Developing Privacy On The Blockchain With Jake Yocom

LLC and the project lead of Decred. We get into what it takes to be a project lead, what it takes to build in the blockchain space, and how he's going about doing that. We get into decred project. We talk about the changes in governance that they think are working really well for them, where that may go into the future. We talk about privacy, why we need it, why we should have it, and what they're doing about bringing privacy back to the blockchain. Some really cool stuff there.

Some other stuff that we talk about includes um buying, selling and exchanging in pure privacy, including a new d e X and new decks at their building. Lots of other good conversations with Jake. So it's going to just jump right into it. Everyone, Welcome to another episode of the Market Disruptors podcast. Today, I am joined by Jake yocum Piet. He is the project lead over at de cred and has been writing some cool articles working on a lot of cool stuff. I can't wait to talk

to him. So welcome Jake. Thanks for having me Mark, It's a pleasure to be here. Great. So, um, yeah, I kind of gave a little bit of an intro, but why don't you just kind of fill us in a little bit on on who you are and and uh maybe how you got to where you at right now and working on decred on the project for sure. Um,

I'm Jacocompi. I'm the project lead for decred, and I've been working in the cryptocurrency space since late twelve early and my history is really, you know, to keep it really brief, is I started working in the bitcoin spased on an alternative full note bitcoin implementation called btc suite

and worked on that for a while. And my perception of bitcoin is that, despite being you know, excellent technology and and really, you know, really a great project, is that I felt that the governance system of it was pretty unfair and I found that pretty you know, pretty jarring and not exactly the best user experience from my position. So I ended up working with two a couple other people to create a you know, a set of changes on top of Bitcoin that we felt would make Bitcoin

a you know, a fairer game. That is that not just make it fairer from storing and transmitting value, but make it fairer from the perspective of governance. So that was really what we launched the project with a focus on. And that's sort of you know, that's our main focused And and uh, when when was that that you launched the decredit project. Oh yeah, that was a February, So that's like three and a half a little over three

and a half years ago now. So we've been in production since February sixteen, and the work to create decred started back in February fourteen, so it took us a couple of years to get everything, you know, set and ready, and then we launched with a working code and everything. So like the first four years you were kind of in in and around bitcoin cryptocurrency space, Um, you were fascinated by bitcoin and then working on bitcoin with with some other projects, kind of learning to code and develop

on it. Yeah, yeah, and and I myself, I'm not a developer, but I worked with I've worked with a team of developers now for you know, over ten years.

And we had approached bitcoin from the perspective of saying, you know, what could we really bring to the table, And what we felt we could bring to the table was some diversity in terms of the ecosystem for full note clients, because in the case that you know, let's just say something bad were to happen to say, Bitcoin Corps hits a nasty bug, then there's you know, at least one implementation that presumably wouldn't have those same bugs, so that the network can keep ticking over and people

can fix their bugs and get everything back online without it being a sort of a coordination mess. M hmm. Now, um, when when you first kind of came in in two thousand twelve and and as we kind of say, like fell down the rabbit hole, so to speak, Um, where there are a couple of core kind of principles that really grabbed you and and pulled you in. What was that like for you? Yeah, I mean what really drew me?

And I think, you know, whether people realize it or not, you know, drew them to the bitcoin game was that it's that it's a fairer game. You know, if you've been if you've been using fiat currency for you know, most of your life, and then you see something like cryptocurrency. It really is striking in that it it avoids many

many problems that you end up having with banks. Anyone who's ever had a problem with a you know, with a bank, whether it's losing an account or you know exactly or or any other kinds of problems, recognizes how much power banks have over you. And and what bitcoin did that I thought was really amazing is that it distilled out what banks, you know, the sort of the leverage the banks have, which is that they can create a time stamp on your transactions and no one else can.

So what they did is they decentralized the time stamping process. And that's you know, that really drew me in and you know, and kept my attention. Yeah, okay, yeah. So, um, there's so many different facets to bitcoin and cryptocurrencies. And obviously with bitcoin and and being censorship resistant is one,

so the banks can't seize it or steal it. And then obviously the hard cap so it can't be inflated and manipulated, and you like those core principles about bitcoin, you just thought maybe there were some tweaks in the governance that that could be made. Yeah, yeah, I mean it's clear that bitcoin works, right. You know, proof of work is a really effective means of coming to a consensus, even you know, you know centralization problems with hardware aside.

