Why Crypto Fails without Privacy with Mert Mumtaz (Helius)

**Austin Federa** (0:04)
Zert, welcome to Validated.

**Mert Mumtaz** (0:07)
Hello, it's Austin. Thanks for having me.

**Austin Federa** (0:10)
How you doing?

**Mert Mumtaz** (0:12)
I am surviving in this market. How are you doing?

**Austin Federa** (0:16)
I'm doing all right, I'm doing all right.
It is up and down every day. New rumors, new news, macro is unpredictable as always, but here we are today to talk about what is historically probably the most under looked field of technology and investment that is now in the last few years become something that suddenly everyone's talking about, which is privacy and specifically on-chain privacy. So I want to get into the nitty gritty and get a lot of your views on this, but what first turned you on to privacy as something you were personally interested in?

**Mert Mumtaz** (0:56)
On a personal level, I've always been interested in the cryptography part of it since I studied cryptography and math in school. And so that always stuck with me, but on a professional or commercial setting, let's say, it was really about, and I'd always been interested in things like Zcash, Monero. You have been using Signal for many, many years, and I'm a huge VPN nerd and all these different things. But a few years ago, I was in a tech summit, let's call it, and there was some high-ranking crypto people, but also physicists and biotech people and all sorts of really smart people, really. And while doing that, the concept of the separation of money and state came up, and all sorts of other geopolitical events, and it's one of those think-thing type things. And me and a few other people, we were somehow the conversation drifted towards privacy and how a monetary asset must have privacy in order to fully help realize the separation of money and states, but also really anything that crypto wishes to accomplish requires some privacy. And it was interesting that at the time, ZK, you know, people were talking about ZK, and it's objectively speaking, if you look at crypto as a technological field, ZK is one of the shining things there that is meaningfully important and can nerd site people against something like AI, but it just wasn't necessarily getting attention. And it was somewhat curious why.
And so that's when I started looking more into it. Some of the Zcash core devs asked me for thoughts on scaling Zcash because obviously I'm working on Solana, and so they see Solana as the scaling, let's say, team, and so they wanted some opinions on that. And mixing all these things together, I realized that Zcash was this basically diamond in the dirt, so to speak, where it uses ZK, I mean, not only does it use ZK, it pioneered ZK Snarks as the first production system on the planet.
It's obviously necessary. It's extremely slept on, and crypto does not scale to anywhere beyond the niche without it. Not Zcash specifically, but privacy in blockchains. And you look at all the other facets of the internet, and your files obviously are encrypted, your private messages are encrypted, assuming you're using private messages, and the entire internet runs on cryptography, the SSL certificates and all these different things.
But the one thing that we are seeing is going to revolutionize the financial system, is just not making any use of it. And so that seemed to me like the last big, and you know, the word last is a little grandiose, but certainly one of the last biggest important things that are still super challenging, aesthetically pleasing, ideologically important, and still has many thousands of multiples in terms of improvements to make.

**Austin Federa** (4:26)
Yeah, it's interesting that you phrase it as that, because I think that is a common thread you see from folks in crypto nowadays, of like, I like what I'm doing, I think it's impactful.
Is there more that I could be doing? And you know, there's been some folks I have a lot of respect for who have pivoted out of working on blockchain projects because of that. So yeah, it's kind of nice to hear that for you, it was sort of this idea of like crypto is fairly uniquely positioned to be a layer, not layers may be the wrong term, but to have a layer of privacy or privacy incorporated into it, that actually does more than just shield something that already exists, but maybe adds a missing component to what is otherwise a very interesting and very libertarian tech stack.

**Mert Mumtaz** (5:17)
Right, and even the name, and you can, there's all sorts of different ironies here, but the industry is called crypto, right? After cryptographic money, yet it's not actually leveraging cryptography to do many of the things it should be doing in terms of the financial guarantees that one would assume they get on cryptographic money.