"ZODL is to Zcash What Coinbase Was to Bitcoin" | Josh Swihart on ZEC’s Awakening

0:00 As a society, if we don't have privacy or private money on the web, we'll enter dystopia. I think biology is set up very succinctly somewhere else. It's a Z-cashore, it's communism. I believe that same thing. And so if crypto is really going to be used as money on the internet, as internet money, we have to have privacy for agency to beat who we truly are, for security.

0:26 And even for sensor-separated systems, you can't have censorship-resistive without privacy. Bangladesh and I'm joined by Josh Swahar. He is the founder and CEO of the Z-cash Open Development Lab, otherwise called Zoddle, which is the new home for what used to be the core engineering product team at the Electric Coin Company, which is kind of like the Ethereum Foundation for Z-cash, where he was previously CEO, Josh.

0:52 Welcome to Banclas. Thank you for having me on. Josh, why work on Z-cash? What motivates you? I found Z-cash in 2016. I was looking for privacy solutions. Z-cash hadn't launched yet. And so somebody else in the crypto ecosystem had said I needed to check out this project that was launching later that year.

1:14 I had years before I had actually built systems that did data tracking, situation awareness, in the ad tech, and had a pretty deep understanding of what it meant to have public data exposed. So I built a intelligence system a long time ago using cell-light imagery, aerial imagery, UAV imagery, extracting data, metadata from that, being able to kind of get a good understanding of what might be happening on the ground.

1:43 And the architect of that, and I started working on the project, and this was all kind of pre-camage analytic aggregating data, being able to do a deep understanding of people, who they were, who their kids were, where they lived, how much disposable income did they have, where they could at their job.

2:01 And we could get high degree probability about people based upon what they were willingly posting online. So when I found crypto, I actually went down the rabbit hole actually with Ethereum, not Bitcoin initially, I'm in the Ethereum Dow, but I had a need, a friend had a need overseas and I need to be able to send money to them.

2:19 And I had been shut down by Western Union, and they were on banked, based in India. And I knew I couldn't use, or felt like I couldn't use Bitcoin because it wasn't private, and I was concerned about some way being able to use that information to be able to dox the person, or dox me. And so I went looking, I was like, well, crypto should solve this, I went looking for a privacy solution, kind of got involved with the ZCash community in 16, formally joined full time in the community in 18.

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4:00 And what about just the current moment? 2026, we have AI, we have people chronically online. Why does Zcash stand out in that environment? What does Zcash mean for you in the modern times? Since you've been with Zcash for almost a decade now. Yeah, I've been with Zcash around the ecosystem at least for a decade, full time for more than eight years.

4:22 So this for me became my life's work. So I was a CEO of another company, an owner in that company since sold it and decided this is what I need to work on a full time. Because as a society, if we don't have privacy or private money on the web, we'll enter dystopia. I think biology is set a very succinctly somewhere else.

4:48 It's Zcash or it's communism. I believe that same thing, where like we have an expectation of privacy or some level of privacy on the internet today. So I can choose to disclose information and it's my choice as to what I disclose. But if I want to make a purchase, I have an expectation that that interaction between that vendor isn't cryptid.

5:08 So I'm choosing to disclose some information with that vendor. But I'm not choosing to disclose my credit card information or that purchase with my neighbor or anybody else that may be sleeping on the internet. And so if crypto is really going to be used as money on the internet, as internet money, we have to have privacy for agency to be truly art, for security.

5:31 And even for censorship resistance, you can't have censorship resistance without privacy. So I think this is existential. I think this is not a crypto thing. I think this is a world that is important for the world. And I think Zcash is world changing and I think it's best in class and it's the best chance that we have for humanity to kind of realize that kind of freedom online.

5:52 If you just go back to 2016 when you started with Zcash or just went down the crypto rabbit hole originally, privacy was said a lot more back then than it was in maybe the 2020 through 2025 era. Your privacy is making a comeback, especially with the context of AI. But I think if you asked me, when I first got into crypto in 2017, not terribly long after you, and you asked me what crypto would be like in 2025 and beyond, I would have said, oh, there'd be a ton of privacy.

6:23 And I look at crypto now and it's kind of the opposite. We just did an episode with Ari Redboard from TRM Labs is kind of like a chanalysis. And he talked about how the FBI, CIA, OFAC, these intelligence agencies are actually kind of into the idea of society moving on chain because it makes their job easier.

6:44 And one half of me is like, oh, great, like another force to push everyone on crypto, that's great. The other half of me is very scared that if these controlling agencies are happy for finance to move on chain because they get to trace it more, that makes me just wonder is like, wow, what as an industry, what have we been doing?

7:08 And so that's kind of my speedrun from 2017 to now. Like did you go into crypto way back when to kind of have similar expectations? Oh, I just fundamentally knew it wasn't private. I think people talked about privacy. I think there was a lot of larping. It probably still was a lot of larping. But the intention with Bitcoin is private.

7:26 It all came out of the initial crypto wars where we were fighting for online privacy. Well, I had a cryptocurrency. If we grew up in this, like I grew up in a world that did not have the internet. I mean, we had chat boards, BBS, Rana, bone board system. We could be anonymous or pseudo-anonymous in those places.