You know, it really does change the game, and it makes the process at least nominally permission lists you can you can store and transmit value without anyone going hey, I don't like you. We're gonna you know, close your bitcoin account, and and that is really just uh, you know, that all worked. The thing that I felt like really didn't work was the component where you go, Okay, what changes are we going to make to the network? Are

we gonna make consensus changes? Are they gonna be software changes? Are they're gonna be hard fork changes? That process is incredibly messy, and uh, the one cpu, one vote mechanism that was proposed by Cistosi originally doesn't work out so great when you know, all, let's say the bulk of the hash power is in warehouses in one jurisdiction, which

would be China, mm hmm. Yeah. Did a lot of that come from I mean, I guess you started working on this previous to the forks that happened in seventeen, so you had kind of maybe seen some issues with the consensus before before all that forking the four cores

or the nerd wars happened. Yeah. I mean what the pattern we saw was this is that is that the existing Bitcoin corps and then you know what what became block stream is that that group of developers, while you know, while very talented and you know, they have a lot of chops and they've delivered a lot of great code,

it ends up being a small central planning committee. So as much as bitcoin, you know, with the ability to you know, uh, store and transmit value without censorship is great, the system itself going Okay, where is this system going to go in the future, is you know, controlled by a central planning committee, which is a small number of people have an outsized amount of influence over the repository

for the bitcoin, you know, for bitcoin corps. And then as a function of that, they are the people who are in charge of the government or you know, what's effectively the government of bitcoin. And I felt like that system was. You know, something I've never really liked about the Federal Reserve is that it's a central planning committee.

You know, you and I we might no matter how much money we have, we can complain all day, or you know, we might know somebody at the Fed, but we're not going to be able to influence their policy. And I and that that was roughly the situation that I found myself in back in I guess it was really like late when that really all started to sink in for me. So, so give me a rough overview of how that how how you've kind of tried to fix that, Like what does the consensus mechanism look like

on on the decred project? Yeah, so, so what I recognize as I recognized there were really three shortcomings to you know, to bitcoin in my mind, one of them being that h that miners had too much power. That is, you know, if you looked at what happened with you know, and from I think it wasteen until seventeen with the seguate change set. So SegWit is a set of consensus changes everyone not everyone, but it seemed like the vast

majority of people wanted them implemented. But the the community of miners did not, so they effectively blocked that consensus change from being implemented for the better part of three years. And uh and you know, seeing that miners just have

too much power. The other thing that, uh, that I experienced was is because uh, you know, I built out BTC suite and I I financed it myself, was there's a real tragedy of the commons with respected development work, right, you know, you want to let's say, you know, there's a team of a hundred people who want to make bitcoin grade. It's like becomes a question, Okay, who's gonna pay you? And then what are the you know, what

what is your what's your paymaster's agenda? And then you know that's a question mark and then the you know, the other thing is is that there's really just no sovereignty, you know, no matter how many big you know, even if Statoshi wanted to change things, Satoshi couldn't really change anything because the governance, mechanimics mechanism is all vested in

the you know, in the miners. So I felt like there was a misalignment of interest there because somebody could mine and just dump all their coins and and still have an enormous amount of sovereignty in that system, and I felt like that was a fundamental misalignment. So these things, combined with reading about a hybrid proof of workproof of stake, uh, you know consensus system is what led me to say this.

You know, this hybridized consensus algorithm is really what I see as the future of you know, of of consensus. Doesn't a lot of the power lie in the nodes who actually decide which version of the software to run, and not the miners. There's something to be said for sovereignty being vested outside of the miners, but you know, when it comes down to it, someone has to mind the currency, and the mining is where the security comes from.

