Defending Crypto in Congress - Matthew West

short laptop okay so railgun's up next we're going to talk about privacy on public ledger blockchains so we got uh alan and edward okay cool whoever bring them all you guys ready all right yeah okay let's make sure we got uh you guys ready to go all right take it away would you guys like an extra microphone um okay gm eat denver [Music] [Applause] so my name is edward fricker this is alan scott and this is kai mesquita and we are three of the contributors to the railgun project uh railgun project is a privacy system for our public ledger chains and uh our uh app is a d app called railgun a smart contract system for private dex trading private transactions and private balances that does not require use of a layer 2 or bridge now i will give some brief context then kai will talk about the zk snarks and the technology that was needed to put this d app together and alan will talk about the practical applications and why people are using this kind of privacy technology uh and also how builders like you can adapt this technology to make your applications private as well so people who use your d apps can enjoy the same privacy that we do so to start off privacy is important privacy is something that all humans instinctually value even those who seek to remove our privacy want it for themselves information about you is used to pretend to be you your own information is used to access your accounts and if the people have access to that same information they can also access your accounts so privacy isn't just about information and and you know things you want to hide it is access to the things that you find valuable in the things that you desire uh furthermore professionals need privacy i'm a lawyer i am legally required to keep the interactions between me and my clients confidential even the act of visiting the lawyer has to remain confidential because people do not want suspicion thrown upon them simply because they're seeking legal advice that is the same for psychiatrists even the amount that you pay a psychiatrist needs to be private because just from that information alone a lot can be uh assumed about your private life which you might not uh feel is appropriate to share with the public in the outside world uh not you know you can see that privacy is not just a luxury that people can enjoy it's required for many professionals no one questions why government officials might ask to make their uh documents confidential or classified for example payrolls if you had access to the payrolls of undercover agents in in a law enforcement agency then you would also know where they shop and where they happen to be at any particular time of the day i don't think it would bode well for their career so uh why is this relevant blog chains are fully public all of your embarrassing mistakes and all of your behaviors are not just recorded in life they're immutable until the end of time so you can't erase them 20 years in the future if you happen to want to hide some of the djen trades you've made it's actually easy now to assign your uh real identity to your wallet address many applications collect all kinds of metadata about you and the the data analytics servers are very successful at attaching users to their wallet address so people like to use privacy applications and privacy solutions you can use a decentralized exchange with a d app like railgun to stay private when you're trading now i'll introduce kai who's going to talk about some of the technology that's used for achieving this kind of privacy when you're interacting with smart contracts um yeah well so um i think people we have some some of the room might be familiar with zero knowledge proofs and associated cryptography they usually so they do provide a pretty strong level of privacy but they're usually uh pretty expensive uh to use computationally and in a constrained environment like ethereum that can be a bit of a problem um and then of course on the user side there's an issue [Music] we've got a mic here on the user side um of course you know you want to be able to um use it on mobile devices and not require your users to have a supercomputer in order to generate a transaction um so on ethereum um we can be smart about the uh cryptographic primitives that we use in order to make things more efficient so we've got eip 196 and 197 which adds the relevant pre-compiles in order to do uh verification of group 16 proofs um fairly succinctly um to guard 16 is a zk snark proving system that is unmatched when it comes to verification efficiency but it's pretty expensive to prove so in order to keep the efficiency on the proving side within the realm of being able to run it on say a mobile wallet we need to be smart about what crypto primitives we choose in our protocol so we can choose a say for example for hashing systems rather than traditional chart of 26 we can use mimsi or poseidon which is very snark friendly so rogan uses poseidon and rough 16 specifically because they kind of fit the trade-offs that we're looking for on ethereum and it uses them to create a private smart contract wallet so you can deposit into a privacy pool uh transact internally privately uh using a similar construction to zcash um so that's using a utxo merkle tree to keep track of balances nullifiers to prevent double spends and then it's not proof to actually do the updating and that provides a pretty uh strong level of privacy but we can also extend that to add in the ability to encode arbitrary smart contract calls into the smart transaction so now you've got a private balance which you can transact internally you can use that private balance through you know arbitrary smart contract calls to interact with