7:47 But all of our kind of interactions happened in real space, human to human. If I wanted to get a new album, I'd have to go to the CD store and buy a new album. So when we put everything online, we digitized everything. Then all of a sudden, that information is like, long tail sub information is available.

8:09 The permanency of it, like it never goes away. It gets captured on the internet, gets captured on the web. And like we hadn't adjusted our, completely adjusted our thinking that we are now like permanently exposing a whole set of activities in who we are to a world where we don't know who's watching.

8:27 Now, there was this fight for privacy from the Cypher punks. And famously, we won that war. But we won that war on kind of communication, transactions between within intermediaries. And I think we're back to the same thing. This is just part two of something that's been going on for decades. And so it's a vision that's not realized and for the internet to really work.

8:51 We're going to have to have this, yeah, we're going to have to have this capability. And I knew it, like I knew it in 2016. And I knew it before I saw cryptocurrency or got engaged with cryptocurrency. But with crypto, it became clear like, we're going to have to have privacy for this to work at all.

9:06 If it's not just going to be a like financial asset that sits on somebody's balance sheet. Crypto's been fighting a bunch of wars. We're especially with a vote, the Senate banking vote of clarity acts. So I bundled up a bunch of fights that we've been trying to fight. There's the stablecoin yield fight.

9:19 There's the fight for developer protections. There's securities versus commodities. The crypto fighting, the political fight is like well underway. Privacy is just not included in these modern conversations when it comes to crypto and politics in Capitol Hill. Really the only fight for privacy that I see is Robyn Storm and the samurai wallet guys.

9:41 And far more mixed results versus anything else, versus like stablecoin, yield or developer protections. Do you think that fight for privacy for crypto is ahead of us? Or are we in the middle of it? Or what do you think happens in the short or medium-term future when it comes to crypto, the industry fighting for privacy in Washington?

10:02 I do think we're in the middle of it. I'm engaging with policymakers, regulators, and law enforcement in Washington, DC, or as long as I've been working on this project. So while not everybody recognized it. Like famously, I won't tell you which agency they were with, but somebody from one of the agencies told me, like we look, we recognize this is a massive national security problem if all of our citizens data is exposed to foreign appetaries for them to see for all time.

10:31 We just don't intend for crypto to go mainstream. Prior administration, prior years, recognition that the problem was there, but they intended to kill crypto. You know, full stop. And we saw it. I've had conversations with DOJ and DOJ years back had said like they had used kind of the same talking points.

10:51 Like aren't you concerned that it will be used for terrorist financing, money laundering, and child porn, right? And they said wouldn't it be better if we had keys and we had access to all the transactions and we could keep everybody safe? What happens when you have an expectation of safety, but somebody has this keys and those keys get hacked, right?

11:10 It completely breaks down. All that information gets exposed. There's not a government system that has ever been invented that has not been hacked. It's super dangerous. And my question back to the DOJ is, don't you have other tools for catching bad guys? Or do you need just this one? Do you need to run over the top of somebody's fourth amendment right to be able to transact freely with unlawful without unlawful search and seizure?

11:31 They said of course we do. Like we're super smart. We know how to catch bad guys without having to trace all the transactions. So they knew that back then. They still knew it without. And again, I was like close to a decade ago. I had the conversation with the prior administration's White House. That was another one.

11:46 They knew very clearly that this was a security problem, but they wanted a solution where they had visibility because they were the good guys. And they would never do anything evil with any of the information that they would see. So I think within the inside of Washington DC, it's been known to be a problem.

12:04 There's been kind of conflicting views, very like FinCEN for the longest time, was actually pretty positive. It where when Mike Moser, who's the former acting director of FinCEN, was like pulling in projects to get briefings to FinCEN on how zero-nall's cryptography works, recognizing that there's a problem with how they handle SARS that they can't even manage that data effectively and looking for novel kinds of solutions and promoting privacy.

12:36 So now we have Michael, who's very outside of FinCEN, very active and an advocate for privacy, of folks like Michelle Corver, who's former DOJ prosecutor, prosecuting financial crimes, now working with A16Z, very supportive and very pro-privacy. So yeah, there happened, some of these things went on for a long time, and yeah, for a long time is under the private administration, who's actually pretty terrifying, right?

13:00 You don't know as a developer when the same people that came after Roman are gonna come after you, the Tour d'Hinecache or Samurai, because they're using these arbitrary rules to make these arrests and make these charges in order to try to shut something down and make an example of people. So I don't know.

13:21 I think it's been ongoing for many years. I don't think it's been visible to much of the crypto ecosystem for many years, and I know we'll still be ongoing, but there are friends that we have that are on the hill, as well as in regulatory agencies that are in support of human liberties and privacy. Are you optimistic that crypto will be able to retain privacy?

13:45 Yeah, I wouldn't be working on it if I thought I was gonna fail. So I fully intend to win. Do you think that that will come smoothly or easily, or will there be much gnashing of teeth, blood sweat and tears along the way? Nothing important comes easily. There's always somebody that is wanting to take you down that have other interests in mind.

