The Payments Unlock: Privacy With Compliance | Howard Wu-Provable, Rich Widmann-Google, Kavita Gupta

[Music] it would be our Del experience thank you so much oh it's finally working how are you guys doing good good energy something in the room great okay so this is very exciting like right before this panel people were talking about why blockchain was invented it was all about privacy it was all about scalability on that privacy both institutional and Retail and let's take that topic forward I'm very excited we have Howard Vu founder of Leo and then we have Rich vidman who is heading crypto strategies at Google which I'm very excited about because it only took you 10 years um so with that let's start so first thing actually I'll start with you re um for a trillion doll company global company like Google uh which has been questioned by lot of policy makers about privacy what does privacy means to you yes so I think that when when we talk about privacy right there's sort of this idea of of proportionality right so for users there's a user idea of privacy um and we've made you know statements about this earlier like generally speaking um everyone who wants to interact with a with a third party service is going to be responsible for for giving up some of their data and the the call to action or the challenge for people building in this space or people building any application is really to provide a service that um users find valuable enough in order to make that transaction right and so we we've been doing that on the search side and on the ad side for a long time um you know when we think about the crypto team and sort of the work that we do it's obviously a very different role for Google to play um because instead of us being sort of the center of a particular ecosystem um that that's controlled and run by us uh in many ways we're just a an equal participant um so and that's really the exciting opportunity of a lot of these public chains is that they are permissionless and so um just like you have we we always think of like the sort of the DJ Crypt Builder who's able to build uh the next asset or or launch a stable coin um in many ways this is also if if we want this to scale globally going to be an opportunity for large companies like Google to find the right way to participate um and so a lot of what we're going to talk about today is a little bit of that intersection of you know and and actually the last panel talked about it which is you know stable coins appear to be a necessary condition for success or adoption for crypto generally right the ability to hold a non-volatile asset to transact um using a Fiat back currency but you using the permissionless rails is absolutely critical for adoption and we're seeing that bear out in the numbers but um as it's designed today in terms of like public totally transparent ledgers it's not ideal from a payments perspective and um Howard and I were actually just speaking earlier at a BB payments event and we asked the question about you know how many people use venmo and then how many people set the privacy setting on their venmo so that those payments aren't visible to everybody and almost everybody's hand in the room went up right so every user every individual wants um some level of control over that privacy just like uh an Enterprise will and so I think what I'm really excited about I know we've talked about this is you know the the the power of of zero knowledge proofs in this context actually offers a unique way to bring all the best things about permissionless blockchains but really level it up for the context that might be a little bit more suitable for large corporates like a ghoul so very interesting you actually talked about two three points which I want to come back and unpack especially on the payments and privacy but Howard let's go here so you have been one of the biggest voices about privacy and compliant in the space from very long time now you have Alo which is a layer one privacy and compliant chain and how do you see blockchain as which is built on the principles of privacy really changing how the Web Two Worlds the the large web2 worlds of Google Facebook all these companies work where does Alo come in yeah so you know for me privacy what ZK does and what what the compliance here is for is really to unlock capabilities that aren't available or possible in crypto today you know take for example a simple user journey of buying coffee at your local coffee shop you know if you were to pay in usdc today the problem is that the bista would instantly learn your address and if they know your address now they know your wallet and now they can see how much money you have how much money you make how much money you spend how frequently you spend this is a broken user journey and so to me this is about unlocking new capabilities and fixing some of the issues that are prevalent in web 3 today um you know with the with a technology like Alo we're we're bringing private smart contracts to Market and this is an opportunity to introduce a private version of stable coins to offer private payments you know this is going to unlock not just for the consumer but also as Rich talked about for Enterprises as well you know so many companies want to do payroll they want to do payroll with stable coins and the problem of course as you can imagine is well if you use a stable coin to make your payroll uh you know you instantly leak how much everyone makes and even more so your your employees they can just see how much their colleagues make and so you know this is a broken user Journey for my view and you know fundamentally the goal