d5 so that gives you a strong level of privacy and you can interact with d5 through a mobile wallet and that should explain the basics of the technical side if people want to dive deeper into anything we can take questions at the end but now i'd like to introduce alan to talk about the developer experience and applications of railgun yeah does this uh might work you guys near me right cool sick uh yeah so the practical applications of all this tech that he was just talking about uh there's there's three fundamental places that you could use this uh first and foremost of course is alpha protection uh there's a lot of companies out there like nansen chain analysis that are taking collecting collating and then selling all of your alpha and the shelf life of this alpha and traditional finance will be a lot further um than it would be in somewhere in d5 we have a public ledger of that that you can actually walk backwards and then study right so i'm sure everybody here takes and follows things like uh whale alerts right you can just take and walk backwards of people who are growing their balances really rapidly and steal their alpha that they've worked really hard to develop you can take and avoid negative publicity some of you guys here work on d5 teams that have tokens and you know you have practical reasons that you have to actually take and sell those tokens uh if you have a team wallet maybe you want to give those to some developers uh you want to pay out bug bounties uh maybe you want to actually pay out an auditor in tokens some of these people take those right and there's a lot of negative connotations in the marketplace that perhaps come from that and you can actually do that with a private balance and then avoid those and then you know the most important thing perhaps to me is anti-surveillance there's probably a good reason why there's a lot of anons on crypto twitter right because they don't want to actually take and uh coincide their um defy habits with uh you know their their financial information right um and you can use a private balance like railgun to take and avoid that you know so if you're like i don't know mark cuban trying to get into olympus and uh getting a lot of critics about that um you can avoid it in terms of the sdk there's three fundamental ways you can interact with the smart contract first and foremost is railgun connect this would probably be really easy for anyone here to implement it's just like you would take and connect your metamask you can actually set that up to connect to a private balance and use your private balance in railgun we actually have a very interesting part of the sdk that will allow wallet providers to develop an incognito mode so you can think of this like the control shift in of your metamask so there's some things that you might want to do private maybe you want to test out a new alpha and you're not sure if it'll work out well so you can do that with a private balance and then of course like kai mentioned earlier there's arbitrary smart contract calls so you can think of just like you could do with a public balance you can take into arbitrary smart contract calls to railgun to do staking farming swaps whatever you can possibly think of maybe you're competing in the curve wars trying to bribe as much as humanly possible you can do that in a private fashion yeah that's kind of the soup to nuts there we wanted to keep the the presentation part kind of short in order to try to open it up for some questions comments concerns i just wanted to add you can go to one of the two websites railgun.org or railgun.ch and create uh your private railgun address there try it out see see how it goes and uh use it to read more about the project if you like and yeah if you have any questions then to um prevention because i'm thinking about the bitcoin grants around this this session that uh had the zk cream uh like uh voting for government using zero knowledge groups to like prevent collusion among actors in a governance system um i assume you're talking about uh uh okay cool i assume you're talking about um the zero knowledge like voting systems that are out which allow you to um change votes um after the fact without like letting people know what you voted um railguns are purely transaction system so um like you can use dk snacks to develop a voting system and then maybe you know vote with a private balance and railgun but i don't think um yeah we're not a government platform so that's that's a problem for a different project to tackle yeah so they can be any mainnet um application essentially like you you encode the um api information into a particular field in the spark um and the royal gun contract ensures that when the um stock or the merkle tree updates executed the call that goes out to the external contract with your like api data also has to be executed and like return successfully before the balance updates committed yeah so there are um a couple of like eighth miners that provide you know um hidden transactions um that they're private um until they're mined right so you can do a transaction and the idea behind that is mostly to prevent uh front running so if you know you get a front running bot that sees a transaction in the mempool um that's you know buying a large amount of like some low liquidity uh coin and you're obviously gonna get uh hit pretty hard by like sandwiching um so the idea behind the private um rpcs is to like you don't reveal your transaction in the in the mempool until that's actually included in the block but once it's included in the block you have the same privacy properties as anything else right so you can still go to scan and see like all your transaction data so railgun transactions hide um the