{ "episodeId": "SLP24", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "adam_ficsor": { "name": "Adam Ficsor", "role": "guest", "tag": "ADAM" } }, "segments": [ { "speaker": "stephan", "time": "00:04", "start": 4.38, "text": "Welcome to the Stefan Livera podcast." }, { "speaker": "stephan", "time": "00:12", "start": 11.67, "text": "Welcome to the show, guys. This is episode twenty-four of the Stefan Livera podcast, and my guest today is Adam Ficsor. Thanks, Adam. Thanks for coming on." }, { "speaker": "adam_ficsor", "time": "00:21", "start": 20.82, "text": "hi Stefan, thanks for having me. by the way, it's, because it's, everyone is mispronouncing it, and maybe, maybe this is the first time I correct it, but it's Ficsor. Oh," }, { "speaker": "stephan", "time": "00:32", "start": 32.5, "text": "Ficsor, okay, got it. Okay. Yep. yep. So, just intro Adam to the, listeners. Adam is, well, he's also known as NoPara73. He is a very well-known Bitcoin privacy wallet developer and a Writer on Bitcoin privacy. He's a very prolific open source contributor in the top one hundred contributors on GitHub, and he is the CTO and a co-founder of the company ZK Snacks, which is a company that researches and implements products that help provide Bitcoin privacy and keep Bitcoin fungible. So, Adam, do you wanna just, tell the listeners a little about your background in privacy research on Bitcoin? Bitcoin?" }, { "speaker": "adam_ficsor", "time": "01:22", "start": 82.32, "text": "yes. So, you know, there is this old joke that, everyone wants to fix their own problem, like, psychologists are crazy or physiologists are all fat, and I, I just want to launder out all my dirty bitcoins from the sewerage, so that's why, that's my motivations coming from. Hehehehe." }, { "speaker": "adam_ficsor", "time": "01:50", "start": 109.93, "text": "No, just, just, just kidding. I just, I just really wanted to, well, how much time you have? I just wanted to, to get into Bitcoin development, and I seen this thing called Joy Market, which was everyone was so interested, e-everyone was so excited about it, and I, I thought I can contribute to it. but then I, I, I discovered some- Some problems, technical problems which, which just led me, led me into this rabbit hole that I realized I have to learn much more about Bitcoin programming because it's, it's much, harder than I initially thought. So, so it just led me into this privacy rabbit hole and, and I ended up, creating this wallet, Wasabi wallet." }, { "speaker": "stephan", "time": "02:43", "start": 162.99, "text": "Sure, sure. And now, I think it's important to set the context here. So, why is privacy important, and who is privacy for?" }, { "speaker": "adam_ficsor", "time": "02:56", "start": 175.62, "text": "how much money do you have? Could you tell me exactly what did you buy, the last, two weeks, every item you did? do you feel intimidated by these questions? Because without privacy, if Bitcoin would be staying the way it is right now and blockchain analysis is progressing, Then I wouldn't even have to ask these questions from you, I can just look it up." }, { "speaker": "stephan", "time": "03:32", "start": 212.36, "text": "Yeah, that's a great answer. I like the positive framing of privacy with your company and with the wallet. So can you tell us why the company is called ZK Snacks and why the wallet is now branded as Wasabi Wallet? Oh, it's a" }, { "speaker": "adam_ficsor", "time": "03:47", "start": 227.11, "text": "good story too. Yes, so first I, I, I wanted to call it Hidden Wallet even when I was, going with Troy Market, so, so I- Yeah, a couple of years ago my idea was that creating a Bitcoin wallet, that's, first step is, putting Joy Market into it, but it's, technology agnostic, so it can be any privacy technology, into this wallet and, and I call it hidden wallet. I was, developing it, for a long time and around last Last year, when I, when I got into, into a position that I could, I could release the wallet, and I released it to," }, { "speaker": "adam_ficsor", "time": "04:35", "start": 274.56, "text": "But, but around one year ago, in the Scaling Bitcoin Stanford Conference, I was going there, and I went to the US and In the US, they stopped me in the, in the immigration. They asked me, \"Why did I come to the US?\" And I said, \"I, I'm coming for a Bitcoin conference and, and...\" Because they heard the word Bitcoin, they took me to another room and kept there for twelve hours. And in that twelve hours, I wasn't allowed to use any electronic technology or anything. I was just, there, sitting in my own thoughts and, and I became a little paranoid. I was, I was thinking about a lot of things. I became a little paranoid that, hey, did they figure out that I'm working on privacy and stuff like that? Are they, are they keeping me there because I'm working on privacy? What's going to happen now?" }, { "speaker": "adam_ficsor", "time": "05:44", "start": 343.61, "text": "And at that point, I decided that I will try to bring this thing, because, you know, it should be pretty obvious that, people who are working on privacy shouldn't be Just because of that." }, { "speaker": "adam_ficsor", "time": "06:05", "start": 365.2, "text": "And, especially now that Corda was on that arrested in Taiwan, who knows why? anyway, so, so I, I got really afraid and I decided to delay the software, release as long as I can, and I started rewriting the very, very basic backend technology. I wrote a Tor library just to, to make it, better. And to delay the software, and then I, I figured out, alright, let's bring it to a completely legal field. Let's not do it as, as a gray, gray wallet, you know, in a gray area, but