Episode 351 - Zero Knowledge Systems, Privacy and Security with Jonathan Wilkins

Transcript

[Music] welcome to zero knowledge I'm your host Anna Rose in this podcast we will be exploring the latest in zero knowledge research and the decentralized web as well as new paradigms that promise to change the way we interact and transact [Music] online this week I dive back into the story of zero knowledge systems with my guest Jonathan Wilkins Jonathan was an employee of zero knowledge systems back in the year 2000 he went on after this to be a founding member of blockstream a company that funded Bitcoin core development from 2014 onwards I

mentioned speaking to Jonathan in my episode Back to the Future with zero knowledge which came out a few weeks ago in that I shared my very coincidental connection to the zero knowledge systems company and what that may have to do with this show I definitely recommend listening to that one before you jump into this one it's only 15 minutes I'll add the link in the show notes in this episode I chat with Jonathan about the emergence of security culture in the 1990s what zero knowledge systems was building at the time he worked there that is the freedom Network we talk a bit about the office and setup as well as the people who worked in the research lab and what they went on to do after Jonathan shares a bit more about what he has done since discovering

Bitcoin joining blockstream right at the start and he also shares why for him Bitcoin remains a uniquely secure digital asset I want to thank him again for taking the time to go back in time 25 years to explore this all with me as I stated in my last episode on zerge systems I am on a side quest this year to learn more about this company a company which brought together amazing technologists working on P2P and privacy Tech because honestly the concepts and experiments which came out of this research lab still reson in our ZK Community today we are working on programming some additional interviews around this so do stay tuned and let me know if you like it now before we kick off I do want to just let you know about the ZK Summit ZK

Summit 13 is coming up it's happening on May 12th in Toronto this is the second time we bring the ZK Summit to North America the first being all the way back in 2019 when we did one in San Francisco if you've never been to a ZK Summit I definitely recommend checking it out this is the spot to find out about the latest research the newest applications to find out who are the most important players in ZK today it's also a wonderful way to get to know sort of the larger ZK Community the application to attend is now open if you'd like to apply to speak you can do so in the same form the speaker application deadline is March 15th generally I recommend applying early we do expect this event

to sell out and tickets are limited speaker slots are even more limited so do get your application in early and we'll get in touch with you very shortly links as always are in the show notes and I hope to see you there now here is my interview with Jonathan [Music] Wilkins today I'm here with Jonathan Wilkins I mentioned Jonathan in my episode Back to the Future with zero knowledge a few weeks ago um I had spoken to him in prep to be able to tell that brief story about zero knowledge systems but I'm so excited to have you on the show Jonathan welcome thanks for having me I'm really hoping through this we get to dig a little deeper into that project but I also want to hear about you and your story um how you got

involved in that company and what you've done since so let's start this off with a little bit of background what were you doing before joining zero knowledge systems what kind of like LED you there I'd uh taken a little bit of time off after I had done a startup uh I was working for a company called secure networks it was based in Calgary and we built a tool called ballista which is one of the first V buity scanners so you know it's a tool that would go on you'd run it on your laptop or whatever and it would go out find all hosts on the network and then it would uh proceed to try and break into them the other the only other tool in the market was um ISS uh internet scanner it was less aggressive than we were like if if it

would just like grab banners and would uh see if that knew anything about that kind of uh version of the software ours was a little bit more comprehensive and a little more of an attack tool it would you know send a large buffer if it was a a buffer overflow and see if the service stopped responding for instance and it was a small team led by a gentleman named Alfred Huger who is uh one of the people I respect most in the industry you know he had this vision for the uh product and it uh had done pretty well and for a small team a couple hundred thousand dos in investment um it had a $25 million exit I think uh about a year and a half after that and so that was my first uh real computer security job i'

been doing a lot of just hacking prior when I was in high school I was going up to the university and breaking into computer labs to get access to the internet that way because that was uh cirka 90 93 94 95 and that that time there wasn't no way to commercially buy access so that was that was that was what you did why were you excited about this what was it like it sounds like computers security internet like how did this come to you and why why were you excited about it oh it was just uh something that I just was just drawn to I don't know what exactly was probably a little bit of um you know exposure to something sci-fi that I was read to at the time like all the William goson stuff like that uh I remember though not

thinking it was a career path back in high school it was just something I did for fun and it was before there really was much of an industry you know he didn't have much in the way of uh computer security jobs it was was basically like you had to network in men and they had to do a little bit of security things but I think it was uh cira uh the first couple commercial firewalls even so it was before that was even really a thing no one really had internet access unless you were an institution or you know you were Xerox park or something like that so IBM you know the people I met who were also hackers were were all very interesting and it was just sort of like a a niche thing that were people were excited about just the thought about this like

back then when you would hack I feel like you were dealing with sort of the core computer elements in it like you're you it feels like you were closer to the bare metal or something oh yeah know much because there if there's no security there's no none of those fire none of the protections that we now think of with computer systems you're not going around things you're kind of just like walking into them you were finding things was a big challenge like a lot of people I know from the time and I caught just sort of the the end part of this was um hacking x25 networks so um a lot of the people we wound up hiring his contractors were people that that Al had met on some of these x25 networks from Argentina you know they

