Bankless - "Crypto Without Privacy Isn't Crypto" - The Zcash Bull Case | Tushar Jain & Mert Mumtaz

Episode Date: May 19, 2026

Zcash is having its first real narrative moment in years. David sits down with Multicoin Capital co-founder Tushar Jain and Mert Mumtaz to unpack why privacy may be crypto’s missing store-of-value primitive, why Zcash is being framed as “private Bitcoin,” how institutional adoption could normalize shielded money, what AI and onchain surveillance change about the privacy debate, and why quantum risk could become a real catalyst. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔮POLYMARKET | #1 PREDICTION MARKET https://bankless.cc/polymarket-podcast 🟦 COINBASE ONE | MEMBER MONTH https://bankless.cc/coinbase-one 🧭OKX | TRADE, EARN, PAY to OKX | 120M+ USERS WORLDWIDE https://app.okx.com/join/USBANKLESS 🦊 METAMASK | DOWNLOAD NOW https://go.metamask.io/BL-Pod-Download 🌐BRIX | EMERGING MARKET YIELD https://bankless.cc/brix 💰NEXO | Get your 30-day access to Wealth Club Premier https://bankless.cc/nexo --- TIMESTAMPS 0:00 Why Multicoin Got Interested in Zcash 5:22 Mert’s Path from Solana to Zcash 9:57 Why Zcash, Why Now? 17:01 The Institutional Path for Private Money 22:03 Zcash as a Private Store of Value 25:27 Fungibility, Tainted Coins, and Financial History 27:26 The Bear Case: Does Anyone Really Care About Privacy? 34:43 Onchain Surveillance and Government Power 39:13 Zcash Tokenomics and the Forgotten Coin Thesis 44:58 The Last PVE in Crypto 50:17 Zcash and the Quantum Threat 59:14 Shielded Pool Growth and Upcoming Catalysts --- RESOURCES Tushar Jain https://x.com/tushar_jain Mert Mumtaz https://x.com/mert --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation, we've got a pretty unique episode today. We are joined with Tushar Jane. He is the co-founder of multi-coin capital. Tushar, welcome to the show. Hey, David. Thanks for having me. We're also joined with Mert Mumtaz. Mertz, also for a time on the podcast.

Welcome to the show. Thanks for having me, boss. Interesting podcast, interesting group of people we have. This is, I think, going to be pretty exciting. I got peaked by Zcash, and I kind of went down the rabbit hole, and I realized that there's just a lot more substance there. Mert, you have been talking a lot about Zcash for over a half, of a year now, maybe even longer.

Tushar, Multicoin just publicly announced that you guys made a big, seemingly sizable investment into Zcash. TooShar, maybe we can start here. What got you over the hurdle? What was the moment that was like, maybe we should really consider this and come into Zcash in size? What did it for you? There were a combination of factors for us.

First, I want to acknowledge that, you know, Mert was earlier to this than I was and has been talking about it for much longer. And I was watching that, and I was watching the entire narrative around Zcash last year really start to build up. And this is an asset that, you know, I've seen since it started and paid attention to,

and mostly it was just left for dead. People weren't really paying attention to it. And so it kind of languished out there. And then I saw that there was this huge push for it, But when I see something like that, I always pause and wonder, is this some manufactured thing? Is it sustainable? Is there a real groundswell of support here? Or am I just seeing a handful of, you know, echo chambery things?

And when you see the price do what it did last year and then what we saw was it pulled back, very significantly. And as I saw it pull back, what I saw was, one, the people who are talking about it were still excited about it. Two, the place where it pulled back on the chart actually demonstrated much better attention and strength than where the thing was trading for years and years before that. So, of course, like all things in the market,

things get overheated, people get really excited. They price that in first. then that implied leverage in the market has to get wiped out. That's what we saw last year. We also had a bunch of macro-crypto-bair things basically happening with 10-10 liquidations and so on and aftermath of that. But Zcash weathered that test,

did not lose the key people who were supporting it. It retained a lot of the community support. It retained the price strength, which demonstrated to me that this was more sustainable. And that was one of the primary things, things that got us over the line. If you could get a 3% top-off on your entire portfolio today, would you take it? Because Coinbase is basically offering exactly that. If you've been looking for an excuse to consolidate your assets, this is it. Until May 31st, Coinbase is giving a straight

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It's already on your phone or in the link below. Mert, people will formerly know you as the Salana guy, the guy that really educated and pushed and elevated Solana and sold the asset respectively. I think now people in crypto Twitter and the crypto community broadly know you as the Zcash guy. Not to the exclusion of Solana, but it's just seemingly what you're focused on. Talk to me about that transition because as Tuchar said, you were very early. I saw a tweet from you talking like doing a little bit of a little bit of a victory lap when Zcash ran up to something like $80 and you're like, oh, I was told you guys and now we're at 500. And so talk to me about what

you saw in Zcash and why you decided to put so much time and energy into it. Sure. There's a quick lore here in that a few years ago, I would say, or maybe two years exactly now, Sean Boe, who is, I call him the toly of Zcash, he's super gifted technical mind. And he and a few others reached out because since I was known as a Salana guy, they wanted some advice or a review, so to speak, on their upcoming scaling designs. So they, I hadn't, I thought Zcash was left for debt as well. This was about two years ago. And they wanted me to look and see if the scaling approach makes sense.

And so I started looking into it and then obviously somewhat of a tryhard, so I had to look into it recursively, so to speak, and look at all the little edges and whatnot. And as I was doing that, it occurred to me that it actually does make a lot of sense and the tech is extremely interesting. And it works. However, they had many other problems, and we can talk about these in terms of the UX layer, the narrative, the hiring and, you know, the positioning in the market and all these different things. And so that's when I first started getting more into it.

