# Ethereum and the Crypto Privacy Landscape 👤 Impact of Ethereum Summit - Bruno Lulinski

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2022-10-09
- Duration: 28:21
- Topics: Science & Technology
- Watch: https://streameth.org/watch/yt-vtU1oOzTn1A
- YouTube: https://www.youtube.com/watch?v=vtU1oOzTn1A

## Description

Join Bruno Lulinski of Aztec for a talk titled "Ethereum and the Crypto Privacy Landscape" - Part of our Impact of Ethereum Summit

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## Transcript

foreign [Applause] [Music] and just in general the kind of crypto privacy landscape uh that ethereum has been able to impact over the last couple of years uh so Bruno when you're ready feel free to uh share your video share your audio good to see you um and yeah thanks for having me of course and yeah whenever you're ready happy to uh to turn it over to you hey everyone uh my name is Bruno volinski and I'm here to talk about ethereum and the crypto privacy landscape um so real quickly on the agenda I'll run through one is a little bit about me and Aztec the project I work for I'll talk briefly about some of the other privacy Solutions uh being built in crypto today I'll briefly touch on zero knowledge generally and how ethereum makes privacy possible today and I'll also take a second to talk through some of the logical fallacies that um usually come up in conversations about privacy that I think are important to address uh so first about me a lot of what I'm going to be saying today is oversimplified for the sake of brevity of course under the financial advice I encourage everyone to do their own research and I also encourage everyone to reach out if they have any questions I'm always happy to talk offline um so about me I uh run ecosystem Partnerships for Aztec that means I lead the aspects grants program we are launching version two of the Aztecs program soon uh if private D5 is something you want to work on or you're really just passionate about privacy and uh wanted to discuss it just reach out and let's find a project for you to be working on in the space um about Aztec Aztec is what I like to call a ZK ZK roll-up um I like to say one of those zks is for scaling ethereum and increasing the throughput of transactions that can settle on ethereum the other ZK is for privacy uh the way it works is that we batch transactions on our rollup we interact with L1 D5 protocols via solidity interfaces what that means um is that there's no need for L1 D5 protocols like uniswap or Ave or curve or Lido or element there's no need to redeploy your L1 contracts there's no need to fragment your liquidity across a variety of ecosystems you can just users that come onto the Aztec Network can interact with your L1 defy contracts privately um without needing you to fragment your liquidity which is a real benefit we expose a software development kit for people to build private dapps on Aztec and we've also built our own consumer front end called zk.money as a working example so today if you go on ZK money you can buy Lido steak teeth you can interact with element Finance you can interact with the L1 V5 protocols you know and love privately via Aztec so I encourage you to go check out ck.money and see what it's all about um in terms of the other privacy Solutions in the space uh I think it's important to highlight uh a non-exhaustive list of them there are so many cool projects being built in the space uh there's so much awesome research and development being done in the space I think uh people sometimes ignore the fact that the cryptographers the researchers The Operators the the people working at Aztec and these companies are pushing forward not only the crypto system but also mathematics cryptography theoretical computer science they're doing really incredible Cutting Edge research across a variety of spaces and uh here's like a a very non-exhaustive list of some of the other projects in the space um but I think it's important to talk through um more than specifics about each of our projects a little bit about like the general features that you see today in crypto privacy projects so because yeah I'm going to caveat the whole presentation again brevity leaving stuff out trying to make it uh quick and dirty all these projects are multi-dimensional a lot of them have different use cases different user bases they are trying to appeal to um different leaders different perspectives uh here are a couple of the features that I tend to see in crypto privacy projects one cryptography being used as a solution for scaling and privacy um many of the Privacy Solutions are building in Alta one many are interacting with ethereum L1 directly really it's not only privacy that people are trying to solve but also privacy at the same time is solving uh scaling and throughput of the theory in general uh many of these projects have some form of shielded transactions where users can selectively disclose information they can uh selectively share the information that they choose to share they are private by default but there's some form of shielding or unshielding that is in the user's hands uh all this is secured by Cutting Edge cryptography and Mathematics um there's ecosystems of dapps being built on a lot of these private projects for additional user functionality uh like defy payments um there are projects on Aztec building private multi-cigs for Dows um there's really it's it's a lot broader than just privacy with payments there are private payments but there's also private defy and a whole sleuth of various uh privacy focused ecosystems of decentralized applications um and finally a lot of these projects either expose a software development kit and or a in-house built programming language that allows developers