let's do it legally, and I ended up, Teaming up with two lawyers who are the CEOs of ZK Snacks, and they are, they make sure that, legally everything is on, on place, and we aren't going to be just, You know, scapegoated like CodeBelson recently. That was, that was the idea. So, and, and, and why, why the Wasabi wallet? It's because we felt safer to go with the more Family friendly name than with hidden wallets." }, { "speaker": "stephan", "time": "07:20", "start": 440.26, "text": "Yeah, yeah, no, that's a great point. I like that because I think it helps reinforce that privacy is not just for these hoodlums wearing, wearing hoodies and hackers and evil people, but it's for everyone." }, { "speaker": "adam_ficsor", "time": "07:33", "start": 452.71, "text": "You know, the problem is that, you can't be anonymous by yourself. privacy likes company, you have to hide in a crowd. So if, if no one else is using what you're using, then you aren't really private because you're sticking out of the crowd." }, { "speaker": "stephan", "time": "07:50", "start": 470.5, "text": "Yeah, sure, sure, appreciate that. Okay. So now, what does the current landscape in terms of cryptocurrency privacy look like? So maybe could you tell us why? Why you didn't go and work on, say, Monero? Why Bitcoin?" }, { "speaker": "adam_ficsor", "time": "08:06", "start": 486.09, "text": "Oh, as I said, I was just, dragged into this, technical. I, I didn't see the big picture. Y-y'know, if, if I would have, approached it rationally, I would have gone on Monero or something else, because that's where the money is, right? And a lot of people are doing that. That's where the money is. if you are in, in the core of, altcoin, then you are I know I was there and I was making money like that, but, that's, that might... I, I, I like Monero, you know? They, they, they, they really get it. But Sometimes I, I think, do they really get it? Because if, if there is a privacy improvement in Bitcoin, they are really, really into just, just, talking shit about that all day long. So do they really get the privacy or is it just the money? probably both. Anyway, the point is that I, I, I didn't see the big picture. I was dragged into this, This, this rabbit hole of how to, how to connect, the Python code of the newly, released, DotNet Core code that I, I was, I was, I was writing, so, so, so it was such a, such a technical challenge for me, and I, I just, I, I refused to give up, you know? I persisted on it and- And I ended up, being here now." }, { "speaker": "stephan", "time": "09:42", "start": 582.03, "text": "Okay, yeah, sure. And then what is the current landscape in term- What does it look like in terms of things like coin mixing? What do the current mixers cost? What sort of anonymity do they offer?" }, { "speaker": "adam_ficsor", "time": "09:55", "start": 595.34, "text": "Yes. So this is an interesting question. On, on the one hand, everyone is concentrating on mixing, right? Because you want to mix on the blockchain, but that's not the full story. So, for example, Have you heard of Blockchain Info's Shared Coin? Yes. So Shared Coin was a mixing service using CoinJoin. So that's, that's a nice idea, but is it really a nice idea if you already tell Blockchain Info every, address is what you own and every balance is what you own, because otherwise the website couldn't show you what's your, balance is or couldn't create new transactions, you know? What I mean so, so it's a nice mixing technique, but privacy is like security, where it is the weakest, that's where you're going to fail. And so most of the, most of the Bitcoin wallets are doing this. they are, they are, give-- if you are using a light wallet, they are giving to a black backend server at every addresses you own, so they know everything about you. and there are the SPV wallets, which are a little bit more subtle, bloom filtering SPV wallets to be, to be correct. they are, broadcasting bloom filters to, to every, to, to Bitcoin nodes, they, they need information from, and, in two thousand fifteen, Nick Jonas, established that, with By crawling for these bloom filters and, and combining network ana- combining blockchain analysis, they could, de-anonymize seventy percent of all, Bitcoin bloom filtering SPV wallets. So this is the other light client, right? And there is the Electrum, this is the third light client type. Electrum was, is just broadcasting your addresses, to every Electrum server. So- I mean, not every, but the electron server, you are interested in. So, so that's not very private either. And there is the Bitcoin Forno, the Bitcoin Core and things like that. Those, those are downloading the whole blockchain, so no one can figure out which, which, which addresses, which transactions you are interested in. And, then I figured out, another, I figured out, Jonas Schnelli, figured, well, actually Satoshi Nakamoto figured out and wrote it into the white paper that there is another, as- That was the true SPV wallet back then, that, you are downloading the transaction, downloading all the blocks from the creation of your wallet. So, so this was Satoshi's SPV idea, and Jonas Schnelli wrote, wrote, Requesting into Bitcoin Core, it was like, no, three years ago and still didn't, it's just no, no progress on it, but that would be really, really interesting. So, so that's, that's kind of light, but not that light. I, wrote it in C# and Stratis wrote it in C# too. Basically, we, we had some code exchange there, and, and I was working on Stratis's Breeze Wallet. So, so Stratis's Breeze Wallet is full block SPV node, and my Hidden Wallet was this full block SPV node. And now there is a new thing called, oh, it's got