So I would argue that the miners have a lot of a lot of sovereignty, the people developing the software have a lot of sovereignty, but the people holding the coins really don't have a whole lot of sovereignty. And then when it comes to note operators, it depends on which a note operators you're talking about. Like, like, let's say I'm a random person and I have a note running, and I go, I'm gonna you know, I'm gonna not

follow these consensus rules. Everyone else is like yeah, I don't care, bye by, and I feel like you know, However, there are other nodes that are economic nodes, like say, you know, nodes a major exchanges and payment processors that have you know, and an outsized amount of power implicitly, um you know, as a function of their role in the ecosystem compared to uh, you know, just random people

operating full notes. So there is there is a little bit of sovereignty all spread around, right, we can all do the user activated software thing and threatened to walk out of the room and be like funk this, I'm out of here. But but you know, I don't think I don't really view that as much. Uh sort of, it's sort of like a it's like a riot switch, like if if you do the wrong thing, everybody's gonna riot and leave or flip over cars. But it's it's

not a very good government's mechanism, got it. And so through through the governance mechanism that you've done, you you you touched on a couple of things. Um. One, we talked about the consensus and and having some sort of like a hybrid pow POS system of proof of work and a proof of steak. So the proof of steak that people who hold the coins you said who don't have a vote, I guess now they're staking those coins that they do have skin in the game. Now they

do have a vote. Yeah that yeah, that's right. So so each block subsidy in our system is split three ways, proof of work, proof of steake, ten percent treasury. And the way it works is is that the miners proof of work create the blocks. And then what proof of steak does is that you you opt into a ticket system, so you lock your coins, you timelock them for a pseudorandom amount of time, and then your your your coins

turning to tick gets. The tickets go into a rolling lottery and every block, five of these tickets are chosen to vote. And what you're voting on is you're voting on the validity of the prior block. And so if there's a proof of work miner and their misbehaving, it is conceivable that you can strip them of their mining

reward uh from the previous block. So that so that what this does is this puts the proof of stake miners, you know, firmly in control of what does and doesn't happen on the network, so that if there's a malicious or a group of malicious proof of work miners, the proof of you know, the stakeholders can effectively censure them and deprive them of income to sort of tow at best discourage their continued sort of you know, bad behavior, and would then be done by some sort of like

a majority vote. Yeah. Yeah, So so, uh, every block there's five tickets called, you need at least three of them to vote or to be included in order for the block to be valid. So if or more, uh yeah, or more of the votes are yes, the block is valid. If there's fifty or more no votes, the block is

in valid. So um, you know, if enough of the stakeholders on a on a rolling basis disapprove of things done by certain proof of work miners, they can go through and start, you know, invalidating the proof of work rewards that those miners receive. Right, But who who's who's actually voting though? Like like today, I mean who's voting? Is there like a small group of people who are actually paying attention to taking time to vote or how

how is that being done? Yeah? So, so the way it works is this is that as blocks, people run things called voting wallets, so that as let's say block N is mind and then it propagates across the network. What that does is that sets a you know, that sets a pseudorandom uh sortition of the tickets, so that block and its header go, these are the tickets that are going to vote in block N plus one excuse me,

and then those votes end up getting cast. So so people have wallets that are online continuously that are ready to vote when the blocks are published. And that and what you do is whether we're talking about voting on the validity of the prior blocks, proof of work, or we're talking about making consensus changes, people can pre program their you know there how they would like their voting whilets to vote. So if there's a certain behavior that

you want to vote against. For example, let's say you saw the mem pool and it has a bunch of transactions, and and then you see a block that's been mined has no transactions in it, you can have a policy set such that you vote no to that block and and you know, correspondingly strip the minor of their rewards. So so this process is generic. And then and then the same thing goes. If you're voting on consensus changes, you can vote yes or no or abstain from votes,

depending on you know, what votements are available to you. Yeah, there's definitely a lot to unpack there, and I can keep asking questions, but I kind of want to move on past that. UM. One thing that I do want to touch on before we dig into some other stuff I was kind of looking forward to, is as you mentioned about the UH ten percent goes to like the development fund, I guess, And so I think you kind of said, like with bitcoin, the problem is is that

developers aren't getting paid. So I guess everybody's kind of doing it for free UM. And so what kind of long term problems could that have in development on bitcoin? Whereas UH, your project decred has um a reward going to pay developers. Is that kind of what you were talking about? UM? All right, So what I was saying is we could spend we could we could spend a lot of time talking about UH, talking talking about those

that that area of government. I don't really want to dig too much deeper into that, but you did mention something about the UM tem per cent of the of the inflation going to fund the treasury or to fund the development, and how other projects like bitcoin don't have any payments going to developers. Um. And so I guess you're saying that Bitcoin potentially could be stunted because eventually it could run out of people willing to work for free. And de credit has a model where people get paid