transaction data even after it's been included in the block so you're referring to like um like an audit of the smart contract system yeah so um yeah we've actually pretty intensely audited the smart contract system here so um we've completed audits with abdk zokyo hackin and we're actually in audit now with trailer bits um i think we'll get to like remediation or whatever at the end of the month and you know we chose abdk because they're like subject matter experts on the poseidon hash they did a lot of the research for this stuff um so i'm not sure if that really answers your question but yeah we had to you know do a lot of uh rigorous testing to ensure that one it's not only funds or safety but also that it's private right so there's a whole different level of it right so the the caliber for security has to be pretty high uh because in a privacy system right if there is an issue you don't really know where it is because it's private right you have to be right from the good so i mean we're constantly auditing the code right so um abdk has been digging into the code since what june yeah and then some some of them had you know a nine-month waiting list so yeah we had to wait yeah but yeah so this is more about like um taking and not revealing who you are as an actor so we can kind of like extrapolate this out to like a constitution down right one of the main reasons why those people lost that auction is because they knew exactly how much they had to bid with right so this is more about obfuscation of like the actor not necessarily um like hiding the exact bribe amount because you'll actually see that bribe amount come out of the railgun smart contract right it's just like a big pool of black hole like a a dark pool of liquidity that's taking and doing the bribing not necessarily you exactly if you don't want people to know that you're the one that's doing the bribing people should be able to see what they're getting yeah no you'll see that right so you see it right but it's all about in this particular circumstance right obfuscating that you're the one that's doing the bribing right so it won't be coming from your wallet but instead from the railgun dark pool yeah people will only see that a railgun user is sending transactions they won't be able to see anything else other than that but once it's sent then if it's comes out of the railgun system then it's back in the ethereum public ledger yeah so the merkle tree is just purely keeping track of balances um we don't do any accumulation on our transaction execution um so the idea behind the merkle tree is like if you've got the the transaction uh systems utxo based and if you have a particular txo in a local tree um you can use a snark to essentially prove that your the utxo that you're spending is contained within the merkle tree without revealing you know which actual leaf in the merkle tree it is so that that provides the the privacy layer there and then you've got the nullifier which is a hash of the private the user's private key plus the the fields of the utxo so it's not tiable to the utxo itself but it's also deterministically like linked so you can prevent you can prevent like double spending that way so in terms of actual execution speed it's just a pure railgun like a pure ethereum transaction so as soon as you can get an eighth transaction to block your uh railgun transactions executed um so you can you can see the fact that the the merkle tree is updated but because none of the actual uh contents of the leaves are revealed on chain it's just proof of existence that's revealed you prove something exists a transaction took place but you don't reveal the contents of the transaction on chain maybe someone near the back or something okay so i've been trying for a while so the first question is if a user wants to deposit balance into the private contract and use my contract to use that balance that that smart contract is so the user can do this by themselves without you modifying your deck or someone deploy a contract right okay so the question was can railgun support any erc20 without prior approval yes yes any erc20 works in railgun but you should probably not use rebase tokens because they might not work okay the relative thing that yeah is contract there's no privacy because people kind of observe the income yeah so in that situation if you are the only person using like elon doe shiba mark iii and that's like some token that only you have then um true your anonymity would be quite poor but once it's in railgun no one would know what you're doing with it let's say you sent a million you know elon shiba to this person and two million elon shipper to that person within railgun no one knows how much you're sending to anyone else of course it would be obvious that you're the only person using elon sugar in there because you're the only depositor so your anonymity would be quite low in that situation but your privacy of the transactions that you do within railgun would still hide the amount and also no one would know that you're making transactions of that particular token inside railgun right um so yeah a lot of people want to know more about uh you know what what are the laws around these kind of things at the moment you know it's not it's not particularly clear but there has not been any problem for zcash which is a very effective uh private transaction tool and you know even even railgun is not as private as you know giving someone an envelope with cash in it so uh you know most people have blinds at home they like to draw the curtains when when they're not home or when you know it's late at night uh people do acknowledge that privacy is a human right so you know there's always there's always a line that's