Welcome to the Number State podcast.
And so, Arjun, you are 22. 19. You're 19.
OK, so 19 means you were born in 2006.
So you were born five years after 911, the financial crisis.
You were only like 2 years old, right?
So, you know, with video games, people spawn into the
battlefield in the middle of, you know, like a MOBA.
You know, everybody's shooting at each other, and there's like
this giant thing and someone spawns into the middle.
And so I think of you kind of people, the Gen.
Z types as spawning into the middle of this totally chaotic
situation. And I just want to tell you, it
wasn't like that in the 90s and the 2000s.
I don't know what your perception is.
Or maybe you perceive this chaos as normal.
I mean, I was born with a lot of things that I take for granted,
right? Which what is the US?
Where are you in India? So, you know, I've like for as
long as I remember, I know like having a computer smartphone
kind of after a while, so. What's your spiel?
Give your life story? You're AZ cash guy now but
what's your give your spiel? Sure.
So, you know, I, I was a pretty normal kid, I would say when I
was up to like. 13, you're still a kid, but go ahead.
Yes, fine, fine. Go.
Ahead until I'm on COVID when I was like, you know, doing
whatever teenagers would do, play Fortnite, you know, and
then COVID hit and then I just like.
Where were you then? In India.
In India, OK, how come you have an American accent?
You have a global accent. International idea just talking
to a lot of people. So I anyway, COVID hit and then
I just started reading a lot of books, like the beginning of
Infinity Naval's book naval, the Navalman Act.
And then I just started questioning a lot of things that
taken for granted and just like started questioning the meaning
of it. All right, like one of my in
school, like I don't want to be just growing up studying
engineering like everybody else. And you know, you know how the
Indian, there's nothing wrong. With studying engineering, but I
understand. Yeah, yeah, yeah.
But but you know if it's. Like if it's only a canalized
path, you want to have some options of course.
Yeah. So anyway, I got completely
radicalized, I guess I'd say. And then you.
You got woke? No, exactly.
Yeah, Yeah, yeah. You, you got well, you got
enlightened. Enlightened.
Right. Go ahead.
Yep. And then I, you know, when I was
time to go back to school, because when I was online
school, I would just like mute the site and then, you know,
write from my blog, write on Twitter.
But then when I had to go back to school, I was like, this
sucks. I'm out of here, right?
So dropped out of high school, worked on air chat for a while
in the ball and we sunseted that, you know, I guess a couple
years ago now and then sort of got involved with Z Cash.
Great. OK, so let's talk Z cash, right,
So the Z cash never see. OK, So my view is there's many
problems that Z cash solves. Some of them are obviously
privacy, simplicity, quantum, you know, like a quantum
resistance, quantum resiliency, let's say, up to some, up to
some certain point, right? And and it has at least a road
map for resiliency, right? And like Sean Bow has a good
post on this. And then scalability with
Tachyon, right? And then it's also got some
degree of lindiness or what have you, given that it's been around
for 10 years, got a good security track record, it's got
a good exchange integration community, all that kind of
stuff. And Z Cash is interesting
because Solana guys like it, Vitalik likes it, I like it,
Novel likes it. And you know, it's it's
something where I think we can build a coalition around
privacy. And you've certainly experienced
this yourself. It's funny to say, like, how
does the youth think about privacy and so and so forth,
right? I'd love to hear your thoughts
and I'll give a thought. I, I would say I'm like I, I
don't hang out with a lot of people my age, right?
So I don't know the like, what like regular people my age
think, but for me, I think privacy is super important.
Like I don't docks my location anymore, you know, I used to
when I was a kid, didn't really realize.
The downside of it? Yeah.
But then now you know, you especially with AI being able to
recognize where you are exactly. And you need that on chain, I
think because you can't have freedom without privacy.
And if it's like every transaction you make is just
broadcasting your entire world to the public or you know where
you are, what you're doing, I don't think that's the world
that I want to live in. So.
Yeah. And I think a lot of people
don't fully understand that point.
If you're under surveillance, you're not sovereign.