This was sometime early 2024. And as I kept, and by the way, like obviously I'm still Salana first in the sense that my company is a Salana only infrastructure provider. and we're actually building a privacy later on Salon now as well. And so that's always still, I'm not necessarily, you know, favoring one or the other, but I call this the obvious barbell, which is to say Bitcoin and Zcash on one end of the barbell and then maybe hyperliquid and salon on the other for me. Anyway, so, and then all this institutionalization of crypto started happening. I was a bit earlier to this than most people because,

obviously a lot of meetings with suits behind the scenes, and that takes its time to propagate to Twitter. But I just, I got disillusioned when I saw everybody was working on some interesting stuff like, you know, defense tech and drones and Frontier AI Labs. And I was like, okay, what are we exactly doing here? Like, USC is cool and all, but fundamentally it's an API for the dollar. I mean, that's mostly what it is. And it felt like I had kind of wasted my time to an extent in crypto.

And, you know, I had a lot of fun, but it just the aesthetics and the ideals weren't necessarily what I imagined. And then, you know, through talking to a few other friends and really forming my opinions over the next few months, it occurred to me that privacy is this last kind of, I call it the last PBE. The major thing that crypto has forgotten, and I think a lot of the institutionalization and whatnot stems from that. So, like, the way we described this is at first, we had to prove that crypto worked, right? So that was Bitcoin and that it could be used and that cryptographic money was possible. Second was Vitalik was like, actually, this should be programmable. We should be able to do things with this. And so then ETHERium came.

And then Atolli came and said, actually, that's good, but we also need to make it to scale. And then kind of the final phase that everybody somewhat forgot about because they were too busy, legitimizing that crypto is you can be used for good. and not necessarily for crime, is that people slept on the privacy part. But now, especially when Trump is president and let's say the regulatory apparatus is much more friendly, we have a shot here. You know, we call it a thousand days to win back freedom to legalize privacy again and bring crypto back and reorient it to be more of what it was supposed to be rather than what it's being co-opted to be to become.

So this is really a just a pursuit of cypherpunk ideals and just kind of like a missing piece for Zcash. There are a bunch of, for you, for you, Mur, there are a bunch of, like, arguments that I want to make with you guys on, on the show today about just like why now. I want to go through them like one by one. There's like the institutionalization path that Zcash might have. There's the value of privacy. There's the proof of work distribution period. There's a bunch of different things that we can talk about. But before we go into each of those, I would just want to zoom out and ask the question just why Zcash and why now? There are other privacy assets. There have all. also been other instances in which privacy has been valued by the market. But now there seems to be

a unique and idiosyncratic amount of attention on Zcash specifically. Why is that, why are the stars aligning for Zcash? I'll throw this one back to you. Yes, I thought a lot about this because, you know, my style is I pick one chain or project and then that's all my attention. And so it's just a lot on Zcash I've been involved with since all my using crypto. And so when I looked into this, the YNAV part is probably slightly simpler. I think there's a convergence of things. Institutionalization is obviously one. And we saw this also. I don't know if you guys remember those posts about like the BlackRock ETF and the derivatives of Bitcoin and Jane Street and all this stuff. And like that's, that part clearly exists. You know, there's sailor kind of just being the

entire face and it's just one guy buying the coin the whole time. And perhaps his AI posts don't necessarily work well to spread the narrative from here. There's obviously AI. which at first I thought was extremely overrated. However, if you... So one way to frame AI is that it's an expert computer for unstructured data. All the computers that you see on the internet or in reality today are designed with structured data,

meaning you put in something and then you get out some spreadsheet and that spreadsheet is generally dynamic, which then gives you a website. But AI can actually understand unstructured data, right? We don't necessarily know how it does it, but the weighting of the, you know, the trading data and the matrices allows us to do that. And so, for example, AI has been shown to be able to de-inonymize, so to speak, pseudonymous forum identities from just messages across different social media networks, right?

And so as you keep institutionalizing crypto, which means you have to, you're adding all these on-ramps, which then, so the way this works is privacy is a network effect, but so is transparency. Meaning, for example, assume you've been perfect your whole life in terms of on-chain privacy. Okay, well, the second that one of your counterparties slips up and identifies you or you leak something or you docks one of your wallets, what's now happened is there's that link. And now it goes back exponentially backwards and forwards until you have just created a network effect of linkability. Okay. So AI makes this infinitely worse.

Obviously, Trump is president and you've seen things like the wealth seizure. taxes in in California, the unrealized gains taxes in Netherlands. And there's just this general trend towards, let's say, extreme socialism. And you kind of put all those things together and the timing kind of. And then obviously, the other thing here is ZK itself is everybody in crypto, like everybody in this room knows what ZK is, but it's been relatively unworkable for many years, right, the scale didn't necessarily work, the user experience, the signing SDKs, all these different things,

never really worked at scale. And it's really been about two years, two and a half years, that ZK has been a functional technology that can actually be used at scale. And Zcatch pioneered ZK, right? So it suffered because it launched with it. It was the first production SNARC system.

But now that it's actually functional and there's a trustless shielded pool, which it doesn't require trusted ceremony, all the stars somewhat aligned. And then obviously we have the Josh's team, Zodal team, which used to be called Zashi. They started building the wallet and provide or show that you can actually have good user experience with a Zheat protocol. And then of course, there's something like Neo Protocol where you have intents and you're able to just swap in from any chain, swap out from any other chain.