to work on it. Yeah, that's right. So we have a we have a contractor model where where for example, there's a company that that I own and I'm the CEO of Company zero LLC, and it's a development contractor and it's one of you know, many contractors that work for the project, whereas with bitcoin, bitcoin is dependent on

you know, mostly venture capital money at this point. I don't think there's any shortage of the venture capital money at this point, but in the few that, you know, there's no guarantee that in the future there you know,

that those funds won't run out. So um. So, what the way Decred handles is ten percent of every block goes to a centralist corporate entity, and then that corporate entity, decred Holding UH Decred Holdings Group LLC, pays out to contractors who build for the work that they perform, which includes you know, company zero and and you know, probably about fifty other contractors. Yeah, and we can definitely see that UM decredit is working on a lot more projects

than bitcoin. So some of the projects I've seen you working on, which I saw one was voted in by the community to build a deckx right, a decentralized exchange, which I thought was pretty cool. Um, you're also working on some privacy US, some lightning UM stuff, atomic swaps, So I guess that kind of allows you the community to kind of work on more projects like that. Yeah. When when we when we started decredit, we started it intention We made a constitution to to try to manage

people's expectations a bit. And one of the things we said as we said we would continue building open source software that's you know, related to the cryptocurrency space, and the decks is a great example of that where we're trying to sort of, you know, the same way were we we main effort to make the governance process fairer. We're trying to make the exchange process fairer. So there's no you know, ks m L, there's no h you know, there's no requirements about you know, things you have to do.

You pay an upfront fee to get on a server, and then you can trade, and then the order matching is pseudorandom, so no one can gain you on a first in, first out basis like they do on most uh FIAT exchanges. And then you know, you know, with privacy and all of these other things. The funding does give us latitude to do, you know, to do new stuff. And we also don't have to do pend on the approval of you know, the venture capitalists who would otherwise

fund this saying the same way that bitcoin does. Did you see today, um, the group Anonymous pledged to donate seventy five million dollars for bitcoin development for privacy. That was pretty amazing. I was surprised to see that. I

think it's pretty interesting. I I did see that as well, and and I guess my you know, my feeling is it's, uh, we've seen so many I c O s who have you know, a mega pile of money, and you know they just sort of you know, uh piss it away on random stuff or they don't really get a whole lot of work done. It's gonna be interesting to see what comes out of that, you know, one, whether the funds are you know, do exist, and you know, to

whether people actually build useful stuff. There's you know, there's there's a lot of good that could come out of it, but it remains to be seen. I'm always skeptical. I'm a I'm a deliverables before promise this kind of guy. Sure.

I just thought it was interesting because they want to donate it towards privacy focused stuff, and that's kind of where I wanted to focus our conversation today because as I saw, you released a paper a few months ago talking about privacy and how uh kind of kind of some of the shortcomings you see or some of the needs of privacy in the industry, and how you want to start optimizing for that. So um, I I personally like to see more companies such as yourself, seeing seeing

the need for that and optimizing towards that. But tell me, tell me how you look at privacy maybe as as something that we need and and something that maybe D credit can help solve for sure. Yeah, I mean when we launched, our focus was just on the government stuff, but we always had an eye to adding privacy. I'm

a total privacy nut. I'm probably way more of a computer security nut than than most of the people who work on the privacy projects, and um, I feel like privacy is really important in the context of cryptocurrency because it's,

you know, it's it's a value transfer system. If you don't have privacy and value transfer system, somebody can use, say, you know, something like chain or chain analysis to look at your entire networth, all the transactions you have head and then figure out who the people are who are

interacting with you, and so on and so on. So I feel like, you know, privacy is really about preventing people from knowing more, you know, learning things about you without your consent, and and and and that I view as something very you know, very important because if we if we look at a world without privacy, which is really kind of where things have been heading for the past decade or two or or five and uh yeah, yeah, yeah, ever since the development of radio so uh so, privacy

has been diminishing. And and the issue there is is that when you have no privacy, people can always tell what you're doing currently. And you know, humans are creatures a habit. If you know what someone is doing currently, you have a pretty good idea of what they're going to be doing in the near future. Or in the or in the distant future. So privacy matters from the perspective of control. Someone knows what you're going to do before you do it, even if it's just a you know,