so, so many names, Neo3.0, BIP158, BIP157, so client-side filtering. SPV nodes which were developed by the Lightning Labs, developer, Rose Beef, and there was something else, sorry for that. Not remembering your name, and they developed this, this thing where they basically turn the blue theaters around, so you are Not, if you are the light client, you are not sending your bloom filters, but the full nodes sending you filters, which are Golomb-Rice filters. It doesn't matter, the only difference is the Golomb-Rice filters are smaller than the bloom filters. So the Full nodes are sending you Bloom, Gollombrae's filters, and from those filters, you can figure out which blocks you are interested in, and then you can connect to Tor and change identities and ask every random Bitcoin full node for one block only once, and that way you can establish your wallet balance, nicely, easily, and it's, it's, it's, and in a light weight mode. And that's what I did, in Wasabi, so that was the improvement from Hidden Wallet to Wasabi, that I changed the full block downloading SPV mode to this Golem-Brise li-filtering SPV. Mode and, and that's why it's become much, much more lighter. Like," }, { "speaker": "stephan", "time": "15:23", "start": 923.16, "text": "sure, sure. Yeah. Okay. And I think just to maybe just make sure I keep it accessible for listeners who maybe aren't as technical, what Adam is explaining there is that your, your Bitcoin wallet, if it's on a standard mobile phone wallet, it, in some ways, erodes your privacy because it's-- when it polls the network and it's asking a full node, \"Hey, send me...\" What my, you know, my balances are, what my UTXOs are, it, it's then revealing what, it's kind of eroding your privacy. And so with these new improvements such as Neutrino and, the, these are ways that your wallet will not give a, give up that privacy. So maybe let's, let's kind of talk a little bit about the overarching framework that Wasabi Wallet is part of. So from my reading, it mentioned on the website it mentions that it is part of the Charmian Coinjoin Zero Link framework alongside some other wallets such as Samurai Wallet and Bob Wallet. So Adam, can you give us an overview of what the Zero Link framework is?" }, { "speaker": "adam_ficsor", "time": "16:32", "start": 992.42, "text": "Yes, exactly. So I already explained you the first part, so zeroing framework, because as I said, everyone is concentrating on, blockchain, analysis, but, Actually, you, you have to, you have to put all the pieces together and you have to be, be there from a privacy point of view on the network level too, right? How you are broadcasting your transactions, do you use RBF, not use RBF, and what kind of way you are establishing your wallet balances, which I just, explained this. And this is one part, and the other part of the zero link framework is that the blockchain, On analysis part, which, which, so zeroing framework can work together with many mixing techniques, those are round based, right? So round based mixing techniques, for example, coin shuffle, tamper bit, and Chaumian coin join. Which actually Xiaomi Coinjoin was, described by me on IndaZi, described, well worked out properly on the Zerolink, paper, so, so that, that two basically goes together, but it doesn't really have to be Xiaomi and Coinjoin for the record." }, { "speaker": "adam_ficsor", "time": "17:59", "start": 1078.94, "text": "And then Shamirian Coinjoin is a Bitcoin mixing technique which, which I implemented into Wasabi." }, { "speaker": "adam_ficsor", "time": "18:10", "start": 1089.59, "text": "the main differences between, traditional Bitcoin mixers is that, There is a coordinator, right? and the coordinator cannot steal your money, cannot de-anonymize you, and we are actually using a proper amount, Hiding amount, hiding technique, hiding technique. Now that would be confidential. So we are actually using, hiding the amount, so we are using equal output amounts, so no one can tell you based on the mix data that, which, which output corresponds to which input." }, { "speaker": "adam_ficsor", "time": "18:51", "start": 1131.31, "text": "some traditional Bitcoin mixers are doing this too, I only know one that's called a cheap mixer, I don't know if they are legit or not But still they can steal and deanonymize you, so, so there is that." }, { "speaker": "adam_ficsor", "time": "19:10", "start": 1150.14, "text": "yeah, that's about it." }, { "speaker": "stephan", "time": "19:12", "start": 1152.4, "text": "Okay, sure. So then let's talk a little bit about the basic way that you would set up the wallet, you know, just kind of the basic steps to set up, and does it differ from a standard Bitcoin wallet setup?" }, { "speaker": "adam_ficsor", "time": "19:26", "start": 1166.04, "text": "Not, not really. I mean, right now you have to go to GitHub and, write a couple of commands into your command line and it's going to run. But I'm already ready with the archives and the Windows installers, so, so there isn't nothing, nothing special. You, you create a wallet and you're using it. Okay, yeah," }, { "speaker": "stephan", "time": "19:49", "start": 1189.04, "text": "so basically you would download it, you would install it, and then you would have, say, an account set up or a password. word setup and it would give you, say, a twelve word mnemonic" }, { "speaker": "adam_ficsor", "time": "19:59", "start": 1198.91, "text": "seed. Yes. Yes, exactly. I, the difference is that, you, when you are sending- When you are receiving and when you are coin joining, right? Or when you are looking at your history. So the history, the receive part is exactly the same as every other wallet. the