Is Privacy the Last Unsolved Problem in Digital Assets? | Rand Hindi

**Robbie** (0:00)
Our first guest is Rand Hindi from Zama Protocol. Zama is building FHE. There's a lot of chat right now about ZK privacy, the institutional wave, what is happening. The ZK cabal is going at, you know, the centralized database cabal. We've got Rand here to tell us all about it. Rand, how are you doing now? Welcome to CAN.

**Rand Hindi** (0:20)
Good, good, thank you for having me, guys. Very happy to be here.

**Robbie** (0:24)
Absolutely, thank you for joining us. I mean, I'm just curious what your reaction is to some of the chatter you're seeing out there on the timeline.

**Rand Hindi** (0:32)
You know, so I was looking at all this debate around centralized permissioned blockchain versus permissionless cryptography driven blockchains. And obviously, you know, I was very happy that people were taking the side of public permissionless cryptography secure blockchain because that's exactly the way we think about it for Zama too, trying to bring FHE advanced cryptography to public blockchains. I think permissioned chain makes a ton of sense in the same way that you remember the 90s, something called intranets.

**Robbie** (1:01)
Yeah.

**Rand Hindi** (1:02)
Right. Remember that, right? Every company had like their own mini internal internet.

**Robbie** (1:06)
They had like a mainframe.

**Rand Hindi** (1:07)
Exactly.

**Robbie** (1:08)
They had a plug-in to it.

**Rand Hindi** (1:09)
I mean, yeah, they had their own kind of private network. And you could connect your private network to another company's private network to exchange data. Does that sound familiar?

**Robbie** (1:16)
Sure.

**Rand Hindi** (1:17)
Right. Okay. Then people created the internet, one global public network that everybody could use to talk to each other, to share information. And with HTTPS, which brought encryption and privacy to the internet, you could use it for financial transactions, for commerce. And today, nobody's using an intranet anymore. The internet actually won. So I think we're going to see the same in blockchain. The reason why people use intranets at the time was privacy and security.
Because the internet couldn't do that. But once the internet offered that, people migrated to the internet. We're going to see exactly the same with institutional finance. They're all going to move to public permissionless blockchain, encrypted using technologies like FHE or YNOTZK.

**Robbie** (2:02)
So the non-negotiables for not just the institutions with the largest of scale, but for the most part, everyone we've seen transact in finance on chain, they're looking for privacy and security. This goes back all the way to the beginning of the internet, and it's still true with Web 2 and Web 3 all the way until today. And so at Zama, you guys are focused on the privacy side of this dichotomy here, between permissioned mainframes versus internet open composable public networks.
And so we kind of have these differences in opinion as far as how we could come up with that. You, at Zama, have chosen FHG. I take it this kind of adds a third dimension to this debate that we see right now. On one hand, we have the mainframe intranet somewhat closed. They can share data with one another, but it's not too composable. Then we have the ZK camp. Then we have the FHG camp. Why do you believe the FHG camp of privacy is the most private, secure, but also composable as the intranet should be?

**Rand Hindi** (3:18)
You know, that's a very, very good question. We didn't choose FHG because we just wanted to use FHG. We chose it because it was a right tool for the job. What do you want in a public blockchain? You want public verifiability, you want composability, and you want privacy slash security as much as possible. There are different approaches people are taking to privacy. One of them is private chains.
I guess it does the job, nobody can see anything. But then you're losing public verifiability, and to a larger extent, you're losing composability, at least atomic composability. If you want to use a public blockchain, then you can use T's, ZK or FHG. T's have been completely destroyed. Every single T blockchain has been hacked in the past two years. As such, I don't know any large institution who even wants to touch this technology with a stick. Like it's dead. Even Intel came out and said, do not use T's for blockchain. This was never meant to be a technology secure in a decentralized environment where people can run their own nodes. Now you've got ZK and FHG. ZK is a great technology, but it's very hard to make things composable. If you're, for example, shielding your assets in Zcash, you can send them privately, but you can't stake them in DeFi. You can't swap them for other shielded assets. ZK inherently is not about computing on a private state. It's about proving something about data you see yourself. FHG solves the problem because it enables you to compute on the encrypted state directly. So you have full composability in the same way that you have with any existing blockchain today but without the data being visible to people outside. So it gives you composability. You can publicly verify the result because it's just a blockchain running code, and it gives you security even against quantum computers. So the data you're encrypting today cannot be broken by future quantum computers.