drawn and like i said even the government wants uh private privacy solutions so um i you know i personally you know this is not legal advice but i i personally believe that there will not be a problem with with having useful privacy solutions because people professionally need them it not just hedge funds not just you know big whale traders but you know normal people um and government officials do need privacy solutions for their their financial transactions so you know railgun is a permissionless tool it's completely decentralized there's no railgun company it's it's an open source um uh project that you know hopefully some of you guys will also contribute to so yeah um you know at the moment it seems like everything's good and because people really need this kind of solution thanks guys [Applause] all right speaking of regulatory things one of the things that we do here at east denver is we build bridges so if you all don't know we have a partnership with the state of colorado we have a technology sandbox and incubator called colorado jam check out the bounties for that but in the meantime i'm going to introduce a friend of ours his name is matt west he's running for congress and it's about his talk today is about defending crypto in congress so one of the things that we believe at sport dow is that you know we've got to build these bridges this isn't going to be just some you know mutiny that we're just going to take over everything we've got to be able to figure out how to transition from here to there so i'm going to give the podium to matt you ready all right let's do it [Applause] it is an absolute pleasure to be here although i will say we may be doing a slight mutiny with the us government if this election goes according to plan um seriously thank you all so much for being here uh both for everyone attending in person virtually and our hosts for having me here uh this is an absolute blast i've been in the community for quite some time but never actually been to eath denver and i am thrilled to finally make it my way here uh and you know i'm here because as i'm sure you've all been noticing our community the one that we've built in the last decade with over now two plus three trillion dollars worth of assets is under pretty much sustained attack just constantly across the entire world but also right here at home in the united states i mean just this weekend i saw some rumors some news that blockfi was hit with a hundred million dollar fine by the sec and our good friend uh mr gensler uh we have no idea why at this moment um no one knows what the thing that they're being slapped with is for but that is what uh the rumor mills have been saying at least on bloomberg so we'll see if that holds out in the next couple of days you know i mean like i said time and time again we've been threatened uh just very recently uh bitcoin and many other cryptocurrencies were outright banned in china other nation states were also talking about doing that such as india but they ended up going with a 30 tax instead and with the legalization route which is pretty heavy but you know better than the outright ban uh in the united states we've also flirted with the idea of doing outright bans but what we're going with right now seems to be just smothering regulations like when you look at the 605 oi provision in the infrastructure bill for example everyone in this room knows that it's fundamentally unworkable to have every single node maintainer have a transit like verify every single transaction that goes through that node at any given time to make sure that there is no malfeasance going on that is fundamentally unworkable and will completely a decentralized network like ethereum we cannot have that happen that is absolutely why we need people in congress who have an understanding of how these things work in order to make sure that we get bills that make sense i mean at a similar event to this uh there was doe kwan from tara labs walked up on stage and was presented with a subpoena by the sec thank god that didn't happen to me walking in here both as a guy who's trying to be a politician but also as a developer for urine for my background i have you know i'll inter-splice my crypto background and my other exterior background into the same story uh and i got involved in crypto in like early 2009 i actually did some very early mining on bitcoin but i was in undergrad at the time at the university of arizona in the summer and having my computer on non-stop was uh not exactly feasible in my under air conditioned department but i got back involved in 2013 with an asic miner one of the very few butterfly labs machines that actually got sent to real human beings i got one of them and i mined with that until it was no longer profitable at that point i was in grad school going on my phd for chemical engineering specifically focused on electrochemical technologies like fuel cells batteries solar uh to fight climate change and that's also why i'm going now back into politics with that lens in mind as well um i graduated and then i moved out to work at intel where i was at their r d facility in the portland metro area helping to turn pen and paper schematics into silicon and metal uh next generation computer chips so that was my job there uh and during the pandemic during 2020 while many people were learning how to make sourdough or knit and crochet i taught myself solidity and did my programming for the first time since my first year of undergrad and uh joined a hackathon that euron was sponsoring to get one of my ideas for a vault up and running uh we actually my partner and i won yern's portion of that hackathon and we were developers ever since as strategists and i'm actually in the middle