14:07 Whether they're entrances surveillance, whether they're interested in control, whether they're interested is purely money, and we saw that with the Curricle React, the banking industry has different incentives, then the crypto industry as it relates to stable coins, stable coin yields, different issue, kind of say everybody's got different incentives, but we are fighting on behalf of human kind.

14:30 We will win. When I had met on the podcast to talk about Zikash, he framed it as we have about a thousand days left before this administration departs, and we don't know what administration comes after that. And so we have a thousand days to lock in privacy, legalize privacy, make sure privacy and crypto can stay retained.

14:50 What do you think about that framing? Is that too black and white? Is there some urgency to get some political process done while the Trump administration is in office? What do you think about this? You only have so many windows of opportunity in order to make major shifts. And to the extent that we have a window right now, whether that's 900 days or a thousand days or whether it's longer, like I can't tell the future, I just know that we have to get this out into the world and people using it as quickly as possible.

15:15 It's got to be so big that it is impossible to kill. That's one of the awesome things that's happening within ZCache right now is there's more and more developers coming in, there's more and more organizations that are supporting it that are adding the capability, there's more source code being written.

15:30 And so we definitely need to be too big to kill and we need to get that going to hands of billions of people. Let's talk about Zashi now, Zadol. I want to learn a little bit about the history of ZCache. Zashi was previously owned by the ECC, the Electrocoin Company. As I said, that was like the Ethereum Foundation, but for ZCache.

15:50 Today, Zashi, which has been rebranded to Zadol, is a privately owned company. You guys recently did a $25 million funding round. You guys raised from Paradigm, A16Z, Winkleboss, Winkleboss Twins, Coinbase, pretty heavy hitters. Can we talk about that story? Just the transition, the history of Zashi to Zadol from being part of the ECC to now being private startup.

16:14 What do listeners including myself need to know just about the history of all of that? So we can just be up to speed with ZCache. Yeah, so the Electrocoin Company, which is always the zero coin electric coin company formally, I bet originally known as the ZCache Company, is the company that brought ZCache to life, activated in October of 2016.

16:35 So again, I joined that team in 2018, and it was when it launched, it's like any kind of technology, the things were fairly nascent. It was very difficult to create a shield of transaction. You needed heavy due to laptop and minutes of time to be able to send a single transaction. So there had to be a number of crypto breakthroughs in order to make it performant to get rid of something called trusted setup.

17:00 And then to just kind of distribute governance and cross ecosystem. So I was like raising a baby, and like Ethereum has gone through like different projects have gone through kind of those teething pains all the way to maturity. So things had kind of flattened out around 2023, and there was a lot of activity.

17:22 I think people were interested in other things. They weren't really talking about privacy so much. And the adoption of ZCache was slow to flat. And so at that time, I left ECC. So I left ECC so I could speak locally in the community about what I saw the problems being with the governance structure of the things that were holding it back from massive growth.

17:45 And so I did that. And a few months later than ECC brought me in as a CEO and as it goes out at that point and on other things. And so since that time, we've done another number of things within the ecosystem to kind of address those issues. We got rid of direct dev funding model. So that doesn't exist anymore.

18:06 We got rid of the governance structure, which was effectively a two of two multi-sig between the ZCache foundation and ECC. We open source some additional code. And I think most importantly, as it relates to adoption, launched an opinionated wallet. It's become the flagship wallet for Fruzy Cash. And so that was originally ZCache.

18:24 It's now been rebranded to Zoddle. And what we've seen without is a massive increase in adoption where the shielded pool growth, an amount of ZCache that shielded, which had been flat to declining, was suddenly increasing and on the move. We added hardware support later that year. It went exponential.

18:40 We added swap support in partnership with near-intense. It went vertical in terms of adoption. And we saw during those same milestones, the chatter increased. People start to get more excited. Quite frankly, it brought a lot of people back into the ZCache ecosystem that had kind of been dormant, maybe quite for a while.

19:00 And then at the same time, things were happening with Bitcoin, right? So people were starting to question the financialization of Bitcoin, whether Bitcoin had really been captured by Tradify and whether it was staying true to its cypherpunk ethos, and looking for kind of a hedge. I think they've all put out a tweet in October of 25 and it said something like Bitcoin is a hedge against the US dollar and it's a cash to the hedge against Bitcoin.

19:26 And we've seen an inflow in a migration of Bitcoin or so are either hedged in or who have kind of fully made a transition. Today, there's some people that are more concerned about whether or not Bitcoin can do it to post-quantum and in time for Q-Day. I think that's a valid concern. And again, ZCache was born out of Bitcoin.

19:48 So ZCache was a code fork of Bitcoin plus zero knowledge cryptography that these scientists had figured out how to make a work on top of Bitcoin. So it's very much a close relative of a Bitcoin to be good with. There's definitely just an aligning of the SARS win, Zashi really win private, got out of the ECC, started thinking like a for-profit company and then also the timing of ZCache kind of being branded as a hedge of Bitcoin.

