Zcash Founder Talks Privacy, Artificial Intelligence, and How ZEC Became the "Encrypted Bitcoin"

Original title:Zcash Founder on Privacy, AI, and How ZEC is “Encrypted Bitcoin”

Original source: Bankless

Original compilation: Vernacular blockchain

Today, more than ten years after the birth of cryptocurrencies, we are standing at a delicate crossroads: on the one hand, the full involvement of Wall Street capital and the rapid evolution of the underlying technology; On the other hand, the original Cypherpunk ideals have struggled under complex user experience and regulatory pressures.

In this interview, Zuko, founder of Zcash and a pioneer in crypto privacy, shares his insights into the current state of the industry. He not only reflected on whether the crypto movement is repeating the mistakes of Linux, but also delved into how privacy has evolved from a “technical function” to a “survival option” in an era of AI computing power.

By dismantling Moxie’s user experience logic and dissecting Zcash’s governance experiments, Zuko paints a picture of a future that transcends mere financial speculation and returns to digital sovereignty. This is not only a conversation about technology, but also a metaphysical discussion of how human civilization maintains free will in a high-pressure surveillance environment.

I. Reflection on the Current Status of the Crypto Movement: Are We Repeating the Mistakes of Linux?

Moderator:Zuko, welcome back to Bankless again. You’ve been in the crypto industry for over a decade and built Zcash for 13 years. Looking back at the point in time in 2026, do you think our crypto movement has achieved its original goal? Are we considered successful?

Zuko: To be honest, this is a leading question, and you may not expect me to give a positive answer. Hearing you ask this, I feel a little frustrated and negative. This reminds me of the history of Linux. Linux was a great movement that aimed to empower ordinary people and liberate the threshold of technology. But looking at the current landscape, it has largely become some kind of underlying software that Google runs its servers.

Moderator: It sounds like the idealistic colors of the Linux movement seem to have faded.

Zuko: Because it has not really helped ordinary users, nor has it been expanded to a scale that can empower the public. While software engineers are still enthusiastic about using it, for non-professionals, today’s Linux doesn’t substantially improve their digital lives. If we let this trend go, cryptocurrencies may be the same in 15 years: only a few giant financial institutions are leveraging blockchain to optimize costs, and 99.9% of the average person is not gaining real power or benefiting from this technology. That would be a bad ending.

ModeratorA: So what do you think we’ve really made in the last decade?

Zuko: I’m a tech. I am most pleased that cryptocurrencies have funded a large number of top cryptography technologies. For example, zero-knowledge proofs (ZKPs) pioneered by Zcash were later propelled into more far-reaching areas by the Ethereum ecosystem. Without the funding and organizational form provided by cryptocurrencies, DARPA, universities, or giant corporations would not have developed these outcomes at all over the past decade.

Moderator: So in your opinion, the advancement of cryptography is the biggest victory, not the current market size?

Zuko:Yes. But this is actually a “light compliment”. It’s like we’ve improved the Linux kernel, but we’ve not really changed the world for the better.

Moderator: Some will counter that the price chart and the entry of Wall Street are a victory. For example, Bitcoin has become digital gold controlled by non-governments, or ETFs and RWAs (Real-World Asset Tokenization) promoted by Larry Fink.

Zuko: I see these as a means to improve Wall Street. If it improves the lives of ordinary people in some way that I care about, that’s fine, but at the moment there are no obvious signs of it.

2. User Experience (UX) Bottlenecks: Why is Moxie’s Criticism Still Deafening?

Moderator: What important parts of the crypto space do you think we have overlooked?

Zuko: Definitely the UX part of Cypherpunk’s vision. I often refer to the opinion of Moxie Marlinspike (founder of Signal). He had pointed out that Cypherpunk’s dream was stuck because of a fatal flaw in the logic of the group. Their method is: the first step is to make tools that are easy for them; The second step is to teach other people around the world to become people like themselves.

Moderator: This “elitist” path is indeed difficult to reach the masses.