to build in programmable privacy uh to the to their decentralized applications um yeah and so really the summary here is these projects are incredibly multi-dimensional but these are some of the features that I tend to see in a lot of these projects uh really quickly I want to talk about the zero knowledge stuff that that underpins these whole systems um people a lot a lot smarter than me are working on math and cryptography that are underpinning these systems and there is uh a ton of resources and explainers and 101s on the internet for learning more about zero knowledge I'm going to keep it really high level um I do recommend either the zero knowledge podcast or a16z's crypto research series or really there's just an absolute plethora of resources out there to learn more about zero knowledge I encourage you to go do that or to reach out to me and I'm happy to point you in their direction to dive deeper um but for my 101 high level overview the cryptography that underpins these these systems um most of it is via this primitive called zero knowledge snark snark stands for succinct non-interactive arguments of knowledge but really the point of them is that you can prove the validity of some statement without exposing any of the inputs that go to that statement um so I like to give one example which is I want to go out to a bar and there's three main parts of this interaction of me entering a bar one I need to prove that I am 21 plus I can drink alcohol legally in the United States Etc two I don't want to expose my name my birthday my address my picture I really don't want to expose anything about myself except for the fact that I am 21 plus and can enter the bar on the other side there's a security guard whose job or bartender or whatever at the bar whose entire job is verifying that I am of legal drinking age to enter that bar and drink uh this seems kind of like a dumb example trivial like why why would we be optimizing for something like me entering a bar and I understand that but what I'm trying to explain uh yeah this example is is zero like zero knowledge snarks give us the possibility of me proving that I am 21 plus and can drink legally without exposing any private information for me and that's a good mental model to apply to a variety of different interactions that happen on ethereum today or or may happen in our lives in the future and and um we're working on building out these Primitives so that they can be used uh for you know trivial stuff like going to a bar um I think a mental model that um the speaker performing Scott touched on briefly is there's a there's a dark force of Bad actors out in the wild of ethereum um and right now our two options are basically expose information to a centralized intermediary like a trusted centralized intermediary which kind of defeats the whole purpose of the space that we're building um or two just putting your information out in the wild for any of these uh these Bad actors in The Dark Forest to come grab abuse take advantage of uh find a way to steal your information or or take advantage of the fact that your information is non-private um by using zero knowledge snarks and some of the other cryptography and advanced mathematics being built in this space we can remove the need to trust a centralized intermediary or not trust anyone at all what we can do is trust math or trust etherea or and Trust ethereum instead um so we can if there's questions on zero knowledge stuff uh we can talk a little bit more about it after but this is like a general framework to think about this as um so how does ethereum itself actually make privacy possible today um these Roll-Ups at least an assets case specifically uh you generate these proofs proofs that I am 21 plus uh without exposing any of my information but you need to post your proof somewhere you need you need a trusted layer uh to post these proofs onto and and the ideal situation is that you can post these proofs somewhere where no single institution can restrict my posting of these fruits uh to anyone without my permission or without any uh intermediaries dictating who can and cannot view the proofs that have been posted and we want these proofs to be there indefinitely so that you can use those proofs to to reconstruct the state of the of the roll-up the the transactions that you're doing on Aztec um ethereum as the trustless global settlement layer uh that is the place where Roll-Ups can post their proofs today because it uh ethereum satisfies like some of these qualities that that are desirable for constructing like proof systems so specifically ethereum is censorship resistance uh censorship resistant excuse me you can be confident that the ethereum base layer uh the validators in our privilege stake model or the miners in the proof of work model uh won't censor blocks that contain proofs uh and so that makes it a great place for us to trustlessly uh batch and and post our proofs there's also finality so the ethereum based layer processes the proofs from these zero knowledge roll ups once those transactions are confirmed and finalized on the ethereum um on the ethereum layer one those those aren't reversible even if you are a malicious roll-up operator and and three is data availability you know posting proofs to ethereum is permissions permissionless and you are able to check those permissionlessly which lets you independently verify the state of the Aztec roll up or generally Roll-Ups um I actually saw this like an hour ago yeah from from 12 pm earlier today is timbago one of the lead coordinators of the incredibly complex and awesome move to to proof of stake uh Tim says that the number one problem he'd love to see uh be someone come up with a solution to on ethereum is private eats transfers