And one way of putting it is if every move is being tracked, for
example, you don't have the advantage of surprise, you can
never launch something, you can never have private
deliberations, you don't have the room to make mistakes.
Anything you do can and will be used against you and so and so
forth, right? And you know, there's, I know
we're putting it as what does privacy mean?
Say arguably means local files and local data.
So that's also the same as what sovereignty means.
It means privacy is private keys is private property is not
online like almost decentralized and local and individual as
opposed to communal and shared and public and whatnot, right.
So that's the sense in which sovereignty is privacy, is
locality is security. It's creativity, right?
Like I'm not going to be creative.
I'm not going to be myself, my authentic self, if I'm always
being watched. And like I would think that
knowledge creation and wealth creation just comes to a stall
if all everything is so well all the time.
Yeah, it's funny. You know, like one thing I used
to say, sometimes people would tell me, oh, biology, you know,
China is going to just be the same as Japan and it's going to
like run into a ditch like Japan did.
But the way I point them to something is actually in the
early in 2017 actually, Sulzberger's paper and NYT
published something that said that China killed a bunch of
American spies in 2010. Japan could never do that.
So that's why China, that's another way of looking at it.
So, you know, I'd say very different national security
sense. But China's sovereign in the way
that Japan isn't because it could kill the spies, because it
stopped the spies. Obviously, I'm sure America's
killed Chinese spies as well, but Japan would never be able to
kill American spies, never, you know.
So Japan is under surveillance and wasn't sovereign, but China
wasn't under surveillance and was sovereign, right?
So the ability to actually be free of surveillance is actually
in a sense to be sovereign. And the alternative way of doing
it is to encrypt, not through violence like the Chinese way,
but through decentralization encryption, which is the
Internet. Yeah, he recently tweeted Z cash
must scale. Why is scaling Z cash a moral
imperative? Well, it's because, look, I love
Bitcoin because it's amazing. I don't never have a negative
word to say about Bitcoin or what.
So she did and so on. But he developed it in 2009,
right? 2009 was many generations ago
technologically you'd make different trade-offs
potentially. Today, especially Quantum has
improved a lot. We know a lot more about
blockchain scalability. Obviously we know about smart
contracts, you know, obviously AI is out there, blah blah.
So the Z cash must scale just means right now how does Bitcoin
scale off chain and other chains that say off chain, which say
you load Bitcoin into Coinbase or Binance and then within the
internal Binance or Coinbase economy, you have a debit and a
credit and you can just send and receive at 0 fees.
And only when it's recorded out as a transfer out is there an on
chain transaction, right? So off chain is basically
database entries. And then other chains means you
swap Bitcoin into something else and then you send it on that
chain. Solana or Etherium or something
like that, or USDC on Etherium or Solana.
And that's fine. You know, that does work.
But many of my, you know, friends who are still, you know,
like Bitcoin maximalist or what have you, I'm sympathetic to
them, but they've basically been saying, oh, lightning, Lightning
is going to be there any day now for 10 years, literally 10 years
of lightning. And the thing about it is when
you press them, they're like, Oh well, Lightning, you know,
there's no public database of it because it's supposed to be
payment channels between two nodes.
And you go and you look into the details of it.
Basically the thing about Bitcoin is any address can send
any other address at any time, any amount without any set up at
basically, let's say standard fees, minimal fees, right, that
anybody can pay anybody anytime, anywhere.
Any amount without any set up is a set of things that is all
broken with Lightning. Any node cannot pay any other
node with lightning unless there's a channel or a route
between them. They can't pay any amount
because it's constrained in a complex way by how much of the
deposits are there. They can't do it necessarily at
any time because you have to have like a channel open and
channel close. And then the amount of money is
like, it's like bound in a complicated way by like the
deposits on the channels. And then what do you get out of
all of this? What you get is something where
like, you know, maybe if one party, other party breaks a
payment channel, then you can you could get like the last
transaction out or something like that.
