Loading summary
Transcript75 lines
- [00:00]
A
Welcome to the Network State podcast. And so, arjun, you are 22.
- [00:05]
B
I'm 19.
- [00:06]
A
You're 19. Okay. So 19 means you were born in 2006. So you were born five years after nine. Eleven. The financial crisis. You were only like two years old. Right. So, you know, with video games, people spawn into the battlefield in the middle of, you know, like a moba. You never be shooting at each other, and there's like this giant thing, and someone spawns into the middle. And so I think of you kind of people, the Gen Z types, as spawning into the middle of this totally chaotic situation. And I just want to tell you, it wasn't like that in the 90s and the 2000s. I don't know what your perception is, or maybe you perceive this chaos as normal.
- [00:45]
B
I mean, I was born with a lot of things that I take for granted. Right.
- [00:48]
A
Which is, were you born in the US where you were. India.
- [00:50]
B
No, in India.
- [00:51]
A
Okay. Yeah.
- [00:51]
B
So you know of, like, for as long as I remember. I know, like having a computer, smartphone, kind of after a while.
- [01:00]
A
So what's your spiel? Give your life story. You're zcash guy now. But what? Give you your spiel.
- [01:05]
B
Sure. So, you know, I was a pretty normal kid, I would say, when I was up to, like, 13.
- [01:10]
A
You're still a kid, but go ahead. Yes, fine, fine. Go ahead.
- [01:13]
B
Until around Covid, when I was like, you know, doing whatever teenagers would do. Play Fortnite, you know? Um, and then Covid hit, and then I just, like.
- [01:23]
A
Where were you then?
- [01:24]
B
In India.
- [01:24]
A
In India.
- [01:25]
B
Okay.
- [01:25]
A
How come you have an American accent? You have a global accent?
- [01:28]
B
International. No idea. Just talking to a lot of people.
- [01:30]
A
Okay.
- [01:31]
B
So I. Anyway, Covid hit, and then I just started reading a lot of books, like the Beginning of Infinity Naval's book, the Naval Manak. And then I just started questioning a lot of things I've taken for granted and just, like, started questioning the meaning of it. All.
- [01:48]
A
Right.
- [01:48]
B
Like, why am I in school? Like, I don't want to be just growing up studying engineering like everybody else and, you know, you know how the Indian mentality is.
- [01:58]
A
There's nothing wrong with studying engineering, but. I understand.
- [02:00]
B
But, you know.
- [02:01]
A
Yes, it's like, if it's only a canalized path, you want to have some options. Of course.
- [02:05]
B
Yeah. So anyway, I got completely radicalized, I guess I would say. And then you got woke.
- [02:13]
A
No, exactly.
- [02:14]
B
Yeah.
- [02:15]
A
No, you got. Well, you got enlightened.
- [02:17]
B
Enlightened, right.
- [02:19]
A
Go ahead. Yep.
- [02:20]
B
And then I, you know, when it was time to go back to school. Because when I was online school, I would just like mute the site and then, you know, write from my blog, write on Twitter. But then when I had to go back to school, I was like, this sucks. I'm out of here. Right. So dropped out of high school, worked on air chat for a while in the Wall, and we sunsetted that, you know, I guess a couple years ago now. And then sort of got involved with zcash.
- [02:44]
A
Great. Okay, so let's talk zcash. Right. So the zcash network state. Okay. So my view is there's many problems that zcash solves. Some of them are obviously privacy, simplicity, quantum, you know, like quantum resistance, quantum resiliency, let's say up to some certain point. Up to some certain point. Right. And. And it has at least a road map for res. Resiliency. Right. And like Sean, BO has a good post on this. And then scalability with tachyon. Right. And then it's also got some degree of Lindin or what have you given that's been around for 10 years? Got a good security track record. It's got a good exchange integration community, all that kind of stuff. And zcash is interesting because Solana guys like it, Vitalik likes it, I like it, novel likes it. And it's something where I think we can build a coalition around privacy. And you've certainly experienced this yourself. It's funny to say, how does the youth think about privacy and so forth. Right. I'd love to hear your thoughts. And I'll give a thought.