sending part is a little bit different because there is a coin control feature, which is, not optima-- not opt-in, but required to use. So before you would, you would send your coins to some-- before you would- Send some Bitcoin, you have to choose that which coins you are, wanting to spend, and you see actually the history and a little bit of blockchain analysis, that, what kind of, clusters, those coins might be i-into if, blockchain analysis would look into, to the blockchain. And And from there on, you can make a very educated decisions that, how can you, how can you, o-what, what coins you want to spend to who. It's, it's pretty easy, you know, actually, because if you, you look at your wallet, not a Bitcoin wallet, just a normal wallet, then you see coins in it, right? So that's the, that's the only thing, and you give coins to people and you get, get back change, so it's exactly the same and it's easy to comprehend. And there is a coin join part which Just as easy, you just have one button that you are, you selecting some coins you want to coinjoin, you are enqueueing those coins and then you wait until the coinjoin happens and, Yeah, that's, that's it. It's, it's, I think it's very, very simple. Yeah." }, { "speaker": "stephan", "time": "21:49", "start": 1309.13, "text": "Sure, sure. Yeah, I think it's probably the sort of thing where at the start it may be more technical users who are more familiar with this concept of coin control, but then over time it might become a bit more well understood. Okay. So what I was hoping to discuss next was just in general, when it comes to Bitcoin, what are the main ways that your privacy can be broken? So So I think you, you've already touched on this before, but things like looking at the IP address that sends or propagates that transaction or the chain analysis of the UTXO of the blockchain. So could you talk a little bit about that in the general case, how privacy can be broken?" }, { "speaker": "adam_ficsor", "time": "22:30", "start": 1349.66, "text": "yes, so my mental model is that there is a chain related, a blockchain related stuff, and there is the network related stuff. So what Wasabi does, it's, it ships with a Tor, Tor is an anonymity network, and every communication goes through Tor, so, so And, and the other thing, alright. So blockchain related network, related network related, I talked about how you are establishing your balance and actually how you are broadcasting your balance, which there is an near perfect solution called Dandelion, but it's not yet implemented. therefore, we, we are just using a good enough solution, which we are broadcasting the transactions over Tor, The other thing is, is the blockchain part is that, we are attacking it in, in two ways, attack-tack-tackling it in two ways. One is the coin control feature I talked about, and the other one is, the mixing feature I talked about. So the coin control feature lets you make, educated decisions. onto what coins you want to send to who, and the mixing feature very lets you, lets you make those educated decisions obsolete by mixing the coins, you know, so you, you don't really need to care about anymore that what coins you want to send to who, but the mixing feature is of course not instant Well, yet, hopefully there will be so many people to use it that it's gonna be instant, because as I said, you need a lot of people to be anonymous then. And, and the more people are using it, the user experience, the speed of mixing everything just gets better and better over time, so that's really exciting." }, { "speaker": "stephan", "time": "24:30", "start": 1469.72, "text": "Now, the next thing that's important when it comes to pre-p-reserving privacy, and you've sort of touched on this before, can you explain what is an anonymity set and why is that important? it just" }, { "speaker": "adam_ficsor", "time": "24:41", "start": 1480.95, "text": "means, if you are, if you see, Unspent transaction output, a coin on a blockchain, then how many people could potentially own that coin? So if, if it can be only you and you because" }, { "speaker": "adam_ficsor", "time": "25:05", "start": 1504.65, "text": "I, I, I don't know, an exchange sent you, so your anonymity set against the exchange is, one, because exchange knows exactly who owns that coin, because they know your customer, you, right? But if, if, if there is a mixing, for example, in Wasabi the anonymity set is one hundred, while right now it's actually twelve, but it's going up, Then, then, then you can, then if you look at the coin, then it can be one hundred people can own this coin, right? And, and if you are even further mixing that, then who knows how much the anonymity, this anonymity model, dies there. Similarly to Monero, right? They have small anonymity set, but they are mixing every transactions and, and that's, well, they, they, they try to claim that's multiplying it, but that doesn't really, never mind. So the anonymity set model is, is, is, is, is different." }, { "speaker": "stephan", "time": "26:08", "start": 1567.89, "text": "Yeah, so, so I guess the point you're trying to make there is that the more people that are part of that anonymity set, the better the privacy." }, { "speaker": "adam_ficsor", "time": "26:16", "start": 1575.66, "text": "Exactly." }, { "speaker": "stephan", "time": "26:16", "start": 1576.5, "text": "Right. Yeah. Okay. And so now, as you've mentioned before, there are companies out there and some exchanges employ the services of these chain analysis companies, and they look at the blockchain to try and, you know, find a heuristic and understand where are these coins being linked. So can you talk a little bit about