The Pomp Podcast - Zooko Wilcox, CEO of Zcash: The Evolution of Legitimately Private Crypto

Episode Date: June 5, 2019

Zooko Wilcox is the CEO of Zcash, and one of the most experienced people in crypto. In this conversation, Zooko and Anthony Pompliano discuss all things privacy, freedom, decentralization, the original battle between governments and technologists for encryption, and how the current privacy technology for crypto is likely to evolve moving forward. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Zuko Wilcox is the CEO of Zcash and one of the most experienced people in crypto. In this conversation, we discuss privacy, freedom, decentralization, the original battle between governments and technologists for encryption, and how the current privacy technology for crypto is likely to evolve moving forward. I really enjoyed this conversation and I hope you do as well. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of

Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of his opinion this podcast is for informational purposes only all right guys bang bang i'm here with uh zuko himself uh thank you so much for coming in and doing this thank you pop um we got a lot to get through uh you've been working on um encryption cryptography, privacy, scalability, except for a really, really long time. And I don't think people quite know your background.

So maybe let's just start there and kind of set your perspective before we dig into some of the stuff we want to talk about. My background is I dropped out of college when I was 21 because I got an opportunity to work on a privacy cryptocurrency. That was in 1996.

That is literally 20 years before the madness of 2016-2017. All right, so what exactly were you working on? Back then, in 1996, I was in love with this cryptocurrency protocol called DigiCash. DigiCash, okay. And instead of paying attention to class and doing my homework, I would hack on like these cryptography projects in my spare time. And they had like a testnet for DigiCash with some play money called CyberBucks. And they said they were going to have a competition for who would make the website like the store, the online store that would sell the most CyberBucks. In 1996, there wasn't really, well, this may have been 95, but there wasn't really a lot of e-commerce happening.

And I made a store where there was two pictures of quarters. And if you clicked on the quarters, it would send a CGI request to have you pay half a cyber buck. Okay. And then if you paid, it would send you a copy of this program I had written to make it easier for my mom to use PGP. PGP was a cryptography program. Anyway, so after a while, the company that was making this DigiCash project, they called me and told me that I had the most successful CyberBucks store on the Internet. Okay. After they excluded all the porn and gambling.

so i wasn't sure how many competitors there were in my category um so then they offered me the job of like junior coder okay their company uh and i said well i guess i have to finish my undergrad degree first and they were like oh okay too bad good luck and then as soon as i hung up on them i called my best friend excitedly they said you'll never guess what happened digi cash offered me a job and because he knew that i would never talk about anything but this digital currency stuff he said what did you tell them and i said and i said i had to finish my undergrad degree first and he said i just have one question for you is this exactly the kind of opportunity you've been waiting for and that's all he said i was like you're right

I'll call you back so I hung up on him and I called DigiCash back and I said I don't have to finish my undergrad degree right now and so I dropped out of school and you know sold all my belongings and moved to Amsterdam Holland which was their headquarters which is a pretty great move one of the best decisions of my life was dropping out of school and going to work for these crazy cryptographers in Amsterdam yeah when I was 21 well we'll Well, DigiCash, if I remember correctly, is one of about five previous attempts at what eventually became Bitcoin, right? Whether, you know, kind of encryption, some sort of scalable, decentralized digital currency, and was probably one of the better known ones. There's about five of them.

When you were working on it, what's the kind of culture or the energy around this, right? And what I mean by that is, like, is there this belief in, like, the late 90s, hey, we're going to go build a new, like, global reserve currency, kind of what you see with some of the Bitcoin stuff today? Or was it more of just, like, we're working on an encryption and a, like, scalability-type problem, and it's more about the problem, and then, like, we'll see what the solution ends up being? Well, it wasn't a currency. It was a payment system. So the idea was it would be U.S. dollars or Deutsche Marks or something. as the underlying currency. And at the time, it was widely believed that you couldn't do commerce on the internet using credit cards. Credit cards worked in person.

Why? Because they were insecure. If you transmitted them over the internet, hackers would get copies or the hackers would hack into the merchants and steal all your credit cards. Because of a lack of encryption. that was the belief at the time was that credit cards were too like not they weren't internet native okay and that an internet native technology would turn on the possibility for e-commerce got it and a big lesson i learned from my stint as the junior coder at digicash was that faith in your product's specialness can be really crippling. Because everyone at the company

believed that we had the only solution to e-commerce. And so it was inevitable that eventually everyone on the whole internet would want e-commerce. And when they did, they would have to use our product. It's almost like this balance an entrepreneur has to have between we're going to change the world, we are special, the detachment with reality to some degree, but also being realistic enough to understand that may not be the best solution and may not actually have the highest probability of being accurate?

Yeah, you've got to be realistic about the fact that having the best technology or the best feature or the best product isn't sufficient to change the world. It isn't sufficient to help people. You've got to reach the people, and you've got to give them what they need when they need it, and they've got to know they want it and all those other steps. What do you think is the reason why DigiCash ended up not being successful? What would you attribute that to?

That's a really good question. It's hard to attribute failure. There were some missteps by management, But I think even if they had done everything right, it could have only reached a certain level, like PayPal, right? It could have been as good as PayPal, but it couldn't have been as good as Bitcoin because it was centralized. So everyone knows it could go away or it could, like, institute a policy that excludes you, you know, terms of service or whatever. and that puts a limit that puts an upper limit on how big something can be and so you work on this for a while you end up leaving were you hooked on the problem of

like a digital absolutely system even while i was there i was always trying to figure out how to make the decentralized version of it oh really i would stop the other cryptographers like the real cryptographers i learned so much i said it was a great move to drop out of school but i really started learning a lot because that company was stocked with all of the smartest cryptographers in the world probably and they like took me under their wing and so I started learning a lot but anyway I would I would stop them in the hallways and say oh I have another idea for how to make it decentralized and I would start sketching out this crazy thing and they'd be like that is never going to work and then after I left I kept thinking about it for literally 12 years

I was struggling to figure out how to make a decentralized currency. And, you know, dead end after dead end, nothing would work. And so that's why when I realized that Bitcoin had a chance of working, that was the light breaking through. You know, that's what I've been looking for for all those years. So a lot of people don't know, you didn't show up in 2016. Right. So kind of late 90s, you're working on DigiCash. Then like January 2009, you knew about Bitcoin. You not only knew about it, you wrote about it.

And you, I think you said, were one of three people or pieces that were linked to on the original Bitcoin website. Right. Like, when did you first hear about C-Bitcoin? You know, just kind of describe that discovery process. I'm pretty sure the first I saw of it was when Satoshi posted his white paper to the cryptography mailing list. And you were on the mailing list? Yeah, that was a mailing list I'd been active on for a long time. It was one of the successors to the Cypherpunks mailing list, which was the early 90s forerunner of the whole culture.

and uh and what what else is getting posted on these mailing lists like whether it's the cypher punk one or uh or this cryptography one everyone hears like oh the bitcoin thing got sent out well it's not the only thing that got sent out right yeah what is the other type of content yeah it was a lot of so cryptography is a very deep science with a lot of really sophisticated complex ideas that only a few mathematicians fully understand and the cryptography mailing list was a lot about the connection between that and practical software deployment in both directions so that answers the question so the bitcoin white paper was a pretty good example

of a novel idea that relied on cryptography, but no academic scientist, cryptographer would have even understood it or considered it to be a valid concept. So yeah, I'm glad the cryptography mailing list existed so Satoshi had somewhere to go to find people who could appreciate it. So you get it, you read the white paper,

you're intrigued. I didn't really get it when I first saw the white paper or I didn't really believe that it would work because, like I said, I'd been banging my head against the wall forever. And so people like me who were experts, I've talked to many of them, and many of them had the same experience of seeing it and saying, oh, yeah, another thing that can't possibly work. But, you know, a noble attempt.