probabilistic relationship. They can outmaneuver you. They can manipulate what you what you believe, or what you you know, or or how you feel about things. So, so privacy matters in the context of us creating a society that functions with a bunch of independent, you know, elements, as opposed to sort of a top down society where somebody with a satellite can tell you know where everybody's going, where

everybody has been, and where they will go. So, you know, it's really it's really about freedom and what kind of a society we want to live in the future. Yeah, And I think one thing that's important for most people to understand is it's not just about like secrecy. It's not just like I don't want this drug deal to be known. UM. Let's say that I I'm a manufacturer

of a product and I have multiple companies buying from it. UM, and I do a transaction with with company A. I don't maybe want all the other companies to know what I sold that product price? You know what the price of that product was sold for. So like that that should be that should be private, right, nobody needs to

know what that deal was. Um, And so I think everybody could understand, like you wouldn't want everybody in the world to be able to look into your bank account and see exactly how much money you have in your banking and what you were spending, and not because you want to buy drugs, but just because you want to privacy there, right, um and so that's the thing with bitcoin, I guess, being being open to everybody, you can see all of that and and so um, so so how

does how how are you approaching privacy and what are you looking to do to solve that? So our approach of privacy was based on, you know, having the luxury of observing what everyone else did and for several years before we really made a move. So we saw we saw, you know, a couple of the two biggest projects for

privacy are probably you know, z cash and Monaro. Monaro was first in the game and they did ring signatures and then they added confidential transactions afterwards, and then they turned it into bulletproofs and the problem you know that I saw with with Monaro was I like ring signatures,

I like confidential transactions. But um, the thing that occurred to me right away when I first saw it in you know, early fourteen, was as soon as you create ring signatures, you create uh, you know, deniability about how um about which transactions are spent and which are not. So once you don't know which transactions are spent um, you end up in a in a scenario where you

can't prune the blockchain. So if I want to go if I just want to throw away all the spent transactions, I can do that with Bitcoin, and I can do it with decred, but I can't do it with with mo narrow. And that's sort of you know, it's it's by construction. So they have something they call pruning, but it's really kind of like it's more database charting. It's uh, you know, it's it's great, you know, it's a great

project for privacy, but not for pruning. And then you know, ze cash has actually the same problem, which is that if you're using shield of trans and pruning, the pruning is being able to cut the database size down so that it's uh, it's stays small enough for people to run nodes on. Is that what the pruning? Yeah, yeah, that's part of it. But I think that the term pruning, at least, you know, it comes from the context of bitcoin, where you can always determine whether something is spent or not.

So what it really is is it's throwing out the old transactions that have already been spent. Like you know, for example, you don't care where every penny that you have in your po it came from. You just care that you have them, and and and correspondingly than you know, the database for the network should only care about where that penny is as opposed to where that penny was.

And and you know, when you use ring signatures or you use shielded transactions with z cash, you can't tell where that penny was because it could have been any of these various pennies that are on you know that use privacy, so you can't tell where you know, where things have come from, where they're going, and then also

whether they're spent or not. And that's something that really drove our you know, the decisions we ended up making, which is because we saw the consequences and and sort of of these other systems we thought, we really want to do privacy, but we really want to avoid uh anything that breaks pruning. So so what we ended up doing is we ended up implementing coin shuffle plus plus, which is based on a paper by um uh roughing Merino,

Sanchez and Katte and um. What that is is it's you know, it's it's a it's a way of shuffling coins. That doesn't right, That's like that's like a coin join. Yeah, exactly. Yeah, So it's a special kind of coin join. So it's a it's a dice mixed coin join. The idea of being when you have a coin join, right, you know,

a whole bunch of it. Let's say seven people show up and they all join their transactions together, and they do it either through a central server through peer to peer network, so that those seven people and possibly a server know where the where the funds came from, and where they're going. Now that's obviously not great because you know, then all of us, you know, everyone who participated, knows where things went. So that's not great from a privacy perspective.

