Business of Blockchain Talk Notes

Hello! Thank you for listening to me speak about privacy and cryptocurrency adoption at the MIT Business of Blockchain conference. Sorry for the talk being billed as “The Path to Adoption: 3 Types of Product-Market Fit” and then being messier and more tentative than that.

Here are the links to references:

I owe a general hat-tip to Josh Swihart from the Electric Coin Company, whose go-to-market blog posts shaped how I think about cryptocurrency adoption trajectories. Read them here and here.

I wrote a full script for the talk, and I’ll probably turn it into a blog post on the Zcash Foundation’s website at some point. Right now it is… not super polished.

If you want to discuss any of these topics, hit me up! (Or if you want to see the rough script.) I’m @sonyaellenmann on Twitter, or you can email sonya@zfnd.org.

Obligatory CTA: Please subscribe to the Zcash Foundation newsletter. And my personal newsletter. Heck, send me your private keys. (That’s the Crypto Twitter version of a firstborn child, right?)

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Lightning Talk on Zcash Foundation Governance

I gave this short talk at the Decentralized Web Summit in August, 2018. (It was livestreamed on YouTube.) Below is the full text I prepared.


I work for a privacy nonprofit called the Zcash Foundation. We exist to support technology that puts people in control of their own financial information. We focus on stewarding the cryptocurrency Zcash, in collaboration with a separate, for-profit startup that you may know as the Zcash Company. The Foundation also works with independent cryptocurrency miners and developers.

As a protocol, Zcash is a lot like bitcoin. The biggest difference is that Zcash includes a cryptographic innovation called zero-knowledge proofs, specifically zk-SNARKs, which makes robustly private transactions possible. Zcash isn’t perfect and it has significant usability problems that are still being worked out, but we think it’s the best technological approach to financial privacy.

Part of the Foundation’s role in the Zcash ecosystem is to assess what the community at large wants for the future of the cryptocurrency. During June we held a governance process that was intended to enable broad participation while also limiting ease of manipulation. The results of the process were not legally binding, but they have already influenced the Foundation’s strategy and will continue to shape our choices as an institution.

Here’s how the governance process worked. The Foundation’s leadership decided to curate a list of people who they knew were central to the Zcash community. We reached out to those people directly to ask them to join a Community Governance Panel. We also solicited applications from the world at large on various social media channels and the Zcash forum. I personally contacted the most active forum commenters via private messages.

In general, one-on-one outreach was the most effective for getting people to sign up, but public solicitation also worked. Only two applicants were rejected: A known scammer who has burned the Zcash community before, and a sketchy-seeming opportunist. The Community Governance Panel ending up totaling 72 people.

Once the Panel had been assembled, its members voted using encrypted ballots on a system called Helios. We know who voted, but we don’t know what their individual choices were, except for a few people who voluntarily disclosed their votes. 64 of the 72 voted, which is 88% turnout. The user experience of Helios was confusing for many participants, so that’s something we’ll try to address next time.

There were six policy ballots, and the most common topic among them was the future of Zcash mining. The ballots had been proposed by community members on GitHub. In retrospect, we could have guided the ballots better, since people complained that they were either too vague or too specific. In addition to those votes, the Community Governance Panel also selected two new Foundation board members, from a field of nine candidates.

Overall, the governance process was a success, not because it went 100% smoothly but because the Foundation learned so much about how to do a better job next time. The whole user experience and how we communicate expectations will be streamlined. In particular, we hope to include more voters from outside of the United States and Europe. I wish I could go into oodles of detail, but if you’re interested, our recap blog post explains everything!

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The Negatively Promising Future of Bitcoin

physical bitcoin
Photo by Antana.

I could have called this post, “Why I’m Bearish On Bitcoin”. The draft has been in my notes for a long time. I might as well see if anyone will bother to flesh out the idea, or disagree with me — either reaction is welcome! Digital currencies are on my mind today because I had lunch with my friend Eva Gantz, who is the community manager at Stellar. She is, coincidentally, stellar! Anyway…

Bitcoin believer needs micropayments
Photo by scottks.

Cryptocurrencies like Bitcoin will fail because of the feature for which they are most lauded: theoretically, no trust required. Veteran journalist Felix Salmon has noted this flaw, as has Sidney Sida Zhang. Cryptocurrencies don’t just incorporate anonymity and lack of trust — they depend on it. Unfortunately for the future of techno-libertarian money, trust is what makes human systems work.

I struggle with this in my personal life. I like to be in control, but I have to outsource what I don’t know how to do, or don’t have time to do. For example, someone else grows the food that I eat. Someone else wrote the code for my website. Someone else takes care of plumbing infrastructure. I have to trust all those people to do their jobs. To a certain extent I can verify them, through consumer and political procedures, through tracking journalism, but eventually it comes down to trust. Trust is essential societal grease.

bitcoin accepted here
Photo by Steve Jurvetson.

That’s my entire hypothesis, pretty much. Here’s some interesting cryptocurrency reading (in addition to the articles I linked above by Salmon and Zhang):

I emailed Martin Weigert about this a while ago, and he told me, “I have not worried so much about trust when it comes to Bitcoin. But probably that is because I have only bought like a half Bitcoin so far, so there was always the acceptance of a potential total loss.” Then he asked if my qualms were about Bitcoin specifically or the whole technological basis of it. The following is my response:

beautiful bitcoin wallpaper
Artwork by Jason Benjamin.

From what I’ve read, the base technology is pretty sound. People are very excited about the blockchain. The concern is re: wallets and banks. Inevitably you have to trust a third party to “take care of” your Bitcoins, and sometimes that doesn’t go well, when banks are hacked or abscond with the funds. So the third party must be trustworthy. There have to be checks and balances, leading to centralized authorities, which is what Bitcoin enthusiasts wanted to circumvent.

Then I dropped more links into the thread:

So? What do you think?

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