Right. And then I listed it on Salana. I worked with Hyperliquid to list it on there. And so now you also don't have the centralized exchange choke point. You can actually use decentralized finance. for this. So that's the why now. In terms of why Zcash over, let's say, other privacy projects, well, again, I think the only other or the main other competitor, so to speak, would be something like a Monaro. But if you are into cryptography at all, you'll know that ring signatures,

which is what Monero uses, it's a decoy architecture, right? For every one real transaction, there's something like 16 fake transactions. And when you combine that with something like AI, or a sufficiently powerful computer, you are able to reduce the anonymity set to an extent where you can start doing some real damage, right? There's a lot of tracing companies oriented around this. And so if you just, you know, I'm a tech guy. So if you look, if you're using from the foundational basis,

then Zcash did the very, very difficult and arduous work of productionizing the snarks, which hurt them for the first seven, eight years until I'm an error got network effects in certain niches, right? You'll hear something like, well, if Zcatch is private, then why are criminals using one arrow?

And really it's similar to saying something like, well, if Solana's so fast, then why are Latam merchants using Tron? And it's like, okay, it was first to market. It has network effects within that niche, but it's not to do with the tech, right? And so I want to minimize my counter-party risk in terms of engineering basis.

And then it's obviously a fork of Bitcoin, right? So it's very simple to meme this and reason about it and de-risk kind of the supply curve and all the different things we already saw with Bitcoin because it's, you can just say it's private Bitcoin, right? It's a very easy sell. And there's a few other things in terms of, for example, the way the architecture is laid out is very conducive to quantum proofing, which it is already quantum recoverable now. And, you know, the proof of work distribution, it was a dead.

dead project for many years, meaning most of the people who sold sold. And then now, if you look at it, the distribution is sufficient such that it doesn't resemble anything in today's crypto, right? It's from a bygone era, so to speak. I want to talk about something that I don't know. I want you guys to validate for me because I'm just kind of getting into the Zcash narrative and understanding it for like my first week here. But as I understand it, the Zcash has a path forward to it to be legitimized and understood

and accepted by institutions. which is why its TAM potential is potentially large. This is a quote from Matt Hogan from Bitwise who tweeted out. As suit coiners, suit to corners drag Bitcoin into the mainstream, it makes space for things like Zcash. I think this is just a commentary on Bitcoin, kind of losing its cypherpunk edge.

Because it's doing its job, it's becoming inside of central banks, it's in, it has things like micro strategy, it's just in and accepted by and legitimized by the world's largest, institutions. But also, I think that same institutional legitimacy is available to Zcash. It's not there yet, but that path forward is possible. Tushar, maybe you can talk to us a little bit about

this possible path that Zcash can take and why institutions might like Zcash and use Zcash and adopt Zcash. So I think Zcash has a brand that is more conducive to institutional adoption or is just more attractive to a wider set of people, right? Like there's other privacy coins out there, like Mertz said, Monaro is probably the main one to compare it to. And when you look at Monaro, it has a very specific brand. And you get the sense, like, you know, you've seen a lot of tweets of, well, if Zcash is such good privacy, why are all the criminals using Minero?

Well, that's the brand that Monero is going for. And Zcash is not for that. Zcash is for the regular person who says, no, I care about my privacy, not because I'm doing anything illegal or I have anything to hide, but because I don't need to reveal all of my financial transaction history to every single person with whom I interact. And I want to be able to transact privately on blockchains. I don't want to have to use, you know, a bank transaction in order to transact privately. And so I think it's a brand question. And, and first, a lot of these assets, like, you know, it's very path dependent, right? Like, their outcome is path dependent. It's not a foregone conclusion when the projects were started, how the brands were going to evolve, or what their use cases were going to evolve to be. But what we see here is the evolution of a privacy for the normal person brand. And that is jelling, together with this desire to return to cypherpunk roots that got us all started.

And I think Zcash is emblematic of those cyphor punk roots while still being accessible and legible to a significant group of people. A lot of people are like, well, yeah, Manero is for criminals. I don't want it. That's not me, right? But Zcash benefits from its positioning. Going a bit further along that train of thought, for privacy to actually be useful for people, it needs to actually scale beyond the niche, right?

That is to say you need some sort of a Trojan horse for adoption. And the fact that Zcash has both a transparent mode, which is just Bitcoin, and a private mode, means that you can get institutional to want exposure to the assets. But then obviously there is a non-zero conversion rate of either that attention or that reflexivity in back into the shielded pool. And so you can kind of, and those people will kind of do the bidding for helping legalize privacy, so to speak, right? Privacy is, I mean, Roman is, you know, still being pursued by America for writing privacy code. And obviously there's some other factors to that. but unless you are able to scale and get enough momentum

such that you can get all sorts of different actors and message it and more as like an individual right types of thing as opposed to I'm just trying to hide my interferes activity thing then you're never going to get the escape velocity required to actually normalize privacy right privacy for it's it's a basic human right and especially in this new age of you know connected systems if you don't have a very strong base in a Trojan horse to get adoption,

and you're kind of just trying to brag about it to random edge lords on the internet, it's never going to get the scale required for it to actually become anything more than a niche. Is the argument here about the upside for Zcash is that there's going to be some amount of people who adopt privacy organically, and that's what grows the supply, the percentage supply of Zcash in the shielded pool. and because there's some amount of that organic demand for privacy, strong privacy, you know, cryptographic privacy, like the good kind, not the ring signatures of Manero, but the cryptographically provable privacy, then as a result of that, and because as you're saying, the Trojan horse model, you have the unshielded Bitcoin version of Zcash.

Institutions can adopt it, and between organic adoption and institutional legitimacy, the market captures goes up because, I don't know, I mean, there's an ETF about it. Organic users are buying and holding it. And then, like, Crypto-Twitter gets in on it. And all these things kind of coalesce together to rewrite Zcash to a higher price. Is that more or less the simple bullcase here? I think that's a good articulation of the bull case.