But the transactions are being recorded off chain, which is why
it's quote scalable to make lightning work and apps like
moon and so on and so forth that try to make like MUUN and wallet
of Satoshi. So they're fine like like these
guys, but basically they end up essentially setting up a hub and
spoke topology where it looks a lot like here's Coinbase, here's
Binance. And they've got a ring of
customers around them and they have a channel between them
where they can do quick Coinbase to Binance settlement.
So that if you send within Coinbase from their Coinbase
customer or within Coinbase to a Binance customer, maybe Coinbase
to Binance is it could be off chain or it could be at a very
quick Coinbase finance like, you know, daily or nightly or
whatever hourly settlement, however they decide to do it.
But if they have an agreement, they have a peering
relationship, they can move it fast.
This is very similar to how banks work, right?
Banks essentially mean within a bank it's fast.
It's just a debit or credit in their system.
And between banks, they use Fedwire or something, they do
settlement and they have a true up where it's like the net
credit, the net debit and they just true it up like this,
right? And so the hub and spoke
implementation of Lightning is really not in my view, doesn't
get you much or just loading in the Bitcoin and doing off chain
transactions and having a peering relationship between
moon and wallet of Satoshi and Noster and whatever, right,
Damus. And and that's all fine.
And and there's a bunch of people who will basically give
me some kind of argument like, no, it works, whatever.
And then whenever I poke on it, it's always some hub and spoke
thing under under the under the hood.
And it's not it's not like truly decentralized in the sense of
you. It's not like Bitcoin where you
can see it on chain. Anybody can pay anybody anytime,
any amount without any set up, blah, blah, Right, OK, So what
you really want is on chain scaling, right?
Just blast the transactions on chain.
What's funny is Etherium actually learned the same lesson
in a sense as Bitcoin. Why?
Like, you know, and to be clear again, I'm pro Bitcoin, pro
Etherium like Vitalic posted that L twos kind of didn't work.
And to be clear, a lot of the L twos are smart people.
I think they will adapt and pivot.
I've actually got a post coming out on this from L2 to app two,
you can turn those L twos into app chains and you have a
theorem for global state. You have your computer for local
state. And then if you have like a
decentralized notion like an Obsidian is the L twos for app
state that you're syncing across computers.
Like, you know, like your username of Arjun dot ETH or
biologist dot ETH is global, but the state that you're moving if
you're doing a file share request or something that
doesn't need to be global state. It could be L2 state and then
you have local apps state fine. So leaving that though, The
thing is, L2's were fine as a hack.
They were more successful on a theorem than they were in in
Bitcoin. Like base and Polygon were
actually quite important, are important, but really the Solana
model of just blasting it, you know, events on chain worked,
right? Because it's easier conceptually
easier. You don't have to think about.
I mean, block chains are complicated enough without
having to worry about like, oh, where's my coin?
What chain is it on? It's easy to make mistakes on
that. It's easier for users to make
mistakes. You're forcing them to be aware
of a detail that they really shouldn't be aware of or have to
be aware of. And so Salon is model of just
blasted on chain and have beefier hardware worked.
And that was, it was maybe not obvious a few years ago, but
that model worked. And it became also very clear
that the value accrual is going to Solana and then an app on
Salon is doing something Solana isn't doing.
And and so that worked, right. So now we have basically 3
levels. So it's Bitcoin Etherium salon
in terms of scalability on chain, right.
And so now the question is, can we go further still the ZK,
obviously there's ZK roll ups, there's optimistic roll ups.
You know, ZK is not simply a a privacy technology.
It's also a compression technology.
It's a performance technology. And in fact, arguably, even
though Z cash came up with the concept of ZK, the utility of ZK
saw use more in scalability than it did privacy at first.
This is good because scalability was immediately commercially
important. You know that saying vitamin
versus painkiller? No, no, like you know, a
painkiller is it's maybe immediately.
Obviously, Yeah, yeah, OK. Yeah, you got you got a meat
problem and you want to take care of it, right.
And then vitamin is like possible upside, right?