About what is the, what are the key heuristics in play here? What do they rely on to link a UTXO, an unspent transaction output, against a, a specific individual?" }, { "speaker": "adam_ficsor", "time": "26:53", "start": 1613.2, "text": "There are couple, so for example, if someone sends, one Bitcoin to a Bitcoin address and some other people sends one Bitcoin to the same Bitcoin address, then you will see two coins. Those are on the same Bitcoin address, right? So, so this is the, the basic heuristic that that address must be owned by one person, so that two coin must be owned by one person. So, this is the reason why you shouldn't, receive money to the same Bitcoin address. And, and, and there are a couple of heuristics like this which aren't these obvious, but, hopefully we are going to break them in, in a big way in the future, and, and by we, I'm not, only meaning Wasabi, but, the Bitcoin community. So if we are, we are creating transactions, does look like a heuristic can apply, but it actually, it's not what it means? Then, then, then, then, then their assumptions are broken. So even if the heuristic would apply correctly, you know, they, they, they just can't know. This is what a pay-to-end point does, but I, I don't want to get into it right now. Yes." }, { "speaker": "stephan", "time": "28:28", "start": 1707.96, "text": "Yeah, so I think what I would summarize that then is it's, it, it's like saying if the inputs, as in the UTXOs, basically the heuristic is that all the UTXOs belong to the same person, right? And then if the script pubkey is the same, yes, as in if all, if in one transaction they're both being sent, then the idea is that these companies would try and link those two UTXOs, U-UTXOs together or multiple UTXOs and say, okay, those multiple UTXOs, they pro- Probably belong to one person." }, { "speaker": "adam_ficsor", "time": "29:01", "start": 1740.82, "text": "Yeah, so it depends on what you are using the blockchain analysis, product for or what is it designed. So for example, an exchange, what, what they are using? Well, I, I, I talked a CEO of an exchange, I, I don't want to say the name, and they said They, they apply the blockchain analysis, tool just to be sure and just they can say about, they can say this to their, customers. And not long ago, I've read, I have read, I read, I, I have listened a podcast, about Elip, the CEO of Elip, to Corchena, and this I, I don't know, one of it, and, and they said fifty percent of all the people who are using, Darknet markets, they are sending directly to exchanges, and these are the transactions they are actually can, can, can hundred percent, say that, hey, this is, this is something that the exchange probably doesn't want to have. Have, well, probably the exchange want to have because they want to have more money and volume and stuff like that, never mind. So, so, so, so, so this is where they are right now that, if they are directly sent from a darknet market to the exchange, then they can spot it and, and it looks like even, what, what they are saying, even the smallest coin joiner, where, where a light join market, where, where smallest uncertainty is introduced, they, they- I'd rather let it go and not coming to, to conclusions except if, if it's a high profile case like the Medco's coins or, or something like that." }, { "speaker": "stephan", "time": "30:46", "start": 1846.46, "text": "I see, so it's like they have a very, very tolerant filtering sort of process, and in some ways, it, it's like you're mentioning that some of these exchanges are doing it for the sake of having plausible deniability, let's say, to say, \"Oh, yeah, we're trying to do chain analysis.\" Yes. now the other point that I'm interested in is there have been some addresses that were listed, you know, as kind of like, you know, on the, OFAC sanctions listing, and I'm, I'm, I'm curious then, because then the problem is, how, how many steps back would they trace to? So let's say the coins were originating from some kind of dark net market or some kind of mixing, known mixing address, how many steps back could these chain analysis companies realistically apply that?" }, { "speaker": "adam_ficsor", "time": "31:38", "start": 1897.55, "text": "Yeah, you don't really know what I told you before it was just an anecdotal evidence too, so it, it must be taken with a grain of- No, so it's, but, but you don't know these companies aren't, they, they aren't, putting their code into the GitHub and MIT licensing it, so you, you don't know, you, you can't guess, I'm speculating only, you don't know." }, { "speaker": "stephan", "time": "32:02", "start": 1922.44, "text": "Sure, sure, fair point. Now, the other thing is around perhaps what we might call fingerprinting of a transaction. So if a transaction looks like a coinjoin transaction, then perhaps that is another way that a chain analysis type company could try to, you know, blacklist certain addresses or coins. Can you talk a little bit about what a coinjoin transaction looks like compared to a standard transaction? It kinda looks" }, { "speaker": "adam_ficsor", "time": "32:30", "start": 1950.01, "text": "like a standard transaction, though. I mean, you have, you just have more inputs and more outputs, and if the coin join is good enough, then the outputs will- Have the same values. So, I mean, standard transaction, coinjoin transaction, y-y- there are millions of reasons why you would create a transaction with many inputs and many outputs. So, it's an interesting question." }, { "speaker": "stephan", "time": "33:01", "start": 1980.69, "text": "I think basically what you're getting at is that really the coinjoin transactions need to be