But there's more to it. It's important to remember, like, the market that Zcash is competing for is the store-of-value market. Like, that's the job that it. it does is it's for storing value, and it is far more scalable than Bitcoin, and so enables, you know, more transactions and such, but the core value prop is store of value, right? This is not going to be necessarily the payments chain where, you know, Stripe or Visa or whoever else is settling their transactions. And something that's important about store of value is human group psychology and the shelling point that leads to people all agreeing that one asset is that store

of value. You know, the classic historical example is gold. Why did people like gold? Because it was shiny. And it had a bunch of other metal properties that were, you know, very helpful. And then everyone kind of just like came to that same conclusion. Bitcoin, why is that a good store of value? Well, it was first. It was the first thing to solve double spend problem. It has this like virgin birth. narrative, and that's really powerful. And then the question is, well, what does the next one look like? What does it take to compete now? And I think Zcash serves as a shelling point, and it's doing that already. And as it, you know, is now the biggest privacy asset, not only by market gap, but by volume, by attention, by basically any metric to look at, then the

There's just a runaway compounding effect, because why would you want to use the second best private store of value asset? Everyone's going to want to be in the same top one. And so my theory here is that just like Bitcoin was in the 2017 era or the 2013 era, I think both have good comparisons to Zcash now, Zcash is going to benefit from the reflexivity of, oh, more people are using it to store value, therefore it is now a better store of value, and so more people choose to use it to store value.

I think that's an articulation that the second money to come after Bitcoin, there's always been this fight to be like, what's the silver to Bitcoin's gold? You know, light coin wanted to be this, but turns out when you just chop the block times and by a quarter, then you don't really do much. But privacy is actually unique and differentiated.

And so, like, maybe whatever asset takes the second place to Bitcoin, which is a very valuable place to be, maybe it's privacy that is the thing that differentiates it for all the things that Mertz said in the world of AI and the world of just like hyper data. Maybe privacy is the thing. Yeah? Not to cut you off, but there's also, like, we say the word privacy, but like privacy is more memeable, for example. Let's say than decentralization. Sure. But privacy is important or those decentralizedization is important insofar as it leads to some tangible property of the product.

And so that is to say, when you have a private store of value, then what you get that you don't get anywhere else is true fungibility, right? Money, like cash money, is useful to the extent that it has no history attached to it. It's completely liquid. All information is devoid. You don't know where it came from, nothing like this. You can just swap it. You can use it for any transaction. Gold, for example, it's been used for centuries for this purpose.

It's truly fungible for other pieces of gold. But as soon as you have a digital asset, the digital asset has a history attached to it, and you can use that history to delegitimize, let's say, its value and put all, and like maybe you can't seize it entirely, even though surely in Canada you can, but you can blacklisted such that now the history of the asset has tainted it. And so it's not truly fungible, right? So it's the first principles correct derivation or property, the true fungibility aspect,

is something that a store of value must have. I take that point. There's been this long conversation around Bitcoin, around just like tainted coins, coins that people might want less. I've never actually seen that really impact things. And this was kind of going to get to the question that I was going to ask,

which is like, I don't know, guys. If we fast forward like a year or something, and Zcash is back at like $40. Everyone's going to look back at this and be like privacy. Like why did so many people fall for privacy? No one cares about privacy in the same way that no one cares about decentralization.

Like it's noble and we should have it. But ultimately at the end of the day it'll be just another instance of when investors tried to invest in privacy and ended up with another tombstone because no one really cares about privacy. And so like well, I take the point that like Zcash is more fungible

than Bitcoin, I don't see that really getting in Bitcoin's way. And so I just want to kind of want to elevate the bear case, the Contra case, that like, guys, we're, you know, dozens of people have tried this before us and we're about to join them. And like, why is now any different than all the times that came before? What would you say to that? If you look at the early Bitcoin posts, because you were talking about the first principles correctness of it, Satoshi actually wanted to, I mean, so did Hal and Len and André Andrea, all these guys wanted to actually add privacy.

And there's a famous block book forum post where Satoshi says, if I knew how to add a ZK, then we would. But I don't know how to solve a double spend problem with this. Right. So one thing to consider is that the lack of privacy in Bitcoin today is actually a technical limitation because you needed to be able to audit the state such that you can prove there was no double spends. And so the tech literally didn't exist for it.

Anyway, in terms of the bare case, I mean, of course, it's a bare case, right? Like, this is a risky, everything in crypto is fundamentally risky, but especially, you know, let's say neuro narratives are always risky. I would say a few things. So one is that, just from a risk-adjusted perspective, I just don't think there's anything better in the entire industry today in terms of risk-adjusted, right?

So, like, if you look at Zcash, it is below, way below XRP, right? and like, you know, what does XRP really doing? I mean, it's even below BNB and all sorts of different coins. And, you know, the target that people will give you for Zcash is something like, well, 10% of Bitcoin's market cap or something, right? So some people are more delusional, such as myself, but I think most people are sane enough such to say something like it's, it'll be some percent of Bitcoin's market cap.

And look, I mean, I think Tushar will obviously have a different answer for this, but like I am actually building things. on top of Zcash, so I'm helping with, you know, hiring, wallet infrastructure, partnerships, integrations, and, you know, talking to VPNs to accept it for payments. On my end, it's, okay, look, even if it does fail, then it was certainly something worth trying to push. And it's like, I'm not going to stop doing it. It needs to exist.

