Winklevoss Capital / Zcash | Zcash's Mandate of Heaven - Maxime Desalle | Common S3nse - 2026

But now it's my honor to welcome a very special speaker. Um I would like to welcome Maxime Dessel, who's going to be representing Zcash here in Amsterdam and talking about Zcash's mandate to heaven. Welcome, Maxime. And a round of applause for him. And a reminder that we have slido.

com #2626 the code. So if you have any questions for him, and ask the hardest questions. Let's Let's make it difficult for him and uh enjoy. Oh, you want to go set up your computer? Here you go.

Yeah, go for it. Here. Here, yeah. Oh, you don't need it? Here you go.

Break a leg.

Yeah, yeah. I'm just for my notes. Oh, thank you. Um yeah. Um it's a pleasure to be here.

Um so I'm here to talk about um Zcash. Um so the the title of this talk comes from um China, uh the wonderful great country of China full of liberty. And um 3,000 years ago in China, there was a a political doctrine that originated called uh the mandates uh of heaven. And basically, it's sort of like a way of legitimizing the the ruler uh by saying, "Well, if whoever's a ruler is uh mandated from heaven, and um as a result, if you're able to replace the ruler, um that's perfectly fine, and you are the new ruler and you're legitimate." Um so overthrowing the ruler is perfectly legitimate.

Um and China's an interesting country because it both invented uh paper money. Um it both it also invented now like the digital yuan. Um so it's this country with full history uh ups and downs and especially monetarily. Um So the three things regarding the mandate of heaven that like the doctrine basically specifies is that it's um it's not guaranteed that you will stay as a ruler. Um it's especially um you you always you you only see that you're not a ruler anymore in hindsight.

So once you've been replaced um and it's um so it's not it's not you have to continuously outperform and it's uh not guaranteed in time. So any time you can get get get can get replaced. Um and I guess that that brings us to money. Um so the three questions like I I myself like how does this apply to money and specifically what does money look like in the 21st century? And if my my thesis is that it's basically split on three tests.

So the first test is whether um money can be abused. And this is where we obviously see this is the easiest one. This is where we obviously see that fiat is just like that out of the gate because um you know, government governments can effectively inflate it infinitely and governments being um you know, full of that have basically three ways out. They have uh inflation, they have control and um they have um I'm missing the last one. Inflation control and uh what is the last one?

And confiscation. Yes. So for inflation they have to block the exits, right? For inflation to work they have to block you from being able to use other currencies. Um, and then for control and um, confiscation, they have to be able to uh, surveil you.

They have to be able to see you. So, essentially, um, they have to block the exits and they have to see you. And so, out of the gates, um, fiat fiat money effectively loses and will inevitably be abused uh, because it's perfectly surveillable, um, it perfectly blockable, um, and as a result, it just fails the test out of the gates. Um, so I guess that's that's the first one. Second one then is, well, why not Bitcoin?

You know, Bitcoin is is is is an interesting attempt at it. And where Bitcoin fails, I think is the fact that um, it's not private, which is the second test. So, Hayek talks a lot about this, but I mean, sort of implicitly talks about the need for privacy, um, that you can't get a free market without privacy. And and I feel like this was sort of like mentioned in the panel before this of like how do we get like um, normies, quote unquote, um, interested in privacy, but I feel like an underrated view for privacy is that it actually benefits um, all of us indirectly by benefit by benefiting only a very few people. So, for example, um, Copernicus, like one of the great scientists of our our age, um, he he sat on his work for 30 years because he was very um, scared of the repercussions for publishing his work.

Um, Darwin had a similar experience. I think he waited 20 years before publishing his work. Um, and then you have other people like Phil Zimmerman, you have Satoshi, um, you have WikiLeaks, you have all these things where um, privacy was actually either very useful or would have been very useful had it properly existed back then and allowed these um really revolutionaries scientifically um to to publish their work. And so Hayek talked about this where it's like we on a daily basis benefits from um a lot of liberties that we don't directly use just because others are able to use those liberties to create things and move the world forward in ways that eventually benefit us. And very similarly um it's it's perfectly fine actually if privacy basically ends up um mostly only benefiting like a few key people um because those are probably the ones that are really needed the most and those are the ones where the output will also be the the biggest.