made to look as much like a standard transaction as possible." }, { "speaker": "adam_ficsor", "time": "33:09", "start": 1989.24, "text": "Yes, so, so, so you see, this, this is another heuristic that you are talking about, and if the heuristic is broken just in a couple of places, then how reliable their conclusions are, and, and it looks to me because there are so many people who just, doing, terrible stuff and, and not So, i-i-Imagine you are, you are, you are someone who is doing child pornography on the internet and, and you are taking drugs every day, then you, you just, you, you, you are, you are used to taking risk in the real life too, so you're just not going to care about anything around you, you know what I mean? It's, They, they, they have such a low-hanging fruit that they aren't really, they don't really care about, those harder to, to understand fruits, right now. That's, that's my guess. Like, like CoinJoin, if, if someone's doing CoinJoin, not just doing a normal transaction, what I heard from Adam Gibson, creator of the Join, one of the creator of the Join market, he said that they, they, they stopped there. Unless it's, it's a high profile case, they, they stop their algorithm stops there and they aren't trying to figure out what's, what, what might be going on there. Right now, maybe in the future it's gonna change, so we, we don't know. We'll see. Yeah," }, { "speaker": "stephan", "time": "34:47", "start": 2086.92, "text": "sure. Can you talk to the need to use the same amount for mixing transactions, rather than, you know, one party using a one BTC and another party mixing two BTC? Can you talk a little bit about that?" }, { "speaker": "adam_ficsor", "time": "34:58", "start": 2098.07, "text": "Well, yeah, if, if I want to mix with you and I have, one BTC coin and you have a two BTC coin, then we put it into one transaction and then the outputs will be Like this, I get back one BTC coin, you get back one BTC coin and another one BTC coin. So this is a perfect mix, which isn't very rarely happening in real life, but, but you get the point, I think." }, { "speaker": "stephan", "time": "35:31", "start": 2130.77, "text": "Yeah, yeah, I see. okay, and I think, historically it has been difficult to get people to put in the time and effort to mix the coins. is there some way this can be overcome by using some kind of coinjoin or like Wasabi wallet by default?" }, { "speaker": "adam_ficsor", "time": "35:49", "start": 2149.39, "text": "Yeah, right. It, it just, it, it really comes down to how much, risk, researchers take, you know? People like to research privacy. They- Don't really like to act on and implement it. Like, the only thing we've seen is join market and some centralized mixers, but centralized mixers are, are operating anonymously without To taking too much risks, so, so it's an interesting question if, if, if that's, that, that was my idea what the case next, if there would be one company at first that, gets, get things rolling and, and show that, hey, this isn't only legal, but it's, quite necessary, you know, privacy is fundamental and a legible human right. So if, if there was one company and it get things rolling Then might other people will be just say, \"Hey, maybe it's not that risky to, to work on privacy, in fact, necessary.\" So everyone understands the need for privacy, but But there is some risk associated with it, and we are pioneers, we don't know that, that what governments are going to figure out. Maybe they club down on this whole Bitcoin thing and we can go home. I don't know. That wouldn't be good." }, { "speaker": "stephan", "time": "37:21", "start": 2240.68, "text": "Yeah, so I mean, I think that's a good example because it may be that once this is proven out, it becomes more wide-stream, sorry, more mainstream and widely adopted with a similar technology into other wallets. Do you see that happening? yes, actual-" }, { "speaker": "adam_ficsor", "time": "37:38", "start": 2257.87, "text": "actually I see that, Well, it might be because I'm, I, I'm talking with people. But there was a guy who, have you heard about Dark Wallet? it was Cordova and Omri Taki who are doing that, and there was a guy who wanted to revive, Dark Wallet. Oh, I think his, his, his nickname was Revive too. Anyway, so he wanted to revive the Dark Wallet, and some right guys are, are, are going into very good directions too. well, what else? of course, there is Joy Market. although I think the developers are, are getting back to research rather than developing it, but anyway, it's, it's, it's, it, it is working, that's for sure. what else? Oh, there is the Bob wallet, that did the same for Bitcoin. They came up with a JavaScript, zero-link implementation very early on. I'm not sure how much traction they get, but That's probably working too. Yeah, so, so I see, I see, I see a lot of things in, in privacy because the, the scaling debate put, put all these things into the background and people were too busy figuring out how to scale Bitcoin, but now that For one year now, people are calm and they, they, they are starting to think about these things again, which is, which is very nice to see, I think." }, { "speaker": "stephan", "time": "39:20", "start": 2360.36, "text": "Yeah. Okay. And now, the other one I wanted to ask you was around the fact that in the past, there were prior concerns on this around the coordinator of the mix being able to de-identify or, you know, perhaps if, if they were to run a honeypot to try and- Identify people. Can you help explain how does Wasabi help get around that problem?" }, { "speaker": "adam_ficsor", "time": "39:46", "start": 2385.78, "text": "yes, there are a couple