- [03:52]
B
I would say I don't hang out with a lot of people my age, so I don't know the, like, what, like regular people my age think. But for me, I think privacy is super important. Like, I don't dox my location anymore. You know, I used to when I was a kid.
- [04:07]
A
Right.
- [04:08]
B
Didn't really realize the downside of it. Yeah. But then now, you know, you, especially with AI being able to recognize where you are. Exactly. And you need that on chain, I think, because you can't have freedom without privacy. And if, like every transaction you make is just broadcasting your entire wallet to the public or you know, where you are, what you're doing, I don't think that's the world that I want to live in. So.
- [04:34]
A
Yeah. And I think a lot of people don't fully understand that point. If you're under surveillance, you're not sovereign.
- [04:40]
B
Yeah.
- [04:41]
A
And one way of putting it is if every move is being tracked, for example, you don't have the advantage of Surprise. You can never launch something. You can never have private deliberations. You don't have the room to make mistakes. Anything you do can and will be used against you and so and so forth. Right. And you know, there's another way of putting it is what does privacy mean? Say arguably, it means local files and local data. So that's also the same as what sovereignty means. It means privacy is private, keys is private, property is not online, like almost decentralized and local and individual, as opposed to communal and shared and public and whatnot. Right. So that's a sense in which sovereignty is privacy, is locality, is security, it's creativity.
- [05:34]
B
Right. I'm not going to be creative, I'm not going to be myself, my authentic self if I'm always being watched. And I would think knowledge creation and wealth creation just comes to a stall if everything is surveilled all the time.
- [05:45]
A
Yeah. It's funny, one thing I used to say, sometimes people would tell me, oh, biology, China is going to just be the same as Japan and it's going to like run into a ditch like Japan did. But the way I'd point them to something is actually in the early in 2017, actually, Salzberger's paper, MIT published something that said that China killed a bunch of American spies in 2010. Japan could never do that. So that's why China, that's another way of looking at it. So, you know, obviously very different national security sense, but China's sovereign in a way that Japan isn't, because it could kill the spies, because it stopped the spies, obviously. I'm sure America's killed Chinese spies as well, but Japan would never be able to kill American spies. You know, so Japan is under surveillance and wasn't sovereign, but China wasn't under surveillance and was sovereign. Right. So the ability to actually be free of surveillance is actually in a sense to be sovereign. And the alternative way of doing it is to encrypt, not through violence like the Chinese way, but through decentralization encryption, which is the Internet. Yeah.
- [06:50]
B
You recently tweeted zcash must scale. Why is scaling zcash a moral imperative?
- [06:56]
A
Well, it's because, look, I love bitcoin. Bitcoin's amazing. I don't never have a negative word to say about bitcoin or what Satoshi did and so on, but he developed it in 2009. Right. 2009 was many generations ago. Technologically, you'd make different trade offs. Potentially today especially Quantum has improved a lot. We know a lot more about blockchain Scalability, Obviously we know about smart contracts, you know, obviously AI is out there, blah, blah. So zcash must scale just means right now, how does Bitcoin scale offchain and other chains that say offchain which say you load bitcoin into Coinbase or Binance and then within the internal binance or Coinbase economy you have a debit and a credit and you can send or receive at zero fees. And only when it's recorded out as a transfer out is there an onchain transaction. Right? So offchain is basically database entries. And then other chains means you swap Bitcoin into something else and then you send it on that chain Salana or Ethereum or something like that, or USDC on Ethereum or Salana. And that's fine, you know, that does work. But many of my, you know, friends who are still, you know, like bitcoin maximalist or what have you, I'm sympathetic to them, but they've basically been saying, oh, lightning, Lightning is going to be there any day now for 10 years. Literally 10 years of lightning. And the thing about it is when you press them they're like, oh, well, lightning. You know, there's no public database of it because it's supposed to be payment channels between two nodes. And you go and you look into the details of it. Basically the thing about Bitcoin is any address can send any other address at any time, any amount without any setup at basically, let's say standard fees, minimal fees, right, that anybody can pay anybody, anytime, anywhere. Any amount without any setup is a set of things that is all broken with Lightning. Any node cannot pay any other node with lightning unless there's a channel or a route between