of writing a few strategies right now uh so the work continues um but you know uh everyone has their own little crypto rabbit hole story for mine i think it's in two different parts the first is when the 2020 crash uh i was trying to get some of my money out of like my corporate stock account with intel into crypto but selling my intel stock took three days transferring it three days getting it to my personal bank account and then into coinbase also a couple of three days by that point over a week had passed but once i finally got it into crypto on chain i could make these transactions within minutes and that was immediately like a light bulb war it was very clear how we were not ever going to go back to the archaic system we have now also during d5 summer well everyone was like moving from one protocol to another to farm yams or what have you uh i saw urine making their vaults and basically doing all that maintenance on behalf of the users so that you didn't have to get hit with those extremely high gas fees every given time so looking at the various ways that we're now working with these money legos like alchemix for example if you guys are familiar with that protocol self-paying loans built on top of yearns vaults so that the apy you're essentially as a borrower paying a negative apy to take out a loan which is unheard of anywhere else basically except for nations with a negative monetary inflation rate uh and that kind of goes exactly into why i'm running for congress you know everyone in this room knows how awesome the technologies we're building are and it's very clear that people currently in power do not they do not understand it and in many ways they're actually straight up afraid of what they don't understand and that's why they want to shut us down and you know we really need to have people of our own in congress imagine how effective the united states government would be if the people who are making rules actually understood technology actually understood science how much we would be in a much better state today and to me this race in oregon six my home is a huge opportunity for our community if we win not only will we get a you know crypto friend in congress we'll get a native cryptocurrency blockchain person and developer that will be a game changer for our community all of those nonsense bills will not make it to the floor without me having talks to my colleagues behind closed doors to tell them why getting the social security number for somebody trying to sell a jpeg is uh straight up nonsense so you know with the help of this community i am absolutely convinced that we can win for those of you who happen to live in my district if there are any of you in this room please vote i need your vote and i need to make sure that we can get all the way to congress for the rest of you uh let's be real right now money moves washington while i'm a huge fan of campaign finance reform i cannot do that until i'm actually in office and historically we've been in a political group right we haven't really been loud about our political stances we've tried to keep our spaces non-political and we haven't historically donated to political candidates but in the united states that is the absolute perfect mixture of ways to get career politicians to not care about you at all so i guarantee you if my campaign can raise the millions of dollars that it needs to run a race and win from the crypto community we will force them to listen to us straight out so i know that if you donate we can win this uh for those of you in this room please point your phones at a qr code which should be taking a nap there it is please point your phones at those qr codes and donate today uh for those of you virtually please go ahead and go to my website www www.matwestforcongress.com and donate that way thank you all so very much and i would be more than happy to answer any questions that you have yes thank you does oregon allow for campaign contributions and cryptocurrency excellent question oregon no but it's actually uh this is a real story so in the state of oregon i did not know this until i started running uh one of my primary opponents is an anti-crypto uh lobbyist and legislator who got appointed to her seat she voted to ban the state of oregon from interacting with any blockchain whatsoever for any reason and that is actually now state law in oregon but since i am running for federal office i don't have to care about that so my point is this district leans democratic and right now we are kind of in the top two positions so it's very likely that whoever wins this primary will be the next person in congress so if you don't want another anti-crypto politician in washington i mean this is our chance so i my website does accept donations in crypto we do have a qr code for that uh through bitpay as well um but yes it's a very unfortunately mixed answer uh steve zorn i'm also running for congress from colorado campaign awesome one of the things i'm struggling with i mean we have campaign finance laws which require us to understand what your job an employer is where you live um and those are just how those that's the law we have to be compliant with it which is why i can't just throw up a you know eth address and have you all throw money into that wallet that would be profoundly illegal so please do not do that um but what i'm basically trying to tell people is like this is really important i know that this is a little awkward for you when you're doing these donations but that's the law as it stands and if you want someone to defend your right to even be in this community and build and you know post on twitter like you gotta do it and that's really just the thing so like it really depends on also