All you need is one person spying on the mix and it's in its toast. From a privacy perspective. So what coin shuffle the coin shuffle element does is it is it is it allows everyone participating to to to communicate cryptographically, exchange keys, exchange some some blinded cryptographic information,

and then the outputs become decoupled from the inputs. So while let's say there's seven of us, and we might be able to identify here's this cluster of inputs, here's this cluster of inputs and so on, what we can't do is we can't determine where the ones went, and neither can the servers. So that's sort of the that's why we were drawn to coin shuffle and then your

coin shuffle plus plus and it didn't break pruning. So it's a straightforward process that uses basic cryptographic primitives and allows you to shuffle coins in a way that uh, you know, in addition to uh, in addition to it being anonymous to or you know what, is it private to everyone in the transaction, including the server. It also doesn't depend on network privacy, which is you know, which is something that I feel like is a shortcoming of

schemes that use blind signatures. For example, was SABI while it does that, and I think that the Wasabi walt system is really it's really quite great because it's even I would argue it's even simpler than coin shuffle plus plus. But it has the downside that if somebody can undo your network path, then they can de anonymize you. So um, like with a SABI which would be used with bitcoin for for the listeners that aren't keeping up with that

technical explanation. Therefore, with saby, it's like an external application, so I could use as my wallet and the bitcoin I receive, I can shuffle through there or mix them and then put them into my wallet. Um, but you're talking about taking this a similar situation system but different, but building it into the protocol as opposed to having it be an external system. That's right. So what we did is we integrated with our directly with our wallet.

And then what we also did is remember how I was talking about, um this ticket process where you lock coins to to buy tickets. The tickets are involved in the in the staking is we intentionally overlaid the system with our staking system because on any on any given day, about I want to say, it's like one point so it's either one point in between one point six and two percent of our of our entire issuance is being

used to buy new tickets every day. So we figured that by having a system like this and then also being able to overlay it with our existing steak you know, with our existing existing stake infrastructure, we would get a lot of transaction volume that you wouldn't otherwise be able to get with the normal mixer, say with with bitcoins. In the case of Bitcoin, gonna have a bunch of coins moving through it, but those coins are are you know, it's only gonna be so much of the you know,

the total issuance. There's gonna be a lot of people who just don't use it. Whereas with the way we've set it up is all the coins are staked, and I think at this point I want to say, it's like, uh like twenty percent or twenty five percent of the of the staked coins are moving through this system already.

So then back to the Bitcoin analogy, So then they have an external mix it mixer like with SABI, and if there's not enough people using it, there's not enough coins to mix together, so it's not really mixed up as well as it could be. Versus you're staying with decred because people are staking on the system and you're doing the mixing on the protocol, you have a larger

percentage of coins to mix through. Yeah, exactly, so, so you know, I I'd expect it in absolute terms, I wouldn't be surprised if say was Sabi, Well it's you know, net net amount mixed and sort of fraction of the U t x O set and then the value of that it's I wouldn't be surprised if it's greater than de credits, but de credit market capital still lowish, and uh, you know, I want to say we're let's say it's of all of the coins staked, is that's ten percent.

I think our market cap is something like, you know, uh something like two or two or forty million, and that's like two million dollars worth of worth of you know, coins that are all being mixed together, on and on. And this isn't just you know, one shot and then they then they go dormant. In most cases, these coins are continuously or semi continuously mixed. Yeah, what do you

think about the future. I mean, I guess you're obviously building for this right now, but like the future of the coin mixing, the coin joining the privacy type coins. I mean, we're starting to see so much crackdown and regulation on that right now. I mean, you're obviously building into it. How do you think about that, like the increasing regulation but also the you know, increasing demand for that,

how do you balance that? I mean, we, you know, we did create the system as an opt in system on purpose so that you know, people aren't necessarily forced

to use it. But in terms of regulation, I mean, my sense of it is is that it seems like people are going to the exchanges first and they're trying to sort of create liquidity problems, which in part of this is why we you know, we decided to build the decks, which is that the DECKS allows us to sidestep things like, let's say, at some point in the future, uh, anyone operating and regulated centralized exchange is pressured by their

local nation state government to not list dcred um. The deck side steps that the DECKS is effectively something like an email server anyone can set up anywhere there's no custody involved, and it's you know, it's it's low risk to operate or low to no risk to operate. So so this process of dealing with regulations is that. The way I view it is is that it's it's really

all about on ramps and off ramps. They're trying to restrict the on ramps and off ramps, and we're already working on building a solution that won't just work for us. But hey, let's say z cash and monero experience issues with they're on and off ramps. They are absolutely welcome to get support added to our decks and then you know,

do their own things. Yeah. And then part of the big thing with coin joining and or coin mixing uh if you will, or even with the privacy coins is is UH to promote the fungibility, which means that they're all equal to be exchanged like a dollar bill would be. And a dollar bill, I don't know what does A nine percent of dollar bills have cocaine on them? For example? So if they said, hey, if that dollar bill was ever used for a drug deal, it's no good anymore.

