Elena Nadolinski I Why Crypto has No Privacy Layer I Iron Fish I Pragma Denver 2024

Wed, Oct 2, 2024, 12:00 AM

Why doesn’t crypto have a privacy layer—yet? In this candid and technically rich talk at Pragma Denver 2024, Elena Nadolinski, founder of Iron Fish, dives into the state of privacy in crypto and the complex regulatory, technical, and ethical hurdles developers face. Elena explores past and current privacy protocols including Zcash, Monero, Nocturne, Namada, Penumbra, Tornado Cash, and Iron Fish itself. She breaks down why many attempts at privacy have failed or been abandoned, and how compliance with entities like OFAC and FinCEN further complicates innovation. You’ll learn about the critical distinction between ingress, internal transfers, and egress in privacy protocols, and why Iron Fish is pursuing real-time threat detection and centralized screening at ingress as a practical and compliant path forward. 00:00 Intro to crypto privacy challenges 01:08 What is Iron Fish and why privacy matters 02:08 Why private transactions are essential 03:09 Use cases: whales, payroll, donations, phishing 04:15 Goal: send USDC privately from A to B 04:51 Overview of privacy protocol categories 05:23 Problems with Zcash, TEEs, pivots, and delays 06:26 Tornado Cash: demand, sanctions, and legacy 07:01 The privacy protocol “squid game” dilemma 07:36 Compliance matters more than tech alone 08:10 Key US regulators: FinCEN and OFAC 09:14 FinCEN guidance and MSB designation risks 10:30 Tornado Cash trial and MSB criteria 11:43 Fee structures, tokens, and regulatory exposure 12:17 Why OFAC is the scarier threat 13:27 Tornado Cash and OFAC contradictions 14:01 Developers’ personal liability under OFAC 14:36 Sanctioned funds and direct fee exposure 15:06 Bridges, sequencers, and MSB-like risks 15:41 Three stages of a privacy protocol: ingress, internal, egress 16:44 Screening at protocol level vs inside privacy pool 17:45 Tracer model for note ownership is impractical 18:48 Global blocklists and jurisdictional conflicts 19:50 Association sets and their privacy tradeoffs 21:26 Why ingress screening is most practical 21:57 Using allow/block lists and threat detection 22:28 Real-time monitoring through bridge operators 23:02 Final thoughts and Iron Fish roadmap update _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🇺🇸 *Pragma Denver* Pragma Denver 2024 took place at The Arch in Denver on February 28, 2024, and was an in-person summit for builders and leaders in the web3 ecosystem. Pragma is a one-stage conference with founders-only on stage, bringing together a small group of curated attendees and speakers to discuss the future of web3 and reflect on the past. Watch the full Pragma Denver playlist here: https://youtube.com/playlist?list=PLXzKMXK2aHh4lJw0vruQ4prh8iMDUk89i&si=ayJ64Sgcqew1fdFk ETHGlobal's Pragma series takes place in cities around the world, and is designed to be a different kind of event. Ever since we first introduced our new event series, Pragma, in Tokyo in the spring of 2023, we have been fostering a curated, global community of individuals who deeply care about web3. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅ *Follow Elena Nadolinski* X: https://x.com/leanthebean ✅ *Follow Iron Fish* X: https://x.com/ironfishcrypto ✅ *Follow ETHGlobal* X: https://x.com/ETHGlobal​ Warpcast: https://warpcast.com/ethglobal Website: https://ethglobal.com YouTube: https://www.youtube.com/c/ETHGlobal _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Are you interested in Ethereum development and entrepreneurship?_ 👉 Sign up for the next ETHGlobal event: https://ethglobal.com/events 🎁 Get exclusive access and perks with ETHGlobal Plus! https://ethglobal.com/plus 📣 Want us to throw an event in your city? Tell us where! https://ethglobal.com/city _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _