Transcription Episode 37

Hello everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Adam. He is the co-founder of Wasabi Wallet.

He goes with the handle Nopower73 on Twitter. He has been a .NET developer and his main focus is basically, you know, privacy and Bitcoin and the Wave 3 space. So, this was a very interesting conversation and also on the day when they were actually launching the second version of the wallet.

So, I can’t wait for you guys to hear this. Let’s deep dive right in. Hi Adam, thank you so much for taking out the time to speak to me.

How are you doing today? Hello, I’m doing amazing. Actually, it wouldn’t be a worse statement to say that this is the most important day in my life. We are releasing a software today that we were developing for two years and six months and very excited.

Wow, so this recording is coming on a really, really nice day. So, this must be really busy for you. You know, for our listeners, could you tell us a little about how you got into Wave 3 and then we can talk a little about what you’re building? Sure.

So, I’ve been in university when I heard about Bitcoin and I’m pretty much, ever since then, I just wake up, sleep with Bitcoin and doing nothing else. That’s all of us. Yeah, it’s a wild ride, you know.

I don’t think there are so many exciting things in any other field than in Bitcoin. Yeah, absolutely. There’s something new that is happening every day.

There’s something new to learn. There’s something new to build on a new problem to solve. So, I think the Wave 3 space is very exciting going to the fact that obviously it’s very, you know, still relatively very young.

So, something or the other keeps happening. Oh yeah, definitely. I mean, it couldn’t be any other way.

This is the single largest revolution that’s happening in our lifetime, right? It’s even larger than we are. Yeah, it’s absolutely. I love the way how you put it that, you know, it’s like the single largest revolution that is going to happen in our lifetimes.

And I totally agree. It’s such a beautiful way of putting Wave 3 across that, you know, we are really disrupting something and it’s going to mean something and it’s here to stay. You know, we’re talking about how we are on the other side of the fence.

There are people like just today, I was reading in the news that, you know, Bill Gates has made some comments about crypto and Web 3 and how, you know, it seems like it’s basically he’s dismissed it as and called it as create a fool theory. What are your thoughts on that? Well, I, you know, have fun staying poor for Bill Gates. Okay.

But, you know, so because, we are in this space and we are very entrenched in this space, it’s very easy to get into our own little echo chambers, right? And then when somebody like say a Bill Gates, who is obviously, you know, not commenting on any other thing, but he is intelligent, and you know, he’s built a company. So for somebody like him, who can be very influential to say something like that, you know, what is your take? Do you think that, you know, perhaps, what do you think? Like, you know, just be honest here, because I would love to know, because you’re an influencer in your own right as well. Sure.

So yeah, I just want to know that that’s, I’m actually a .NET developer and .NET was developed by Microsoft and Microsoft was founded by Bill Gates. So I’m not the typical Linux guy who hates Bill Gates from every inch with his body. But, but, you know, as you just pointed out, we are on our, in our own echo chamber.

And yeah, you know, guess what Bill Gates is in his own echo chamber, right? You know, we can, well, I would love to have a discussion with Bill Gates and talk about this. And maybe we can come to a common understanding on things. But for now, my, my most rigorous thinking on the revolution of Bitcoin or Web3, well, I think Web3 is coming later after we fixed the money, then we can fix everything else with it.

But first we have to fix the money because, you know, just thinking about the decentralized marketplace is not working without a great money. And Bitcoin is getting there. It’s not quite there yet.

Right. Like let’s, let’s say, let’s say our first objective is to build a perfect money. Then you might ask the question, what is the perfect money? You’ve taken the words right out of my mouth.

That’s what I was about to ask you. So tell me what according to you is perfect money? Well, I’ve been thinking about it a lot. And the best theory that I found that is the properties of good money theory, which says that you might heard about this money has to be fungible, portable, uninflatable, scarce, and a couple of things.

And let me just bring four things out of it because everything else is kind of perfect in Bitcoin. Bitcoin’s main innovation was the scarcity, bringing a money to the world that cannot be inflated. All right.

So, but we are left with fungibility and portability. Fungibility is the privacy aspect and portability is how cheap and how fast you can communicate value to another soul. And Bitcoin is not very good at that yet.

Now, there is a, this is where I want to bring in Web3 or Ethereum. There is another disputed property of good money. I believe it probably exists, which is programmability, which is that you should be able to create ways of transferring value based on rules that does not rely on third parties or minimize the third party risk.

Now, this is very disputed this, but in my mind, this is the only way how Ethereum would make sense. And, but that three would be built upon later. So, we have two properties here, fungibility and portability.

Regarding portability, people are working on the Lightning Network on Bitcoin. Yes. And that is probably the way to go.

Regarding fungibility, that’s what I decided to work on because that’s the least, the most underworked thing on Bitcoin. So, so other cryptocurrencies, well, I am actually not personally involved in other cryptocurrencies, not because I have like bad feelings or, so I don’t, it’s not that kind of bias. It’s the bias of, hey, I want to spend my time on what is going to make the most impact.

And for that, I can look at the market and the market says that Bitcoin’s market capitalization is 50%. And the second cryptocurrency’s market capitalization is 20%. I’m not quite sure about the numbers, but it’s something like this.

Now, and this tells me that the market is predicting that the most likely future money is going to be Bitcoin. And it might not be true, but you know, you have to, at one point decide what you’re going to spend your time on. And, and well, I’m going to bet on the most likely one until something takes over Bitcoin.

And we are going to get back to Bill Gates here. Okay. So, you know, that’s a very good answer.

Now, this was just something that was, you know, there on my mind since morning, since I came across this new space. But now, you know, to more exciting things, there’ll always be naysayers, I think, builders gotta build. So you tell, please tell us, you know, what are you working on? And what is that software that, you know, you’ve been working on for two years that’s releasing today? Oh, yeah.

I’ve been working on Wasabi Wallet. I’ve been working on it since 2015. We created a company, we launched our first release in 2018.

And today we are launching our second release. So what is this about? That’s exactly what I’ve been just talking about a second ago that, hey, we just realized that Bitcoin is lacking in fungibility and importability. So the vision of Wasabi Wallet is to make Bitcoin fungible and portable.

And we are starting with the fungibility aspect of it. And Wasabi Wallet 1.2 was the first light wallet, the wallet that normal people were able to use without downloading a 300 gigabyte blockchain or how many it is today, maybe 500. So Wasabi Wallet was the first one that enabled privacy on Bitcoin, but enabling on Bitcoin for light wallet users on desktop, but enabling privacy is not the same as, hey, making the money anonymous.

Now, in order to create a real anonymous money experience, we have to make sure that what we are doing in our system, in our software is just as intuitive as the other wallets. Those do not have these privacy features. Now, for a long time, it was a question if it’s even possible to get that point.

And with Wasabi Wallet 2.0, I believe we got to that point. So I believe Bitcoin’s privacy is fixed on desktop with Wasabi Wallet for the users who have larger amounts of value, because the users who have less money, they are going to be priced out well, you know, because I once wrote an article about how do you scale a blockchain? And the article was that you don’t. Well, blockchains are inherently unscalable.

That’s where the Lightning Network, we are coming later on. This is where we are. Anonymous Bitcoin user experience just launched today that competes with the non-anonymous Bitcoin user experiences.

Wow. Congratulations. This is quite a big defeat.

You know, I know how hard it is to push out like a version two of something that you’ve already done. And it can take months of hard work. And you know, people tend to not be able to see that what is happening behind the curtain, they just see the output.

But the more part to you that you guys are doing this and taking this seriously, especially the privacy part. So exactly from the tech end of it, how are you enabling the privacy aspect on these wallets? All right. Well, stop me if I’m going too much into the technical details.

But if I want to simplify everything, then I would say that there are two aspects of privacy in cryptocurrencies. One is the network level aspect. It’s like you don’t want to leak information on the network level to any third party.

And the other is the blockchain level aspect is you have blockchains. So you don’t want transaction information to go into the blockchain that can be interpreted and deciphered and eventually make you spied on. Right? Like, I mean, if you think about Bitcoin right now, the only reason why there is no Google of Bitcoin users that you know, you write your write the name of someone and gives out all the financial data that financial transactions that they ever did with Bitcoin is knowledge blindness.

Blockchain analysis companies do have this information. They are just protecting it. But how long can they protect it? That’s the big question.

Anyhow, so on the network level, what we are doing. So first of all, we are using an anonymization network called Tor. So we are sending requests to our servers over Tor meaning our server doesn’t know where those requests are coming from or who is asking those requests.

Okay. So on the other hand, we are applying still on the network level, we are applying a technology called client side filtering from the Lightning Labs developers. They figured it out at first.

And what it does is, all right, let me give you the problem. The problem here with the Bitcoin full node, meaning you download the whole blockchain, then you can search the whole blockchain. And you can figure out how much money you have in your wallet from the blockchain you locally have.

But what if you don’t have that blockchain? Well, then you have to ask someone else, hey, how much money do I have? But by asking someone else, how much money do you have? You are telling them how much money you have, right? You’re leaking your privacy to them, basically everything. And for that, the Lightning Lab developers came out with the client side filtering technology, which is creating filters in a way that hey, we are not exposing our wallet balance, but we still be able to get to know about it. This is on the network level.

On the blockchain level, what we are applying is called coin join. Not sure, have you heard about coin join? I don’t think so. No, you could go ahead.

All right. So it’s many people come together and create a big shared collaborative transaction. That’s coin join.