And you can argue, but basically I know where you're putting it
is like a painkiller is a must and a vitamin is a nice to have,
right, Like a like a, like a, you know, a want as opposed to a
need, right. So making more money required
scalability. So I was a must, right?
And it seemed for a long time like people could do without
privacy or or rather it wasn't like it wasn't as important as
scalable, so people thought. But now we have all of these
attacks on people for like, you know, doxing locations, so and
so forth. Where if you're now, if you're
in Dubai or you're in a low crime jurisdiction, Singapore,
if you're in El Salvador perhaps and so on and so forth, you're
fine, right? Those are going to be 3 very
important places on the earth. In my view, Singapore, Dubai, El
Salvador are the new like Tokyo, London, New York, like even
Miami is maybe I think El Salvador has more upside than
Miami because it's a start up seat.
Like I actually like Francis Suarez a lot.
Miami and El Salvador will probably have an important
relationship. But El Salvador is like a full
sovereign, right? It can do a lot.
It did deal with Elon recently. It has tether there.
These are big moves, right? So Bekelly is like Bekelly
Kwanieu. Those get you the Americas, EMEA
and APAC, right? It gives you all three times
it's El Salvador, Dubai, Singapore and those if you're
doing, if you're saying of anything in crypto, I think you
or anything in tech crypto, those are going to be the three
nodes. One thing we need to do I should
post this afterwards like President Bikelli should set up
direct flights between Dubai, El Salvador and Singapore El
Salvador and build an International Airport.
We all have them. Already I don't think we have
them. Partly it's because South
America, Latin America has been sort of locked off from the rest
of the world, especially Asia. And lots of flights have to
route through America. And to route through America, if
you're not AUS citizen, you have to get a so-called, like I think
AC visa, transit visa. So many people who wanted to go
to Crushamento and Argentina and they're Asian, they don't have
AUS visa or something. You have to like go to the
embassy, the US embassy to get AC visa for just a like it's a
huge tax. You want to just fly from let's
say India to Argentina. You have to stop through the US
but to even stop through the US you need like AC Transit visa,
which means you need to go to the US embassy and apply for a
visa months in advance to jump on a flight.
So I mean, it takes away all spur of the moment.
It's like this enormous tax of time and energy.
You can get rejected for that visa.
It's often not awarded. So having someone like El
Salvador which can just route around that will be very
important. Like an enormous amount of
traffic will go there because Dubai and Singapore are these
huge, huge points anyway coming back.
So, so on chain, just being able to blast private transactions on
chain. Solana likes scalability, but Z
Cash is what I think Sean Boe may have with Tachyon.
That seems simple, scalable, easy to understand.
It's what a lot of people wanted Bitcoin to be, you know, So,
yeah. So that's how I think about
that. What?
What else will it take to be the official currency of the network
state? There's no official currency of
the network state. I think because there's, there's
going to be 1000 network sheets, right?
It's like there's going to be like 1000 cities, startup
societies, 1000 startup cities, thousand network states.
But I think there will be just like there'll be a salon in
network state, Ethereum network state, don't die network state,
coin based network state, Binance network state.
All these people have talked about Telegram network state,
etcetera, etcetera. There will be a AZ cash network
state. The only thing about Z cash
historically has been that the Zcash people were so into
privacy they never talked about it.
And also Zcash itself for a variety of reasons.
Just you know, most crypto things have a failure mode of
being way too commercial and like too much, get money now too
much. You know, like when AirDrop,
meme coin, blah blah type of stuff.
Once in a while you have a project which has the opposite
failure mode, or if not failure mode, because I don't think
Zcash has failed at all, but rather the reason that they
haven't like they're being sort of shadowed by other projects is
they were so academic, right? They were so academic like you
can overreact and be too non commercial also, right.
And there was, there was good in a lot of ways in all the
cryptography. They're very smart.
They were playing the long game, all that kind of stuff.
But you need the right equilibrium, right?
You don't want to be too phd.com.
You don't want to be too phdortwo.com.
You want to have the right synthesis.
You're going to change that. Yeah, I think we're changing
that, right? You guys have Gen.