Thanks for trying, for adding to our catalog of failed ideas. And then what happened for me, well, then I did blog about it, even though I thought it wasn't technically going to fly. But I blogged about how it was a good idea, and it was sort of a stab in the right direction. And at the time, like, nobody – well, my blog post says there's a thing that could exist, which is decentralized money. And it's not PayPal. It's not a payment system. And it's not centralized money like World of Warcraft gold.

It's a possibility that I don't know how to make. And by the way, see this new Bitcoin thing by this new Satoshi Nakamoto person who is the most recent attempt at making it. Got it. So you really took a kind of a stab at here is an idea around decentralized money. I think that here's components or criteria that it could have. By the way, here's kind of the closest or newest thing I've seen that generally hits in that direction. But you didn't think it was going to work, which is really interesting. Well, what changed my mind was I saw people playing with it in practice. Why did you not think it was going to work?

For technical reasons, like it kind of seemed like it would rely on global clock synchronization. Okay. Because that's kind of the way it was described in the early parts of the white paper, is that it relies on some sort of shared clock. And I thought, oh, but I don't know how to make global clock synchronization work. So that will be the fatal flaw in this. That's hilarious. Like sitting here today, 10 years later, right, and kind of seeing how it all played out, that it wasn't what I would say were like the hotly debated, you know, block size.

Or like nothing that today is a problem. Like the things that you thought were not even actually the failure points, but just like the risky things were things about like global clock synchronization. You know, we still don't know that Bitcoin works. That's very true. And it still could not only, quote unquote, not work, but, you know, I tell people all the time, the downside is that it could be worth zero. Yeah. Right? Like there's actually a pretty high percentage chance that's still possible.

Yeah. Yeah. Complex software often completely fails so completely that there is no value left in the complex software. Absolutely. So, all right. So you write this blog post. You get linked. And do you continue to participate in like the Bitcoin talk forums and cartography stuff?

Like just what are those early days like as these things people are kind of playing with it? Like the early Bitcoin community came out of the cypherpunks and the open source communities. And I was already pals with some of those folks on IRC. You know, we used IRC. That's like a chat thing. For those listening, it's like instant messenger of AOL. but for smart people it's like slack but without graphics it's like slack i love it all right so um as you're doing all of this uh you actually communicate with uh the

the uh okay we can't say infamous the famous uh satoshi nakamoto um and he she they uh linked to this blog post you wrote they essentially just say thanks right for uh for writing it yeah yeah that was on the bitcoin talk forum because i was on there talking about like various bitcoin things and in particular i was working on a decentralized encrypted file system okay which still exists which is called tahoe lafs okay and that um i was talking about how it would be great to integrate decentralized encrypted storage with bitcoin which is sort of a forerunner of of ipfs style concept today um anyway so i was hanging out on the bitcoin talk forum talking about many different topics and satoshi said like oh hey zuko i wanted to thank you for blogging about my white

paper something like that the uh the irony of satoshi thanking you for blogging is not lost on me right of like this person who every word is scrutinized now as to you know who is it why did they use this word why does that phrase in there uh and the idea that uh you know they're literally just thankful that somebody took notice yeah right is yeah it's pretty cool yeah um all right any uh i gotta ask uh any idea or guess as to who it is uh no yeah a i don't care b i don't know c if i knew i wouldn't say yeah i so that's actually exactly where i am like i don't think it matters at all and there's probably a lot of benefit to not knowing right um just because uh it's one less thing to attack bitcoin on right of like you can go after my c i wouldn't say isn't

um like for the good of bitcoin or to protect bitcoin it's out of like respect for satoshi oh satoshi was such a wonderful like hero and like achieved the things i wanted to achieve and for the reasons that I cared about them. And he was a nice guy. So out of general respect for anybody who wants to maintain their own privacy, I wouldn't speculate or share any information that I had. Got it. And so as you see this, it starts to gain some traction.

You're like, oh, this may actually work. Why eventually start Zcash? What was the thought process? Well, it was many years later. Yeah. Because this is in 2009, 2010 with Bitcoin. Well, the thought process was, it really started right then, actually, because even in 2009, Satoshi and Hal Finney and others

were talking about the privacy problem in Bitcoin. Yep. And there may be some revisionist history eventually. If Bitcoin's successful enough, there will be revisionist history eventually. Of course. But the original true history is that Satoshi and Hal and everyone When like 100% of everyone involved for the first several years considered privacy to be not only a necessary goal, but almost the overriding purpose of Bitcoin was privacy. Like privacy and decentralization, which are probably not extricable from one another.

And they talked from the beginning about how to achieve it, about how there was a sort of a gaping problem with the original design of Bitcoin and that it exposes people's transactions to unauthorized others. It's interesting, right? Because I think when many people who are uneducated when it comes to Bitcoin specifically, they look at it, they say, oh, this is, you know, it's private, it's anonymous, it's all these things, right? And again, it's not anonymous. It's pseudonymous, right? It's not that it is private in terms of the transactions. It's just that you don't know who's doing them, but it's actually very transparent. It kind of reminds me of the early days of the internet because IPv4 addresses are just four numbers with dots between them, and it doesn't have your name in it. And so, therefore, people thought on the internet nobody knows you're a dog, and it's all anonymous.

And it turns out that it's much more complicated than that to prevent someone from scraping and using AI or whatever or spying on people. It's really hard to protect information. For sure. And so as they're talking about all this privacy stuff, what was the general consensus or sense of how that would get solved? At the time, there wasn't a good answer. So they talked about – so Howell was a great cryptographer. Satoshi was not a great cryptographer, but he used cryptography effectively. And so what they talked about was cryptographic approaches to the problem.

Well, they also talked about other approaches, but I think those are all doomed, like Band-Aid measures that aren't even going to help. But they did talk also about cryptographic approaches to the problem. But at that time in 2009, the necessary cryptography didn't exist. And that's what they concluded. They were like, well, it would be great if we could fix this with cryptography, but nothing will work. And they were right at the time because Howell knew all the cryptography. He's another hero of mine. And I miss him because he's frozen in carbonite like Han Solo.

We can get to his decisions there because it's pretty incredible. So as they're talking about this, obviously, you're kind of in and around the community. Many people don't know that the cryptographic work that's been going on literally for decades eventually intersects with cryptocurrencies and Bitcoin, right? So the invention of zero-knowledge proofs by a bunch of folks at MIT happened in the 80s, right? I mean, even before the DigiCash, like all of this stuff. And then eventually, it's almost like two parallel worlds are being built, right? Kind of the electronic money or digital currencies. And then you've got this cryptography work that's happening.

