[Music]
all right hello everybody thank you for
choosing to wait with me for Vlad's talk
I appreciate it
but I'm I'm here today to talk a little
bit about decentralization and the Z
cash foundation as you don't know me my
name is Josh Cincinnati you may have
seen me on Twitter you may have seen me
write some rather sarcastic white papers
from time to time but my main job and
what I'm really focused on is helping to
distribute power in the Z cash protocol
by running the Z cash Foundation so
there's a specter haunting
cryptocurrencies
it's the specter of are we decentralized
yet.com so this is something from
Jackson Palmer who has made a rather
welcome addition to the suite of data
that we have on whether something should
be decentralized or not it actually was
mentioned in another Z cash Foundation
board members talked earlier and it's
it's a great piece of data it tells us a
lot about some of the features that we
care about when it comes to
decentralization but it doesn't truly
answer the question it provides us with
intuition and heuristics and it leads I
think a lot of us to realize that like
that term is sort of overloaded it's a
common theme it's not novel for me to
say this but it does seem like it's a
bit of a Shibboleth in our community and
so I'm afraid that I kind of did a bad
job with my title I made a bit of a
misnomer in reality first off like an
unscrambled egg is far more centralized
than a scrambled one because you can
tell by the fork in the scrambled egg
but beyond that it's really not about
decentralization at all it's about how
we build a foundation for Z cash the
protocol to grow and develop beyond the
conflict excuse me beyond the confines
of an individual company so the question
that we have to ask ourselves is what
are we really after like what's what's
the goal
for z cash and in particular the Z cash
foundation we're dedicated to building
Internet payment and privacy
infrastructure for the public good with
a particular focus on the Z cash
protocol so what really matters to us is
that mission matters very deeply to us
at the foundation and what that means
strategically is that we're meant to be
a check and balance on the Z cash
companies power full stop
so earlier today in Zuko's talk I think
he asked how many people were familiar
with Z cash I'm gonna do the same thing
how many people are familiar with Z cash
hands raised great ok I'm not going to
go over the history then but how many
people are familiar with the fact that
there is a Z cash foundation and that it
is a separate entity from the Z cash
company ok ok we're doing ok that's
that's not bad there seems to be
confusion around that generally but just
to snapshot a little bit of that history
after the Z cash company was founded and
after the protocol was launched a
segment of the founders reward that was
part of the Zach distribution mechanism
was granted by some of the early earlier
recipients in donated to the Z cash
foundation to create this this nonprofit
and the idea of course being that we
would help distribute power so what does
that mean for us starting out well in
2017 we had some real low bar goals no
scandals and when you dispersed some
exploratory grants we only had I was
only part-time at the time the only
part-time employee there so that was
like a reasonable set of goals for us
back then so then the question becomes
what was the Z cash company's role
responsibilities and was literally
everything else literally everything you
can possibly imagine protocol
development ecosystem partnership and
growth everything was on the company
side and in the middle we all had to
confuse everyone by having Z cash in the
foundation and company name so mission
accomplished
but where where
do we need to go and where are we going
from this year onwards so thankfully
we've expanded a bit on the foundation
side and we're still in the process of
dispersing more grants to more ecosystem
participants stay tuned for next week
for our grant disbursements we've been
experimenting with different governance
structures incubating them you might say
I apologize in advance I'm a new dad so
the dad jokes are gonna come then the
the other piece that we're going that
we've been working on is actually
hosting and supporting meetups and Zeke
on 0 and also something that's new that
we're getting into is researching
speculative cryptography that could
benefit anyone that's working on on
privacy in crypto systems so the Z cache
company has still maintained a fair
amount of control over Z cache D
supermajority of protocol roadmap and
feature development and also other sort
of broader ecosystem development and
partnership opportunities but in the
middle like we're still helping to we're
both working on building open source
libraries and wallets and the foundation
is going to be taking a much more
involved role in moving forward with
protocol and future development
particularly next year but why are those
roles distributed the way they are and
what what underlies them what motivates
them what incentivizes them we love
incentives and cryptocurrencies in this
case it's fairly well delineate advance
to a pretty pretty stark corporate
language and bylaws in the Z cache
company there is a fiduciary duty to
shareholders as a for-profit and the
foundation it's a duty of care as as a
non-profit the board is tasked with