them. They can't pay any amount because it's constrained in a complex way by how much of the deposits are there. They can't do it necessarily at any time because you have to have like a channel open and channel close and then the amount of money is like, it's like bound in a complicated way by like the deposits on the channels. And then what do you get out of all this? What you get is something where like, you know, maybe if one party, other party breaks a payment channel then you can, you could get like the last transaction out or something like that. But the transactions are being recorded off chain, which is why it's quote scalable to make lightning work. And apps like Moon and so on and so forth that try to make like Muun and Wallet of Satoshi. So they're fine like, like these guys. But Basically, they end up essentially setting up a hub and spoke topology where it looks a lot like here's Coinbase, here's Binance, and they've got a ring of customers around them and they have a channel between them where they can do quick coinbase to Binance settlement. So that if you send within Coinbase to another Coinbase customer or within Coinbase to a Binance customer, maybe Coinbase to Binance is. It could be offchain or it could be like a very quick coinbase Binance like you know, daily or nightly or whatever, hourly settlement, however they decide to do it. But if they have an agreement, they have a peering relationship, they can move it fast. This is very similar to how banks work, right? Banks essentially mean within a bank, it's fast, it's just a debit or credit in their system. And between banks they use Fedwire or something, they do settlement and they have a true up where it's like the net credit, the net debit and they just true it up like this, right? And so the hub and spoke implementation of lightning is really not in my view, doesn't get you much over just loading in the Bitcoin and doing off chain transactions and having a peering relationship between Moon and Wallet of Satoshi and Nostr and whatever, right? Damis. And that's all fine. And there's a bunch of people who will basically give me some kind of argument like no, it works or whatever. And then whenever I poke on it, it's always some hub and spoke thing under, under the, under the hood. And it's not, it's not like truly decentralized in the sense of it's not like Bitcoin where you can see it on chain. Anybody can pay anybody, anytime, any amount without any setup, blah, blah. Right? Okay, so what you really want is onchain scaling, right? Just blast the transactions on chain. What's funny is Ethereum actually learned the same lesson as sense as Bitcoin. Why? Like, you know, and to be clear again, I'm, I'm pro Bitcoin, pro Ethereum. Like Vitalik posted that L2s kind of didn't work. And to be clear, a lot of the L2s are smart people. I think they will adapt and pivot. I've actually had a post coming out on this from L2 to app 2. You can turn those L2s into app genesis and you have Ethereum for global state, you have your computer for local state. And then if you have like a decentralized notion, like an obsidian use L2s for app state that you're syncing across computers. Like, you know, like your username of Arjun Eth or Balgius Eth is global, but the state that you're moving, if you're doing a file share request or something, that doesn't need to be global state. It can be L2 state. Yeah. And then you have local app state. Fine. So leaving that, though the thing is, L2s were fine as a hack. They were more successful on Ethereum than they were in in Bitcoin. Like BAS and Polygon were actually quite important, Are important. But really the Solana model of just blasting, you know, events on chain worked, right? Because just easier, conceptually easier. You don't have to think about. I mean, blockchains are complicated enough without having to worry about like, oh, where's my coin? What chain is it on? It's easy to make mistakes on that. It's easy for users to make mistakes. You're forcing them to be aware of a detail that they really shouldn't be aware of or have to be aware of. And so Solana's model of just blast it on chain and have beefier hardware worked. And that was, it was maybe not obvious a few years ago, but that model worked. And it became also very clear that the value accrual is going to Solana. And then an app on Salana is doing something Solana isn't doing. And, and so that worked. Right. So now we have basically three level. So it's Bitcoin, Ethereum, Solana in terms of scalability on chain. Right. And so now the question is, can we go further still? Zk, obviously there's ZK rollups, there's optimacy rollups, there's all, you know, ZK is not simply a, a privacy technology. It's also a compression technology, it's a performance technology. And in fact, arguably, even though zcash came up with the concept of zk, the utility of ZK saw use more in scalability than it did privacy at first. This is good because scalability was immediately commercially important. You know that saying, vitamin versus painkiller. No, no, like, you know, a painkiller is. It's maybe immediately obvious.