of, couple of ways we can go. Well, for example, one, Wasabi client, talking with the coordinator through Tor anonymity network, so real I, IP addresses aren't are not, exposed. And well, it, it might be worth noting that, most of the Tor attacks are You, you hear in the media that, hey, this person was the anonymized, the wheretor and things like that, and, and, and all of the, all of the Tor attacks are, are Are doing, doing stuff when you leave the Tor network, so you are the exit node, yes, on the exit node, but, in Wasabi both the coordinator and the clients are behind Tor, so the onion network isn't left and, and that's one thing. The other thing is of course that, you are, you are registering your inputs into the coordinator, right? That's one step. And how do you register your outputs? Because Tor doesn't just magically make you anonymous, so you have to change Tor identity so you will look like another, Tor node, not the same who registered the inputs, right? So, so, so that's That's, that's the, that's the big trick, and it's, it's much harder to execute than, than actually it would, would seem though. A-anyway. That's why the inputs and outputs cannot be joined together and, and, and everything else is to handle how the peers not, disrupt the rounds, right? So all this Chomian, Chomian blind signature stuff is, every, everything else is about, defending, denial of service attacks by the peer. Yeah. Yeah," }, { "speaker": "stephan", "time": "41:53", "start": 2513.08, "text": "I see. Okay. And then the other question I had was around the amounts. So my understanding is everyone has to use the same amount in terms of Wasabi wallet. Do you manually set that amount or is it just kind of a set, you know, zero point one and everyone just has to mix that exact same amount?" }, { "speaker": "adam_ficsor", "time": "42:11", "start": 2531.07, "text": "Yes, so it's a very, very interesting field of research. Yeah. So the basic thing what we are doing right now is that the amounts, we set an amount and- And that's a minimum amount that you have to reach. So if what the, the real amount will be, what is, what is the smallest, peer provided, right? So if we set zero point five, the, and the smallest peer provided, zero point six, then zero point six will be the, the mixing denomination. So what's interesting about this, that confidential transactions, which are something that, where hopefully we are getting to Bitcoin, probably not, but hopefully, that hides the amount so we don't have to, to, to mess with these things. Now, now the thing is that, there are actually better mixes. we can make better mixes. So for example, right now, if you put zero point six I put zero point, nine and someone else puts one point three, then the denomination will be zero point six and that gets mixed. But what if The two person who, who gets back the change, right? Because they have to get back the, the leftover money, which is not going to be anonymized, but if you, they are mixing On top of that, in the same transaction. So, so this is a very interesting field of research, which of course, confidential transaction would, make, Make obsolete, but I don't really see coming, so, so we, we probably have to do this unequal amount mixing research, by ourselves. right now, the stability of the software is the, the focus." }, { "speaker": "stephan", "time": "44:18", "start": 2657.68, "text": "Okay. And the other question I had was around the interaction between the different privacy technology. So for example, let's say Dandelion comes in to help, mask from a transaction propagation point of view, let's say more people start using Wasabi Wallet, and then let's say people also start using, say, Lightning as well. Can you talk a little bit about? If you think that interaction between the different, you know, aspects of privacy technology, will that be enough?" }, { "speaker": "adam_ficsor", "time": "44:48", "start": 2688.38, "text": "alright. So, i-i-it depends on which-- what, what are you talking about, right? that depends heavily on the context. So, for example, don't rely on is a net win. It's, it's, i-it's just a plus. I-i-it doesn't have any negatives. don't rely on is how you are broadcasting your transactions. Right now, we have a good way to broadcast a trans- Transactions via broadcasting over Tor, Dandelion makes it a near perfect way to broadcast transactions, you still need Tor if you want to be really, really private and get the anonymity set of the Tor network, but nevertheless, Dandelion is just an improvement, it doesn't change anything. Lightning Network, how I think about that is that, that is just, I mean, it's simple math that blockchains don't scale, right? So, it, it, it just doesn't work like that. So, so wallet developers can't avoid eventually implementing Lightning Network. It just, it, it has to be done at some point in the future. I think it's too early, there are too many things changing right now. I, I don't think it's, it's It's a good idea and the fees aren't that terrible right now, but eventually every wallet has to implement Lightning Network or they get obsolete. Now, how private Lightning Network is is a good question. There was a meet up in London, workshop in London between the," }, { "speaker": "adam_ficsor", "time": "46:26", "start": 2785.85, "text": "well, basically Blockstream brought together all the people who are working on Bitcoin privacy technology, many of them wants to stay anonymous, but For example, who doesn't, is that Adam Beck said, \"Yeah, Adam Beck was there,\" Adam Gibson from Joy Market, Tim Ruffing from CoinShopper, so, so this kind of people think about it and we- We were, I, I actually