And at some point, right, it sounds like probably 2014 or so, there's an intersection of let's take these cryptographic techniques and technology and apply it to digital money. So that's what Hal and Satoshi were talking about was the use of zero-knowledge proofs. And in 2009, when they were talking about it, it was impossible. They wouldn't fit. And in about, I think, 2013 or so, some scientists came up with improved zero-knowledge proofs, which they now call SNARKs, which were good enough, but no one realized yet because nobody had put two and two together. And then at the same time, some different scientists came up with the zero-coin cryptography

protocol. And then at the San Jose Bitcoin conference in 2013, these two teams of scientists met each other. And it was like, your chocolate goes well with my peanut butter. They were like, oh, we have this improved zero knowledge proofs, which can do all sorts of things. If only we had a problem where the efficiency of the zero knowledge proofs was the limiting factor. And on the other side, we have this protocol to have privacy in a public blockchain, which is a novel, interesting breakthrough, but its limiting factor is performance. And in fact, the ones who came up with that, Ian Myers and Matt Green and Christina Garman, presented it at the 2013 San Jose Bitcoin Conference. That was kind of the first big Bitcoin conference. It was probably the second or third Bitcoin conference ever.

and it was the first one where there was that like thrill in the air and there were all these vcs walking around and all of us geeks were like whoa this is weird this is like when you're having a party and your dad comes in like the winklevosses were there and like there were journalists who were covering it and we were like how did the journalists find out about bitcoin yeah and before we go to the the conference i just want people to understand who are listening explain what a zero knowledge proof is and explain what zk snarks actually is and then let's talk about zero coin and what the idea there was just so they understand those three concepts okay talk about how they got come yeah good good catch yeah i just threw out a bunch of different ideas i've

done too many of these to know when uh when we got to clarify things so as your knowledge proof is this really mind-boggling cryptography idea that like you say was invented in the 1980s And the people who came up with it won the Turing Award, which is like the Nobel Prize for computer science, for the most important advance in computer science. And the idea of a zero-knowledge proof is there's an interactive protocol where I can convince you of the truth of some fact about some data without revealing the data to you. So, like, if I know how to solve a Sudoku puzzle or, you know, I know the answer to a crossword or I know my secret key that can unlock, can decrypt some data or anything I know, one way I can prove to you that I know. I say, hey, I know this. I know how to do this. I know this puzzle.

I know the secret key. And you say, no, you don't. Prove it. Like, I challenge you to show me you're not bluffing. Well, one way I can do is I can give you all the stuff. Like, okay, here's my password. You can use it to decrypt the data. Here's the solution to the pseudocoupes.

I can tell you everything. And that convinces you, oh, I must have known it because I just told you. But that also gives you all the data. Not very private or secure. Right. So that means there's a lot of limitations to that. Now I can't – this puts all my data at risk. Like, now you know my password.

It also means I can't prove it to a second person after I've proved it to you by giving you my password. Now if I go to prove it to a second person, he won't know if it's you or me or someone else who got the password. So it's a really weird conceptual breakthrough to say, which these scientists did in the 1980s, to say, actually, there's a way I can prove to you that I can solve the puzzle while giving you zero information about how to solve the puzzle. Yeah, it's basically, I want to tell you that I have a piece of information, and I want you to know that when I say I have it, you have confidence that I have it, but I can't tell you what the information is. Yeah, so I have to not be able to bluff, so it's got to be a proof that really proves to you that I know it, and I'm not trying to bluff my way through, but it has to give you zero information. It's funny how zero-knowledge proof is the name for something that involves giving zero knowledge but proving how it actually works. Yeah, it's a weird word, but it actually has a lot of meaning baked into the name of it. And so how does it actually work?

Well, I can give you a really simple—do you have a couple of, like, three—oh, watch this. Yeah, hold on. All right. First time ever on the podcast, Zuko has gotten out of his seat. He's grabbed a bag. I'm going to narrate. He's back. He is furiously digging through and he's whipped out some index cards. all right i'm gonna so this is this is a database all right with a bunch of data in it all right and i'm gonna write uh some bits of data on it so databases are full of information all information can be encoded into bits all right but you can't see what i'm doing here i'm going to write a zero or one on each card okay all right he's writing a zero or one on each index card and and and this

is my secret. This is my database. This is my health history or whatever. It's not for you to know, right? And then I say, hey, I want to prove to you something about myself. I'm over 21. I'm a citizen of the United States. I have license to drive. My credit record has zero unpaid debts in it or whatever. And you say, oh, OK, you want to prove to me something. Fine, give me all of the information about you give me the database and your name and social security number and that's the way the world works today and that's why there's these increasing crisis of data breaches because this data is more and more valuable it's more important to more people's lives because databases drive everything we do and we need to use it more and more but the more we use it the

more vulnerable to exploitation it gets by bad actors. So here is a zero-knowledge proof. I say, oh, I've got this data here. It shows that I'm over 21 or whatever. So it's a couple of bits in a database. And these bits are either 0 or 1 that I drew on this card. And I'm going to prove to you that the two bits are different.

So either this is a 0 and this is a 1, or this is a 1 this is a zero. But I'm claiming they're not both zero or they're not both one. And this is just an example of something you could prove about data in a database. But zero knowledge proofs can apply to any data in principle. This is just a minimal example. So I say, it's not the case that they're both the same. They're different. So therefore, I've proven whatever it is that you're going to let me do. And you say, I think you're bluffing. I think actually, you do have unpaid debts in your credit record they're actually both zero yep and uh and so i'm not going to let you you know let you in whatever it is and so now we're going to do a zero knowledge proof i'm going to prove

to you that they're different but i'm never going to let you look at the database okay ready here's how it works okay don't don't look at the don't don't look you can't look at the camera because you're not you're the one who doesn't know he's made me turn my face no one else so so we know what's in the database you don't we're going to prove to you that you're different so here's how works you get to hold them but don't look all right i'm now holding both index cards show them to the camera but don't look at the camera but i haven't all right all right now i feel like i feel like zuko's a magician right now so when in a minute you're gonna hold the cards behind your back and either swap them or don't swap them and bring them back out and if they're actually

different i should be able to tell you whether you swapped them or not if they're actually both zero or they're actually both one i won't be able to tell make sense yep okay put them behind your back so i can't see i am now doing a magic trick i've taken the cards i put them behind my back i still haven't looked all right hold them up i now i've showed zuko show them to the camera You didn't swap them. He claims I didn't swap them? So, and I'm right, right? You didn't swap them.

Correct. So either they're different, and I've just proven that to you, or I'm bluffing, right? Maybe they both have zero on them, and I just guessed, and I got lucky. Yep. So how can you make sure that I'm not just bluffing? Do it again. Do it a bunch of times. Yeah.

Yep. And so keep doing it. Yeah. Do it a hundred times in a row, and eventually you'll say, These two bits must be different from each other because he can't have guessed bluffed successfully 100 times straight, right? But here's the zero-knowledge property. You have no information about whether this is a zero or a one.

