the privacy in, in, in one product that you asked about focus about providing private ways to transcend. And you’re going to, going to get much better brought up for privacy, right. Rather than something that’s a Swiss army knife, right. It’s kind of like, I want to machete rather than, than a Swiss army knife, we can do lots of things, but it doesn’t do any of it really well.
So I, I would argue strongly that if, if. Privacy is a focus. Privacy focused cryptocurrency is definitely have to play a role in this rather than trying to think of of a way to have one point do everything because it’s not possible to optimize a coin to do everything
Ben: [00:42:25] originally. I had always thought of privacy coins almost as a sandbox for interesting features to eventually add to Bitcoin. And it was like, this is the Bitcoin train, and these are the sandboxes that you can play and experiment and you know, Oh, okay. It’s it makes sense. Let’s implement that back into Bitcoin, but yeah, I’m starting to come around to seeing multiple versions exist like this.
I think that makes a lot of sense. With Z coin. give me, give me some rundowns. I know you guys have a big couple of months coming up or month really. I mean, packed until the next month. So this is being recorded as beginning of September, but yeah. Give me, give me some updates on your project,
Reuben: [00:43:10] right I mean, I think we’ll, we’ll. Pretty soon releasing, I guess our, our new privacy pro and the last we put the pin, any arbitrary amount of coins and redeem them for brand new ones, even partially like been burned 10.5, I can redeem 0.32. Coins and all these coins, the ones that are redeemed like have no previous transaction history, they look like Virgin points whatsoever.
There’s no fancy, like, you know, a lot of the criticisms of other privacy protocols is that he used a lot of like fancy mathematics. Ours is a relatively simple construction means not as many moving parts, so it’s really good. Let me like less, less stuff to go wrong. So we’re trying to balance between simplicity, good performance and privacy altogether.
And I think the Lantus is which is my privacy protocol, which recreate that does a really good job. And I think the past snatch could be
a main net in the month or six weeks after that. There’s so many other stuff that’s going on, like defy integrations, the centralized finance you know, we, we have waste to passively move into the material ecosystem and, you know, participate in all the. Wonderful things that are decentralized loans, these centralized exchanges and stuff that we not necessarily want to do on a chain like a tiering, do what they do well and let we do what we do well.
So I think that’s a good way to see like the whole cryptocurrency ecosystem rather than one coin hind the Soviet or let’s play into each other’s strengths and do what. You know, what, what we’re good at. Right. And, you know, we also have having that means our supply emission is being cut into half as plan and.
These are all like really, really big things that are happening in the next one or two months. Really exciting. We also doing a rebrand just to you know, launch up the Lantus. We want to kind of stand on our loan. I mean, I think some of the listeners may still have confused the coin and Z hat.
Or think that sequence a copy of Z sexually in no relation or technology is totally different. So we kind of want to make sure we disembarked ambiguity that, and. So that I’ll, I’ll, I’ll privacy critical. It really is. You know, we think it’s the leading privacy technology out there that balances all the, the trade offs in, in the best way possible.
Ben: [00:45:44] Yeah. And I’m, I’m really excited. I mean, I’m biased because I know you guys and the Z queen team, but I know that you are working very, very hard behind the scenes, right? You particularly, but the entire team, you know so I’m excited to see LA Lantus come out and hopefully the market reacts accordingly, but I think it’s you’re bringing a lot of values to space that’s for sure.
Reuben: [00:46:06] I, I mean, like, you know, we, we always talk about the price and whatnot, but I also think that the technologies that we are building, it’s not just about the price and the price reporting. Great. But I think that the tools that we’ve built. Ah, going to be really important in the coming years, especially with the rise of CBD CS, like, you know, central bank, digital currencies, which are very, very like the opposite of the origin purposes of cryptocurrency
Ben: [00:46:34] and they’re coming and they’ll be here.
Reuben: [00:46:36] Yeah, that’s coming in like the DCP. I mean, there’s even talk of the digital dollar. And I mean, if you take, even look at it, look at the O U S laws, you know, there were controls to, to, to disallow the federal government from, from looking into individual, like in a bank balances or amounts of information without like hot approval, things like that.
But now that’s with a CBDC that’s. That’s just totally erode, right? I mean, like even the old people realized the problems of this and now we’re just like throwing it all away. So I think be, have to be very aware and, you know, think about what they’re giving up on. Like, I think one of the really common things I talk about is some people, you know, bimonthly defend their right to bear arms, to see as a way to fight against a government that’s oppressive.
And. But you can have all the guns you want. I cut you off from the financial system. Let’s see how long you lost. I think that’s also a very real risk, like yeah, you guns and you run out of bullets. You can buy some stuff. Right. You know, like I can just cut you all off, see how you feel. And you can organize crap without money.
Ben: [00:47:47] Yeah, very, very valid point. Well, you’d probably make a, make a run from more sued before you ran out of it. Or at least I would hope if you had a bunch of guns, Emma, but well Reuben. Where do you want to send my listeners? Where can they find out more about you about Z coin? Where do you want to send them?
Reuben: [00:48:06] We have a [email protected]. You know, we’re very active on Twitter as Z coin or Fisher. We have a very vibrant telegram and discord community. All the links are on our website. So you just go to Zico and the IO and yeah, we have a YouTube channel where I taught, give updates and you can find out more about technology, the tree four minute bites and.
I guess that’s a great place to start
Ben: [00:48:31] Perffect and I’ll link all of those in the show notes, but really appreciate you taking the time this morning, Ruben, and thanks a lot for coming on.
Reuben: [00:48:38] Thanks for having me, Ben. Real pleasure.
Ben: [00:48:41] There you go. First off. Thank you very much for listening all the way through.
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