Keynote: Make Ethereum Cypherpunk Again: Why we need privacy by Zac Williamson | Devcon SEA

[Music] thanks you everybody um hello good morning uh so um for those who don't know I am Zach I am the CEO of Aztec we are a layer 2 building on top of a the etherium network uh with privacy by default privacy is a first class primitive and so here I want to talk a little bit about uh about privacy why it's important why I think that not only is it uh necessary for blockchain to thrive why it is an essential missing component uh that will decide the future of our industry um so click there we go um I think that the information age so the the the rise of the internet the rise of uh this Mass peer-to-peer communication Network and the rise of AI agents operating within it has massively increased um like the overall human um Prosperity uh it is it has done wonderful things for the world but it has had a very dark undertone which is that it is eroding these trust foundations that our society is built upon um before uh the proliferation of online networks when we our social spaces were still uniquely physical spaces um it was very easy to to forge bonds of trust between individuals and hold people accountable and nowadays a lot of our social spaces have moved into the online space where uh you don't know who you're interacting with what algorithms are attempting to manipulate you what uh corporations are attempting to monetize you um and as a result we don't trust each other uh and I think the technologies that we are all developing here today uh these information networks they are going to be uh the Keystone that brings a lot of this back uh so I'm not sure this is going to play this is a little momentum from 1998 so privacy has been around privacy of technology has been around for a long time this is howy uh one of the OG uh Bitcoin Pioneers talking about um creating zero knowledge proofs uh to prove hidden hidden statements all the way back in 1998 oh it does play hang on is it playing no never mind um back then it took 120 Minutes to prove knowledge of a of a basic shahash uh think things have improved along along uh since then but we are the inheritors of a great legacy this has been a long time coming so I want to talk a little bit about why is uh what are we even doing here um what even is a blockchain useful for why blockchain why decentralization and I'm going to do this by talking about uh this concept of information networks and communication complexity how a society's ability to be um consensus driven to be to be Equitable is in my opinion largely a function of uh its communication complexity which itself is a functional technology and I'm going to do this by talking about uh everybody's favorite topic or at least certain people um uh the the Roman Empire um so hands up who here has recently thought about the Roman Empire be honest be honest M okay well you're all thinking about it now so congratulations um so um okay I'm going actually going to go a bit further back than R I'm going to talk about ancient Greece uh I would say that uh the the concept of like the the the the the Classical Greece Democratic city state is the the foundation of our existing consensus driven societies of Western democracy um you know it was very flawed um people used ftiz a lot it had its problems but ultimately it was the first unit social organization that extended towards an entire city that we know of where it's uh you had a concept of um uh consensus people uh people would decide amongst themselves collectively what their City should be doing instead of an autocrat or an oligarch um uh and here's a question why didn't it scale why did it remain as a city state why didn't you have Greece as a democracy in the ancient world or or any larger entity and I argu it's because of of communication complexity that was a world back then when if you had an idea and you wanted to share it uh you don't have a printing press you know you could write a leaflet but if you want to distribute that to 100 people you're writing 100 pamphlets and most people can't read um the way that you shared ideas was you talked about them peer-to-peer with individuals and that was this is a world where information traveled at the speed of a horse and generally the information that traveled along these information networks roads was the contents of a human brain uh this is hugely limiting um and it created a culture and a so and Society where individuals felt a very strong bonds towards the people that they knew within their cities within their polities um and so uh any kind of inter inter city C coordination collaboration was always very short-term because the individuals within those city states would always favor their city state over like at the expense of other city states if they could um and so what's the kind of the next Revolution that enabled something better than than than a citystate democracy I would argue it was the printing press because with the printing press now your information network uh the road um its data bandwidth has massively expanded now because if you have an idea you can print a book or a pamphlet and you can share it with thousands of people tens of thousands of people um you know if this was one of the foundational liberating moments in in our society where uh you you could acquire some kind of consensus around um shared ideas shared values I would argue that the concept of a nationhood nationalism is intrinsically tied up with the printing press because it allows for stories to be shared and disseminated uh to create a culture where you have uh people separated by relatively large Geographic distances that all basically subscribe to the same myths the same Legends around who they are and where they've come from um and so I would call the printing press and and the associated mass media that generated around it newspaper print broadcast print even radio and television broadcasting it's all the same thing it's basically a one to many style communication if I have an idea I can share it with all of you it's very hard for all of you to share an idea with me um and I need resources and influence to be able to to share my idea I need to be published I need to be distributed um and