You have zero added information. If you were forced to guess, you have 50-50 odds, right? Yep. You got zero added information. Isn't that amazing? I've proven something to you that they're different while giving you zero added information beyond the fact that they're different. And so the whole idea here really is that the individual or the organization that's asking the question, right?

So, you know, the birthday is a great example. I want to ask you, are you over 21? You don't want to tell me what your birthday is, right? And so what I need to be able to do is confirm that you are over 21. I actually don't need to know what your birthday is. I just need the information of yes, no, and are you over 21? In this scenario, I basically can do a set of tests without actually ever looking at the data and then receive additional information from you to confirm whether the information says you're over 21 or not. Right, and zero-knowledge proofs are very general.

You can configure them to prove any fact. You're over 21, you're over 22, any combination of facts, whatever it is. And they never reveal information beyond the minimal information necessary. And that's why they're more scalable for society than the current way of doing things. If you think about it, the current way of doing things is almost the opposite, which is I want to prove something kind of minimal. Like, this is really me who's covered by this health insurance. I go into the doctor's office. They're like, let's make sure that you've got the right health insurance linked in our database or whatever.

So all I want to do is prove that I'm the right person for the health insurance. How do I prove it? I prove it by giving you more sensitive information, which is more dangerous to me. Like I give you my social security number and everything you would need to do identity theft. We write it down on a piece of paper and you like fax it somewhere. It's a pretty dumb system. So the more we use it, the more vulnerable everyone gets to being exploited by like criminals or foreign actors or advertisers or whatever. For sure.

So as zero-knowledge proofs gets created, it's come a long way in the last almost 40 years now. Where do we get from the zero-knowledge proofs that intersection with zero coin, right? So this idea that there can actually be a payment network or a transaction settlement network that has privacy baked in. What was the original kind of way that worked without having the zero-knowledge proofs incorporated? The answer is that was kind of the idea that Howell and Satoshi talked about, and they decided correctly that it wouldn't work in 2009. And then Matt Green and Ian Myers and Christina Garman came up with a way to do it using zero-knowledge proofs, but they were not SNARKs.

SNARKs are like the S in SNARKs is for succinct, which means like small, efficient zero-knowledge proofs. But the zero-coin protocol by those scientists from Johns Hopkins required like about 40 kilobytes of data for each proof so you would have to put all of that into each transaction in a bitcoin like blockchain so at the 2013 san jose bitcoin conference uh ian i think it was presented that scientific result it's like a you know a talk at the conference and there was a lot of buzz about it because remember back then okay now we do have the Winklevosses and the journalists and the VCs have shown up for the first time.

The suits are here. Yeah, but still, like 90% of everyone in the community considers privacy to be not only necessary, but almost the whole point of the whole experiment. So everyone's really excited about the Zerocoin proposal. And there was so much buzz about it that the Bitcoin core devs, who were also presenting on other stuff at the same conference, they took some of their time on stage to say, okay, by the way, we've been hearing a lot about this Zerocoin presentation that happened here, and we just want to make it clear

to stave off anybody jumping to assumptions, we're not going to put Zerocoin into the next upgrade of Bitcoin. Wow. They had to say that because everyone was talking about it like that, Like, oh, we figured out how to solve this problem with this upgrade. Why did they take that position? They said, for really good reasons, they said, A, we totally don't know if 40 kilobytes per transaction would even work or if that would just be a killer. B, Bitcoin is too important for experiments.

We're not going to try something out in Bitcoin. So what you should do is try this out in an altcoin first. And if it flies, then we could consider adding it into a future Bitcoin. This is like one of the most important parts about Bitcoin that I think is misunderstood by especially the non-crypto community, like the financial community, the institutional investors, etc. It's this idea that there's a very important tradeoff between security and what I like to call speed and innovation. Yeah. Right. So the shiny things are the experimental things that we don't know yet if they work or not. Right.

Right. Bitcoin optimizes for security in the sense of it is slow, it is methodical, it is intentional in the way that it operates and also in the way that it is built in terms of the actual engineering process. Yep. Right. And let me interrupt you. It's really neat to see historically how that didn't arise from like market forces or startups or whatever that arose from the culture of the Bitcoin core devs back in 2013. What they said was Bitcoin's too important. But you know what? It wasn't very important back then. Different people with a different culture or a different attitude might have said, sure, this isn't important.

Let's, I mean, it's- Try everything. Let's try something. And they didn't. And that set the culture. It is, it's almost like they knew the potential. Yeah. They were saying it's so important.

And I think they were right. But what they were really thinking is it's going to be so important if we stay the course. Yeah. Yeah, the discipline is pretty impressive. Yeah. One of the things that is really interesting to me is this idea that privacy, right, the knock against it today, especially around financial transactions, is why do you need to hide your transactions if you're not doing anything wrong, right? And, you know, at one point, you and I had been talking about this a while ago, and you said something to me that stuck with me. And I told you before, I don't even know if you remember saying this to me, but you said this is the exact battle that encryption had in the 90s, right?

And so maybe for those that don't know, just give a quick overview of this idea that, you know, when encryption was created and it became popularized, there was enormous blowback, right? I mean, people were just, why do you need to encrypt your data if you have nothing to hide and kind of how we got to where it's the standard. Different parts of the government tried to ban it in lots of different ways. Like they tried to ban it in certain ways and they failed. This is probably also happening with Bitcoin and Zcash too. And then they tried to ban it in the next way and that failed as well. But eventually after, so what happened like cryptography went from being a military and diplomatic tool for like top secret messages between generals or whatever to being a mainstream part of public infrastructure that allows the internet to happen. And that was with the creation of Netscape.

In 1994, Netscape added cryptography. And, of course, Netscape was the first time that people could use the Internet without being a computer programmer. And that was the historical moment that cryptography became part of public infrastructure instead of part of military secrets. And the military, like the NSA literally in the United States, which is part of the Department of Defense, was attempting to sort of retain control of that science. And so for maybe a decade or so, there was this policy and technical struggle in which these entrepreneurs like Netscape and these hacker activists like Adam Back on the Cypherpunks mailing list on the one side. And then, like, Al Gore, the vice president of the United States, and the NSA and the FBI on the other side, were trying to control the future technology. And basically what this faction inside the U.S. government was trying to do was either prevent encryption entirely or make it weak encryption so that it would be crackable by sufficiently big players. So the whole idea was basically—

Or backdoor it. Yeah, the idea really at the core was the belief our generals have things to hide, right, in the military, and so they're using encryption, so that makes sense. There is other communications that we know needs to be secure and hidden. They're using encryption. Why do you, Zuko, as a user of the internet, need to have encrypted transfer of information if you have nothing to hide? Yeah, and there was this – what I always thought at the time was like myopic perspective that, A, encryption is going to hide things from the government, whereas actually it's going to hide things from criminals and hackers a lot more than it's going to hide things from the government, right? Yeah, yeah. Or from your government.