20:14 Those happened in pretty close timing to each other. Is that correct? You know, my team, ECC historically pretty underfunded so didn't have a lot of resources. Like there's no big ICO or any big event like that. There were no big VCs involved that were able to kind of keep its supporters. So we just been freaking grinding for years and years and years and doing it because this is a belief.

20:35 The mission is a belief. It's not about cryptocurrency, like the broader industry. It's not like Maxi, like there's Bitcoin and that's it. It's not like that at all. Very much believe in a multi-chain world. But this problem, there's like nobody else going to solve it. Like if we're not going to solve it, who else is going to solve it?

20:54 Because there's nobody else. And so we've been kind of grinding through that thing. I got to token last year and network state and biology had me speak and I was talking to biology afterwards and he's like, you know, ZCash is one of the most important projects in the world, not one of the most important crypto projects in the world, one of the most important projects in the world.

21:16 Like are you well-funded enough to get to the level of growth that we need to get to in order to make this dent in the universe? They said, no, we're not. He said, all right, let's fix it. So that's when we started working on fixing it and started this kind of process of talking to third party investors.

21:33 And I was quite frankly surprised. I think many have been kind of realizing with AI, with the things that we're going to have with Bitcoin, we have this kind of existential threat as it relates to cryptocurrency. How important privacy was as a thesis to these major investors. Now we had to make a change in the middle.

21:52 There was a little bit of drama in order to kind of reestablish saddle, like get it at Gets Ashi effectively out of ECC. And but 100% of the East former ECC team is now a saddle and we're continuing to do what we were. We just now have the backing of these kind of players. And what's really important is when we started when I was talking about the capital, it was like, you know what?

22:18 It's like really important that we get the right people. It's not about the check. Yeah, the check is important. But we need to build a coalition of people that believe in what we are trying to accomplish, that want to be a part of what we're trying to accomplish. And that are in positions of power to help us do that, to help us push boulders that we just can't do alone.

22:40 So yeah, I was heavy hitters. And it was people that normally don't necessarily even invest with one another that had been part of that round. So that's been really encouraging to see the entirety of crypto kind of come behind this mission. I was curious to see if there was going to be some sort of cause and effect of Zashi turning to Zodol going private, thinking like a startup, really becoming product focus.

23:04 And that leading to a Z-Casha awakening of the narrative, of the price, of the UX, all because of the work that you were doing at Zodol. But hearing your answer now, it seems a little bit more that the universe just decided that it was time. It created the environment, the need for privacy, people like Naval, Apology, you know, others all kind of identified the growing urgency of privacy at around the same time that you really wanted to spin out of ECC and take Zashi wallet.

23:38 Kind of felt like there wasn't any one particular trigger, but just a bunch of disparate factors all kind of came together to just align stars behind a bunch of momentum and energy behind Z-Cash. Is that right? No, I don't think, I don't believe in accents. I just, I don't believe. I think there was momentum that was building.

23:54 And the momentum really kind of had started a couple years before, like we had to deal with the governance, we had to deal with some toxicity, like every ecosystem goes through these kind of governance and toxicity stuff. But we had to get that behind us. We had to fix the user experience. The user experience is absolutely just sucked, right?

24:13 So if you are going to use ZEC, like, fine, go and Coinbase and store it, but you're not actually using ZEC and you're not getting any privacy. And so to use it on a self-custody wallet, these are experiences where like something like a decade old, it wasn't, or very like, crypto-native. So we had to build a very simple, easy to use.

24:30 It was like, had a lot of complexity behind Zoddle in order to protect privacy and make it work well. Like I can't tell you who it was. There's another company that is well known for privacy and I was talking to the founder of that company and they said, you know what? I think people don't realize that it probably takes two to three acts of the engineering to build something that's not private than to build something that's private.

24:52 So not only do we have to build something that's private, we have to make it super, super simple and easy to use and make it in such a way that people actually want to use it and they're gonna trust, they're gonna trust their money with it. And so that, the creation of Zoshy and Zoddle and the usability and the capability, I think it's really important because then what it did is what it demonstrated is there was actually product market fit.

25:19 People wanted to move off of exchanges onto self-custody because you don't get shielded Z-Cash on an exchange. You don't get shielded Z-Cash with a synthetic. You don't get shielded Z-Cash with a cost to be provider. You have to self-custody in order to do it and to see the size of the shield pulled triple, you know to now billions of dollars of value being held on people's phones or hardware wallets with something like Keystone.

25:43 High conviction, high conviction community that was there that was really unlocked as soon as we gave them the tools to unlock it. Can you share what Zoddle's role in Z-Cash is? You guys are something of a protocol steward. You aren't the only one, but a lot of the Z-Cash protocol is at least in some part in Zoddle's hands.

26:01 Can you just try to light on what that dynamic is? Yeah, still a core of protocol developers, very deep cryptographic and engineering chops. Built and have managed the Z-Cash D, the consensus node that's used most pervasively. The Z-Cash Foundation has developed a new Russ-based one called Zephardy, which we all want to move to.

26:19 So we're all going to move to that over the course of this next year. We're building the command line wallet that will accompany that called ZLA so that is built as being built and managed currently in alpha with Zoddle. There's like client services that we built in support and then the wallet. So we are really full stack.