Zuko: Moxie said it would never work out. You have to give people the tools that fit their current situation without forcing them to change. If you reach less than 100 million users, you’re wasting time because you’re not impacting the world at all. The current crypto industry is repeating this mistake: we make complex systems that protect freedom, privacy, and autonomous choice, and then expect ordinary people to learn how to use it.

Moderator: So cognitive load has become the biggest obstacle.

Zuko:That’s right. If the cognitive load is close to zero, that’s a good user experience. I remember Brian Armstrong telling me about his regulatory strategy: at least 100 million users. This is the same logic as Moxie.

Moderator: From a long-term perspective, Ethereum is trying to expand beyond decentralized finance, such as decentralized identity, computing, and AI. How far do you think this Cypherpunk vision can go?

Zuko: I hope it goes to the end, because it is related to whether our descendants can grow up in a more stable and civilized society. I was inspired by Signal’s success. Signal’s philosophy is that the user interface (UX) should reflect what’s really underlying. If you’re chatting with non-encrypted software, an honest UI should display the avatars of you, your friends, the company CEO, and the system administrator in the dialog.

Moderator: It sounds very intuitive and scary.

Zuko: If the CIA is listening, their avatar should also appear. Signal just corrected this “honesty”. Today’s social platforms, such as Twitter or Telegram, are actually “honeypots”. If you’re chatting with five friends in a Telegram group, Pavel Durov’s face should actually appear in the dialog box because it’s not end-to-end encrypted by default. People need privacy, and they can do it technically, and the key is whether we can provide an interactive experience that is as good as the Silicon Valley giants.

3. The Privacy Paradox in the AI Age: When Algorithms Can Read Your Financial Intentions

Moderator: Are you optimistic about the future? Especially now that AI is changing everything.

Zuko: I’m optimistic. While AI may make Linux simple to install and configure, making UX less of a puzzle, AI also introduces new risks.

Moderator: Are you referring to AI’s manipulation of information?

Zuko: A few days ago, there was a case where a user asked ChatGPT to correct errors in a tutorial. That tutorial covers how to use a disposable phone number service to protect personal information. In addition to correcting errors, ChatGPT also voluntarily removed all content about disposable phone numbers and cryptocurrencies, citing that these tools “may be used for abuse and fraud.”

Moderator: It’s very dystopian indeed.

Zuko: This is the nightmare scenario where AI doesn’t provide what you want. Most of the current AI follows the Web2 business model: relying on advertising and user lock-in. When AI deeply integrates your emails, calendars, and financial data, it not only predicts your behavior but also guides your intentions.

ModeratorSo what different solutions can cryptocurrencies offer?

Zuko: Cryptocurrency offers a completely new funding model, and while it is still in the experimental phase, it tries to jump out of Web2’s extraction logic. We need to establish a positive cycle of “pay-to-use + open competition + no-capture”.

Moderator: Zcash’s recent price performance has been impressive, does this also reflect some kind of shift in market sentiment?

Zuko:Yes. This massive price signal is hard to fake, and it proves that people really care about privacy. As AI tools can easily associate on-chain addresses, the originally transparent ledger has become extremely dangerous, and people are beginning to realize that privacy is not an “optional feature” but a survival necessity.

4. The Metaphysics of Store of Value: The Mystery of Privacy Options and “Static Value”

Moderator: When it comes to privacy protection, many people have misunderstandings. They often understand privacy as “cutting the link during a transfer”, similar to the concept of a mixer.

Zuko: That’s exactly what I want to correct. Many people try to transfer from Ethereum to a new address, thinking that it is safe after a few operations in between. But in the age of AI, this “value in flight” is almost impossible to obtain true privacy. AI can easily see through your disguise by correlating intent and signals on both ends of you.

Moderator: What should be the correct logic?

Zuko: You can only get privacy from “Value at rest”. I have a somewhat metaphysical opinion: if you hold ETH and plan to transfer, your intentions are clear and AI can read them. But if you choose to swap a portion of your assets for ZEC for long-term holding without a clear plan for the next step, AI will be blinded.