It hides things from foreign governments, but it doesn't necessarily hide things from your government. And my understanding, right, and don't slap me in the back of the head if I get this wrong, is while this is all going on, there's eventually like a congressional hearing, right, where I forget the gentleman's name, but he has to defend encryption, right, and basically say, look, this is why this is important. This is why we need this. And we go from, you know, literally. That may have been Whit Diffie, one of the inventors of public key cryptography who testified before Congress. Yeah, and so we go from that scenario where literally it's should we ban this? Should we prevent people from doing it? If we can't ban it, should we enforce rules where it has to be weak, right?

To today, it is the industry standard. After about 10 years, the people in favor of openness and a stronger economy and safer national infrastructure got the upper hand over the people in favor of espionage and law enforcement. Basically, the majority of the United States government sided with strong public infrastructure. It protects individual citizens. It protects businesses because how else are we going to have an economy on the Internet without this kind of strong safety? And it protects national infrastructure. You don't want your citizens' activities being visible to enemies. Yep.

Right? So eventually the faction that was trying to control cryptography and keep it a military secret succumbed. Yep. And it became like today HTTPS is the standard. So it's about 20 years on since – literally 25 years on since HTTPS was originally invented. And now it's almost unheard of that you would use unencrypted internet for anything. Well, imagine using your credit card and sending it over unencrypted anything. Or anything.

You wouldn't browse your social network. So as this happens, the reason why I bring it up is when we were talking, you know i was asking you about the privacy technology and cryptocurrencies right and z cash monero etc uh today there's a lot of uh folks usually law enforcement government you know same players saying why do you need privacy technology if you have nothing to hide right and your response to me was really targeting this idea that like no this isn't about privacy coins it's that privacy technology is likely to be baked into all cryptocurrencies all of these digital assets and it falls similar to encryption, right?

And that's where kind of that came from. Just think of it for business requirements. If you're running a business, you're paying employees, you're making purchases or investments or transactions, you can't be leaking that to like foreign militaries, hackers, criminals, competitors. Look today at the exchanges, right? And once their wallets are identified,

people can watch the flow of money in and out now you may know that it goes to a certain address you may not know who that address is right is it an employee is it a you know somebody else whatever or you may know it and if you know it then you can transparently see all of the movement of money yeah that same so there's this tracing and like metadata visualization tools like chain analysis and many others. And their primary customers are probably exchanges and law enforcement. But you can think how that exact same tracing would allow you to front run traders who are using exchanges. It's pretty crazy. Or it would allow like a foreign military to analyze the activities of Americans by using that exact same tracing technology.

So let's talk about this idea of why privacy is so important. It's not even an idea as much as it is a debate right now around privacy as a financial right. Your financial privacy is a right. There's plenty of people who say, look, this is how we track terrorism. This is how we track people doing bad things is we follow the money. And there's a lot of truth to, yes, we do catch people like that. But following your transactions or my transactions or our businesses' transactions who are law-abiding citizens is different, right? And so maybe just kind of opine a little bit on, like, how you think about privacy as, you know, like financial privacy as a right compared to maybe the way other people think about it.

Well, I would say things have sure changed in the public discourse. So before Bitcoin, there were these – I told you there was like 12 years after I left DigiCash and before I discovered Bitcoin where Silicon Valley at that time during the dot-com boom or whatever pretty much threw out the notion of decentralization or privacy as having any value in the pursuit of their new business models. And it wasn't until Bitcoin and then moreover in the past like two years maybe that all of a sudden everyone around the world is shocked to find out that they are personally and their institutions and their societies are threatened by the massive experiment in eradicating Bitcoin. privacy and making people vulnerable to one or two or a few specific companies or governments in some regions, it's really heartening to me that it's like almost every headline now, right? It's really well understood as the problem or as a problem. and i have to personally my experience i don't think this is why it has affected the rest of

the world but in my little tiny circle it was bitcoin that made people start caring again perhaps because it demonstrated that some kind of decentralization is actually possible whereas before then there was kind of a nihilism or fatalism like there's this famous quote from some Silicon Valley captain of industry in the late 90s probably, he said, privacy is dead, get over it. And I'm really glad to see that sort of give up sentiment is currently on the wane. Yep. Well, and part of it too is, I think as Bitcoin has become popular, and again, this belief in 2013 of the Bitcoin developers, this is too important, right? Matt Green, who you mentioned earlier is a professor at John Hopkins, and he said that in a Fortune article

about Zcash that Bitcoin is the least private financial system ever created. Yeah, it's kind of ironic. And there's pros and cons to that, right? That the level of transparency and the openness of Bitcoin is highly celebrated in many cases, and because, you know, rightfully so, because it brings a lot of advantages. I think that there is another group, and many of them are actually Bitcoiners who say, look, there is privacy components that are not there, even Satoshi and Hal, et cetera. Walk me through kind of what you guys have built to date with Zcash, why that technology hasn't been incorporated into Bitcoin,

and like kind of, you know, is there an intersection point in the future where eventually it does get, you know, just kind of like what is Zcash, how does it work today, and then like how do you see that interacting with it? So let's pick up the story back at the 2013 San Jose Bitcoin conference. The zero coin was presented. It took like 40 kilobytes, 30 or 40 kilobytes per transaction. The Bitcoin core devs rejected the idea of bundling it into the next upgrade of Bitcoin. And at that same conference, the Johns Hopkins team met up face to face.

they ran into this other team of scientists who had invented these really efficient zero-knowledge proofs called SNARKs. And from that collaboration, they realized that using the SNARKs instead of the older, bigger zero-knowledge proofs would make it really sort of practical. And then, and I was at that conference, but it wasn't until maybe a year later that those scientists had come up with a science protocol

that made the practical version got it and they had that they had the components but they hadn't put them together yet they spent a year they put them together and now we've got kind of a working prototype to some degree yep like yep and then they asked me to productize it to make it real world scalable and all that um and then so that was the origin of zcash so we we spent starting in like 2015 or so um and we launched zcash at the end of 2016 and it worked so it was a huge experiment right um but now after more than two years we've seen that it's has sustained like live fire exercises in the wild um and it protects people's privacy effectively. And so this was the demonstration that proved the maturity of the modern zero

knowledge proof technology. And I believe it's because of Zcash that there's been a renaissance in zero knowledge proof science and in a whole bunch of startups and major companies like J.P. Morgan and MasterCard and every major industry trying to apply zero-knowledge-proof technology to all of these massive problems we have. And as you guys are building this, you know many of the Bitcoin developers, right? They know what you're building. Their thought, again, is just this is experimentation. We can't risk Bitcoin with the experimentation.