so uh I would argue that since the invention of the printing press um communication Styles is basically being this one to many um mode until the rise of the internet the internet is really the first technology we have where we we we possess a many too many Star communication any random person can um share an idea disseminate it and gain traction with their peers uh and this is hugely liberating it's also hugely disruptive and the same way that the invention of the printing press directly led to the 30 Years War which um uh in some parts of Europe uh kills 70% of all all human beings uh so good and bad um and so one why am I talking about this uh because blockchain is the new information Network that extends past the internet the internet has a problem you cannot differentiate signal from noise everybody has an opinion to share not only that but now we have uh algorithms and AI agents pretending to be humans sharing their opinions and we don't know what's real and what's not real what's valuable what's not valuable blockchain is important because it allows individuals to coordinate amongst each other how to pool allocate and distribute assets money that can't be faked with Ani agents um uh you know it's it's a f foundational expression of human agency um what you spend your resources on and this is what a blockchain can achieve this is why in my opinion it's so such a radical technology um and I would argue for it to really fulfill its potential it needs privacy technology because right now blockchain doesn't uh reach particularly into the real world the cipher Punk visions of 2015 and 20 200 haven't really come to fruition I'll talk about a little bit um so I was going to go on a little bit of a segue about uh information networks and cavemen um I'm afraid I I didn't timee myself very well so I'm going to have to say this for another time uh it's a good story though but another time um why is privacy important why does why do one why does this new information Network that allows for the coordination of assets need privacy technology first of all I want to talk talk about that what is privacy technology because privacy extends far beyond um hiding like how many assets you have or what you're spending your money on privacy Tech is all about at a low level proving a statement is true without revealing underlying information required to derive that statement for example um having a UK passport e signature without revealing the name of the person or their age uh proving I I've received an email from from Facebook um without uh leaking um the contents of that email it's an privacy is information symmetry I know something you do not know you know something I do not know and information symmetries are fundamentally important um in our everyday interactions uh they are not nefarious they are completely benign um for example when you vote in an election uh uh everybody will um uh like your vote gets counted everybody like we'll know in aggregate that your voters affected the outcome but nobody knows how you voted you know how you voted that's an information asymmetry they're important um and they are used to create things like identity Technologies um proving that I possess a passport from a certain Nation proving I possess a bank card from a certain Bank even something as simple as proving I have a Twitter account with that's over 3 years old with over a th followers that can be used to prove not prove but like give strong indication I'm not a bot what this is is trust infrastructure um Pro technology is not about trustless it's not about not having to trust each other it's about creating Technologies and mechanisms that allow individuals to more easily trust each other um by reducing the surface of what they need to rely on so here's a question here's an elev of the room that's been bugging me for seven years um where's the fundamental vanue from in web 3 uh right now now all of the value in blockchain all of the billions of dollars is sourced from I would argue only three locations you have the value that people place on the consensus of a distributed Network think of think Bitcoin how much are people willing to pay to get a a unique record of events you have the value in dollar back stable coins and you have the value in stories entertainment media basic things think like um nft art things like that uh what's missing from that well what's missing is anything where the value is derived from something in the physical real world we don't have real world assets on chain we don't have asset like the ownership of physical items um or even something as simple as like intellectual property or or or anything Emeral that's derived from a real world quantity doesn't exist on chain in any meaningful form right now and so whilst you know we're all here because blockchain is a big industry you know there's there's there's enormous amount of money in it relative to the Global Financial system the value of blockchain is a drop in the ocean and we cannot become mainstream we cannot make sure that our technology reaches into individuals lives in a meaningful way uh without that I would argue that this is deeply cypherpunk uh because because of what this enables and how how we're going to do this um composability is a foundationally important value proposition of blockchain uh it is the value proposition if you exist in a traditional industry and you want your organization to become more efficient the canonical solution is vertical integration you bring your supply chain in house you bring your third party dependes in house so that you have fewer middleman to pay and you can more more easily efficiently optimized and refined for use cases um this gives large centralized organizations um a strong Competitive Edge over smaller companies smaller competitors um which I would argue is is not good um composability in web 3 inverts this Paradigm because in a distributed Network like ethereum uh any piece of software any library that you deploy any application any dap that you deploy to the network can be used permissionless by every other entity in that Network every node adds value to every other node um and so what this means is you can take a uh the the the the technological stack of