I’m not going into the details of it. But I guess I just tell you the history that coin join was figured out in 2013. I created my own research in 2017 called zero link and where I described Xiaomi and coin join.

And then from 2020, well, we launched Wasabi Wallet with zero link. And from 2020, we actually created Wasabi Research Club and we reviewed and interviewed, we reviewed every single Bitcoin privacy paper, research paper that has been written up until that point, and interviewed many of the authors there. Well, I would send people to look at the Wasabi Research Club recordings, but that’s, well, if what I’m saying right now is technical, then that is going to be hell for you.

So anyway, we reviewed everything. And in one and a half a year, we came out with a research called Wasabi that’s, well, the best we could do with coin joins. And we implemented it in after one year following that.

And that’s how the two and two years and six months time that we’ve been developing the 2.2 version that’s released today come out. So to summarize, we are taking care of things on the network level and on the blockchain level. Okay, awesome.

So you’re using Tor, obviously, at the network level, and then you’re using this coin join thing. So this is awesome. You know, the fact that, you know, you kind of have put it together.

There are like other protocols as well. That’s like, you know, we talk a lot about privacy, but nobody seems to be doing much. And you guys seem to have like Yeah, well, I, you know, privacy is quite a thing.

I wrote an article about, I titled it fungibility, privacy, and anonymity. And my naive idea was that, hey, I just explained these concepts. And, and well, I’m going to know things better.

But that’s, oh, boy, this, this is so this these topics are so much larger than I originally thought, because it just leaks into every single territory of your life. I mean, there were research papers written about that, how no one is really able to agree on how to define privacy, right? Like, that’s how complex these topics are. And, well, I can go on for a long time, it took me actually months of deep work, every day writing that article.

Yeah. Yeah, I think that is that goes for all of us that, you know, we can talk about things that, we are passionate about for absolutely months on end. But this is just fairly interesting.

And the fact that you guys have been, as I said, you’ve been able to execute on it, that is what is more important, I think I’m gonna be trying out your new features very soon. So leaving aside, you know, what you’re building on currently, the market has turned slightly, you know, bearish, for the lack of a better word, what is your outlook towards the market in general? Well, you know, it’s price is going to go up forever. I am not paying that much attention anymore.

I definitely when I got into Bitcoin in 2013, I’ve been looking at the price every day, multiple times a day, 100 times a day for many, many years. But you know, this, this gets addictive. And, and later on, you have to like, regulate your addictions.

So well, you know, 20,000 seems really unreal to me. People are really sad because it went down from 60,000 to 10 20,000. But you know, I compared to the 200 I have experienced, it’s just a whole different level.

I can’t even comprehend the price anymore. Yeah, nothing makes sense. Yeah, I don’t think it makes sense either.

I think it’s, it’s just, it’s just the way markets are like, you know, markets are regulated primarily by emotion, they’re guided by emotion. And I think just the macro outlook, and there are so many external factors that are at play right now with the Fed, the war, and inflation everywhere in the post COVID economy. There are a lot of factors at play.

And I do think that it’s a phase obviously markets are always cyclical. But I do think this, this particular bearish phase would be a shorter one than perhaps what we had with this last time. I mean, yeah, I know nothing, but that’s my feeling too, because it’s been down for quite a while.

And I don’t, I’m not sure if I remember it being down for so long. Although the last rally was very long, too. So who knows? Oh, no, yeah, that’s true.

That’s true. But you take it one day at a time. So you know, now that you know, we’re talking about the market and what is happening right now, do you have any favorite protocols that you know, you like you wrote for and you think that you know, they’re doing a fabulous job in DeFi NFT, any anything, absolutely anything at all that you know, you you have, you feel that you know, they’re doing a fab job? Oh, yeah, I will.

Well, I will not say projects by name, but I will just bring up a philosophy here, which is actually, our company is called ZKSnacks. It’s a wordplay on zero knowledge proof protocols, ZKSnacks, everything today in crypto. But the point is that, hey, it’s it’s kind of an important concept here, compared to, you know, every single company that grow big and happened before Bitcoin, before the cyberpunks.

Okay, not every company, but most of the company, they grow big, they, they get a lot of data from their users, they are selling the data, or they are keeping that confidential, or somehow the companies have leverage over their customers or users. The difference here is that, hey, what if we build products and companies, those have zero knowledge, and maybe even zero leverage, or at least minimized leverage over their customers and consumers. And now, every project that is trying to bring to minimize their leverage over their customers is a project that I am rooting for.

Right. And you made it very clear. So if anybody is able to read between the lines, they’ll know exactly all the protocols you’re talking about.

But basically, you know, the fundamentals should always be right. Like it’s, it’s very easy to just create a token or say that, you know, you have a new protocol, but with unfound perhaps fundamentals, no business can really be built on scale. Oh, yeah, it’s definitely much harder to build businesses this way, right? You know, like, it’s a handicap for you, right? It’s, hey, you should build something where you try to minimize your power.