26:36 One of the great things about it is it allows us not only to have a kind of deep understanding the cryptography and the protocol, but to suggest or kind of push for changes that allow for the user experience improved since we're not like a degree or two separation away from users anymore and just focused on the protocol.

26:56 So for example, with a keystone wallet work, it's an air gap hardware wallet. It needed something called partially construct as Z-Cash transactions that need to be implemented in the protocol so we can do that on the wallet side, yes, but it allows us to do that on the protocol side as well, which I think is pretty neat.

27:13 So we've kind of shifted from cryptography and engineering up in terms of what we built for Z-Cash to what user demand is and then bringing that back into the protocol. How would you articulate what the actual roadmap is for Z-Cash? In Ethereum, for the Ethereum listeners, well, we kind of have this scale layer one, scale layer to improve UX.

27:35 Those are like the three swim lanes to meme the whole protocol development roadmap into just three lines. Is there something like that for Z-Cash? I'll tell you what mine are and there's some others that may have some differences in opinion. But, yeah, number one is to be able to scale the billions. So there's an effort that's going on with something called Project Takiwan that a guy by name Sean Bo is leading and a number of us are involved with their collaborating on.

27:59 That will introduce some new user experience elements that have to be kind of incorporated that may be kind of counterintuitive out of the gate, but will be intuitive a long term. So we want to be able to scale the billions, post-quantum is a big focus in getting that over the line and then use abilities, just making it easier and easier for people to get more and more access.

28:19 And so when I say usability, like I want to build a complete parallel policy, this kind of system that's adjacent to, but not part of the legacy financial system. So we don't need to be, you know, subtle in terms of the wallet itself, a single currency multi chain. So it's access to DeFi services, barway lending, yield, you know, the stuff like that that people want, that they would normally expect from a bank account, but without the bank.

28:44 And so we've already seen the high demand for swaps and I've been working with Nier and then now with Maya for different paths. And then there's kind of other interoperability that we need to build out on the wallet side to deliver, to truly deliver that user experience people want. What do you think technically speaking is the thing holding back Zcash the most?

29:06 What do you think is if you guys should solve one problem and then Zcash adoption goes up, second option goes up, more privacy transactions happen. What do you think of the most important thing is in the Zcash roadmap right now? Well, I think the most important things are things that we've talked about, which is getting post-con on them.

29:21 I think people want to have that security that win Q&A hits, which may even hit earlier than 2030. Their money's gonna be secure. That's a good store of value. I think we need to, in order to scale the billions, it has to be able to scale the billions. So high TPS and so people can use it to store, but they can use it to easily transact and then user experience where it's just one clicks.

29:40 So they'll last a three seconds. Yeah, yeah. So even with that, it's like, you can right now with Zoddle, you can swap, it's a single currency wallet, but you can swap in and out with Ethereum, with Solana, with Bitcoin, with stablecoins. So I can store my shielded Zc in the wallet, have security in that, but that if I wanna buy a bike for a hundred bucks in USDC, then I can send somebody a hundred USDC on top of Ethereum, but I've kept my balance private.

30:10 I've kept my transaction history private, and my counterparty can't see any of that information, nor can anybody else is trying to snoop on my interaction. And you can do that with just a couple clicks in your phone. You don't have to think about all the complexity of what happens behind the scenes, and so it's important that we kind of drive those kinds of use cases out more.

30:32 How do you think about Zec the asset then? Just like Bitcoiners call Bitcoin Digital Gold. Is Zec similar? Is it the same as a store of value? How do you think about just like the classification of Zec as a financial instrument? I don't care, I really don't. So it's like, isn't a medium exchange? It will eventually be a universal account.

30:53 And people like that kind of store value in medium exchange, economy, I don't, I don't particularly care much about. It's like, if I think about it in just in terms of US dollar, or money, like I have a bank account, I wanna be able to put my money in there. I put my money in there because I wanna ensure that it's secure and that it's guarded by people with guns and the doors and that then I can put it to use so it's not just dying, right?

31:18 That I can earn some yield on it, that I can get a loan. And then I have that money there and I've saved that money and I've put it aside, it's a store value at that point, probably, but now I wanna go buy a car so I withdraw the money and I write a check or I send somebody a bank transfer. It's now a medium exchange.

31:34 Like what was the US dollar in that context? It's, I care about the utility, like I wanna be able to store it, I want it to be mobile, I want it to be within my own hands. We have Zcashers who were in countries where their assets were seized, their force to move. So that mobility, that self-custody, super important.

31:54 And then the medium exchange is just based about time preference for store value, right? So I just wanna spend it now or I wanna save it now. Yep. Do you think Zc deserves a high price? Oh yeah. So if people are, it's funny for the longest time we've had this kind of very purest perspective is like we're not ever gonna, when I first joined ECC, it's like we never talk about price, we never talk about price, and it was good, right?

32:24 I mean, and we were focused on delivering the best technology that we could and we weren't focused on whether or not we could get our market cap up because we had a lot to do to get done and it was not ready for prime time at that point. So it is ready for prime time. It there is a need in the world for it.