of a large vertically integrated organization and you can break it apart and make and and have individual smaller actors providing each individual service on a blockchain platform um while still benefiting from the the efficiencies of of a vert of vertical integration um uh composability is why blockchain has become a big thing if you had to ask for permission from the ethereum foundation to deploy a smart contract ethereum would not exist if you had to ask permission from the Unis Foundation to use Unis in your application like Unis would not exist um and right now private composability is something which is badly badly missing and that's which is required privacy Tech is starting to become more widely available um um and people are more aware of it uh things like being able to prove the existence like prove that you have received an email from a certain domain uh without revealing any more information things like that but all of these privacy Solutions are very bespoke if I use a if I write a Dap that contains um a ZK email or TLS or some kind of privacy preserving aspect um I'm not composable anymore not easily because if another application wants to use my uh my smart contract my software they have a lot of Downstream complexity they need to incorporate into their application it's not as simple as just calling a Unis swap smart contract uh and without composability blockchain is nothing without composability Prive technology is uh is this kind of like Niche and nice to have that interests people but with compos visibility it changes blockchain it changes the world I'll give some examples that are starting to emerge today uh you know I've mentioned ZK email ZK passport is a brilliant technology that uh where you can verify um an e passport digital signature prove that you possess a passport from a certain Nation without revealing anything else ZK TLS enables relatively trustless um attestations from web 2 applications you can prove that you've received information from a website U from a web server um and share that with other IND idual uh and these are going to form the the foundation of um uh composability in the future um uh because these Technologies enable something which is quite powerful which I'll talk about in a little bit which is basically making web 2 composable taking data fortresses that exist within the web 2 ecosystem and allowing entities to siphon data from them permissionless but before getting on to that I want to talk a bit about decentralization and how privacy is not only aligned with decentralization um like the two are deeply deeply interwined I'll give some examples here so if you're building AAP it touches the real world or it touches web to you there's a very good chance you're going to need some kind of identity um uh standard uh kind of proving who you are in some way um who here is uh excited about adding identity um standardization into web three I'm I'm grateful there's more hands than I thought um this is this is this is this is the this is this is foundationally important if you cannot link a cryptocurrency account to a real world identity then your blockchain can't talk to the real world without a data custodian in the mix and I want you to to consider that so let's say I'm doing I'm doing real world assets on chain and I'm doing that by having some centralized data custodian who is attesting to like the validity of certain cryptocurrency accounts saying okay yes you can hold this ass you can hold this asset if I build a Dap that utilizes that technology I am not composable anymore because if if another third party wants to use use my technology so let's say I'm doing I'm doing an exchange for re assets um and I want to talk to and I want to like interact with a smart contract that originates real world assets well if I need to integrate with their data custodian uh what if they say no I need to ask for permission again I need to have a a relationship with another entity which is which is completely unlike what happens on chain today where everything is completely permissionless any random person can just turn up and um like add some value to the ecosystem dat custodians break composability and you can only get rid of those data custodians whilst touching the real world with strong privacy technology zero knowledge cryptography that can allow for trustless attestations about what's happening in the real world once you have that then you can build decentralized protocols defi type systems that can still have some kind of understanding on who you are as an individual without leaking that information um you can create non-custodial um applications cryptocurrency wallets that still interact with assets and value originated in the real world um and in my opinion that is quite wild I mean the idea of a non a non-custodial wallet is radical you know um people outside of blockchain still struggle to wrap their heads around that and that's for wallets that hold what are ultimately uh largely like synthetic assets like Dogecoin um extending that to a world where you know you are interacting peer-to-peer with a smart contract proving who you are to that smart contract to an algorithm and nobody else and then using that to to be authorized to trade and transfer and hold real world assets um that is absolutely revolutionary and it's going to happen if not this year next year or the year after eventually so um why is privacy going to make etherum ciper Punk again uh this concept of a ZK Transformer is one of the mo is is is a like one of the most um radical things you can do with ZK today basically the whole entirety of web free is based around these monetization models of monetizing your data the social media networks will have information about who you are that they control and the data Fortress that they use to monetize and I just want to just highlight like how strange this is this is your data your data about you it should be yours but it's not it's it's owned by a company that's and it's used to Le it's leveraged at your expense largely um to generate Revenue uh and and the and zero knowledge cryptography technology can be used to basically crack open these data silos because if a third party application wants for example