making sure that the foundation is is
still in line and guided tour their
mission the other thing that's rather
interesting that I think will help to
explain how even foundations in
particular us-based nonprofits that pass
the public support test can be more can
actually help encourage even more
disbursement of power and I'll get into
that a little bit later but in the
middle we still have a common shared
ideology which is do good by advancing
privacy everywhere particularly in
payments and internet payment
infrastructure and to maintain and grow
and grow Z cash so why aren't there more
stakeholders with more Venn diagrams
well the lazy answer is this is the
template I got from DEFCON 4 and they
didn't have three circles for me to use
but the actual answer is that in a lot
of political history in particular there
seems to be a stabilizing force around
bimodal power distributions you see it
all the time
for better or for worse but in general
these these sorts of distributions lead
to Stabler periods of development and
and and more advancement in society
they're really powerful particularly if
you can design a bimodal power
distribution that has inherent gridlock
where you have common goals and aims but
there are places where you might not
completely agree and in those cases it's
not just powerful but it's empowering it
enables participants who may not have a
seat at the table at one particular
structure or whether you're if you're
not an employee of the Z cash company
but maybe you're an open-source
contributor that can get a grant from
the Z cash foundation there are ways for
the foundation to offer an opportunity
to effectively roll up a lot of user
voice and user will into our
organization and to be the
counterbalance to the company so there's
obviously an American balance of sort of
bias here from from me and in effect if
you wanted to make an American political
analogy if political discourse was civil
and mutually respectful you could you
could say that the Z cash company is
much like the Senate and that it's a
smaller or in this case bigger
organization but but definitely like
represents the smaller will of people
whereas the House of Representatives
represents the broader will of a
community but maybe a more familiar
analogy for everyone whose
cryptocurrency focus would suffice which
is you could view this as governance by
two of two multi-sig
and it's it's actually like a I think a
real powerful mental model for people
who are familiar with multi signature
transactions because that makes it very
easy to understand like how things can
move forward how protocols can be
developed when you have these two
parties that have similar aims but maybe
when there's conflict there's actually
no way for us to go forward in a
particular feature or protocol
development and I also view this as
being kind of a fundamental feature and
a lot of these bimodal power
distributions and in fact that you'll
you'll wind up seeing a lot of this
behavior even represented within
organizations themselves but to be
intellectually honest it is still
currently more like one of one because
the Z cash company still controls a
great deal of protocol development and
and support but that's changing one of
the things that I was really really
excited about was the announcement
earlier this week that we had the
foundation are gonna be partnering with
parity to develop develop a completely
independent implementation of from the Z
cash company that will be under
foundation control after it's developed
beyond that we've had these experiments
that we've been incubating particularly
our governance panel experiment was a
really interesting way for us to try and
get the voices of the community but it
had a lot of flaws namely there is sort
of a necessary identifying and
identifiable element to the people that
were participating and we as the
foundation had to be arbiters of who
could and couldn't participate but
thanks to thanks to sapling hopefully
becoming much more widely used and
deployed particularly shielded
transactions there's an opportunity for
us to start to pull community members
based off of the shielded transaction
pool where no one has to reveal their
identity but we can still understand in
great detail the will of the community
through the people that actually hold Z
cash in in the shielded pool and that
really excites me personally I I don't
think that as many as discussed in sort
of pure like carbon vote style
situations it's very difficult to not
have those systems be gamed so I I don't
imagine that it'll be the end-all be-all
of what in
what we use as a foundation to describe
what how we move forward but I think
it's going to be a useful piece of data
as we as we go there's the grants for
the ecosystem development there's a
future trademark agreement with the
company that will be very important in
determining what gets called Z cash and
that's something that I think will have
a very very strong analog to that idea
of - of - multi-sig and then finally
there are zip process improvements where
we're going to be working diligently to
take the product roadmap and feature
discussion that currently really happens
behind closed doors and make it more
open so what's the point of talking
about all this in the context of the
foundation and why why am i speaking to