32:43 It does have value, it is a scarce asset, it has the same tokenomics as a Bitcoin 21 mil cap supply. And things are very reflexive. So I don't care, like I know we get into these kind of speculative bubbles and people start buying and they're buying just to have exposure to the asset. And yes, there's a benefit of liquidity.

33:01 The challenge that we have is informing people like what it's really about. So once they've like had price exposure, they get in, they learn about it, they're like, oh shit, like I wanna have a self-custody and I wanna use this privately. So they do, and then the size of the shield of pool rises and people see that the size of the shield pool rise and the wallets become very sticky that way.

33:26 And then the price goes up and then it becomes very reflexive. So the more we have some of this price volatility, I think it's actually better for people to kind of ultimately learn what this asset is, the price, if nobody's caring about the price and it's in the doldrums, it means nobody's using it, nobody cares.

33:41 So yeah, I do think it's important and it's terribly undervalued. I mean, you think about, and end of the Bitcoiners hate this and they gripe for whatever, just technically it is better, it is better than Bitcoin. And look at the price, right? So you can say, okay, not, technically it is, but like we have more reach and more institutions and greater decent, I think the greater decentralization thing is totally BS.

34:06 I think it's made up, but yeah, so it's just, it's way undervalued what it should be. Okay, I love it, I love it. It talked to me about the shielded pool. Right now I think there's like 32% of all outstanding exec inside of the shielded pool. Talk to me about what the shielded pool is for the listeners who don't know and then why it's significant and what it means.

34:27 Yeah, so there's two types of addresses essentially. It gets a little more complicated. There's like multiple shielded address types, but essentially there's a transparent address type and there's a shielded address. The transparent address works just like Bitcoin. It was part of the Bitcoin code code base, so it's just like a Bitcoin address.

34:43 You don't have any privacy guarantees, same, same. And if shielded, which uses zero knowledge encryption, if you move your deck from a transparent address, you have coin, you bought some Zcashon coin base or better yet, you buy it on Gemini because Gemini supports sending it to a shielded address. And I send it to my shielded address at in or something called the shielded pool, which is the cryptography that is being able to guard your privacy.

35:11 It's a UTXO space chain, so in very simple terms, we say this is the number of exec, right? That there's five million whatever exec that's stored in the shielded pool. There's something called the anonymity set and it's based upon the number of UTXOs that are actually in the shielded pool that gives you like increases privacy.

35:29 So as you increase the size of the shielded pool, you increase the total anonymity set or the number of transactions that are, or outputs of transactions that are, that your kind of transaction is swimming in. Yeah, you increase the size of the crowd that you are hiding in. Yeah, yeah, yeah. So that's kind of basically how that works.

35:51 And so again, like all the exchanges in the world, all the custody, so the institutional investors, they all have to custody with custody providers, right? Just legally, they have to comply. So all of that is sitting in transparent addresses. The only way to get a shielded Z-Cache is to use a shielded wallet like a saddle, move it from your exchange or whatever and choose to self-custody.

36:14 So we went from in the beginning of early 2024 from about 11% of the total supply of Z-Cache at that time. We shielded to now, now north of 30% has shielded over the last two years as compared with the previous eight. And so that's great. I think that more and more come in line, I'm guessing some custody providers will come online and start to offer that ledger as working on adding support for ledger devices.

36:41 I think there are a lot of people on ledger devices that want to keep you using them. And so we'll see more hit independent of kind of new user acquisition. Does the percent in the privacy pool, the percent of Z-Cache in the privacy pool, does that represent some sort of like KPI for you or a target of growth, like something that you want to go up in number?

37:02 Yeah, it's the most important KPI in my mind. Okay, I feel like price is great. But and like wall downloads and stuff like that is great. But I know what's going on. I can tell what's going on and I keep telling people this is the alpha. And so, but if you look at the side, if you look at the shielded pool, the shielded pool is generally up into the right.

37:20 There's some dips and some things where kind of meet people moving it out. But it is extremely sticky. If you look at it over the last 10 years, there's a ton of data. If you see the shielded pool going up, typically you're going to see the price going up as Z-Cache wall supply moves off of exchanges and into self custody.

37:43 Because then there's just less available liquidity. We've had a couple of happenings now, so there's less equity that's entering the market, less inflation. When you see the price go up exponentially, a huge price, but the shield size of the shielded pool is flat than a speculative, right? Now, the wild card in here is that you have institutions who may be coming in or you have maybe some large whales, individuals that may be coming in and they cannot move it to a shielded pool because of what I mentioned earlier.

38:11 So you don't know how to separate those things completely, but it is a leading indicator in my mind. And so once you get to a certain shielded pool, whatever that price point is, it's a pretty good idea that it's a base plus some amount. And so we want to see is if people are actually finding utility, if they're actually using our wallet, if they're using Z-Cache or using other wallets that are shielding, then the size of that pool should be growing.