Z cash? Yes, that's right.
Tell me about that. Yeah.
So I just thought it was a cool. Little it's fun word, yeah.
Yeah, it's good. Yeah.
Plan words. So it it's yeah.
I think the idea is like, you know, a lot of things start from
young people and then the older generations just like catch up.
Right. What are the five best Gen.
Z cash videos? Or what are the best ones?
Which ones are about? Well, do you remember?
We did one with you. That's true, you know.
We had the Z Cash Network state event here.
Yeah, Yeah. We did one with Hasib, did a
couple with Hasib. The first one with Z cash was a
$30.00. The second one was a $700.00.
Nice. That's good.
That's good, right. Didn't buy, so yeah.
Well, I mean, I love Hasib, obviously, because keep going.
I'm listening. Yeah, yeah.
There's a few more interesting ones, but yeah, I think we want
to ramp up starting more, OK. So what is What are the themes
of Gen. Z Cash the Feed?
Fun for sure. You know, we want to make it
fun. Make privacy fun, make it sexy,
make it cool. And I think, yeah, educating
like, you know, you don't want to be like, you just want the
user to know as much as they need to know.
Like that's why I love Zashi, right?
Because Zashi, there's all these different shielded pools with D
cash that, you know, if you really wanted to dig deep, you
could like learn all about them and the other apps kind of force
you to learn them. But Zashi, it's all just default
into the shielded orchard pool, right?
So as little information you need, but to use it properly,
obviously like, you know, you're not leaking information
anywhere. So I think, you know, educating
about that, that'd be great. But yeah, one more question I
had about, you know, you're talking about lightning in
Bitcoin. Do you see a world where you
know Z cash is sort of a compliment to Bitcoin where
it's. Actually, question, Yeah.
So The thing is, I mean, one thing to not underestimate is
like Bitcoin has like an insane brand, right?
It has been. I mean, one way of putting it is
there's a lot of people who are just now thinking about Bitcoin
or whatever, and what they'll say is something like, Arjun,
what kind of Bitcoin should I buy, right?
Yeah, I'm probably, you heard something like that, right?
So that is, I know where you're putting it As, for example, how
many drone manufacturers can you need.
I know mock Industries, which is a small one, yeah.
But what are the big ones? Most people can name DJI, maybe
they can name Andrew, right? So you have to be really into it
to be able to name like small ones.
That's just probably a friend of yours.
Exactly. So, but like to be able to go
down the list of all the very strong manufacturers.
It's like DJI is like Bitcoin. Maybe Andrew is like Ethereum.
It's a military drone, very different, but it's a drone
manufacturer. And then like to know more than
that, you really have to be in the space, right?
So if you think about it that way, right, like again, like
most people, they name an AI, they'll name ChatGPT, right?
And to be in the space to know Gemini and Claude and you have
to be really in the space to know like, I don't know, sea
dance that just came out, this open model or the Chinese cling
and whatever, you know, Quan blah, blah, DeepSeek.
And so you have to that's a useful way of modeling.
Another example is like how many Chinese politicians do you know
exactly, right? Can you name Lee Chang and all
the other people in the Britain? Most people can't, right?
So that's a good way of thinking about how people from the
outside think about crypto. They just know Bitcoin.
They just know like the one name in crypto is Bitcoin, right?
That's so like insane, like the there's a power law and brand,
right? So don't underestimate that.
That's like a huge, huge, huge, huge thing.
So because of that number one, and Bitcoin is just insane
ubiquity and you know, like all the kind of stuff I think
Bitcoin will be around and do well for a long time.
Also, there's an aspect to being public on chain, like
transparency and privacy are actually both useful things,
right? And for, but Kelly to be able to
prove that he has this amount of Bitcoin reserves is actually
useful for him at times, right? If he can secure the private
keys, there's a sense in which Bitcoin literally does become
digital gold, right? It's something where if you,
you, you used to actually show you'd have proven reserves, you
know, and then you need proof of reserves and liabilities in
general, because you know, you know, it's not just that you
have 100,000 Bitcoin or 10,000 Bitcoin, but rather all the
claims in them add up to this, right?