Prices will go up and down as interest in crypto because most assets are correlated. But if you look at where the world is heading, if you look at the limitations of the biggest SOV asset today, or the two biggest really, including gold, then this is the first principle's correct version of the solution, and the rest of it becomes something in our control to be able to like, okay, just how do we tell the story better? How do we understand the weaknesses, take that feedback, and keep improving the project because it's a dynamic effort? I don't think that we should think about the market as a monolith and say, oh, the bare case is that people don't care about privacy. Well,

yeah, possible, but people are not a monolith. And what we need is some percentage of people to care about private store of value. And that clearly exists. That is what the last 18 months of data really proves to me. And that's one of the main reasons why we put on the position more recently is because you can have all the great high-minded ideals in the world, but if no one cares, then it's not going to succeed. Right?

You have to show some early traction of, oh, people actually care. And that showed up here. Right. Like, that's what I saw. That's what got me really excited. But there's a couple of other components as well, right? Like now with the Zashi, now Zodal wallet, enabling near intents and creating the ability to trade in a decentralized way,

Previously, if you wanted to buy Zcash, you have to go to a centralized exchange with KYC in order to do that. Kind of defeat some of the purpose that you're aiming for here. And so there are technological reasons why people who did care about privacy in the past may not have been excited about Zcash. Because it wasn't usable for what they needed yet. But now I think we have evidence that at least some set of people do really care. and we have evidence for why adoption can increase now when it previously was stagnant. I'll also add, I think, just Tushar made a good point there

about like, clearly there's some percent of people who care about this particular niche in the market, right? So one way to think about this is, you know, I mean, the show's name is bankless, right? And like, you can certainly become bankless, so to speak, on Ethereum or Solana, but just having cryptographic key pair, right? You don't need anything else. You just hold ether soul and you're your own bank.

But there is this other niche that isn't super talks about, which is like the offshore wealth folks, right? Like the people who store money all across the world for fear of seizures or just to be able to decentralize the or reduce the counter party risk, right? One thing, like analogy I use here is like it's a Swiss vaults for in your pocket, right? Obama has this famous quote where he's like, well, we can't let people have privacy because then everybody's walking around with a Swiss vault in their pocket.

It's like, yeah, that's exactly right. There's a certain set of people. And like Switzerland, for example, just, I think they were under the, they came under some heat for working against a few individuals and actually turning against them, so to speak. And so there is actually this niche where you can have a bank, you can be bankless with, with Jesse Thier and Miss Salana.

But if you want like that Swiss vault protection, so to speak, like where nobody knows what you're doing and it's just completely private, there's a lot of people, you know, like, you'll see. these people like Chamath and Ray Dalio, et cetera, kind of hint at this, biology, et cetera. And that niche is such that you just need to close, let's say, a few of them, right?

And that niche specifically needs to exist for to have a much higher floor than it did before. I think something that we did a podcast with lately that is alluding to the same point that you are Burt is we did an episode with Ari Redboard from TRM Labs. And one of the questions I asked him, we talked about Lazarus Group. We talked about the IRGC's use of crypto.

We talked about the Cambodian pig-buttering scams that happen. And they're able to track all of that stuff on chain. And that's what TRM Labs does. That's what chain analysis does. And the feds love it. And I asked Arias like, hey, do you think the feds, like the CIA, the FBI, OFAC, FinC, Fincen, do they like on-chain finance?

So like, do they want finance to move on chain? And Ari was like, yeah, it's really helpful for them to do their jobs. And to some degree, that's great because they're going after the scams. Like, to some degree, they're the good guys. And so I'm happy about that. But, like, the net effect of that is a little bit chilling in the sense that, like, if finance is all on chain and there is only very small islands of privacy, those islands become pretty crowded places to be.

That was kind of like my reaction to that. Yeah. So, David, I want to chime in there because, look, it's easy to fall into the trap of, well, those are the good guys. But you have to remember any power you give to the government, you have to imagine it being used not by your political allies, but your worst political enemy. Because that is the level of protection that people need. from their government is you have to imagine your political enemy is in office and is able to take advantage of all of the powers of the government to try and go after you. And so, yeah, having all of your transaction history easily visible on chain where, you know, a hostile

regime can then use that to track everything you've ever done using AI tools and understand your entire financial history and then maybe be able to use. use that against you without having to go through the proper warrant process, without having to issue subpoenas in order to get the information that they need. Like, the protections that we have are very much built around a economy with intermediaries who need to be subpoenaed. If you want to see all my transaction history, well, as a prosecutor, you're going to need to go get a subpoena and get the bank to give that to you. But if it was all on chain, well, then there's no warrant needed. There's nothing. You can just go see it. And you have to imagine that power being abused

by your political enemies. And that's why privacy is so critically important. And that's why I agree with Mertz, like, we have a thousand days for freedom. Right. Like right now, we know we have a friendly administration and a friendly Congress in place. And so we have a limited amount of guaranteed time, basically in order to enshrine privacy as a normal thing that regular law-abiding people want. And then that will protect us from potential abuses of power by others in the future. The way I summarize this is just, you know,

when cops arrest you in America, they say, you know, anything you say can and will be used against you in a court of law. And it's the same thing as just anything you do on chain, canon will be used against you. anywhere, right? Because now all that information is free-floating forever and it's exponentially compounding. And there's a good interview with Peter Thiel about this by Sorkin and Aspen Institute where he asked him about his Bitcoin position and he says something like, well, when I talk to my

friends at the FBI and they tell me that they'd rather people use Bitcoin than anything resembling the transition to finance system, then that's when I wonder, you know, like what exactly has crypto turned into, and so he like basically reduced his position. And, you know, obviously the crime stuff is a, is a real problem. However, I would argue that the tam for individual dignity and sovereignty and choice is several orders of magnitude larger than criminals using it to do nefarious things, because again, cash already exists. I want to talk about the shelling point that Dushar was bringing up earlier in the pot. I want to go back to that and touch on that. And this has to also do with ZCAS is just distribution schedule or supply schedule,

and it's kind of its history up till now. I'm actually kind of wondering if you can kind of just download us on ZCast's distribution so far, like the whole monetary policy, the supply schedule, how it got distributed, the whole proof of work phase, and then culminating in why that actually adds to the strength of the shelling point around Zcash.