38:37 And if they're not, if it's not growing, then they're probably speculating. The reason why I like the Z-Cache shielded pool number is it represents kind of like a political statement of how many people give a fuck about privacy. And when that number goes up and to the right, like the assumption is, and I'm sure technically there are probably ways around this, but the assumption is that when you put your ZEC in the privacy pool, it's not liquid.

39:05 It's not easy for you to sell. If you want to sell that, you're gonna have to do like two, three, four hops to get that ZEC onto an exchange. It's inconvenient. And you are adding, it's kind of a statement of like, oh yeah, I actually care more about privacy than I do liquidity. I care more about privacy than I do convenience.

39:24 I care more about privacy. And so the ZEC shielded pool going, I think it's had this all time highs right now at 32%. Going up into the right is kind of just a reflection of what people care about. At least the aggregate is ZEC holders. And so to me, it's like a political statement that I find enjoyable.

39:42 Yeah, mostly though, but the thing that's interesting is we made it, when we made it easy to move in and out of shielded ZEC, so I can like single swap in. I can swap in with USDC and ZEC with a couple clicks in a few seconds and I can spend USDC the same way. So we actually made it easier to go in and out with the wallet and the adoption rate spiked.

40:07 That makes sense to me. That makes sense. Yeah, it's kind of like when Ethereum had enabled withdrawals from staking, what happened more people staked because they had more assurances that they could get out. That's right. Yeah, that's right. Yeah, very cool. In 2024, emerging markets generated over 115 billion dollars in annual yield for investors.

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42:07 You guys raised from, like I said, paradigm, A16Z, the week of buy, Coinbase enters, chapter one. What are your guys' goals for Zoddle? Yeah, I think, again, I think everything is very kind of intertwined in that. So even with the investors, the investors that came in, as I mentioned, we wanted to be very careful who participated on the cap table.

42:27 It wasn't just taking checks from anybody, we were very intentional. To the investors, and I don't know what the exact percentages are and each investor and they didn't disclose them to me, but the general sense with most of them, as they were putting in, they had an allocation that they want to invest towards Z-Cash in the Z-Cash ecosystem.

42:44 They were taking 75 to 90% of that, and they were buying or had planned to buy, or will buy ZEC, and then the remainder 10 to 25%, they funded Zoddle. Because they believe that there's a symbiotic relationship between Zoddle and its Z-Cash, and kind of another bolognism. One of the things he was, he told one, he's like, he's like, look, Zoddle is to Z-Cash, what Coinbase was to Bitcoin.

43:16 And I think people immediately kind of rock with that means, if you've been kind of around in what Coinbase meant in terms of onboarding, lots and lots of users into it. And so, you know, we intend to build out a full set of capabilities. I think there's a sense that, look, if Bitcoin's able to 10X from here, Z-Cash is easily 100X from here, Zoddle can, easily 1,000X from here as part of the thesis, because we'll deliver kind of a rich set of capabilities on top of the Z-Cash protocol, and nobody at the user experience level kind of has the same depth that this team does.

43:51 And with the core protocol, depth and history. So I think that's kind of going in, where everybody's coming in there. Do you wonder that one of the reasons why Z-Cash is what it is is because the un-shielded side of Z-Cash is friendly with institutions. It makes allows institutions to be compliant, because they can handle the un-shielded sides.

44:10 Yeah, that's sort of bullshit too. So I think they can't be compliant, right? So I think very early Jim and I allowed for shielded withdrawals. Like everybody can do shielded deposits with withdrawals, but only Jim and I chose to do it, because it took some work with their HSMs or hardware security managers to be able to implement the elliptic curve that was necessary to be able to support that function to create a proof.

44:36 And so there just wasn't commercial demand. So it wasn't regulatory. Because they still, if you think about it, if you go to a regulated exchange, they still KYC you, they know who you are. If they want to get additional information, then they use EDD and their two diligence, and they ask you your source of funds or things like that where it's going.

44:56 And so all of those organizations everywhere could be in complete compliance and still support shielded Z-Cash. They just chose or have chosen not to, because it's work and their customers having demanded it. So my understanding was that Z-C has been, Z-C has won the compliant privacy coin brand because of the un-shielded half of it.

45:21 What I'm hearing for you is that's not true. But then my question is, how come Z-Cash did win that brand, where Manero, which is the privacy by default coin, won the brand of the criminal coin? How did Z-Cash get the compliance right? Like a lot of that's mimetic. So when we started the, for better or for worse, like again, to create a zero knowledge proof and to create shielded Z-Cash when Z-Cash launched, it was too computationally intensive.

45:45 So realistically in exchange, like whether it's like Polonex or Kraken or whatever, launch that they couldn't realistically support shielded Z-C because to create a proof for every withdrawal, you know, out of the exchange, it didn't scale, it just didn't scale. So that was kind of solved in 2018, but by then everybody had onboarded with transparent Z-C because it worked just like Bitcoin, the software is basically the same.

46:11 They didn't have to do lift a finger to hardly any work and now they've got this other new asset on. So then to go from transparent to shielded, still a ton of work. Now they can do it and they can scale, but they have to make the engineering decision that we're gonna update our HSMs in order to make this work.