really with this technology is to unlock these types of user Journeys so let me follow up on that how does Alo come into the picture with this broken payment Journey so Alo is foundational infrastructure it's a new L1 using zero knowledge proofs for those who are new to zero knowledge proofs it's a technology that allows you to convince another party that you know something or you did something without having to reveal to them all of that data and so this is a very powerful primitive we've seen it used in very very small examples and early examples thus far this is the first blockchain to come to Market using ZK that has private smart contracts and what we think is going to be a huge opportunity for developers is to use this technology to introduce configurable compliance into their applications so I actually just gave a talk uh two days ago at eth Global about uh Primitives that developers can develop in their applications specifically um escal time locks verifiable credentials um as well as uh policy engines and the reason these things are so important you know take verifiable credentials for instance everyone understands the importance of authenticity and and being authenticated but one of the problems is you don't want to reveal all of your information on the blockchain so if I want to attest that I'm over the age of 18 I don't want to make it permanent in this immutable blockchain you know my date of birth U or my name or my my nationality right but I need to convince um other people and the application that for example I may be over 18 that I may be a US citizen that I may not be on an ofac sanctions list for instance and so having zero knowledge proofs enables you to do that and so we think about this as a opportunity to introduce compliance and confidentiality for crypto very very fascinating because every time when I check in a hotel and I have to give my driving license and passports and all that information and my credit card I'm like well if I would be behind with basic computer knowledge I can hack this person in two second so maybe not a good thing to say I need to use Alo uh so bringing the that point here Rich so um the question is how does that work for Google like not only from the institutional side I'm a big gpay user so how much privacy and compliant am I getting on that yeah well it's a loaded question um as much as you set in your privacy settings is what I'll respond but I I think um look where you're going to is where every crypto person goes in their mind but we have a long way to go before we can even get to the scale of GP just frankly um but for us like I think there's two angles to this so we don't have a long way to go for businesses to start adopting stable coins that's something that we have been pushing within our company for the last couple of uh quarters and actually as of Q4 last year we're doing about tens of millions of dollars in stable coin volume as payment for for services and so we're we're really actively playing around in this sandbox and exploring the crypto native Primitives that exist and figuring out like how much of this can we use right out of the box um how much of this has a Delta between our current processes from a finance and an accounting standpoint and then are there people working on solving some of these um what we consider foundational challenges um with respect to adoption so I think that's the you know the the one part of it is as we think about Google being a participant either as a recipient of stable coins or perhaps a um a distributor of stable coins um allowing people to receive payments you know content creators Etc like what what's our role there and and what technology do we need to make that more possible the other side of it is really the developer side and before we got on stage Howard and I were just talking about this which is like how do we bring the power of ZK to more developers um in a way that allows them to tap into the benefits of this privacy preserving technology while still building useful applications like you know wallets and you know swapping uh dexes and things like that and so uh the big part of this uh discussion that we've been having with with Theo and the provable team has been well what are the things that developers need right and so um obviously the value here we're talking about data is the public data sets that we have we have a public data set program we've indexed over 25 blockchains some of that actually appears in Google Search now um but before it gets into search there are thousands of developers who are looking to build on these protocols who want access to that data um and so that's an area that we've collaborated with provable Team to make the data on the provable network essentially available to um to developers and third parties and then there's a whole host of things that we can think about that will make this easier when when it comes to like delegated proving right and that was the conversation we were just having um it's still very hard and and frankly costly um to to run zero knowledge proofs right there's both a time and a latency uh concern and then there's also a bit of a supply chain concern which is if I build a wallet but I want to take advantage of ZK who who do I send the proofs to um and the the folks that are Leo approvable like they they can't do all of it for everyone some of this has to be adopted in yes right I mean we we would love the ecosystem to be decentralized I would like that to well that's yeah that's exactly the point right the the point is is that we don't just come up with great technology that large Enterprises or large