Kind of go prove that it works? Well, there's no easy way, there's no way I can see to upgrade Bitcoin to have this zero knowledge proof privacy built into it without a very divisive, complex change to the protocol. And that's where the advantages that you eloquently sketched out earlier of maximal security, and also I would put it as maximal predictability, right? Those are tremendous advantages, and the way Bitcoin is widely trusted probably in large part stems from this longstanding, like Lindy effect of maximum not only survival, but also predictability and recognizability. And I don't really see how you could add something so radical as built-in encryption without throwing all that out. And really, when you describe it that way, it's almost as if that technology is incorporated in the early days before you get adoption in any degree. You can move forward with it. once you start to get adoption and you don't have that encryption incorporated it's nearly

impossible to put in right in the future without just i mean like really major obstacles and changes yeah does that leave you thinking that it is unlikely snarks or similar type of encrypted technology ends up ever getting incorporated into bitcoin or is there some other like organic way that they can... I mean, ever is a long time. What's your investment thesis horizon here, Pom? 100 years? 25? Forever. Well, after you're done solving this problem, you're going to go solve life expectancies. We'll be around forever. You'll live longer if you eat only meat, Pom. We'll get into that in a second there. I'm not going to say anything about forever. I find it hard to imagine getting this kind of radical, strong privacy baked into an upgrade to Bitcoin

at layer one within like 10 years. Got it. Okay. And so as you continue to build Zcash, right, it has this privacy focused component to it that really is privacy by design, right? If you think about, you know, people hear that terminology all the time, but Zcash is a great example of a of a product and a protocol that was built for privacy from day one uh but not only for privacy it was built to have transactions Etc um one of the things that uh you know I know you guys are running into now is this whole scalability right many many different protocols and blockchains are running into this uh challenge of you know how do you make a currency right an actual transaction settlement Network work if it isn't scalable it has to be scalable yeah when you have the privacy

components that doesn't relieve you of the scalability challenges, right? And so Bitcoin is taking, you know, I think most people in Bitcoin are very excited about kind of the Layer 2, the Lightning Network, et cetera. I think you guys are looking at it more as like Layer 1 scalability. Maybe just talk about, you know, one, the difference between the Layer 1 approach versus Layer 2 and why you're excited about and focused on the Layer 1 scalability. The why is that our mission is to provide economic freedom and opportunity to all people. and you know with the current architectures we can't reach all people we're lucky we could do

like 10 000 people simultaneously right so we have to have a radical improvement like unprecedented improvement in scalability in order to satisfy that mission now about layer one versus layer two i've been studying it closely for a while for like years my current thought sort of half-baked even though i study it closely this stuff is really complicated and as as has been demonstrated by my thinking bitcoin would never work um i'm often wrong right so um but my current belief is that layer two can add features or like functionality like um non-custodial exchange which i think is a very cool much needed feature so that like when an exchange gets hacked you don't lose your funds that's everyone would want that well just on this note a lot of people who don't

understand or have never been exposed to the traditional financial system they don't realize that custody and exchange are not vertically integrated in like any other major financial market in the world right like in crypto most people coming from like a wall street or a banking background when they see that the exchange is also the custodian their heads explode right and it leads to problems that we've seen right when the exchange gets hacked they're actually hacking a custodian at the same time right right and so I think to people coming at it from the finance background they're like of course you have to break those two apart many people in crypto have just always seen

the custodial exchanges and so they think that's normal that's really interesting perspective thanks for sharing that with me I hadn't thought it through so layer two like lightning network and there's this thing called called bolt which is like lightning but more private um i think those are really promising for lots of reasons one is new features like non-custodial exchange um and the other is i think it's a massive improvement in the latency and the fee strike like they'll be making the fees really low but i don't think it's an improvement in scalability in terms of number of users who can onboard unless like they come up with better and better fixes and improvements to

the layer two where they could reach that but currently i think of it as layer one is what i think of as horizontal scalability which is how many simultaneous users who are active you can sustain you can onboard and sustain and then layer two is improving latency and fees and add additional features okay and on layer one how do you improve the scalability there well that is an unsolved problem um and it's really why did you tell us all the secrets right here um so you know we here's the thing our team is both science innovators and pragmatic engineers um so many of the people involved in zcash invented some of the fundamental breakthroughs in cryptography that other scientists will be citing for like 100 years probably.

But that's the easy part. Hopefully they won't hear me say that. But that's not the hard part. The hard part is making a thing which satisfies real-world use cases well enough that people can use it and it runs in practice and it keeps running despite errors and bugs and hacks and everything, right? And our team has done both of those things. Now we're in this with privacy, like deploying practical, secure, zero knowledge proof based privacy to large numbers of people was never done before, even though the science had existed in various degrees all along. Is it fair to say that all of these challenges, the scalability, the transaction fees, all the things that people know are actively being worked on, they become exponentially harder when you have to do it from a privacy standpoint?

Like it's a privacy by design, and then also you're trying to deal with scalability? Yeah, some of them really do become harder if you also add a need for privacy. And, again, like we went over earlier, I don't really believe that you can have mass adoption be used by all businesses and all citizens of all different countries if doing so exposes your private data to, like, foreign enemies. It's just a non-starter. So anybody who's making a scalable system without privacy, I question if they could find product market fit with that. And it does make it technically harder in some cases, but it can also help. And in particular, there may be a breakthrough possible, which is that zero-knowledge proofs can help with the scalability problem. Okay.

Because the reason that Bitcoin and Ethereum and Zcash today are non-scalable is that every node on the network has to verify the correctness of what every other node on the network has done. Right? So that means it doesn't scale because the more participants there are, the more work it is for every participant. Right? Now, it could be that zero-knowledge proofs can allow a succinct, efficient proof that a whole swath of operations that were done outside of your view were all correct. And you can verify that cryptographically, so then you can sign off on it without having to transmit and inspect everything else that's happened everywhere on the network. Does that make sense? It does.

And there's a lot of people – what I was getting at was there's a lot of people – there's at least a few people working on this, various notions of scalability, and a couple of people who are also working on the same idea we are of using efficiency or knowledge proofs as a key piece of the solution to scalability. But what is fun and exciting and encouraging to me is we're the only people I know of that have both the fundamental science, the baked-in privacy, and we know how to bring these things all the way to mass adoption. As we talk about some of the additional challenges on the technical side, privacy can lead to a lot of advantages. And one of the things is regulators, right? And so when you think of Wall Street coming in to— You mean privacy can lead to disadvantages? Is that what you were going to say? No, I think that there are plenty who would claim that, right?

There's plenty of regulators who think, again, going back to the encryption debate, et cetera, of why do you need to hide stuff? Why should regulators or these large banks on Wall Street, et cetera, why should they be excited about privacy? Or what is the thing that, you know, if you were talking to those regulators saying, like, no, no, no, this is actually an advantage or a positive, what's your answer to that? Yeah, yeah. Actually, I think it's actually pretty easy in practice to get people to start thinking about it from a different point of view, which is everybody wants insight into other people's information. but everybody also has information of their own that they need to protect from other people inspecting it, from getting, like, spying on your stuff. And that's true of regulators, too.

Like, a regulator, there's lots of regulations in the United States, also in other countries, but especially in the United States. Some of these regulations are about anti-terrorism, the drug war organized crime but then there's other regulations there's regulations about health care information protections there's regulations about children accessing the internet there's graham leach bliley which is just a general purpose a very general rule that financial institutions are not allowed to disclose private information about their clients to unauthorized third parties that's just that's just law in the united states you're not allowed to do

that and so regulation has lots of goals to satisfy there's consumer protection um you know anti-fraud and and there's national security and it's only a very sort of first knee-jerk reaction like with http in 1994 there's only a first knee-jerk reaction oh we don't want secrets uh We don't want, like, crime to flourish. Sure, nobody wants crime to flourish. But a more considered study of the technology tells you you also don't want, like, foreign governments surveilling the behavior of your businesses. Well, there's a balance, right, between you want to protect the right information, but you also don't want people to abuse the system. And I think that's where the debate lies.