Yeah, so I mean, it was released later than Bitcoin, so it is mimicking Bitcoin's tokenomics in a way that's slightly behind it. So there's still other things coming up. The one notable difference, I would say, is there is a set of fees taken. And the way it works is token holders get to vote retroactively on how those funds should be allocated. So for example, Sean Bo's team, which is doing Project Hackegon, which will not only help improve the scale of Z-Calcified or magnitude, but also lead its way to quantum proving it entirely. for example, he's an independent core contributor.

And so if the token holders of Zcash think that he did a good job, then they will basically reward him by voting on chain. And so that's like the notable difference. But I would probably say to just emphasize what you said, it's a fork of Bitcoin. So 21 million hard cap, proof of work, supply happening all four years. I think Zcatch was released in 2013. So Bitcoin released 2009.

I could be wrong about that date. Bitcoin released in 2009 Zcash released four years later, five years later, something like that. And so what you're saying is a carbon copy of Bitcoin's monetary policy moving forward, except for this one nuance that you just highlighted. Correct. Although I would bat that Too Shar probably knows the, as he's a liquid investor, he probably knows the token stuff a bit better than me. Sure, yeah.

Too Sharer, what I really want to get at is like, you know, despite, you know, Bitcoin has its monetary policy and Zcash is a clone of that. Also, the price action and price history and market structure history around Zcash has just been different because Zcash just was laughed at in terms of its price action, basically every single cycle up until right now.

This is actually like the only moment in my entire history of being in crypto that Zcash is viewed with prestige and not with just like, it was kind of perceived as like this sandbox for cryptographers to tinker with but not by anything serious. So just talk about the history of Zcash.

and its price action in the market and his position in the market and why that actually is conducive to what it is now. Yeah, look, I was Zcash hater for a while. I don't know if I'd call a hater, but I wasn't a fan. Disregarder. Yeah. And, you know, in fact, in the past, we had even had a short position on at some point on Zcash,

which I talked about on Twitter. And people brought that up recently. And I said, yeah, well, not dogmatic, not as dogmatic as some others, and I got some new information that changed my mind. The main thing that I was thinking about as catalysts now that I think are really, really different are that you are seeing this macro trend

that is more exciting here for privacy, which is around this wealth tax in California or the wealth tax or unrealized gains tax in the Netherlands. You're seeing more of a push for that. And I actually do think that, like, as AI increases wealth inequality, you're going to see even more of a push for wealth taxes. And private stores of value are going to gain even more attention.

So, you know, if you look back at the history of it, like, it was not really paid attention to. It was left for dead. And quite honestly, it was for good reason. It was a hugely inflationary coin that didn't really work, right? Like if you wanted to buy this privacy coin, you had to do it on a centralized exchange. It didn't really scale. The wallet infrastructure was awful. Like, you know, you try to use it and it's just like this miserable thing to work with.

And a regular person would just not even think about it. And it did not have any sort of like marketing or it didn't have any sort of attention grabbing like apparatus at all. It just didn't exist. So it was just like bad on so many different levels. But what we've seen is over the past 18 months or so, it's turned around on all of those, right? It is able to get attention. The wallet infrastructure is better. The chain does support being able to buy it privately.

And then you have these macro tailwinds of things that are happening in the world, which I think are good for private store of value. So look, don't overindex on the past. don't look at like, oh, well, this is going to be exactly like Bitcoin in 2013. Like, you know, I'm not a guy who's drawing triangles on charts and then, you know, counterpacing them on top of like other charts with triangles on them. You have to look forward, not backward. And you have to be willing to change your mind, right? And I think that there's a lot of people like me who forgot about this thing or left it for dead

and are now thinking, huh, should I think about it again? In crypto lore, there's like the Bitcoin Immaculate Conception. People will talk about Ethereum had the Immaculate ICO. It was like the first meaningful ICO. All further ICOs after Ethereums were adulterated because of how the success of Ethereum's Uniswap had the immaculate airdrop. All air drops after uniswops were all kind of adulterated and messed up and the incentives were bad.

Uniswap really had the one good one. Zcash kind of has something like. this, the immaculate forgotten coin that people just abandoned for like five plus years and like slowly allowed the price to just approach zero. And then it stayed there for a very long time. And like, so there's like a lesson that I think we can all, I'm, I feel when I like get on the Zcash hype train and I invite like Merton Tushar to people who I've never invited onto the podcast before. And it's like, oh, there is some level of like everyone in crypto can get behind this thing. In fact, the only people really in crypto who might feel offended by the Zcash

pump or the Bitcoiners, because they're the, they're always offended by everything that's outside of Bitcoin. So the PVE branding that Zcash has, where like everyone in crypto who's just not a laser-eyed Bitcoin maxi can kind of get on the Zcash train without having to feel some sort of like tribal warfare about it. It's like, I feel, I feel that presence. And, and, and, And I think a lot of people kind of just like the guard is down around Zcash. Like maybe we can disregard it in the past. But also, no one really hates Zcash. Like, how can you hate it?