companies can use um but we come up with technologies that even individual developers can use and that they're cost effective in in sort of the open source ecosystem right so um so for us I think there's those two big themes right the first theme is how do we think about solving a lot of the big challenges um and when it comes to you know the large companies I think we are generally the most forward thinking and open to reevaluating our position in the space and how we can leverage this technology not just bring new markets um or new Services out to the world but also how we can change Google uh at large internally but then the other side is the developer ecosystem but I I think I want to take this you did tease into a big news which I want to share in a minute but I want to bring this to you Howard so that is all the payment system but I'm sure Alo is just not for that right that is one big piece of it but uh I think identity the supply chain proofs and like lot of things which came back here absolutely Alo offers General programmable privacy and so beyond just payments there's several areas that we think are very interesting real world use cases for one I touched a little bit on identity there's an initiative that's been run by our foundation called zpass the goal there is to provide for this type of attestation where I can actually provide uh assurances that I'm over 18 that I'm not uh in unsanctioned list that I'm a US citizen you know all these types of information available uh and widely widely kind of verified by other third parties another area is gaming um you know when it comes to gaming right now if you're trying to build on ethereum or salana one of the challenges is that um there is no ability to have hidden game State um so if you want to build a game like chess absolutely you can do it on ethereum but the problem is if you want to build a game like Battleship um it gets really really difficult and maybe there's some cryptographers in the room and they'll say well maybe you could do like a commit and reveal scheme yes you could the problem there is it it completely breaks the uiux of the gameplay because it makes it incredibly slow incredibly cumbersome and what makes private smart contract so interesting is that you now have information asymmetry I can create a game like Battleship hide the opponent's board and play this game directly on chain without having to go through any cumbersome mathematics or cryptography or or or kind of convoluted schemes there the last year I'll touch on which I think is very interesting with with private smart contracts in ZK is that you now are giving developers far more expressivity which is a huge Advantage so it opens the door to things like zk& ml uh uh and and also AI because the fact that you now have ability to run computations offchain in a blockchain like ethereum everyone is time sharing this 10-second block time it's it's a lot like a Mainframe is how equated to um whereas when when you're looking at you know ZK computations you can now run computations offchain that take a minute that take an hour it could even take a day and then you submit it onchain there's no re-execution the proof gets checked in under 10 milliseconds and it's stored in as a state transition on chain and so that is a huge capability that opens the door to what developers can write in a smart contract and we think that's a huge huge and Powerful primitive for for developers wow so that's like anything and everything you can create the whole world starting from a person's identity payments shopping like all the way down to everything that's the dream yeah you're probably going to know like the whole history of 10 generations of people are going to be on Alo looks like that okay so now uh before we go I mean there is a huge press release from Google and Alo like Google going into privacy and compliant with a Alo and it is for notes validator Google Cloud a bunch of stuff very exciting yeah so I think it's one of those things that cuts across both themes so um you know at at the technology layer and at the developer layer um there are there are some things that we're doing using uh the machine sizes and shapes that we have at Google Cloud that are going to lead to performance improvements on the proving side and and and if Howard wants to talk a little bit more about that he can and then the other part about it is that we're really focusing on is how do we start taking some of the things that we're learning by working actively on chain um and incorporating it into our own experimentation around stable coin adoption within the company at large and I think that's that's actually really the um you know two parts of one whole which is yes you need to be able to think about how do you uh increase adoption yes you need to make it easier for people to build um of course there's an opportunity for us to uh you know actually start thinking about um how do we make it easier not just for the approvable folks but for anybody building in the ZK space to get access to that technology essentially you know democratize it but then you know in service of what and so that's I think the really um the really powerful Point here is that this is all really in service of our own exploration as a company in terms of whether or not we can take advantage of these Technologies for privacy preser preservation around payments and things like that as a Google when you're sitting and you have so many choices and so many people coming and building and telling you zcash and sorry uh ZK proof and like different type of ZK proofs actually why Alo for you yeah so I think there's