Moderator: Because the act of holding itself cuts off the continuity of the intention.

Zuko:That’s right. This is the “privacy option”. You don’t need to hold it forever, but you need to hold it without future use intent. Just like your checking account, you don’t spend it all the time, you keep a certain balance. From an adversarial information theory perspective, it makes sense to keep your living funds in a privacy pool for 1-2 months.

Moderator: The example of the Zashi wallet and Near Intents integration you mentioned earlier seems to demonstrate the utility of this “privacy at rest”.

Zuko: That example touched me a lot. When I need to pay for Proton Mail anonymously, I don’t need to ask the person to accept Zcash. I just need to scan the QR code in my Zashi wallet and complete the payment through Near Intents. To the outside world, it was just an ordinary transfer, and the source of my assets and personal information always remained in the privacy pool. That’s the power of UX-first to bring.

5. Zcash’s Governance Experiment: Development Fund, Cross-link, and “Crypto Bitcoin” Dispute

Moderator: Let’s talk about the governance of Zcash. Zcash has a well-known “Dev Fund” mechanism, which is considered blasphemous in the Bitcoin community.

Zuko: Zcash mimics Bitcoin’s 21 million total and halving mechanism, but with the difference that we allocate 20% of new coin output to the development fund. The fund’s size has increased significantly as ZEC’s price has risen, providing ample fuel for the protocol’s continued development, avoiding the “death spiral” that many projects have fallen into in a bear market.

Moderator: But this mechanism has also caused a lot of controversy, especially in the distribution of power.

Zuko: Indeed. Zcash’s social contract takes place every four years for a major discussion. We’ve gone through an evolution from funding the founding team to funding nonprofits and now being controlled by committees and token votes. As an experiment, I’m happy to see that it’s trying different modes.

Moderator: There has been a lot of talk about the “Encrypted Bitcoin” meme lately. What do you think of this label?

Zuko: I love this meme so much. The fewer words, the stronger the power.

Moderator: But there are also concerns that the cross-link mechanism you are promoting (adding staking on top of mining) will destroy Bitcoin’s pure PoW image.

Zuko: I’m trying a “jiu-jitsu” style response. Cross-link is not meant to become PoS, but to reinforce the sustainability and credibility of the 21 million cap. Whether Bitcoin’s 21 million cap can be maintained in the long run is actually unclear, as it is still unknown whether fees alone can support the safety net when the block reward tends to zero.

Moderator: Zcash tries to solve the dual problems of privacy and long-term security at the protocol level.

Zuko:Yes. Because of the underlying design problems, it is difficult to add a layer of privacy without leaking information, which is like taping the bottom of a leaky ship. And Zcash was born to make privacy a native property of blockchain.

Moderator: Zuko, thank you for sharing today. Your adherence to Cypherpunk values is admirable.

Zuko:Thank you. Finally, I want to say to the audience: go and exchange the value of your checking account amount for ZEC and deposit it into your private wallet. You’re not only protecting yourself, but you’re also contributing to building a better future. Let’s “Zodling” (the coin-holding colloquial term of the Zcash community).

Moderator: Go to Zodle, buddies. Of course, this is not financial advice, the crypto market is very risky, please proceed with caution.

Through our in-depth conversation with Zuko, it’s not hard to see how much cryptocurrency’s true value lies not in how much settlement costs it can save Wall Street, but in whether it can build an impenetrable firewall for individuals in the digital age. In today’s increasingly sophisticated AI algorithms, which can easily “read minds” and correlate transaction intentions, privacy is no longer the paranoia of a few geeks, but a fundamental tool to protect personal choice.

The logic of “resting value privacy” represented by Zcash challenges the traditional idea of privacy as an intermediate process for transfers, elevating it to a “privacy option”. While there are still many challenges in the user experience and governance path, as Zuko emphasized, Cypherpunk’s vision can only be realized when the cognitive load of privacy tools is reduced to zero and can serve hundreds of millions of ordinary users.

In this new frontier built by code, “Zodling” is not only a store of wealth but also a silent vote on digital sovereignty.