when we're talking about crypto donations if it's under three thousand dollars you don't have to go through like an hour's worth of kyc so i mean if you get people who are fortunate enough to give you more than three thousand dollars ask them to do it in two contributions yes 2 900 is the maximum for each each each race the primary and the general so the max anyone can give in any given election is 5 800 that's why i can't go to ryan salkas and get him to just to float my entire campaign it won't work so that's why i need everyone here to give what you can to my campaign because that's how we will win this sorry what was that question uh businesses cannot donate to congressional campaigns outright and regardless i've sworn off corporate money um i do not want to have that issues like say with big pharma for example so i'm just only to accepting money from uh you know issue like pro crypto political action committees uh if they are a bundling organization like uh huddlepack i will be accepting money from them should they choose to give it to me uh but mostly i've got to raise it through individuals are you open to other groups forming super pacs around you that i would love to answer that question but cannot for legal reasons [Applause] i can know it exists but that's the end of the conversation um yes please that's a great question um the question for those of you on this side of the room i'm assuming you didn't hear it was uh is it just people who are afraid of what they don't understand or are there actually entrenched like lobbyists who are actually out to you know get us more or less and in all honesty the answer is both uh like most of the career politicians that are currently in office especially in my party the democrats don't really understand new technology i mean we all know the meme of the internet being a series of tubes and whatnot talking about you know recently uh finsta for example so when people don't understand something and they're afraid of what they don't understand they will go to the people who they've trusted for quite some time and for many of those those would be you know the other financial institutions which would be traditional banks and we are building a entire infrastructure here to disrupt the traditional banks so they are clearly not fans of us and so because of that it's a really sort of a mixed issue there where a lot of corporate politicians are funded or back back rolled basically by these large banks or these other institutions who do not want to see this uh technological innovation spring up and threaten their bottom line and also people are just scared of what they don't understand so i really do believe it's both and the way that we win is this is an open district there is no incumbent right now there are a few different districts across the country that have pro-crypto candidates but they're always against some like entrenched incumbent like uh you know brad sherman for example it will take in a tremendous amount of money to unseat brad sherman this district is open i have no incumbent nobody in this race is particularly well known that means two million dollars can win this race outright straight up so this is a huge value proposition as well does that yeah sure yeah i mean that that you're absolutely right uh we are in a very hyper polarized community right now and if one sides for something the reflexive reaction is the other side is against it so when we're talking about my fellow democrats a lot of them do not really like this technology because they see it as far-right libertarian you know the original narrative of bitcoin with the original signature on the genesis block talking about the bailouts that narrative has persisted for quite some time but when i'm going to be talking to my colleagues about why i believe in this there are so many different venues that do fall within a democratic sort of value set banking the unbanked 60 of people in this country who do not have access to a bank account do have access to a smartphone that's a huge win right off the bat uh talking about the democratization of the internet with web3 you have to specifically approve any transaction that happens whatsoever so if any company wants to harvest your data you have to actively give them permission to do so whereas right now like google amazon facebook are all just scraping your data and you have no say about it so it's little things like that we're trying to tell them like look we're giving we're building an entire infrastructure to democratize the internet to give everyday people access to the same financial tools that the wealthiest had for generations but we've been locked out of because they don't have a billion dollars to throw out a bank and ask them to do clever stuff with now we can do things like take out loans on our assets with say ave but traditionally that's been something that's been reserved for hyper millionaires or billionaires so with just even those three things those are all core democratic values and i will just speak to that and try to tell them like this is why i believe in it this is why i think it is in line with our values and really like you've just been listening to um an outdated narrative we have definitely grown beyond uh libertarian sovereign money and into a completely diverse crowd of people thank you donate please okay well we have a little bit of a switcheroo we're gonna do on the calendar unless anybody's seen james young have you guys seen him colorado kids all right well we're going to switch up so kevin walke is going to jump up my homie kevin what's up dude hey everyone kevin owaki from git coin is going to talk about funding for colorado using quadratic methodologies you ready i'm ready do it you