We can't the bank can't take it. But they're trying. I think maybe some exchanges might already or some people might say, hey, we don't want to accept that bitcoin if it came from some blacklisted wallet or something. Um so is that is that something big that you're seeing there,

that's why that's what you think. Well, yeah, I mean that's that's the direction I think things are going, which is that, um, you know, the way nation state governments have chosen to deal with bad actors is rather than try to catch bad actors in the act doing bad things, what they've done is they've tried to turn all of the sort of the systems that we use to advance ourselves as a human society into surveillance tools so that, you know, uh, if they could they put a camera

and microphone in every pair of shoes and have it spin on you to just make sure you're not misusing the shoes. I mean, that's how things work with you know, both our financial system. You know what, what is it traveling anywhere? It's the same deal. It's a treat. You know. They assume everyone's a criminal until you prove that you're not. And it's like it's it's these kinds of systems, in my view, build a society that is not uh, you know, it's not the kind of society I want to live

in the future. I want to build a society where, you know, you assume most people are good and most people are nice, and you know, you don't assume that people are gonna misuse the shoes to kill people and

you know things like that. Okay, So UM, so that you were talking about with the coin shuffle and the coin joint and basically we're breaking that history so there's nothing to be traced back and it doesn't cause harm to everybody else, right, So I was kind of giving the example that, UM, recently we saw bitmax they have to capture k y C you know, your customer on everybody, and then they accidentally sent customer data out or we've seen like with Experience, they were hacked and all those

people data got hacked. And so I'm really putting the people at risk to potentially catch one percent of malicious actors. UM. And I was just kind of saying, that's kind of like the original ideology I think of the cipher punks right to um not have to capture more information than you need and so UM, I like that initiative that you guys are doing. Yeah, and I think it's I think it's important to uh, you know, to to build systems where you're you're not taking custody of people's data.

It's just it's just a better way to build the infrastructure so that at no point can you know, somebody put screws to me and having you know ruined, you know, ruin your personal information, or have people you know identity you know, steal your identity. Yeah. So, I mean, I like a lot of the stuff that you guys are doing. I'm curious, is how how do you look at it? UM? Is it kind of like a competition to see who

can build the best product out there? Or you know, is it is it kind of are you taking an approach like almost like with your decks, were like, hey, we're doing what we're doing, but we're also doing it for the good of the community. Well, I think that the pattern with to say bitcoin, what bitcoin did is bitcoin UH removed the oracle of time stampers. You know, normally used to used to have go to a bank and they would be the the official time stamper of

transactions and that's just how it was. And everywhere else that you went to get have time stamping done, there was one person who did it, and they turned time stamping into a game. We turned decred at its launch, turned UH turned um voting into a game. So we turned decision making into a game, or instead of it just being me making all the decisions as the project lead, we collectively make decisions together. And then you know the decks is uh making a fairer game out of the

exchange process. So you know, the exchange process is one way right now and you know our our our vision is to turn it into a fairer game in the future. And I expect that. You know, it's fair for you and your viewers to expect more of that kind of material out of decred whether everyone else benefits or not. You know, there's there's a path that we take and

we remove oracles. If you get in our way and cause this grief, we will we will engineer you out of the equation and so and and I don't mean that is like a veiled threat, uh, you know, a physical violence. Uh, It's more it's more just a question of how, you know, what kind of a society do

we want to live in. Do we want to live in a society where an old guy behind the desk can tell can you know, remove all of your your your money from your account, or do we want to live in a society where where it's fairer and more balanced than people are you know self software? Yeah, yeah for sure. Um. Now, one last thing I want to kind of get into is just um, you you kind of mentioned how the market cap is pretty small today

compared to to bitcoin. I mean, it's obviously much larger than a lot of the other all coins that are out there. Um. But but um, I know, you have this hybrid system of PW and POS. So how do you look at withstanding attacks against the network, you know, seeing as you do have a smaller network or market cap, but you have this hybrid consensus. So like, do you

guys look at that? Well, what it does is that the hybrid consensus algorithm, beyond the fact that it puts the stakeholders in charge versus the miner, you know, as opposed to the miners in pure proof of work, it also create makes it much more expensive to run majority attacks also known as fifty one percent attacks or the you know, the fine it's attack is that you know, you can't mind a chain in private without the stakeholders.