by default now not to speak for Tim but I think he assumed I think what he's trying to say here is that the base layer ethereum have private youth transfers by default on on L1 um but Aztec is is a stepping stone to this you can do private ease transfers on Aztec via ZK money um today right now if you want to while I'm doing this talk so feel free to go check out ZK money and see how this works uh but just to demonstrate how important it is for uh privacy to be the default on ethereum rather than um like a secondary option that users need to opt into uh when I'm talking about privacy in the space there are a variety of logical fallacies that um come up in these conversations and so I think it's it's really important to to address logical fallacies up front um and and Twitter just 280 characters don't give you enough space to do it so I thought it was valuable to talk through them right now um especially with the sanctions to tornado cash recently by uh the United States ofac um one thing I hear is that every privacy project is just a mixer now on on one end um the complexity of privacy projects today is still very high and so I I understand that not everyone can put in the time to understanding uh the nuances and the differences between our systems but uh hopefully I've been able to demonstrate that you know privacy projects are doing a wide array of different things there's a lot of projects tackling uh privacy differently um a lot of them are building open source tools asset included open source tools for decentralized programmable privacy um so I think it's a little bit reductive to refer to every privacy project that is just a mixer when there's there's a clear delineation between um like a bunch of our privacy projects generally and it seems like a logical fallacy to bunches uh all into you know one classification uh secondary is um I hear this a lot is is you know the technology is interesting but but Bad actors uh that might abuse technology make adoption or or even research and development in this sector a non-starter uh on day one the reason this is a fallacy is um you know you merely have to look at basically all technological development that's happened over the last four or five decades or really since you know all technological advancement that's ever happened in humanity and you notice how Bad actors potentially abusing a system has never stopped us from developing technology that could be net beneficial to um the world to ethereum to to humanity uh you can imagine artificial intelligence which is a debate that's coming up uh more and more frequently artificial intelligence or Gene editing via crispr or social media a lot of these Technologies um could be abused by Bad actors but but that doesn't make the research and development and um really the community building and commercialization of these softwares it doesn't make them a non-starter it never has and so it's a logical fallacy to to follow that argument as you know because a bad actor can use it that makes adoption a non-starter um frankly I think this is a little bit of a cop-out um Bad actors use our traditional Financial system that actors use basically every software tool that's ever been created uh just because a bad actor may use it does not mean that the technology itself is for Bad actors or built by Bad actors and frankly it's a fallacy that is far too common in in crypto uh specifically but the world generally but I think it's important to face that policy head-on and really you know call people out when they're when they're abusing that um when they're abusing that argument and finally finally the third logical fallacy I see really frequently is you don't need privacy if you have nothing to hide um that that just that statement just doesn't follow right like um you may not need privacy if you you don't need privacy if you have nothing to hide that nothing to hide just just doesn't really relate to your desire for privacy um as my colleague John Wu loves to say if you don't care about privacy like why do you shower with a curtain on um we we all want and value and respect our privacy to differing degree but to conflate the desire for privacy to criminal activity I.E nothing to hide is is just frankly absurd and unfair to a lot of people that that want privacy for a variety of reasons I mean you could be a political dissident in a country like Ukraine um that that wants privacy for their safety and for their family safety or you might just not want your family members colleagues co-workers to see what you're spending your money on on you on the weekends um and frankly the the argument that you if you have nothing to hide you don't need privacy is is completely a nonsense or illogical and should be called out when when it's used so in summary um I believe privacy is a human right and until the last few decades basically not basically all monetary transactions we're private by default cash is private by default and until the last couple of decades we we haven't really um needed privacy in a financial perspective because it hasn't been an issue in the last two or three decades are our technical our technological advancement has been so rapid and so incredible um that we've let a couple of big topics fall to the Wayside number one is like our personal privacy and number two is like our informational privacy our data privacy specifically in the context of social media um and so this is our opportunity to like rebuild these systems um with privacy as the default uh second I just want to highlight there's a broad diverse ecosystem of projects that are doing critical critical research and development in a variety of fields outside of ethereum or blockchain specifically uh like mathematics and cryptography and theoretical