Okay, that's a really good point. Now, in the way we've gotten into doing it in the West, especially led by the United States in the last, like, 30 years with financial regulation, is that the balance is mediated by financial intermediaries, right? So in the United States, what you do with the cash in your pocket and who you buy from or give money to is your business, and there's no – it would be rejected by the mainstream of the United States government and the United States society if we said, ooh, let's start requiring you to report everything you do every time you send or receive cash or whatever. But the balance is that banks and money services businesses and financial intermediaries are required to do a whole bunch of surveillance and reporting and anti-crime operations, right? Now, for the time being at least, that same balance works for cryptocurrencies. The financial intermediaries are exchanges instead of banks currently, although they might be banks themselves in a few years. and you can treat people holding cryptocurrency on their wallet. This has got a Zcash wallet on it, but it's locked.

That's okay. You can treat people holding cryptocurrency on their... I'm talking to a guy who likes privacy, and I think I know his password. So we're going to see if I can do it here. Look at that. I got right in to his wallet. Only because I heard him say the password earlier. This is the second demo of the day.

For the time being, a reasonable balance that fits with all the current laws and the current stances of United States regulators is we treat people having cryptocurrency on their phone like we treat people having cash in their pocket. It's probably unconstitutional, and it's definitely against the ethos of the United States to have the government sort of heavy-handedly mandating what people are allowed to do in their pockets. But at the same time, it's normal and accepted for there to be heavy-handed rules about what all the financial intermediaries do. So for those who are just listening and can't see the video, what we're showing is there's

a wallet. This is a prototype or a demo. It's a Zcash wallet. It's a working prototype. Working. It totally works. no smoke and mirrors explain what what this wallet does that other wallets don't do and why it's important this this is the first wallet on a mobile phone where all of it's like a fully

decentralized cryptocurrency right and all of the uh encryption is done on the mobile phone so uh nobody outside of this phone can spy on what this phone is doing by looking at the blockchain Got it. So it is fully encrypted on the device and it provides a layer of privacy that just isn't being done anywhere else in wallets. Yep. So as far as the blockchain is concerned, it has a similar effect as cash. If I zap some Zcash to your wallet, your phone from this phone, there's not any record of that happening that's visible on the blockchain. Got it. All right. You're building all kinds of stuff. I could literally talk to you for like three days, not even hours. But before I let you go, we're going to talk about this carnivore diet. I know that you are incredibly excited about it.

Oh, yeah. Describe what this is and just like the whole thing. So let me caveat all this. How many hours do we have? Hold on, hold on, hold on. Because I know that he'll talk for three hours on this for sure. We don't have that much time. But one of the most fascinating things about you to me is you are very well known in the cryptocurrency community.

You've spent decades of your life working on encryption, privacy, digital currencies, etc. And if you go to Zuko's Twitter account, the first thing on his profile is ketonic.com. Ketonic.org. Right, .org. Okay. Which has nothing to do with crypto. Yeah. Has nothing to do with privacy.

Yeah. Has nothing to do with medical research blog. Literally, his life's work is not the first thing that's listed. So obviously, this is important to you. Maybe I should update my Twitter bio. Well, it was cracking me up when I saw this. So talk a little bit about why is this medical research blog the first thing that you link to? What is the purpose behind all this, and why are you excited about it?

Just what is it, right? You just eat meat all the time? Right. And you don't eat anything else? I try not to. About one day out of four, I give in to temptation and eat ice cream. So I'm really a bad role model, but I'm a good thinker. So you should do as I say, not as I do, and eat only meat.

I'm going to start using that. I'm a bad role model, but I'm a great thinker. That applies to a lot of things in life. All right, so you eat just meat, and we're talking— Right, on a good day, I eat only meat. Okay, and that is red meat, chicken, any meat? Mostly red meat. Red meat's better for you than chicken because it's fattier and has more micronutrients.

All right, and what time do you wake up? What time do I wake up? Yeah. Oh, I don't know, 7-ish. Okay, so like 7 a.m. you wake up, do you eat meat? Like are you just eating steaks at 7.30 or you wait till noon? I usually have bacon and eggs if I eat breakfast. It's typical for people who eat the carnivore diet that there's a rule among the carnivore clan,

which is that you should eat according to hunger, not according to like a schedule or a plan or a calculus. That seems pretty reasonable. It's kind of like the theory is humans are animals. like lions don't have wristwatches they don't have a plan written down uh they just presumably we assume that lions eat when they're hungry and then they don't eat when they're not hungry that seems like a reasonable assumption and so the theory is a similar thing would be good for humans which actually totally makes sense if you start thinking of humans as being animals uh anyway the point is i'm not always hungry in the morning but if i am hungry i'm going to eat

Bacon and eggs or ground beef or steak, usually. Okay, and then how many meals do you think you eat in a day on average? Two on average for me. And each one has steak? Or do you also eat vegetables? I try not to eat vegetables. I think vegetables are bad for you. I know that you know that that's a ridiculous statement, but explain why you say that.

I know, I am fascinated, and this might have some connection to cryptocurrency and Bitcoin. I remember being so thrilled and having so much fun. You can find my old tweets from like 2012 or whatever. I remember one of my tweets was something like, oh boy, another Nobel Prize winner is saying that Bitcoin is a stupid idea that can never work. I love this, right? It really excites me when I see authoritative or consensus being wrong. And I'm sure they're wrong. That's interesting.

That's like an opportunity for us all to learn and benefit. So vegetables being good for you is a consensus. Yeah, everyone believes that. You laughed. You literally made the funniest facial expression. For those who don't have the video and you're just listening, He made the funniest facial expression when I said, oh, no, vegetables are bad for you. Zuko's going to be the podcast host by the end of this.

He's already got it down. You described the facial reactions. Everyone knows vegetables, plants and vegetables, fruits and vegetables are good for you. It's like so well known and with such high confidence. And if you dig into the science, the very first thing that you find out is this has never been tested by experiment. Wait, what? no one's ever like taken a bunch of humans or even like mice or whatever and said we're going to give these ones more like five fruits and vegetables a day we're going to give these ones

no fruits and vegetables a day and we're going to follow them for six months or six years or something and find out if it affects their health and if it does affect their health how it affects their health okay it's never that experiment's never been done now there's a couple of close calls where they made experiments like that accidentally like they were trying to test different kinds of vegetables like do apples help versus cucumbers or whatever and they accidentally had some people taking more vegetables and fruits than other people and the results of those close calls just like maybe two i think experiments were that the additional fruits and vegetables made no detectable difference to anyone so it's not that the fruits and vegetables hurt you it's

that they just don't make a difference they hurt some people okay in what way um there are a lot of toxins and anti-nutrients and things that people are sensitive to or allergic to. If you think about it, animals, they either hide, fight back, or run away. Plants don't do any of that, right? What do they do? They have chemical warfare to make it hard on things that would eat them, right? So every plant is packed full of pesticides and not the additional pesticides added. Well, also the additional pesticides or the breeding to increase the pesticide levels in plants in order to reduce the spoilage or the loss to pests.