It's like cryptographically pure. Zucco is just a friendly guy. And its background is like relatively unadulterated. There's no real question there, but I'll let you guys riff on that if you like. Yeah, I wrote maybe it was a year ago now, the, you know, this is the last PVE in crypto. And, you know, that's obviously a little dogmatic. But I think one thing I know. noticed as I started talking about it was that I had guys from Celestia, from Ethereum, from

Solana, from even Cardano and all these different types of dudes, even like certain OG bitcoins, right, start basically agreeing with me. And I was like, I never had this happen before, right? Usually I'll say something good about Solana and then I'll get all sorts of shit for it. But with Zcash, yeah, that also exists, especially from like Minero people. but it is certainly something where if you are, if you got into crypto for like the ideals of it, then you can almost certainly resonate with what it's trying to do. And also the other thing I like about it is that privacy as an entire sector

is so, I don't want to say the word oppressed because it's like a little woke, but like so, let's say forgotten about and so underappreciated, that people from other privacy projects that aren't even necessarily crypto can also get behind it, right? And it benefits every other privacy project on all other chains. I think the railgun guys started doing well as well on Ethereum. I funded like five different privacy projects that were new on Salana. Even like Charles started building some privacy stuff onto Cardano. And so you started having all these different privacy projects.

And most of them will fail, of course. but the net result will be that there will be more privacy and more privacy-oriented solutions today and in the future than there was in the past and that is just a net good for anybody who really is an individual. When the market pulls back, most people just wait. They hold cash, hoping things stabilize. But there's another move, and that's where Nexo comes in.

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Even the best carry trades can be within reach. Bricks brings DeFi's promise to the emerging world and brings the emerging market yield to your wallet. Let the yield flow with Bricks. One last subject to touch on before we kind of conclude here is quantum. All blockchains have to make it over this quantum hurdle. I think everyone kind of knows it's understood that Bitcoin is not going to elevate. make it over the quantum hurdle. It's going to get there. It's going to be in some sort of rough shape just because of the Satoshi coins. There are other things, other challenges that Bitcoin

needs to achieve to more smoothly get over the hurdle. But I think everyone in the industry understands that like something not amazing is going to happen with Bitcoin and quantum. How is Zcash positioned with regards to quantum versus Bitcoin and the broader rest of the market? I think this is a question for you. I would say Zcash will almost certainly be the first quantum proof change. and one thing I'll note is that it's already quantum recoverable now. There might be maybe in the next week another update to the wallet to make that fully the case. But by quantum recoverable, we just mean as long as your coins are shielded, you can have any sort of quantum attach and be fine, right?

You can just weather it out there, which I think is actually, it will be, you know, if quantum timelines are, if they accelerate, I think that'll actually be underrated move for adoption, and getting people to shield their coins. And so here's like an interesting way to think about this, which is that in most privacy protocols, I mean, certainly for a Bitcoin, right? Like if you have the public key of somebody with Shores algorithm,

you can derive the private key. Meaning if you know somebody's address, you can literally take their money. And the most nefarious part of this, of course, is that you won't actually be able to detect it, right? There's not any infrastructure that's possible where you can say, oh, you're being quantum attacks. No, no, no.

It'll just be like if you had just randomly lost your seat phrase and somebody exposed you, you don't even know it's happening. Right. So unlike like the, let's say the nuclear arms race, the quantum arms race is such that you don't want anybody to know about it. And so you won't be able to even detect that there's an issue for a long time. Okay, so how Zcash differs here is that once you have encrypted all your information, there is no additional information that's exposed on Zcash, right? When you look at a block explore on Zcash and you send somebody money, you don't know who received it, you don't know who sent it, and you also don't know the amounts.

You know absolutely nothing. And so assuming, like, if you are just even using Zcash regularly, you won't be able to, for example, retroactively trace anything, right? You'll hear about these things called the Harvest Now Decrypt Later attacks, meaning if you have the information today, you can decrypt it going to the future. This is also another knock on Monero, which is to say that with decrypt, you'll be able to retroactively trace every amount of crime that has ever happened there. You'll be able to see exactly what happened when, where it went, all these different things.

With Zcash, that is not possible because the information physically does not exist. However, there's, of course, a ECC-based, so elliptical curve cryptography-based things that govern the ZK proofs. and so Zcash is vulnerable to things like being able to mint different coins, for example. Now they have these things called turnstiles to defend against those anyway, so you will actually be able to detect them. However, with Sean and Dev's new work of Project Tachyon, the communication for the key exchanges will be out of band. Meaning, so once it's quantum recoverable, which is like this week, you're already fine. But after that, the entire chain will be quantum proof. We're really estimating by mid to late summer, right?

And so this is also, I mean, you briefly mentioned it actually about, well, Zcash used to be this sandbox for like niche cryptographers. Well, it turns out that having super talented niche cryptographers is uniquely advantageous to a cryptographic attack, right? And so it just turned out, like, I don't think this was planned or anything, but such that it will be the best prepared for when that time comes. And if you want more information on this, Sean Bo, I'd recommend following them on Twitter.

I think as ad is like EBF, EBFULL or something. And then there's Dev and I think as ad as ZK Dragon or something. And they have whiteboard sessions on this. They have blog posts. They have papers and everything so you can get more into it. My understanding here is in the Ethereum camp, the Ethereum community is pretty stoked about the Quantum Challenge because I think is in Ethereum,

it's kind of branded as like the quantum opportunity. Nonetheless, Ethereum getting over the quantum hurdle is very ambitious. The Ethereum is ahead of the curve. It has people like Justin Drake, and they're doing all the right things, but there's so much to do in Ethereum land with regards to quantum. And when I look at Zcash and I see the same kind of situation

where we've got to get over the quantum hurdle, Zcatch just is so much more simple. It's simple like Bitcoin. It gets the simplicity points that Bitcoin has, but then it also kind of gets the cryptographer's like prowess. It has all the smart brains working on it. And so it kind of has this position, I would say, even better than Ethereum in that sense that it has the right minds doing an easier job.