computer science um and a lot of them are just exposing programmable privacy tools for for others to build um using our open source software um we at Aztec believe that building privacy Solutions excuse me building privacy Solutions on top of ethereum makes the most sense because of ethereum's credible neutrality excuse me ethereum censorship resistance and ethereum's immutability um and there's a lot of logical fallacies that try to muddy the water around privacy Tech and I think it's important to call them out when you see them and I think um in our space we we may be noticing in the last month month and a half um we need to be United around a cause like privacy we need the entire space to demand privacy to demand the right to determining your own level of comfort around your privacy um and and really pushing for that across the space um on that note I want to leave everyone with with a quote from Phil Zimmerman the creator of pgp the a very widely used encryption software that we all use today whether you know it or not in email or a variety of other places um Phil said oh sorry about that so throughout the 1990s I figured that if we wanted to resist this unsettling Trend in the government of outlawing cryptography one measure we can apply is to use cryptography as much as we can now while it is still legal when the use of strong cryptography becomes popular it's harder for the government to criminalize it therefore using pgp is good for preserving democracy if privacy is outlawed then only Outlaws can have privacy and I just want to tweak that quote a little bit pgp has been great for preserving democracy but we've got a next wave of privacy solutions that are here um to help preserve democracy and preserve personal freedoms uh so therefore using Aztec and other privacy Solutions out there today is good for preserving democracy if privacy is outlawed only Outlaws will have privacy and I think that's the message I want to I want to leave this on so thank you all for your time I can't even see how much time I've taken so I hope I haven't run late or run short but I'm happy to answer any questions um from the audience from from Jacob uh yeah awesome thanks Bruno and yeah what a great quote to to wrap that up on um yeah I mean we still have a little bit of time so if anybody has any questions feel free to drop them in the chat and I'll relay them uh over to Bruno here but maybe just to like kind of kick off a little bit of a conversation like uh you know we kind of touching on this at the end of your presentation like it does seem that maybe a little bit weirdly like privacy is is very political um in a lot of ways and I think also like you can almost see that like in your presentation where you're saying you're like caveats like you know not Financial like you know you're kind of prepped for this already in a way because I think you've probably been spending so much time in the space like you just from like a developer perspective I can definitely see that as being maybe a bit of a turn off for some people and I'm kind of curious like what your thoughts are about for people who are you know thinking about maybe building in the space or are very curious about kind of privacy like you know what either should they read what should they kind of pull their inspiration for being in the space from like you know really just kind of highlight anything that that comes to mind as uh that you know as being like why this is like an important space to work in even if maybe there's a little bit of a you know political kind of action happening in that space yeah yeah I I think um I think you should everyone should look up the quote that I just ended with if if privacy is outlawed that only Outlaws will have privacy uh Phil Zimmerman's I guess I don't know if he goes by fail Phillip Zimmerman's uh paper on this is is phenomenal it's just an incredibly uh concise succinct write-up on on why privacy is important and he wrote this in the I guess I I don't know the exact date but early 2000s far far before this has been a discussion in recent months and it's it's incredible to see how that uh is applicable today I think a lot of people in crypto or I guess Building Technology in general we we I can't speak for everyone but we may not me for example I've not been old enough to even understand what was happening in the 90s when the discussion about weaponizing encryption tools um was important and I think it's important to get that historical context um I think the argument about crypto in general about uh decentralization about credible neutrality about a global settlement layer outside of one that's maintained by federal governments or um world governments uh as as a unit um it's it's become politicized because everything has become politicized but I think myself Aztec I would imagine all the Privacy Solutions in the space would feel similar um we don't do this because we have a political ideology we believe that it's a human right to have your own privacy and make your own decisions about what you spend your funds on where your money is deployed without um you know exposing that to the the broad not only to your inner circle but to the broad world of Bad actors that are out there and so we're just trying to build Solutions where consumers can make their own choices about what uh where they want to sit on that spectrum of privacy um and so I would encourage everyone to to try and get out of like a political lens when thinking about this and just think about like your fundamental human rights what you believe in what you how you want to live your life and whether whether privacy is a part of that and I I imagine that that almost everyone cares about privacy to some regard and so just think uh think about