Presentation to Blockchain Alliance

Zcash-BlockchainAlliance-slides.pdf (792.7 KB)
A couple of days ago I gave a 15-minute "webinar" presentation about Zcash to some of the law enforcement and regulatory agencies from the Blockchain Alliance. In attendance were people from DEA, FTC, IRS, Treasury, FinCEN, SEC, California Highway Patrol, and a few more agencies, both USA and foreign, as well as some other companies who are, like the Zcash Co, part of the Blockchain Alliance (http://www.blockchainalliance.org/).

The presentation was pretty high-level — 15 minutes is not long! It focused on the basic facts about the tech of combining encryption with blockchain, plus a few slides about my speculations about the impact of technologies like these on the practice of regulation and investigation.

The questions after my presentation were interesting. One of them that I remember was "Who do we send the subpoena to when doing an investigation?". The answer was something like "Whatever company — like an exchange — is privy to the details of the transactions you are investigating.". Another question was something like "Does the Zcash company have access to the records so that we can request them during an investigation?". The answer to that one was "No, the company doesn't have access to any such data. We're just the makers of some science papers and some open source software. Zcash is an open source project, like Bitcoin.". The third question was something like "How would we decrypt or otherwise get access to records during an investigation?". The answer was "You'd have to subpoena a company, like an exchange, that was privy to those records, or gain access to a device used by a person who was privy to those records.".

Here are my slides. They are pretty bare bones. Below I'll paste in the source code for building these slides — the comments in the source code were my notes-to-self about things to remember to say. I may or may not have remembered to say those things during my actual talk.

(C.f. https://bitcointalk.org/?topic=6652.0)


.. Zcash slides file, created by
hieroglyph-quickstart on Sat Nov 8 23:23:17 2014.

Zcash

zooko@z.cash

.. image:: /_static/Z-yellow.orange-logo.png
:width: 4cm

Zooko Wilcox, Founder and CEO

Bitcoin is HTTP for money; Zcash is HTTPS

background / history

  • team of scientists
    • Johns Hopkins, MIT, Berkeley, Tel Aviv U., Technion

  • Zcash Electric Coin Company

.. We're developing enterprise products for the financial industry.

.. We've deployed an open source cryptocurrency.

science

  • encryption

.. Encrypt the data! Then you can selectively disclose the decryption key to authorized parties while concealing the data from unauthorized parties.

.. Why didn't Satoshi do that in the first place? It prevents validity-checking.

  • zero-knowledge proofs

tech 1/4

.. image:: /_static/high-level-txn_v3.svg
:width: 70%

.. mixture of transparent and private transactions

.. transparent addresses vs. shielded addresses

tech 2/4

  • selective disclosure

  • per-transaction

  • sender starts with the decryption key

.. latent in the protocol but not yet exposed in the API

selective disclosure example

.. image:: /_static/selective-disclosure-financial.png
:width: 100%

.. selective disclosure example 2
.. ==============================
..
.. .. image:: /_static/selective-disclosure-medical.png

tech 3/4

  • encrypted memo field

.. useful for the Travel Rule!

.. image:: /_static/standard-cheque.svg

tech 4/4

  • the "blockchain properties": canonical and append-only

  • the "encryption properties": confidential and selectively disclosable

implications 1/5

  • You tell me!

implications 2/5

  • some things stay the same:

    • FinCEN's approach to AML regulation

    • a lot of common investigatory techniques

implications 3/5

  • you lose some things:

    • clustering / tainting / blacklisting a la Chainalysis & Elliptic

    • maybe

implications 4/5

  • you gain some things:
    • privileged access to live data in the canonical blockchain

implications 5/5

  • the big question: large-scale commercial deployment?

thank you!

Thank you! Get in touch!

.. QUESTIONS:

.. what am I missing in "implications"?

.. how could you use technology like this in your work?

zooko@z.cash

.. image:: /_static/Z-yellow.orange-logo.png
:width: 4cm

Bitcoin is HTTP for money; Zcash is HTTPS

.. toctree::
:maxdepth: 2

.. to build this from source, run "make slides"; requires Sphinx and Hieroglyph; sudo pip install hieroglyph

9 Likes

Very cool stuff Zooko!

I'm going to nominate "We're just the makers of some science papers and some open source software" as the understatement of the year. :smile:

Zcash is really breaking new ground here with the whole approach to Privacy and still being willing/able to engage and converse with Law enforcement and Policy makers directly about it.

2 Likes

The fact that Zcash has caught the attention of law enforcement and regulatory bodies is huge. I am less interested in the former than the latter, though. Regulators focusing on Zcash is a big step in wider ranging acceptance. Keeping in mind the young age of Zcash as a live currency, this is a remarkable achievement and by no means a small feast. Congratulations and keep up the good work! I believe Zcash will soon become the prime cryptocurrency and replace Bitcoin by a significant margin. All that is required, in my humble opinion, is more volume to make trading and using it interesting for the general cryptocurrency market. I am not greatly concerned by the current price drops. I feel the first weeks were no representative and we are now going to see a steady rise.

ready for an AMA :slight_smile: ?

i like that quote! :sunglasses:

No. :slight_smile:

(Post must be at least 20 characters.)

1 Like