information about Facebook uh for example faster wants to import their user profiles from Facebook well Facebook's not going to cooporate and you can't trust the user because they're going to lie but the user can send you a zero knowledge proof that they received uh information from Facebook using Z email using zls things like that uh and it basically allows for a level of composability between application that do not want to be composable now I wish I had time for this but I've got 6 seconds so I'll move to my conclusions uh maybe run over 10 seconds ethereum will be Cypher buuck again with these strong privacy preserving Technologies you add privacy identity standards private composability into ethereum and you create an Information Network that has teeth where individuals can coordinate and communicate how to distribute and disseminate their assets um in in all contexts uh it allows for um a radical new way of um of of living um of of organizing one oneself uh that doesn't exist in the world today it makes the many to many communication style created by the internet um uh understandable and digestable and composable um human Centric networks that are governed by human beings instead of AI agents that where we use our own data however we down well please without having to ask for permission from entities that are accustomed to owning information about who we are um and we can distinguish ourselves and what we do through trustless atest stations we can distinguish our creative Works our desires our hopes our fears from uh the the uh the ocean of um statistically generated AI generated noise that is saturating our existing information networks um so yep uh that's how we're going to make ethereum cyer again thank you for listening Zach thank you so much we have time for a couple of questions here and i' like to start with one Legacy G somewhat tolerate the transparent chains will they tolerate the private ones will they this a very good question I think the the the solution to this is is the the um uh to be slightly factious deliver shareholder value demonstrate value uh basically you can create alternative Financial models in web 3 um uh that use strong privacy technologies that are just simply better than what we have at the moment um so Financial encumbers like the US well it's going to be a tough sell um for privacy Technologies but for countries that aren't the US that still have large Financial Industries perhaps like the UK that are looking for comparative advantage fostering a technology that allows for much lower barriers to entry much greater competition more efficiency is unbelievably attractive there is a giant pot of money on the table waiting for a government uh that is willing to embrace uh not just blockchain technology but privacy preserving technology in a big way because it'll it'll it'll turbocharge their economy another question here doesn't onchain ID pose censorship risks yes not going to deny it so imagine if you're using passport signatures to validate who you are and well you get you get dezen well you're you're in trouble so it's a spectrum um I think if you have a universal identity standard that poses much greater sensorship risks than a holistic identity standard what I would like to see happen is um like a coner H somebody is is coming from a large diverse set of sources so not just things like passport signatures or I I could prove I possess uh like a UK government account I used to pay taxes or I could do things like prove I possess a bank card pres prove I have an email from a utilities provider for a physical address in the UK prove I have a Twitter account with a lot of followers prove I have a LinkedIn account that's been active for 5 years basically you build you have all these little at stations right here are that you build up into a concrete mass that provides overwhelming proof um and that kind of system is much more sensor of resistant than relying on a single source of truth how we reconcile the need for tracing and indexing to provide useful UI with the confiscating encryption required from onchain privacy a very good question so um we have some solutions at the moment in Aztec uh so like how do you um handle shed state ofation with uiux well in atic the way we handle it is we have this thing called pixie private execution environment um runs locally in a user's device uh that could be queried like a blockchain node um for information um longer term this will be a solv problem through um uh F basically um P private information retrieval uh you can basically you can store your data encrypted on a third party server make queries about that data get it returned to you um uh and the third party server has no no understanding of what's happened um but they can still handle your request it's a few years out but that's going to be the future can you debunk the age old if you have nothing to ride you have nothing to fear how many people here are comfortable yelling out their yearly salary yeah not that many people right um yeah you have something to hide uh everybody has something to hide Like We Are Who what is a human being uh we are the difference between the mask that we present to The Outsiders and and our internal selves full of contradictions insecurities hopes and dreams and fears and Petty vanities uh we are all a miserable pile of secrets um and we need to embrace that one last question what are the main limitations of smart contracts on ZK chains um you mean privacy preserving chains what are the limitations uh well I mean the main one is they barely exist right now in the real world I mean you have alio um that have launched uh ASC will be launching next year um I would argue that uh there is there there are there are some user experience issues where you know you have to generate Zer prod client side that can take some time um but ultimately uh I would argue that um uh it's a uh like foundationally I don't think there will be any user issues I think like the technology will lag lag behind the transparent world but eventually it'll it'll it's it's always going to be pain and catch up but you can expect the same end end status as the transparent chain when it comes to uiux Zach thank you so much thank you thank