It’s kind of, you know, there is a cognitive dissonance there. But you know what, like, eventually, that’s what, what should should succeed. Maybe it will take a while to have those kinds of products, those kinds of markets, those kinds of chat clients, those kinds of wallets, those kinds of all kinds of product protocols.

These are very long, probably taking very long, but hopefully these are going to be the last Ubers, the last, the winners at last, even if it’s not first. Right. And I absolutely right.

So we’ve talked about protocols. Now, can you tell me a little about who are the people that you follow? And you know, you, you seem to think that, you know, they kind of have, they get it right, vis-a-vis the market or the information or just the outlook, you know, towards the space. So how am I, am I getting information in the space? Yeah, who are your favorite talk leaders? Or, you know, what, what do you tend to? Oh, all right.

So that’s a good question. Well, in the beginning, my main source of information was Reddit. And then I started moving on to development resources instead.

And for a while, I was trying to use Twitter. You get a bunch of information into your face. You have no idea what to do with them.

It’s a bit noisy, but Twitter is fine too. Well, the thing is that I am in a position where the information is coming to me, even when I’m not asking for it. So it’s well, contrasted to maybe you have listeners who are, who will have to actively seek out the information about Bitcoin crypto blockchain space.

For me, even if I don’t do anything, I got a bunch of private, a bunch of tags, mentions, private emails, all kinds of things every day that keeps me up to date. So, so it’s a bit different. Obviously, you’re in a different place, like, you know, where you are, perhaps you’re getting, you’re being inundated with information, but if you had to perhaps recommend, like, you know, for our listeners, who should be the people they should be paying attention to? Who would you like, who would be the three people or three thought leaders? All right.

Oh, well, I’m a huge fan of Andreas Antonopoulos. I have a bunch of these. Yeah.

Yeah. So Andreas, and I would say, trying to find Bitcoin core developers. That’s well, you might not understand what they are saying, but, but there is very little noise there and a lot of signal.

So that’s a good one. And for third one, well, you know what, Breedlove, I love Breedlove. He’s a Bitcoin philosopher.

He’s creating great content and, and, and very long form content. Check out the Breedlove Max Hillebrand series. You learn all about Austrian economics and Bitcoin.

That’s great. Yeah. Awesome.

Those are such good recommendations. Okay. So, you know, this has been such a lovely chat.

This is a question that I kind of ask everybody who comes on the show. If you had to give advice to somebody who’s peering in from, you know, from the outside and looking to get into crypto, but feels a little, you know, it feels intimidating to them, perhaps. What would be your suggestion or advice to them so that they can start living on blockchain? Oh yeah.

Just keep doing things and never stop. Opportunities are all over. You invest your skills into Bitcoin rather than your money.

Of course you should buy, buy Bitcoin because, well, it turns out every other place to put your money is, it’s pretty fragile, but yeah, invest your skills mainly and you’re going to learn a lot and you’re going to have opportunities you could have never dreamt of. Absolutely. I think, you know, Bitcoin, crypto, it’s like the second greatest equalizer after the internet.

So I very strongly believe that I think anybody with a smartphone can be a part of this new parallel economy, a new way of doing things and they can be involved in it. And as you had put it very beautifully, that this is like the single largest revolution that will happen in our lives and people owe it to themselves to be a part of it. Yeah.

Join the revolution. We sound like cult leaders, you know, on some days, Adam, just like asking people to join our cult. All right.

So before we wrap this up, any other thoughts, any parting thoughts? Oh yeah. It was a very pleasant chat and I’m well, I’m, I’m just sorry. I just keep my, my thoughts on the release right now.

And maybe I was a bit distracted, but thank you very much for the chat. No, no, absolutely. You were lovely.

And I love learning about how you guys are doing this. Like for me, I’ve been in tech. I hope that, you know, our listeners can get through as well.

It wasn’t very technical, but in case, you know, they do have any questions, etc. We’ll take them up perhaps later over email. And, you know, I, in case I have anything that, you know, I’m not able to wrap my head around and, you know, some listeners want some further details, I’ll get in touch with you so that you can help, you know, clarify for them.

But otherwise this has been lovely overall and more part to kudos on what you’re doing. And I think, you know, your profile on Twitter that I’ve been following, I think, you know, initially with the podcast page and then now personally as well for a while and what you are building is absolutely commendable. I’m completely in awe of what you guys are doing.

Yeah, definitely. Anytime. Let’s have a chat later and you will tell me about your journey then.

Absolutely, absolutely. Thank you so much, Aram for being such a gracious participant in this conversation and then taking out the time to speak to me. Thank you very much and have a good day.

Bye bye.

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