That's my read on the situation. Mert, would you agree? Yeah, I mean, certainly just by the virtue of it not being a smart contract platform and it being singularly focused, even if, I mean, Ethereum, I think, has actually a really good privacy roadmap and cryptographic focus. Zcash's hurdle is just much lesser because it just doesn't have to do as many things. And by the way, this also goes back to the store of value property thing. Like some people might scoff at quantum and be like, oh, like, you know, they're 10 years away,

they're 20, they're 50 years away. Now, okay, I personally think they're actually much closer, but that's not even relevant. But the point that I'm trying to make is that quantum proofing isn't necessarily about quantum proofing, but it's more so the minimization of surprises for serious investors, right? One of the reasons why gold is seen as like the premier store of value is that it's a low entropy, it's a low entropy carrier in a high entropy world, meaning if there's a lot of surprises and uncertainty in the world, you know for a fact that gold is just still gold. there is nothing that can necessarily happen to it to fundamentally alter it.

And so as a store of value, you need to have that mindset of like, this needs to be extremely low entropy, right? There can't be a surprise that causes people who trusted the asset to re-question anything on any dimension, right? And so even if it is far away, just minimizing that potential for a surprise sometime into the future goes a long way for giving confidence to, especially like the older type of investors who seem to be much more

quantum built ironically. Yeah, I want to add something there on that quantum timeline point. We don't know when it's going to happen. Obviously, we have companies like Google saying we want to be post quantum ready by 2029. You have Microsoft talking about all of their work on quantum and how they want to be quantum ready. Everyone, you know, should be more cautious.

You shouldn't be like, ah, well, you know, that bad thing, that will not happen to me. Right. And if you are safeguarding a lot of value, you have to think about all of the edge cases and all of those various risks out there. But to bring that to the present, think about the uncertainty that quantum creates if you don't have an answer to it. Right. And then markets hate uncertainty. That's the one thing that markets abhorre is not knowing what might happen. Could there be a quantum attack? Who knows?

I wouldn't even know if I saw it unless you move, you know, one of Satoshi's coins. But, you know, you just have this like fear in the back of your head. And look, one of my favorite memes in all of crypto is that IQ chart meme, right? And I think both on the left side and on the right side of the IQ chart is, oh, quantum is scary. and we should solve that. And then in the middle is like, oh, well, it's at least 10 years out. And, you know, there's this excuse and that excuse. And we're going to think about, you know, every last thing that we can do

versus just like simply, oh, well, I want to be long the thing that's quantum resistant. Guys, we've done a pretty thorough job here. We talked about quantum. We talked about the supply schedule. We talked about the value of privacy, the institutionalization path. Is there any stone that I haven't turned over or we haven't turned over yet on this podcast? Is there any angle of privacy that you guys want to bring up before we wrap this thing up?

Like there's a lot of upcoming callists for Zcash. There's a low-hanging fruit. So like one obvious one is that Ledger actually does not support shielded ZEC today. It's actually only transparent sec. And so I made like a little website called Zekprice.com. Just totally vibe-coded it where it shows you the shielded value over time. And I would imagine today it's about 31 to 32%. And you can see it's been going up the whole time.

And I expect that number to just kind of continue to increase in shielded pool. And what's interesting about something like Zcash is that the reflexivity in, yep, that's the one. The reflexivity in crypto generally is just used as like a PVP game. But in the case of Zcash, the reflexivity envores people into the shielded pool, which then increases the anonymity set, which then increases the privacy properties, which then is this feedback loop that, you know, the most. more activity happens, whether even if it's just speculation, the privacy benefits of the chain keep increasing over time. So, like, leisure will soon add this. There is, you know, the newly funded.

And by the way, the Zoda wallet, it was co-led by Paradigm and Andreson, which by the, it's like not a usual pairing of leads. These guys don't necessarily work with each other. But like, to our PVE point, they kind of made up their differences. And so that project is about to receive a much more track. and core development. We are also going to reduce block times from 75 to 25 seconds.

So that's going to make things like near intents feel much faster, but also P2P transactions will be much smoother. And then there's also all sorts of different application teams starting to slowly build on Zcash. It's a little hard to work with due to the bespoke cryptography curves. But I would say that, you know,

there is no way in which I think crypto succeeds, but privacy doesn't, right? I always say that crypto without privacy isn't necessarily crypto, right? Like the entire vision of the cypherpunks is using cryptography for privacy to give individuals a choice. And we have slept on that,

and we are going to bring it back with immense force. To summarize the case here, right? And I think, you know, we've talked about how broadly accessible and legible Zcash is or that private Bitcoin is as a story, it has this complete simplicity. It is a brand that a wide variety of market participants both within crypto and outside crypto can accept. I love the PVE branding for it because that's what it really feels like. It has this strong, like intellectual backbone and also a moral backbone around

you know, privacy as a human right and as a core aspect of human dignity and protecting our rights against overreaches of governments and, you know, other forces out there. So it has all of these components coming together at a moment where a lot of people are paying attention to this, right? And so that's what I really love about this moment in time for Zcash is it's a confluence of very powerful factors that are very, very easy to understand, and they all happen to be occurring at the same exact time. Tushar, Mert, thank you guys so much for giving me some of your time in exploring this thesis with me. I like it. There's not really that many times where I see such a good story to tell with C-Cash.

So thank you guys for coming on and help me tell the story. Thanks for having us. It's great to be here. Bankless Station, you guys know the deal. Crypto is risky. You can lose what you put in. If you put it in Z-Cash, you can make it private, though. It's not for everyone, but we're glad you are with us. on the Bankless Journey. Thanks a lot.