just missed it. I just see the, I just see the, the address that we were, we were thinking about how Lightning Network will be private and what kind of problems it has. So I- The takeaways that Lightning Network solves a lot of things, solves a lot of privacy things that Bitcoin has, but it also introduces a lot of attack vectors. So, so there is that it's, it's, it's not like a- It's not like a dark network or something like that. It's, it's, it's not. So there are hubs and you, you don't have anonymity through those hubs if, if your, your transaction only goes through one hub." }, { "speaker": "adam_ficsor", "time": "47:47", "start": 2866.95, "text": "it, it brings up other problems, but solves a lot. So it's exciting. I- Yeah, this is another research that, that I would love to get into, but, no, no time for that. Interesting. Sure, sure, you have other" }, { "speaker": "stephan", "time": "48:08", "start": 2887.79, "text": "priorities. Yeah. Okay. So with, ZK Snacks and with Wasabi Wallet, what's the funding situation like at the moment? Is it a user pays model? What's the, what's the go with that?" }, { "speaker": "adam_ficsor", "time": "48:23", "start": 2903.02, "text": "There is 0.003% mixing fee. per anonymity set, which adds up if when one hundred will be the anonymity set, it will add up a zero point three percent to a mixing fee. So for example, zero point one percent is the denomination, and one hundred mixing that with one hundred other peers, it's going to be zero point one Bitcoin. Multiplied by zero point one bi- the, zero point three percent of zero point one Bitcoin will be the fee, which is Which is the lowest actually, even from centralized mixers. Right now we didn't even get any fee because there are just so-" }, { "speaker": "adam_ficsor", "time": "49:21", "start": 2961.22, "text": "Because the fees wouldn't reach, around three dollars, the whole fees, you know, with the anonymity sets. 0.05 BTC denomination, that's what it's doing right now, but the fees doesn't reach 3 Bitcoin. in, in together, so, so, so we didn't really take any fees yet." }, { "speaker": "stephan", "time": "49:49", "start": 2989.15, "text": "Alright. And now, what's, you know, what's kind of next? I mean, you guys are launching soon, can you tell us a little bit about the launch and what's kind of the immediate next" }, { "speaker": "adam_ficsor", "time": "49:58", "start": 2998.13, "text": "steps? On October 31, the ten year anniversary of the Bitcoin white paper, we are going to launch the 1.0 stable version, which will include, Windows installer, Mac and OSX binaries, so you download and run Download on, on Tar Run. Yeah, so, so, so that's, that's, that's going to be the user experience, from the one point o." }, { "speaker": "stephan", "time": "50:37", "start": 3036.79, "text": "Excellent, that's great. Okay, now if, if someone wants to help you guys out, how can they do it? Do they, is there a donation address or, can they help with development?" }, { "speaker": "adam_ficsor", "time": "50:47", "start": 3046.83, "text": "And you know, yes, there is a donation address, for me personally. To be fair, it goes, everything goes to, to, to people who are contributing, paying the amount, but I don't want to mix it with the, with the company because that would be Some, some legal gray area. So, so, so this is a personal donation address for me, and this is going towards privacy work." }, { "speaker": "stephan", "time": "51:15", "start": 3074.82, "text": "Alright. have you got any other final closing thoughts you wanted to make?" }, { "speaker": "adam_ficsor", "time": "51:21", "start": 3080.65, "text": "Yes. I think we have a momentum now, and if we don't grab this momentum, then it might go away and not coming back for, for years. the more people are using privacy technology, the better that privacy technology is working because you can't hide in a, because you can't be private by yourself and you have to hide in a crowd." }, { "speaker": "stephan", "time": "51:49", "start": 3108.57, "text": "Okay. Yeah. No, I think that's a great, call to action. I think more people should, take their privacy seriously and, yeah, they should have a look. So if people wanna find you, where can they find" }, { "speaker": "adam_ficsor", "time": "52:01", "start": 3121.16, "text": "you, Adam? They can find me on Twitter nopeor73 also on Medium and well, GitHub." }, { "speaker": "stephan", "time": "52:12", "start": 3132.4, "text": "Yeah, excellent. Okay. And the website, I was just looking up, it's, zksnacks dot com for the company, and then the wallet is wasabiwallet dot io for anyone interested. I'll put the links in the description, obviously. and yeah, guys, I recommend you check out, Adam's, articles as well on Medium. They're quite good. but other- Guys, I think that's, that's pretty much it. So thanks very much for coming on, Adam. It's been a pleasure. Thanks for having me. Hope you guys enjoyed that conversation with Adam, also known as NoPara73. Make sure you check out his stuff, zkSnacks, Wasabi Wallet, and some of his Medium posts on Bitcoin privacy. I'll put all the links for those in my show notes page for this episode. So go to my website, stephanlivera.com, that's spelled Stephan, S T E P H A N L I V E R r a dot com. Go there and search s l p twenty four, and you can find the links for this episode. If you guys enjoyed the podcast, don't forget to give it a five star review, share it on social media, and/or just share it directly with your friends. and lastly, if you've got any questions, you can come and DM me on Twitter. My handle there is at stephan livera. Also, that's it from me, guys. Thanks, and I'll speak to you next time." } ] }