Now, I'm not saying that we don't have to uh make the whole uh the world more private. I would love a world where everyone is um you know, using Mixnets and using Zcash and using all these privacy technologies. Um but you know, the the response to um oh, why should I care about privacy if I have nothing to hide? Well, it's other people do actually have something to hide and it will help you a lot if these other people do get privacy. Um and so privacy is extremely important.

Obviously, we all know this. Uh but I guess this is like to like a general tangent about this. Um but you can't have free markets without privacy um and especially in the age of of uh of AI, um it's it's it's going to get worse and worse. And so that that that but I guess leads me to then the fact that privacy is at the limits is effectively binary. Um this may be a bit contro- controversial, but you effectively either have privacy or you don't.

And what what I'm getting at here is when you have um as you get exponentially more compute, as you get exponentially uh better AI, um better quantum computers, uh and all these things. um Um every bit of data that you leak, um it's an is first un-doable. Um you can't take it back. Once it's out there, it's over. Um but as you every bit of data you leak makes it exponentially easier, um for um you know, an attacker to identify you uh with enough compute.

And so, the question at the limit is really whether you have a system that is fully encrypted, fully private, zero data leakage, uh which is in practice is extremely hard. Um or whether you have a system which is uh effectively transparent, whether or not it attempts to be private. Uh now, of course, there are like uh specific um scenarios, like if you're like being attacked by a nation state, like they will have a lot of compute. Uh but if you're simply, you know, at risk of someone like trying to identify you in Arcane or something, that's I guess a different scenario. But the basic The point here is that at the limits, eventually, uh it basically just falls down to whether the system is fully encrypted, fully private, or not.

Um needless to say that Bitcoin is not fully encrypted, uh so it completely fails that fails that test. And worryingly, actually, strangely enough, there's actually basically no attempts in Bitcoin itself, as far as I know, to have um on-chain encryption or privacy. Um I think the the default is still like the mixers and the coin joins, uh which is just not a workable solution, I think. Um you know, in our age, and again with even more computes, and where we're going to be able to pattern match all these things. So, I guess then that leads me then to the third thing, which is in in an age of everlasting progress and more computes and more um better AIs and quantum computers at the gates, um the store of value probably for the 21st century is going to be one that purposely rejects ossification.

Um uh as a mindset, ossification actually doesn't really make sense. Like if if you have those threats that increasingly get better, um which AI computes and quantum computers effectively are for technologies like Bitcoin, um you can't it's just not a workable mindset to just stop and say, "Oh, like we're good. We're good to just be like like gold and just hang around." Um effectively, gold is when you if you buy gold, you're uh betting or um buying the the inability of uh humans to reach asteroids and mine gold in space. Um but eventually, that will be the case whether this century or next one, I don't I don't know, but like eventually, we will be able to send robots on those asteroids and mine gold, and gold will eventually, I'm guessing, uh become uh worthless or at least much less valuable.

And similarly, Bitcoin at this point, due to this mindset of ossification and stasis, is effectively a bet on um or, you know, on humans not growing computes, which, um if you've been following uh the news, is not happening, right? Like we're building data centers left and right. And computer is only growing as as a market, and and so it's it's it's fundamentally self-defeating as a strategy. Um so the the core value for the 21st century is probably one that is constantly evolving. One that is right now implementing uh quantum resistance protocols.

One that is uh actively scaling. One that is implementing better and better privacy uh to counter, for example, AI uh attacks. Um it's all these things, and there are probably unknown unknowns here. Like there are probably new threats that we haven't that we don't know yet about yet, that we will discover through new technology and that the store value will need to adapt to. Um and so I guess the the point I'm getting at here is that I think the the best bets um we currently have at this is is Zcash.