where you sit on that scale and to try to understand uh your neighbor or someone you don't know when they say that they sit in a separate part of that scale they're not bad people for wanting more privacy that's just their preference of sitting on a different part of the scale so one read Phil Zimmerman's work on this uh two feel free to reach out after and I can send you some more resources and three just try and view the situation uh non-politically and with empathy and I think we'll understand that everyone here is just trying to advance humanity and and really defend our personal Liberties um as everything gets more digitized and those uh Liberties start to erode um I think that's that's all we're here for is is to fight for personal liberties amazing uh I'll definitely take a look at the Philosopher's post after this um and then I mean you actually brought up like what I was going to ask about as well um I also saw Tim's post earlier today on Twitter about you know sort of like ethereum L1 transfers being um you know private by default um as you mentioned in your talk like this is the case for Aztec right now and um Tim at the end like uh of his statement said you know it could completely change what the end state of the space looks like um I read that and I was like oh like what could that mean and I haven't like had enough time to think about that yet given that you've been thinking about the space and Aztec already has this as an outcome like what do you think like what could be some of those kind of like end State outcomes that he's sort of hinting at here yeah and And to clarify uh again I think I think what what Tim is saying that is that uh privacy at the base layer on the L1 protocol um which is not what Aztec is right we're an L2 roll-up um but you have that functionality of being able to interact on L1 privately send transfers privately to to other addresses on Now One today um I what what is the use case that that for me at least the biggest use case for crypto like the end goal end State use case here uh is payments right like we use payments uh we don't take we don't get two and a half percent taken away from the credit card cartels out there and we transact trustlessly and permissionlessly privately now if you want to do anything any sort of payment where you may not want everyone to see what you are paying you just can't do that on L1 today right like I am running.if you can just go look at my address and you will be able to see all the things I've paid into and unfortunately like that's that's just the status quo today but um you know payments uh fine I'll go on a short tangent here um Aztec was actually started several years ago um with the premise of bringing corporate debt onto ethereum layer one um that's right yeah but unfortunately that's that's not possible because corporations value their privacy and so if we want to uh enter into these two sectors like payments generally and really widespread adoption in the financial markets whether like or just like D5 payments global settlement layer exchanges really anything that you can imagine uh financially crypto being used for like it requires privacy on the parts of everyone outside of the current crypto ecosystem that is like okay with with the public Nature by default so I think like uh if you want to look at it from a market sizing thing uh like Global Payments Market Global Financial Market just take like a small percentage of that and and this is the biggest industry uh this is like 10x what crypto is today um and it's impossible without privacy and so I think that's hopefully that answered your question Jacob of like how how important it is this is this how transformational is this how big is it how big is privacy for uh achieving this like end state of ethereum and like Global adoption of ethereum as our Trust settlement layer yeah absolutely no I I think you know that you nailed the you hit the nail on the head there we go um on that one I mean the payments being such a big part of everything we do all all the time and you know really not being able to uh really tap into being a large percentage of that as a as a protocol as an ecosystem if not for privacy right so you know enabling that um you know really absolutely critical so and and just one last night like the the point here I'm sorry I know I'm going a couple minutes over I um you probably could be privately transacting on ethereum L1 today like you could you know open up a fresh wallet you could figure out a way to to basically get privacy but we don't need that for Global adoption we need completely easy uh adoption of privacy Solutions on ethereum for that to really reach the mainstream right like people are not going to go in and play this wallet roulette of like hiding funds and like that's just not the way that we're going to reach Global adoption so we really need simple consumer uh simple consumer interfaces for adoption of privacy on on L1 ethereum and I think zk.money is like a great step in that direction I encourage everyone to check it out and just like fund a little bit of money into ZK money send a private payment and see like how awesome it is to see that etherscan transaction as like not brony.eath but you know Aztec role of contract no one can see actually who is funding the other side of that so I encourage you all to to go to ZK money and check that out awesome that website's just zk.money right decayed out money exactly awesome okay great thank you so much for being here Bruno and then for your chat really appreciated it and yeah dovetailed so nicely with uh with with Scott's chat earlier so that was that was just perfect so um thank you so much for your time and uh and for being a part of this with us yeah thanks for having me everyone