you about it well it's actually quite
prescriptive for people here that have
projects that they're working on you
really should consider a us-based 501 C
3 now look I I know that we're all here
to dismantle the government and that's
great and all and all for it but at the
in the meantime I think it's important
to recognize that we shouldn't dismiss
hundreds of years of bureaucratic legal
tradition that helps us understand how
we can organize and reach consensus I
actually like I was hearing Cory dr. oz
talk about law being an additional arrow
in the quiver that we have this is
exactly the kind of mentality we have
and he expressed it much more eloquently
than I so I want everyone to have that
in the back of their mind when they
think about about how they should
structure their projects and and just to
get a little bit more detail about why
public charities in particular are very
very good for this one is as I mentioned
there's a long legal tradition it
removes some ambiguity not in the
technology that you're building but
certainly in what sort of duties that
your board might have and how you
organize - is that conflict of interest
policies obviously are not perfect but
they are certainly better than not
having those transparency requirements
501c3 you're actually mandated to you
know report when a board member
refuses themselves from a discussion
because of a conflict of interest at
least we do in our bylaws and then there
plenty
there's just plenty of history of
successful software and protocol focused
501 C 3s obviously the the ones that
come to mind are some folks that are
here from the e FF and from the Internet
Archive but they're there many others
and and also above and beyond that like
there are norms for nonprofit pay that
mean that you're basically going to be
self selecting for people that are
intrinsically motivated for your mission
this is working for a non-profit is not
a way to get rich it's a way to change
something that you want to see changed
in the world and lastly and something
that we are gonna have to deal with
after our founders reward endowment runs
out there's this concept of this public
support test in public charities that's
actually really really powerful because
effectively what it mandates and you
don't have to read all that text but it
really means that you have to get a long
tail of your donations from members from
from donations of individual donors
people that are interested in your
mission and want you to succeed and and
that basically demands that you you have
to listen to you the people that you're
trying to serve and whatever whatever
nonprofit you're in so in order for us
to remain a public charity we have to do
this and I think it's exactly the kind
of accountability that will help other
projects that are looking into you know
looking into trying to distribute power
that this is one wonderful way to do it
but as mentioned I don't know that
bimodal power distribution is Neph is
necessarily the goal this is sort of an
arbitrary view of how distributed power
is forgiven cryptocurrency I think we
all want to live in a world where where
it's very clear that there is no central
power structure that can that can
dictate how we interact with the systems
that were involved in whether it's
payments or computation or anything else
except for Doge the dogecoin
hasn't changed for like two years
because it's perfect and every Sheba
that I've ever met is a self sovereign
Sheba so thank you yes finally there we
go I knew something would get some
chuckles just one thing so the takeaway
for aetherium or projects building on
ethereum or anyone getting involved in
encrypted currencies I think there's
this fascination with novelty in our
space and it's merited right like we're
building these new systems they're kind
of amazing everything that they've done
is amazing and I it's incredible that
that everything has has blossomed and
grown and it's really wonderful space
for experimentation but don't don't
throw out all of this combined history
that that can really help dictate how
you how you structure accountability and
incentives in in in the tools that
you're building and and that's where
there are all these tried-and-true
governance models and even though a lot
of us are not big fans of authoritarian
States there are tools that these states
provide to encourage the legal
enforcement of some of these incentives
and it's worth exploring them and
finally if you have to have
centralization for speeds sake I really
believe at the the case as is the case
with Zee cash that what we're doing to
have a foundation as a counterbalance as
a focal point for other viewpoints is is
something that is tremendously important
and can be really powerful for
eventually reaching that state where yes
you can claim that you are decentralized
so thank you all very much i blaze
through that I feel free if there are
any questions I'm happy to take them
[Applause]
oh it was just like legal fees really so
like ten or twenty thousand dollars I
can you talk a little more about how
Zeke has foundations thinks about the
distribution of power versus resources
because there's obviously we're in the
blockchain space and yeah there's a
tremendous amount of capital that's in
the Zika ecosystem in to what to what
role is the Zika foundation in charge of
distributing that yeah and and how and