Um I think there are uh fortunately also many other competitors. Um and I hope that these competitors get better and better um because sort of like and tying back to Hayek um the um money should be a free market. Uh the best product should win and and hopefully we'll get there. Uh but I think right now Zcash has a has a real great shot and I believe it has a real great shot at becoming uh the store value for the 21st century. Um so yeah, that was my talk.

Thank you.

Thank you. Do we have questions for Maxim? Jump on slide, yeah? Do you want to just live questions is also possible.

Yeah, you talked about uh gold is on other planet and they take it here, but if we have no power everything is go off and then we still can pay with gold. So um um and I don't know if there is silver on other planet maybe we can go uh connection with silver and Zcash together.

Um sorry, I'm not understanding your question so you

If the electricity power is off then it's very interested if people can have silver. And then maybe they can can connect it in the future with Zcash. And yeah, maybe we can do something with that with the government.

Yeah, I mean I I I feel like the reliance on on um you know, energy and the fact that it's digital is obviously like one aspect of Zcash. It has like downsides and and upsides. Uh like gold for example, it's kind of like hard to pass like through uh

but it's too expensive gold. It's too expensive already. It's more than 4,400 dollars now and silver is very cheap. So and it's in used in industry and in panels, sunscreen panels. And and she used in batteries.

So it's very interested to connect it.

Yeah, maybe silver is a new Bitcoin. Yeah.

And both both statements.

[laughter]

Any other question?

Thanks for the talk. Yeah, I have two questions actually, but one is that Bitcoin of course could have implemented privacy features, but they chose not to. Also with the auditability of the supply and like the store value aspect. Um Yeah, how do you think that could impact Zcash on the store value front and uh Yeah, also regulatory like because if the shielded pool and also um you know, private supply do you think that could limit like the institutional appetite of interest in investing in Zcash?

Yeah, 100%. Um so actually interestingly Zcash was actually originally meant as a BIP as a Bitcoin improvement proposal. Uh I think this was like back in 2013 with a zero cash paper and then the um um and then at the time like zero knowledge proofs were so slow and just frankly immature um that the Bitcoin community refused it. And so back in 2016 they launched um Zcash. Um and you know, at the time in 2016 it was effectively unusable.

And if you look at the usage, um I think only like 1% of the transactions were like shielded. Um so it's been it's been a a long time that this has been in the works. Um I think for the auditability of the supply um this was true probably up until a few months ago. Uh, where I think there was a very short consideration and was actually brought up by I think by Peter Todd on on on Twitter at the time. But, as of recently, um, the most recent shielded pool in Zcash has been formally verified.

Um, so we effectively have uh, quote-unquote guarantee. Um, I mean, there are certain edge cases, very unlikely, but edge cases where this could still break. As like for example, if the cryptog- like if ECC cryptography gets broken, but um, we basically have proof that a mathematical proof that um, the shielded pool is has no bugs. Um, and so if you add that in with uh, turnstiles, which is this mechanism of like tracking supply between the pools and ensuring that there's no uh, inflation uh, from like a hacker, um, you get to a pretty safe state in the long run. Uh, and the the former pools, um, so Sprout, Sapling, Orchard, um, Orchard's already frozen now, but um, the other ones are probably eventually going to be frozen with quantum uh, or if not, um, people will just lose their funds if they still have them in there.

Um, so eventually all of it will migrate into those formally verified pools, giving you assurance that it's very very very unlikely that there is um, supply inflation, basically. Um, yeah.

Hello.

Let's go.

Good afternoon. Um, [snorts] I have a question about uh, Zcash, you know, supporting other assets. Do you are you interested in it? Do you think it's a good idea? Do the Zcash people just mostly want privacy for Zcash?

And then like we can just benefit down like trickle down privacy open source for the rest of us uh, to implement our own uh, privacy systems for other assets?