46:26 So it took Jim and I did it because they're very ideologically because Kim and Tyler are very ideologically aligned. And so they did the lift to make it work with their systems. So there is this kind of notion, yes, but it did get kind of broad traction with exchanges and access to liquidity because T addresses work just like Bitcoin addresses.

46:49 So super easy to support, where initially T addresses weren't supported. So, and number two, the other kind of fallacy that gets kind of thrown around is it's like shielded by default. I think it's better to say that there's a private by default. I think it's mandated, certainly, in the Monero ecosystem or the mixing, you have to have a certain, now the level of privacy that you get with Monero changes dramatically based upon how you use it.

47:17 Likewise, the way that you use Zcash changes dramatically. Zcash itself isn't opinionated as to whether you use shielded Zcash or transparent Zcash. Right, it doesn't care, you can use either one. So Zadol as a wallet, we care. So we decided to take an opinion. We want shielded Zcash. So if you move transparent Zcash in, you have to shield it before you can spend it before it can go anywhere else.

47:39 So we're seeing more and more like that. And I think that's helping with the shielded option. Ultimately, I think T addresses get deprecated at some point and go away. They're not necessary. You know, some other people in the Zcash ecosystem have some different views for me, but I don't get their arguments at all.

47:56 Well, the question I have is, part of the weight behind Zcash's current narrative is viewed as the compliant privacy coin. So it's going to, it has the treasury company from the Winkle Vi trading on the NASAC or the New York talker change, one of the two. There is the trust from grayscale, which is being filed to be an ETF.

48:16 The idea is that it can follow in Bitcoin's institutionalization path, and that's one of the bowl cases for Zcash. That's one of the reasons why people are excited about it. Do you think that that takes anything away from the more cypherpunk side of Zcash? Because this is what I think a lot of big coiners are pointing at Bitcoin and be like, yeah, it's, it's, Michael Saylor owns like two percent.

48:39 It's BlackRock is in it. The United States government loves Bitcoin. It's lost. It's like cypherpunk, you know, counter culture, rebellious edge. Do you think that same thing might happen to Zcash as is something you worry about? Kind of, like, and I think cypherpunk that, some people where cypherpunk is like this badge of honor and I'm one of them.

49:01 But I think we interpret it sometimes differently. I think some people interpret it as like this counter cultural, like rebellion. I'm this shadowy supercoder, whatever. And for me, it's that this should be normal. Like we should not, it shouldn't be this like band of Robin Hood and his Mary Thieves like out in the forest constantly.

49:24 Like this, we need to normalize it, right? And it should be available to everybody. It should be easily accessible by everybody. I think that's an Eric Mint that's true to the cypher punk roots. That's different than an ETF in financialization. So if like backark decides to do, somebody decides to do an ETF, you know, grayscale's file for one, that's great.

49:45 People can come in and do price exposure. Like I love my friends at grayscale. I really don't care. Like what we are building is for financial freedom. The protocol won't change. We're not going to change the protocol based upon like this kind of institutional adopt. That's not why we're building. That's not why any of the people in the ecosystem is here, are here and it never has been.

50:06 So I think I don't know if I can answer the question, but like we are fighting to change the world. We're not fighting to build another financial product that you can put your forward, okay? Sure, sure. Just to add a curiosity, beyond Zcash, what else do you do for privacy in your life? I'm not going to tell you.

50:23 That's a good answer. Okay, that, all right. I will say this. I will say anything that you do, like privacy is not an absolute, it's a spectrum. You know, we have this belief that it is basically what you choose to disclose to the world. So by coming on this show with you, right, I've disclosed some things I've disclosed.

50:48 We both have white t-shirts, I disclosed, you know, I've got a mirror in my background. There's some kind of, and this isn't just a private conversation. This is go out to other people. So I am very cognizant about what I choose to disclose to the world and make very conscious choices about where and how I do that.

51:07 What I choose to disclose around my loved ones, and people around me. And I think it's important, like you don't want to have to walk around in terms of with that kind of cognitive load. There's basic kind of hygiene and best practices that you can do, which is inclusive of not oversharing online, you know, or oversharing, only sharing what you're comfortable everybody seeing and what everybody's seeing forever.

51:33 When people share online, and it's part of the problem with AI, so AI, now it's not just a human looking for information. Now you have aggregators that are able to aggregate all this data, now aggregating on-chain data. So I'm able to take all this information, I know about you, pull it in with your financial track, you know, your transaction history with your balances with every financial interaction that you've ever done online.

51:56 I can do very rich searches and queries on you, or sets of people in order to try to manipulate people to get to certain outcomes. It's very, very scary. And so by default, we want to have privacy, so we can have a transaction. I can just pay you that money for a bike, and it's between you and me. It's not then part of this graph that gets captured for this big machine to own forever.

52:23 So I think if people just, I think you need to use the tools that are there, and then easy to use, we need to make it easy to use to accessible to everybody. Josh, things are coming on the show today. Thanks for having me. Thank you, Lissation, you guys know the deal crypto is risky, you can lose what you put in, but if you use Zcash, you can make a private.

52:40 This is the frontier, it's not for everyone, but we are glad you're with us on the bank list, or any, thanks a lot.