- [13:43]
B
Yeah, okay.
- [13:44]
A
Yeah, you got, you got immediate problem and you want to take care of it. Right? And the vitamin is like possible upside, right? And you can argue, but basically, I know we're putting it is like a painkiller is a must and a vitamin is a nice to have. Right? Like a, like a, like a, you know, a want as opposed to A need. Right. So making more money required scalability. So that was a must. Right. And it seemed for a long time like people could do without privacy or, or rather it wasn't like it wasn't as important as scalable, so people thought. But now we have all of these attacks on people for like, you know, doxing locations, so and so forth, where if you're. Now if you're in Dubai or you're in a low crime jurisdiction, Singapore, if you're in El Salvador perhaps, and so on and so forth, you know, you're fine, right? Those are going to be three very important places on the earth in my view. Singapore, Dubai, El Salvador are the new, like Tokyo, London, New York, like even Miami is maybe. I think El Salvador has more upside than Miami because it's a startup seat. Like I, I actually like Francis Suarez a lot. Miami and El Salvador will probably have an important relationship, but El Salvador is like a full sovereign, right. That can do a lot. It did deal with Elon recently. It has tether there. These are big moves, right? So Bukele is like Bukele Kwanu. Those get you the Americas, EMEA and apac.
- [15:08]
B
Right.
- [15:09]
A
It gives you all three time zones, El Salvador, Dubai, Singapore and those. If you're doing, if you're saying up anything in crypto, I think you. Or anything in tech crypto, those are going to be the three nodes. One thing we need to do, I should post this afterwards, like President Bukele should set up direct flights between Dubai, El Salvador and Singapore. El Salvador and build an international airport.
- [15:28]
B
We all have them already.
- [15:29]
A
I don't think we have them. And partly it's because South America, Latin America has been sort of locked off from the rest of the world, especially Asia. And lots of flights have to route through America and to route through America, if you're not a US citizen, you have to get a so called, like I think a C visa. Transit visa. So many people who wanted to go to Cresciamento and Argentina and they're Asian, they don't have a US visa or something. You have to like go to the embassy, the US Embassy to get a C visa for just a. Like it's a huge tax. You want to just fly from, let's say India to Argentina. You have to stop through the US but to even stop through the US you need like a C transit visa, which means you need to go to the US Embassy and apply for a visa months in advance to jump on a flight to go. So me it takes away all spur of the moment it's like this enormous tax of time and energy. You can get rejected for that visa. It's often not awarded. So having something like El Salvador, which can just route around that be very important. Like an enormous amount of traffic will go there because Dubai and Singapore are these huge, huge points anyway, coming back. So, so onchain just being able to blast private transactions. Onchain Salana like scalability Bud Z Cash is what I think Sha Bo may have with Tachyon. That seems simple, scalable, easy to understand it. It's what a lot of people wanted Bitcoin to be, you know, so yeah, so that's, that's how I think about that.
- [16:54]
B
What, what else will it take to be the official currency of the network state?
- [16:58]
A
There is no official currency the network state. I think because there's, there's going to be a thousand network seats, right? It's like there's going to be like a thousand cities, startup societies, thousand startup cities, thousand network states. But I think there will be just like there'll be a Salana network state, Ethereum network state, don't die network state, Coinbase network state, Binance network state. All these people have talked about Telegram network state, etc. Etc. There will be a, a Zcash network state. The only thing about Zcash historically has been that the Zcash people were so into privacy, they never talked about it. And also zcash itself for a variety of reasons, just, you know, most crypto things have a failure mode of being way too commercial and like too much get money now too much, you know, like when airdrop, meme, coin, blah blah type of stuff. Once in a while you have a project which has the opposite failure mode or if not failure mode, because I don't think zcash has failed at all. But rather the reason that they haven't like they've been sort of shadowed by other project is they were so academic. Right? They were so academic. Like you can overreact and be too non commercial also. Right, right. And there was, it was good in a lot of ways. They nailed the cryptography. They were very smart. They were playing the long game, all that kind of stuff. But you need the right equilibrium, right. You don't want to be2phd.com, you don't want to be2phd or2.com. You want to have the right synthesis.