So if you're going to try to you know, make a deep reorganization, which is typically the way that you're going to make a damaging majority attack, you need a really large segment of the steak, and you need a really large segment of the proof of you know, of the mining power. So it makes it roughly, you know, tend you know, tend to tend to thirty x more expensive to run a majority attack on decred than say

on a pure proof of work cryptocurrency. So you know, sort of pounds or pound, we're ten x or or or more resistant to double spend attacks than than a pure proof of work profer currency because they also have to stake the clients as well as as that have the hashing power. Yeah. Yeah, so you have to you have to buy tent of the town just to try to burn it down. It's kind of you know, the

scenario you end up in. So it's like the amount of you need a whole bunch of stakeholders will hold a bunch of coins to collude with the miners, and then what would happen is is if that, you know, an attack like that gets executed, the value of the coins drop. So then it's like, why would anyone collude with the miners to do that? Yeah, So what do you see being the future of decred in the next you know, one three five, ten years. I mean, are

you looking to be just another payment coin? Are you looking to develop more into a platform that have other applications built on it working. Where do you see the future? Well, what we're doing is is that you know, we're we're you know, we're following in the steps of Bitcoin in the sense that we're focusing on being a store of value first, um store, the store of value, proper value proposition is really what drives most of the value to

say bitcoin. So I think it's fair that with that we continue along that path, the idea of being that we're trying to create a you know, a secure, adaptable and sustainable store of value for the longer term. And then once you know, as that proposition firms up and more and more people recognize that, will will transition into becoming more of a medium of exchange and hey, if

we're lucky, even a unit of account. And the future that I see is that some people see a winner take all future to cryptocurrencies, like, oh, you know, if

it isn't bitcoin, it's worthless. But you know, my view of it is it's going to be similar to banking and many other domains that we see, which is that there's gonna be several major you know, major players in the future and who they are and how they operate as you know, that's what's being determined right now and you know, in in recent history, just in the past

few years. So my hope is is that decred can continue to evolve in a way that that keeps it sufficiently cutting edge, that it acts as a strong store of value, and that you know, it's one of the few that's left standing at the end of it. And our hope is is that the sustainability that comes from the you know, the treasury funds is enough to really keep us kicking. And you know, there's a few things that are coming. Uh. One of the things that's coming

is that we're fully decentralizing the treasury. It is at least nominally centralized in terms of releasing payments. We're going to turn that payment release process into a fully decentralized thing where people actually vote on the transactions. And then there's more privacy stuff on the pipeline. There's there's enough of it to you know, probably keep us busy for six to twelve months to really sort of close all the all the gaps. Yeah, cool, great, well, it's a

lot of information that we went through. But I love the focus that you guys are taking on decentralization and privacy and uh and really pushing that forward. I mean, it's just something that we need. We're seeing it all around the world right now with Hong Kong and China, and it's just we need to push back against that tide. So I love to see that. I know you have a bunch of good information that you update pretty regularly on the dcred website, Like you have a pretty good

blog that's there. Where else do people go to learn or keep up with the project for yourself? So the uh, the revolution will not be centralized, but our chat but our chat platform is so uh you can go to chat dot decred dot org. Most of us, who are you know, project contractors were on Matrix, but we Bridge, Discord and Slack, and I believe we also have some Telegram, so we we we cover a whole bunch of different

platforms for our communications. And then in terms of learning more, if you're interested in learning more about you know, the details of things that we discussed on here, you can go to docs dot decred dot org and uh, you know, for everything else so that you can you can hit us up on chats and and we can we can redirect you where we need to be. Yeah, awesome, Well Jake, I appreciate you taking the time to explain that to us. Um really interesting stuff and and thank you thanks marking

for them. Hey, if you like this episode of the Market Disruptors podcast, please help us take this to the top of the podcast charts. Just please do me a favor and rate, review and subscribe. Taking fifteen seconds to just leave a quick review goes a long way and helping us reach more people and disrupt born markets. I really appreciate you listening and I'll see you next time on the Market Instructor's podcast.