But just natural pesticides from evolution. How long have you been eating this carnivore diet? About 10 years with a whole lot of ice cream along the way. And what do you think the benefits have been? Oh, for me personally? Yeah, is it like more energy, clearer mind? All kinds of benefits. I was really fat when I started.

I had like 40 pounds of excess belly flab hanging over my belt, and I was really ashamed of it and hated it. And that all went away like within probably nine months after I started. It was gone. And it cleared up a bunch of like weird medical conditions. Like my toes used to turn purple and like tingle and hurt all the time. like they were too hot or too cold and nobody could tell me why and that stopped happening and it gave me better energy and alertness and gave me a much better mood like I stopped

being so impatient with my kids you know and my then wife who is my partner in this research if you go to ketotic.org that was actually mostly her science ideas and I was mostly like the editor or promoter um but it really helped my mood um but that's just my personal experience um i'm much more i don't find personal anecdotes very compelling right because you can only there there's a billion personal anecdotes pointing in a billion directions what's the guy who uh only ate subway and lost all the weight and then i haven't heard of that one i've heard of the twinkie guy so well the guy who was all the subway ads this is uh i believe this to be true but somebody on the internet will correct me if i'm wrong uh i believe that now the fda categorizes

deli meat like salami pepperoni etc as a carcinogenic oh yeah which also cigarettes are uh-huh and so it's this idea that it isn't just eat only meat i think it is also what type of meat you eat has a big impact i think it's the world health organization you're thinking and i think they're totally wrong for the internet the world health organization thing about processed meat is total baloney so you disagree with them yeah it's it's based on completely nonsensical pseudoscience like the world health organization should be ashamed of themselves for that it's it's based on for those at home i'm just laughing go ahead are we out of time yet no no go ahead the world health so there's this horrible horrible

publication from the world health organization that says that red meat and processed meats like cured meats and things like that are carcinogenic and it it's absolutely implausible it's based on a whole bunch of correlational evidence like as a as a i don't know about this i was gonna say you should recognize this as a financial expert have you ever seen people looking at like graphs or whatever, numbers or facts, and correlating two different things from the past and saying, aha, I figured out what causes the other thing. It's this one that correlates with that one. And you're like, okay, maybe, maybe not, right?

My favorite is when you take the 2017 cryptocurrency bubble and you overlay it on the internet bubble, and people say, look, this is what's going to happen. And I say, you could overlay every bubble on top, and that's what it looks like. Right. So if you have enough data sets and you overlay enough things on top of enough other things until you find the one you want and then you show everyone, look what I found. Look at these two line up. That's the World Health Organization report on processed meats and carcinogens.

That's what they wanted to find. If you look at the actual corpus of all the different data sets they could have looked at, half of them line up the other way where eating more meat correlates with having less cancer in women. And there's no scientifically plausible reason why it would affect men and not women. So it just doesn't make any sense. And plus which, there are a few actual experiments. So the solution to this correlation stupidity, I don't know how to apply this to financial markets. But in human nutrition, the solution is you do an experiment.

Like almost every – You should win a Nobel Peace Prize for that. That's a really novel idea. Well, you know, in almost every other science, people know this. I don't know why human nutrition is such a pseudoscience where they think it's okay to publish these non-experimental correlational stuff and then claim they found a causal explanation because we can back test this. We can go look at the record of the last 30 years worth of announcements about these correlational results. And then we can say out of all of those, how many were subjected later to an experiment, right? There are at least 40 of the most important, most widely reported results, like this World Health Organization result, that have subsequently, years later, someone has done an experiment where you're not just correlating, but you're actually doing one thing to some people, doing a different thing to someone else, and then measuring the results.

Out of those 40 or so, zero of them stood up to experiment. Those correlational stuff is actually less likely to be true than if you flipped a coin. All right. So here's what I'm going to do. I think we agree on two things. One. You should eat more steak. No, no, no.

One. And buy more Bitcoin. Sugar is bad for everybody, right? And fiat currency is bad. Fiat currency and sugar are basically the same. So that's one. Two is that all of the health and dietary quote-unquote studies, information, et cetera, is definitely driven by big money, right? And it's very capitalistic in terms of the sugar industry was behind a lot of stuff, et cetera.

So I think we both agree on that. True. I will promise you at some point, I'll decide when, I'll do 30 days of it, and then we'll come back and we'll talk about it. Okay. But the caveat is, if it sucks, I'm going to tell people it sucks. If it doesn't work, I'm going to tell them it doesn't work. And if I like it, I'm going to be quiet and not admit that you were right. Heads I win, tails you lose.

But we will come back and we will talk about this more. My ex-wife and I, my now ex-wife and I wrote a manual, a little web page that says how to do it for 30 days. It's called Eat Meat, Not Too Little. Mostly fat. That's easy. Go Google that for your 30-day instructions. All right. I will do this, and we'll come back, and we'll talk about it.

Before we wrap up, two things. Most important book you've ever read. Most important book. I never answer the most questions. I just answer the first thing that pops into my mind. The first thing that pops into my mind is Catch-22, which I'm halfway through, and I'm so confused. I'm just going to have to go back to the beginning and start again.

Zoom, go. You're one of the smartest people that I know. And the recency bias is just like smacking us in the head. Yeah, I'm not even finished with that one. Oh, you know, a really – so my second thing – I get to have three answers. Okay. I've decided. The second one that pops into my head is about diet.

It's about the history of nutrition theory. It's called Good Calories, Bad Calories. Okay. It's like a history book. what it's fascinating if you're into like philosophy of science or history of science but don't read it unless you have a high tolerance for facts and dates and then the last one that pops into my head was a philosophy book that i read when i was probably about 19 called darwin's dangerous idea okay what's that about philosophy book about evolution and about emergent

qualities in emergent order that weren't designed or chosen by any individual. Highly relevant to our interests. I actually will read all three of them because I feel like you'll give good recommendations. Aliens,

real or not? There probably are aliens somewhere, don't you think? I'm asking you. I'm asking the questions. You're supposed to answer them. I'm pretty sure all the aliens that anyone has ever reported are not real. So the aliens that have previously been reported are not real.

Right. We definitely haven't run experiments, so we discount all the studies. But do you think that they exist? That's a fun, interesting, unknown question. Because I'm aware of zero evidence of aliens, but there should be a whole lot of universe that I've never gotten any information from. So it's entirely possible there are aliens there, right? What would you put the probability at?

I don't think you can ascribe probabilities to this situation because there's the anthropic principle, which is that since I'm wondering, that changes all the priors about what I'm wondering about. And I don't think I can quantify how much of the universe we don't know anything about. so i don't think i can put a probability that's fair just so you know uh people are going to listen to this and somebody's going to write an article and the title is going to be zuko

believes in aliens no no they're going to say zuko didn't believe in bitcoin now does he thinks vegetables are bad now listen man this has been awesome i really appreciate you taking the time to do this uh we will definitely do it again uh at some point but uh i think people will enjoy hearing from you so thanks so much thank you so much i really appreciate it Hey everyone, Pop here. If you liked this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts,

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