- [18:27]
B
We're going to change that.
- [18:28]
A
Yeah, I think we're changing that. Right? You guys have Gen Z cache. Yes, that's right. Tell me about that.
- [18:32]
B
Yeah, so I just thought it was a cool little word. Yeah, yeah. Play on words. So, yeah, I think the idea is a lot of things start from young people and then the older generations just catch up. Right.
- [18:46]
A
What are the five best Gen Z cache videos or what are the best ones? Which ones do you buy? Well, do you remember we did one with you? That's true. We had the zcash network state event here, I guess.
- [18:55]
B
Yeah. We did one with Haseeb. Did a couple with Haseeb. The first one when Zcash was a $30. The second one when it was $700.
- [19:03]
A
Nice. That's good. That's a good one.
- [19:04]
B
He didn't buy, so.
- [19:05]
A
Yeah. Well, I mean, I love Haseeb, obviously. Keep going. I'm listening.
- [19:10]
B
Yeah, yeah. There's a few more interesting ones, but, yeah, I think we want to ramp up, start doing more.
- [19:17]
A
Okay, so what is. What are the themes of Gen Z? Cash the feed?
- [19:22]
B
Fun, for sure. We want to make it fun, make privacy fun, make it sexy, make it cool. And I think, yeah, educating, like, you know, you don't want to be like. You just want the user to know as much as they need to know. That's why I love Zashi. Right. Because Zashi, there's all these different shielded pools for zcash that if you really wanted to dig deep, you could learn all about them. And the other apps kind of force you to learn them. But with Zashi, it's all just default into the shielded orchard pool. Right. So as little information you need, but to use it properly, obviously you're not leaking information anywhere. So I think educating about that, that'd be great. But yeah, one more question I had about, you know, you're talking about lightning and bitcoin. Do you see a world where, you know, zcash is sort of a complement to bitcoin, where it's actually.
- [20:13]
A
Interesting question. Yeah. So the thing is, I mean, one thing to not underestimate is like, bitcoin has like an insane brand, right? It has been comp. I mean, one way of putting it is there's a lot of people who are just now thinking about bitcoin or whatever, and what they'll say is something like Arjun, what kind of bitcoin should I buy? Right. I'm probably heard something like that. Right. So that is another way of putting it is, for example, how many drone manufacturers can you name?
- [20:42]
B
I know Mock industries, which is a small one.
- [20:44]
A
What are the big ones? Most people, dji, maybe they can name Andrew. Right. So you have to be really into it to Be able to name like small ones. That's just probably a friend of yours. Exactly. So but like to be able to go down the list of all the various drone manufacturers, it's like DJI is like bitcoin. Maybe Andrew is like Ethereum. It's a military drone. Very different, but it's a drone manufacturer. And then like, to know more than that, you really have to be in the space, right? So if you think about it that way, right, like again, like most people, they name an AI, they'll name ChatGPT. Right. I have to be in the space to know Gemini and Claude. And you have to be really in the space to know, like, I don't know, Sea Dance that just came out, this open model or the Chinese Kling and whatever, you know, Quen, blah, blah, deep Seek. And so you have to. That's a useful way of modeling. Another example is like, how many Chinese politicians do you know Xi Jinping? Exactly, right. Can you name Li Chang and all the other people in the pro. Most people can't, right? So that's a good way of thinking about how people from the outside think about crypto. They just know bitcoin. They just know like the one name in crypto is bitcoin, right? That's what, like insane. Like the there's a power law on brand, right? So don't underestimate that. That's like a huge, huge, huge, huge, huge thing. So because that number one and bitcoin's just insane ubiquity and you know, like all that kind of stuff, Bitcoin will be around and do well for a long time. Also there's an aspect to being public on chain, like transparency and privacy are actually both useful things, right. And for Bukele to be able to prove that he has this amount of bitcoin reserves is actually useful for him at times, right? If he can secure the private keys. There's a sense in which bitcoin literally does become digital gold, right? It's something where if you use to actually show you have proven reserves and then you need proof of reserves and liabilities in general, because, you know, it's not just that you have 100,000 Bitcoin or 10,000 Bitcoin, but rather all the claims on them add up to this, right? That's like another level of it, but at least proof reserve shows you you have something. And so there's a sense in which it's possible because transparency and privacy are both useful features. It's kind of like immutability and programmability. Are both useful features. So Bitcoin is immutable and Ethereum Solana were programmable. Mutability, like in the sense of if you Google mutable state, that's like a core concept in programming. That's like the thing that Bitcoin doesn't want to do, that Ethereum Solana must do. But it's like these are both valuable things, immutability and programmability, but you can't have them in the same package. It's like I want to drink water, I want a warm fire, I don't want fire plus water. Because they annihilate each other, Right? So you need to have them separate as things. Right? So it's possible that Bitcoin, just like Bitcoin and Ethereum coexist because Bitcoin is immutable and Ethereum is programmable. Bitcoin and zcash coexist because Bitcoin is transparent and zcash is private. And you may want to have proof of reserves, right?
