Zcash, Ethereum, Aztec, Canton and More: Which Chain Will Win the Privacy Race?

**Mert Mumtaz** (0:00)
I don't consider a leader in the privacy space any more than I would consider JPMorgan a leader in the privacy space, which is to say that those guarantees in terms of privacy that you would get, which is just trusting your counterparty, are totally achievable without using crypto in the way that they've done it. And so I don't see any reason why I would want to expose myself to that.
Like why I would want bank level guarantees, I would just use a bank.

**Laura Shin** (0:25)
Hi everyone, welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this live stream, and we will first take a quick word from the sponsors who make this show possible.
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Today's topic is privacy. Here to discuss are Joe Andrews, CEO of Aztec Labs, Jarrad Hope, founder of Logos and Mert Mumtaz, co-founder and CEO of Helius. Welcome Joe, Jarrad and Mert.

**Joe Andrews** (1:13)
Good to be here. Thanks for having us. Yeah, thanks for having us.

**Laura Shin** (1:17)
We're facing a moment in crypto when it just feels like privacy is going to start mattering a lot more. It's already starting to matter a lot more. And more chains are going to be adopting it in various ways, and they already are working on that. Obviously, Zcash saw a huge renaissance in the last year. Monero also got a boost. Ethereum announced this privacy roadmap. Mirror has confidential transactions. And Canton is drawing institutions to its private chain and more. But before we get into all the details on that, let's just start with each of you explaining your interest in privacy and why you think this is the moment that this direction is getting momentum now.
Why don't we start with Jarrad?

**Jarrad Hope** (2:04)
Sure. I guess like, you know, I got into like the space through the sort of BBS and piracy scene and found cipherbanks and like crypto anarchy. So in the 90s, I was already pretty naturally inclined towards these ideas.
But and I've argued, you know, for privacy on a civil liberties standpoint, as well as, you know, against the sort of surveillance state, particularly after 9-11.
But I think what's interesting to me about it now is like how my thoughts have developed a lot more. And I started to realize that privacy is actually a property that's required to unblock new market activity, as well as creating stronger institutional quality. I don't know if you want me to go into that in more detail now, but it requires a little bit of understanding of token, sorry, transaction costs, economics, and institutional economics. Sure, go ahead. Maybe I'll let the other guys. Oh, yeah. Okay.
So I guess when you think about what a blockchain is actually selling, it's not really selling just block space. We have all of these mechanisms in place to effectively create what's called credible commitments. Credible commitments is like this notion behind an institution and what makes an institution pretty high quality. So for example, like a state can be very powerful, but he who giveth can take it away, right? So what actually matters in terms of an institution is its ability to be able to hold its promises, right? Hold in such way. So these promises are effectively called credible commitments, and there's two types, right? There's motivational commitments. This is like, trust me, bro, I've got it, don't worry about it, I'll honor my agreements. And then there's imperative commitments, which are a lot stronger. And we started to see like, an example of this is like in medieval times, right? A king might have some kind of deal with another king and leave their first born son with the other king as kind of collateral. Williamson basically talks about the sort of ideal version of this, which is the ugly princess, right? It's a lot of high value to the father, maybe not so much value to the other king. But if the other king does not honor his agreement, then maybe there's a beheading involved, right? So this is an example of an imperative commitment. So in blockchains, we do this with cryptography, we do this with game theory, mechanism design, and even decentralization. These are all things that basically make the commitments that are made on chain much, much stronger.
Now, the other side of this is a lot of people think of a transaction when it happens on chain is like, and that's basically the only thing that's happening on a transaction, right? But in transaction cost economics, there's like seven steps that are involved in a transaction. You can view this as a life cycle or a process or even a supply chain. And the blockchain is really only doing the settlement and some of the other ones, right? So think about it, like, when you do a transaction, you actually have to discover your counterparty, you have to communicate with them, you then have to negotiate or come into contract with them. And there's a few things that happen after the fact as well.