a there's a couple things um one of the things that was really stood out to us about Lao and and provable was the previous um conversations around privacy and payments was really kind of a um a take it or leave it option so if you use zcash or Monero it was really just like it's always private there are no smart contracts I mean it was it was um I think at the time um you know very Innovative and it solved a problem but it just solved like the first order question of um privacy on chain it really um didn't as far to think about like okay well what does this look like if it's adopted broadly by by large corporates and by the way that doesn't necessarily need to be the thought process of everyone who's building in this space right um not everything is designed for Global adoption or for big corporates like Google to be able to use it that's okay um but but at the same time what we loved about uh what Howard and the team were building there was um they had thought about private smart contracts which he had mentioned that was something that we thought was Innovative and then the other part of it was uh on the developer side they had just this they had articulated a plan here where they were thinking about what I would consider to be like proportional or optional privacy in other words um you know ways in which you can preserve payments and have them private but also enabling things like compliance um where if you do need to see a payment um as a third party who's doing this and and by the way any corporate is going to need to be able to view who's paying them um that is an option that didn't previously exist in the ZK space before and so it opens up very fascinating actually as an investor in the space that's a very interesting point that that as as Google with that level with that scalability you didn't think that option existed before Alo well I mean no and and honestly I think a lot of there were options that existed but they didn't play nicely in terms of that optionality standpoint so like I said it was sort of take it or leave it so you either you come and you accept these kind of privacy preserving methodologies and there is no compromise and I like I said earlier that's okay for certain um for certain use cases but for for a company it's very difficult for us to for p it's impossible GL cents with so many different countries gdpr and everything different rule sets different requirements and that's the other thing like people yeah obviously um Google interacts with users in all sorts of different jurisdictions and so we have to that SS too complicated Alo why Google then a big part of the the opportunity here is to accelerate ZK development and ZK adoption and you know I think to what rich is saying we believe strongly in configurable compliance we want developers to be able to comply with local laws and regulations where they are and and that's a natural conversation that comes up when you talk about private payments or private applications and so you know unless you have a smart contract system wedded to a privacy system you're not going to be able to develop compliant solutions that are going to work for your specific retail market and I think that that is where you know Google recognizes that we've been working on trying to develop confidential payment systems with them so that that's an opportunity we can showcase to the world and make that widely available to kind of see this is kind of the standard of what can be done and really give developers an opportunity to plug in and play wow this is massive guys like being in the space since 2015 companies like Google Facebook bunch of those multi International we have been talking to them and it has never really have came all the way foration to where we are very quickly with this announcement of Partnerships what does Alo now looking forward with Google what you are already doing and what you want to get Google to do which they're not thinking right now well so there's several things for one good question now's your chance yeah yeah I'm going to put you on the spot here man no for one uh Google Cloud we be running a validator on the Alo Network we're very excited to announce that um secondly uh Google cloud has integrated um and and indexed all of ao's blockchain data so that is now available on the Google Cloud Webb portal you can now use it in big query we think this is going to be huge not just for analytics but also for new applications that developers want um and also features that they need for example like record scanning um and also lastly we're exploring this um the confidential payment systems area that's something that we think is very exciting it's a very new area because people have not been able to articulate a good solution that is compliant and confidential and so that's an area that we really want to push on together can I add one more of course identity for all my Gmail and all the emails I really want to delete but I don't know where they are there's um I mean it's interesting because there are people that are using Google single sign on and ZK capabilities to allow people to access wallets now and so that's you know obviously the protocols are leading that that's not us but um I do think that there are untapped or unexplored areas where you can take some of the Google properties combining it with this technology to create a better user experience and by the way leverage some of the Privacy privacy preserving tech there so that's what I'm excited about my identity my gpay my Gils and all the boyfriends I want to delete from there with that thank you so much guys thank you so much for being here