and how do you think about that versus
power versus yeah yeah that's a that's a
great question I think in large part the
grant process is supposed to be a method
for us to engage particularly in that
capital redistribution where we have
resources that we have the foundation
are not allocating as effectively as
members of the community might be and we
need to be able to find them and give
them an opportunity to develop core
pieces of infrastructure that can be a
part of the Zika ecosystem and hopefully
also help to distribute some of the
power as a result so a good example of
that is we are going to be funded in the
past mobile wallets and having a mobile
wallet that is not controlled by a
company or the foundation is a great way
to add another piece of distributive
distribution to to the network of power
distribution rather but a lot of them
need capital and that's what the grant
process is really supposed to supposed
to help with I have to admit like in
terms of being a little bit
self-critical the current grant process
is structured on in such a way that it
really mirrors like an academic style
grant grant committee and as a result of
this first mint process is a little bit
too slow I think I'm okay with the idea
of nonprofits acting slower to to
distribute those are just slower in
general but it's still a little bit too
slow for us and my hope is that we're
gonna be partnering with some folks to
actually build a more streamlined grant
grant platform and bounty platform that
will help with that too what about you
know like the the biggest revenue
generator in the Hashi Coast
is the founders reward right right and
and is that going to be like that's
obviously a governance question of how
that founders who were guys distributed
yeah this ecosystem
yeah and that's probably the most
sustainable way to fund effort and on an
ongoing basis yeah is there is there
anything like that where there's a
sustainable model where the foundation
can fund something through the community
yeah well I think a lot of that a lot of
that depends on how so if you're if
you're building a project that has a
founders reward you're effectively
engaging in a social contract with
miners and users that you are going to
create a certain carve out for for
resources that should be dedicated to a
given ecosystem and then the question
becomes well how do you you know
distribute them effectively and to be
honest like the foundation it was
somewhat of a foregone conclusion on how
the founders were reward would be
distributed because the foundation
didn't exist when that decision was made
but it was made as a result of in my
view I think people who are looking far
ahead at what needed to happen to help
distribute power and those individual
recipients of the founders reward came
together and said we want to donate to
create this foundation that's completely
separate from the company and it's a
rather sizable amount of of Zach it's
roughly 1.4 percent of G cash that will
ever be mined you know that the the full
supply schedule will go to the
foundation and and so the onus is on us
for coming up with a better method for
distributing those grants right now we
have a voluntary grant review committee
it's very academic it's a little slow my
view is that there's a way to create
more community involvement that will not
necessarily involve anything fancy like
on Shane but really just a platform that
we run that enables people to fund
projects they want to see with the
possibility of getting foundation
support later on yeah thanks
oh hello a great talk and I'm referring
to the scale that you showed us I can't
help but notice that the privacy
protocols are a little bit more
centralized yeah do you think there is a
correlation between the degree of
privacy and the degree of
decentralization maybe but I actually
would so that's a great question but I
would reframe it not in terms of privacy
but in terms of cryptographic expertise
necessary to execute a privacy coin
because truth be told I mean doing doing
this stuff right is very very difficult
and very esoteric and it's hard to find
the right people to do it and I mean so
many kudos to the Z cache company
because it's one of the brightest group
of cryptographers that I've I've ever
seen and I think it's it's very very
difficult to find people of that of that
calibre but a lot of that is also an
education problem and it's something
that we at the foundation are also
somewhat tasked with trying to open up
more opportunities for people to learn
about these technologies so they can
become contributors but it's very very
difficult to contribute to to any sort
of like you know snark development or
ring signature development or or grin or
MIM belen Bowl it's like it's just hard
and so it that necessarily makes a
smaller pool and they're also younger
projects so it takes time can you share
a specific example of tension that was
resolved using this by model governance
a specific example I would say that
there's so III won't give us I'll give
it a specific enough example is that
better oh I'm sorry specific enough
examples so you can mask it and
ambiguity a bit yeah yeah okay I'll do
that so there's a case where I think the
come the company and the foundation we
were chatting about the possibility of
distributing Zee cash to to people in
places that are at risk and I think it's