Yeah, I mean, there's been huge debates. Um as far as I know, um it's still there are still people like rooting for it, and it's still in the works on testnets, but there was a vote a few months ago. Um I mean, Zcash governance is like sort of complicated. There's technically it's not vote, it's polling, but anyway. Um and so there was a poll where um this was asked, oh should we support ZSAs, basically.

Um and the answer was uh no. Um so I think at this point it's rather unlikely.

W- Why, if you don't

Oh. Oh Well, I think the the reasoning for most people who voted no is that Zcash basically sort of like found product market fits with the encrypted Bitcoin meme, and that as a result, like let's let's capitalize on it. And um Yeah, I do think there are like merits to ZSAs. Um I I guess I would say like the both sides basically like um if you want to be like a full all full store value, probably want the protocol to be as simple as possible, which is you don't don't want to complicate complexity. You also don't want to confuse like people uh by being like many different things.

Um Like right now Zcash is pretty easy to sell, like it's just Bitcoin encrypted. Just buy the bedrock, keep it. Um Yeah.

I'll go again if no one else.

Let's go.

Yeah, no one should give me mics. This is a bad idea. Um so uh do you think it's a useful property of money to uh be correlated to a basket of goods that you buy regularly?

Yeah, so I I've actually long debated about this like internally. Um Hayek actually also talks about this. Sorry, I always bring up Hayek because I'm a really good fan.

Is he Is he the only economist that you're familiar with?

Uh I mean, mostly. I actually read all of his work, and I'm just like a huge fan of him. Uh I I I read other works work like Solow and stuff. So it's all good, but like anyway. Um Okay, so um and the problem with I think uh tracking the basket of goods is that it's it sometimes takes a long time for things to reflect in those goods.

So, you would probably need to first track um, the raw supplies, like the raw materials, like I don't know, like wood, copper, whatever. Um, yeah, and I guess it's it could be a good experiment. I'm all for it basically. Like I just want competition. We need better money.

I love Roy by the way, a huge fan. So, we should have private Roy. But, yeah, basically yeah, I'm all for it. May the May the best win. I think the message that Zcash brings is that there's no management basically.

With if you want to track supplies, like you certainly need to have some mechanism or like you sort of like bring humans into it. I guess it could work. It depends, like the market will decide. Yeah, I'm all for it.

Anyone else? You want to go?

So, you mentioned that in the limit there could either be total privacy or no privacy because of AI. And I thought that was a really interesting thought experiment. If you extrapolate forward, so when you're speaking about AI, it's kind of like anonymity or privacy comes from a large set size, right? So, you want to make it hard to find the needle in the haystack. The problem with AI is it lets you find the needle no matter how much more hay you kind of pile in there, right?

So, the solution would be to add more needles. Stop adding more hay and instead converting, you know, hay into needles. So, I don't know where this analogy is going, but I'm just wanting to ask if you have any thoughts maybe around AI or around what cryptocurrency can do to encourage that trend because we're in a tricky position where if you get people into BTC or into other coins that don't have those privacy features, they might feel like they're making progress, but we're not in that environment anymore. So, how do we make that distinction to them or make it easier for them to find the right path?

Yeah, um I mean I mean yeah, Bitcoin is effectively like a surveillance machine at this point, um which is very sad. Um I I I I guess in many ways I I I I'm going at it. Um I think something that is actually very very underrated right now in crypto is the networking part. So, we focus a lot on like on-chain privacy, but basically never I mean Nym that works on this, but like um no one else actually works on like the networking privacy part, which is sort of like the second half of like doing the work for privacy, uh on-chain privacy, and then you need to when you communicate your transaction through the network uh be able to do so privately. Um so, I guess that's that's one thing that is very undervalued.

And then how to make how to communicate that through the users? Uh well, I think we just need to be screaming it all day long that Bitcoin is not private and that it's a surveillance machine. Um it's very sad, um but yeah, it it it it is what it is. Um yeah.

Maxim, thank you so so much for taking the stage and telling us that Bitcoin is a surveillance machine. Thank you.