That's like another level of it. But at least proof of reserve
shows you, you have something. And so there's a sense in which
it's possible because transparency and privacy are
both useful features. It's kind of like immutability
and programmability are both useful features.
So Bitcoin is immutable and Etherium and Solana are
programmable mutability, like in the sense of if you Google
mutable state, that's like a core concept in programming.
That's like the thing that Bitcoin doesn't want to do that
Etherium and Solana must do. But it's like, these are both
valuable things, immutability and programmability, but you
can't have them in the same package.
It's like, you know, I want to drink water, I want to warm
fire. I don't want fire plus water
because they and I leave each other, right?
So you need to have them separate as things, right?
So it's possible that Bitcoin, just like Bitcoin and Etherium
coexist because Bitcoin is immutable and Etherium is
programmable. Bitcoin and Zcash coexist
because Bitcoin is transparent and Zcash is private.
And you may want to have proof of reserves, right?
Zcash has T addresses. It does have T addresses, that's
true. That's true, You can do that.
But so there's something also where the total sum of Z cash
can't be proven as easily as the total sum of Bitcoin, right?
Maybe there'll be some cryptographic technique that
does that, which is probably possible, but it's not quite as
simple as with Bitcoin where you just download blockchain, run a
verifier, sum all the chain tips and you get this.
How many Bitcoin there are, right?
That was a troll that people used to run on Ethereum.
They'd say how many ETH are there, right?
And they could show a strip that just simple just showed how many
BTC there were. You can't say how many eat there
are, right. You can say how many transparent
sect there are, and certainly that's an upper bound.
Like you can also say how many Shields there are.
You can see how many Shields there are schools.
That's true, that's true, but it's a little bit less anyway
people can make these arguments and so it's it's like a little
bit less trackable yeah than than Bitcoin is and sometimes
it's a feature. So anyway, that's those are the,
the benefits of an older technology are ubiquity, brand
and perhaps transparency. And we wouldn't, we shouldn't
underestimate that. I mean, one thing that's
interesting is, you know, when Facebook was in its early days,
Twitter was and Twitter was in its early days.
People said, oh, Twitter is just Facebook's status updates,
right? Because Facebook there was a
there's a time when it said like Arjun is and then you can type
in a box. I don't know if you remember
that it actually is before your time.
You it was like 5 years before you're born or something like 3
years. But 2004 to 2007 you had that
like biology is and you type something in and then eventually
the biology is went away. You just type something in.
Those tests would be similar to a tweet, but it'd be like
biology is. It was, it was an update of AOL
Instant Messenger. AOL Instant Messenger, you'd say
John is asleep and that was like your away message or John is at
the office. So you tell people where you
are, almost like an answering machine message.
So answering these machine message became an ICQ or AOL
Instant Messenger away message became a Facebook status update,
became a Twitter tweet. And so that's it.
That's the evolution of it, right?
So the answering machine became the tweet.
That's not the only lineage, but part of it.
Point is people thought Facebook can do all these things.
Twitter can do only one thing. Therefore, Facebook will just
crush Twitter. It turned out that the
simplicity of Twitter meant to just build a community around
it, right? That's the other thing that
Bitcoin has just says gigantic community, right?
Hundreds of millions of people, right, are part of Bitcoin.
And like you could say, for example, that I don't know
what's a good version of this. Like, I don't know, maybe El
Salvador is a better Mexico, but how many people are going to
move from Mexico to El Salvador? Community has a stickiness.
Also, of course, you know, that's not exactly right.
You know what I'm saying right? So yeah, I I, I don't know what
the future holds, but I'm pro Bitcoin, pro Ethereum, pro salon
and pro Z cash because it's we're still in this very non 0
sum mode for a long time. All this all the intra coin
fights. I think there's a healthy
competition and so on. But but I think this could be Z
cash at the moment. Let's see.
Awesome. Cool, thanks.
Thank you. Sir.
Great. Thank you, Sir.