very important
important thing to do and it's very
critical that we figure out a way a way
to do it right but there was a case
where really the foundation didn't feel
quite as comfortable doing it and there
was as a result lack of a joint effort
on doing it that that way I will say
that there also to bring a hypothetical
future case up let's say that in the
future that we have a version of Z cash
that's promoted by the company that has
some degree of a feature that is
controversial that some people in the
community say they don't want and we
hear that feedback and we on the
foundation side we collect it and we say
we can't support this because of this
feedback in the ecosystem at large so in
that case if when we have our future
sort of trademark agreement there is
this possibility where the company and
the foundation will come together and we
will try to figure out how to make that
feature work and if we can't then
effectively it's like nothing can move
forward that in that no neither the
foundation nor the company will be able
to enforce the trademark on whatever
whatever fourth the company wanted to do
and then the main you know whatever
maintain non fork version would not be
allowed to be called Z cash by trademark
law now that that trademark agreement is
something that we're still trying to put
in place but it's something that is I
think very meaningful to determining how
people view what is considered like the
the authentic chain going forward and
that is like maybe not a very it might
not be a very like satisfactory answer
for a lot of people but I think that
there's far more protection and going
that route than just letting the company
who again I deeply admire and respect
but having any any organization that has
unilateral control over the direction of
a protocol is is just it's it's bad
design so yeah yeah hello so recently
we've seen a bit license approved
exchanges as Gemini list in Z cash as
one of their coins and I have a question
as if you believe the company structure
of Z cash has boosted in terms of area
in terms of other privacy coins like
Manero oh do you like that the company
structure has helped other other yeah do
you go in regulation absolutely because
I think particularly with other privacy
coin projects because of the lack of
maybe a legal entity it's it's very
unusual it's not like it's not like
you'll see a narrow contributor being
invited - you know - unfortunately
actually like I think there should be
more of a more openness and exchanges
being willing to talk to individual
contributors but I think it helps when
you have some Authority that you can
point to and say yes these are the
people that I go to to talk to about
privacy coins because they are a company
that's represented and I know how to
deal with companies as an American
company myself on the I think it'll get
trickier as the foundation and and
companies start to distribute more of
that power but part of our goal is to
try and figure out how to delineate
those things going forward one more
question if you don't mind do you do you
know if there are any very noticeable or
significant downsides to choosing the
company route for the cash well I mean I
think the the big downside is really one
that's purely of perception I think like
I I again in my interactions with
everyone of the company it there's not a
more I mean the theorem is actually
pretty close but there's not a more open
and welcoming and kind group of people
that are also just wicked smart and that
that is the company but when you have a
for-profit entity that is creating a
protocol that they've knowingly want to
be decentralized it leads to
viewpoints and perspectives that I think
can be can be difficult to try and argue
against because of the kind of crypto
anarchic roots of all these systems that
we're building but my hope is that
everything that we're doing on the
foundation side will change that thank
you yeah thanks cool well I think we've
got
a minute left and synthetic Oh so how do
you manage the conflicting goals of
let's say marketing something versus
educating a community like how do you
bridge that gap because I've noticed
some cryptocurrencies kind of jumped the
shark a little bit while some have
invested heavily in Community
Development and education yeah so
actually I mean it's it's really it's as
clear as the way you frame the question
for the difficulty is deciding what's
marketing and what's education really
that's that's ultimately what it is and
and and really what will wind up
happening is right now there's very
little interaction between the company
and the foundation but there's
occasionally something comes up that
says oh there's this opportunity to
engage with this company on on this
thing and effectively it's up to my you
know the Foundation Board a five-person
board and amede as the executive
director representing the board to
decide whether that falls in line with
our mission to actually educate or if
it's just you know marketing or business
development and so if we if we basically
disagree on approach then the company
can do what they independently want and
similarly if if the company disagrees
with our approach on a particular
partnership like that's fine but we're
gonna go our way cool all right
and I'm done thank you all very much
really appreciate your time
Thanks
you