- [23:41]
B
That's why zcash has T addresses.
- [23:43]
A
It does have T addresses. That's true, that's true. You can do that. But there's something also where the total sum of zcash can't be proven as easily as the total sum of Bitcoin. Maybe there'll be some cryptographic technique that does that. It's probably possible, but it's not quite as simple as with Bitcoin, where you just download the blockchain, run a verifier sum, all the chain tips and you get the so many bitcoin there are. Right? That was a troll that people used to run on Ethereum. They'd say, how many ETH are there? Right? And they could show a script that just simple just showed how many BTC there were. You can't say how many eat there are, right? You can say how many transparent sec there are. And certainly that's an upper bound. Like, you can also see how many.
- [24:26]
B
Shielded sec there are.
- [24:27]
A
You can see how many shields. That's true, that's true. But it's a little bit less anyway, people can make these arguments and so it's like a little bit less trackable than Bitcoin is. And sometimes it's a feature. So anyway, those are the benefits of an older technology are ubiquity brand and perhaps transparency. And we shouldn't underestimate that. I mean, one thing that's interesting is, you know, when Facebook was in its early days, Twitter was, and Twitter's in its early days, people said, oh, Twitter is just Facebook status updates, right? Because Facebook, there was, there's a time when it said like arjun is.
- [25:08]
B
Yeah.
- [25:08]
A
And then you could type in a box. I don't know if you remember that it actually is before your time. It was like five years before you were born or something like three years. But 2004 to 2007 you had that like biology is and you type something in and then eventually the biology is went away and you just type something in those tests that be similar to a tweet. But it'd be like biology is. It was, it was an update of AOL Instant Messenger. Alan Sebastian, you'd say John is asleep. And that was like your away message or John is at the office. So it would tell people where you are. Almost like an answering machine message. So an answering machine message became an ICQ or alien messenger. Away message became a Facebook status update, became a Twitter tweet. And so, and so that's it, that's the evolution of it, right? So the answering machine became the tweet. That's not the only lineage, but part of it. Point is people thought Facebook can do all these things, Twitter can do only one thing. Therefore Facebook will just crush Twitter. It turned out that the simplicity of Twitter meant to just build a community around it, right? That's the other thing that bitcoin has just says gigantic community, right? Hundreds of millions of people, right, are part of bitcoin. And like you could say for example, that I don't know, it's a good version of this. Like, I don't know, maybe El Salvador is a better Mexico. How many people are going to move from Xavier? Community has a stickiness all its own. You know, that's not exactly right. You know what I'm saying? Right? So yeah, I, I, I don't know what the future holds, but I'm Pro Bitcoin, Pro Ethereum, Pro Salon and Pro Z Cash because it's, we're still in this very non zero sum mode for a long time. All this, all the intra coin fights. I think there's a healthy competition and so on. But, but I think this could be zcash this moment. Let's see.
- [26:50]
B
Awesome.
- [26:51]
A
Cool. Thanks. Thank you, sir.
- [26:53]
B
Great.
- [26:54]
A
Thank you, sir.