had met on a system where they both realized they' broken into the same place and you know there was someone else on it there was it was a basic talk interface or something like that or you know one of the first machines I got access to at the University of sketch one was um it was a backx box called Sky cat um there's Sky cat Sky fox and a couple of other ones and person who gave me access told me uh Ells and man and that was it so I could okay you know get a directory listing and then I could find uh the manual pages for whatever I saw there that was enough to get going not a lot of handholding but you know I was curious enough and stubborn enough and frankly it was a sketch one the winters there are pretty vicious and so

you there's not a lot else to do you know you don't have uh mountains nearby it's it's- 50 and it's flat wow okay so boredom and a curiosity about computers got you there sounds like yeah pretty much that's that's what it was and I this this pattern is repeated um I've met uh more than a few people who are are quite good hackers and and have had a similar experience um I spent some time in like Minnesota or something for a period of time if I Rec call correctly um there so there's a winter in a cold place does seem to figure in more than a few hacker histri okay so that that led you then to work on a startup I I mean I just think it's kind of cool to imagine a tech company in Calgary in the 90s

because I just was there a tech scene in the 90s not really um I happened to have moved there um and a friend of mine had gone to a 2600 Meetup and he'd met gentleman by the name of Bruce lle who knew Al and uh made the intro uh when he heard that I knew something about Windows uh cuz I had basically enough Unix experience to get into things and i' had Al also got enough Windows programming experience from like just generally around with um dely and um C++ Builder and some other things like that to be able to create a UI stuff and so forth on on windows so that combination was enough to qualify me for

a role there and was just basically like word of mouth and I you know sent some I showed him a denal service tool that i' written for for Windows that exploited some issue with the the TCP stack that killed it back in the day so it was you know that was all the proof they needed for me to like get hired because they're really weren't a lot of people who had that combination of of skills and you know the project was Way Beyond what I thought I could possibly do but I was so excited about being like a security job not just like a sissman or something yeah that I was like I'll figure it out and I did cool so that's awesome when did that company get sold it's sold in '98 to to network Associates uh what had been maffy and and so forth and spent a

little bit of time down in Mountain View yeah and everyone else stayed on I did my few months that they were asking of me and then I just went back home took some time off nice did you do anything else before going to Zer knowledge systems or was was that sort of your next step I basically spent some time um uh I started a record label oh um mad science records and uh released some music some some friends of mine had uh been working on got to sort of Shepherd that through the the whole process which was which was a lot of fun enjoyed the electronic music scene of at the time and quite a lot and did a bunch of snowboarding and that was exactly what I

needed at the time I was pretty burnt out from the startup but um uh a friend of mine had seen an article about uh the whole zero knowledge systems I think it been a something in wired or something like that maybe um he pointed me there I sem my res May in not really think I would necessarily hear back but at that time there weren't that many people doing security or privacy you know anywhere much less here's another company in Canada so I I got a call one out did an interview and um it was for some sort of real world programming job halfway through my first interview they they pulled someone else and and um I wound up interviewing instead for the research group oh nice and uh had the title of adversary at uh zero knowledge

when I was hired cool which was possibly the coolest job title I'd ever heard at that point so quite quite enjoyed it it sounds like the culture in there was kind of like perfect for that time and sort of like the type of people they wanted to attract to did you know like the names Z knowledge for zero knowledge systems like were you at all familiar at the time with what that meant or what it stood for I wouldn't say that IID ever studied that kind of branch of cryptography or anything like that I knew what kind of it was from reading through probably all the the applied cryptography I'm pretty sure one and two were out by then but certainly one was out by then um and there was the handbook of Applied cryptography as well

which might have covered it a little bit but uh you know it wasn't something I'd you know ever written code for or anything like that I knew roughly what it was basic sort of example of it do you think back then though like you you were coming more from security and sort of as a hacker more I guess on the engineering front zero knowledge back then like I don't know if there were like very many implementations of that anyway so it may have I mean you tell me but was it more in the realm of like weird math or was it actually like being used in anything for real anything that was in being used in the company at the time not so much but it was certainly something like a protocol element that people in the company would happily use if it was

applicable you know we had some more than a handful of first- rate cryptographers like the research group was was was stacked with Talent you know we had uh Ian Goldberg we had uh Adam back there were another handful of you know PhD cryptographers there was no shortage of people who Adam show stack with was there they managed to bring together a really great solid group of people and so there wasn't really much that was beyond them as far as protocol design and and you know then that was also a group of people who was more than um capable of doing the analysis and attacking it and so there were a bunch of other like little side projects that got built as well like um there was a

ecash system called zor mids that was uh essentially a chian bank there was so much talent that they basically had more bandwidth than was required for what was being built with the freedom Network okay especially given that it was hard to make big changes once it was you know being deployed and was uh actually being run as a uh live service so they were trying to use some of that talent to do some Consulting work for for businesses wow um they had uh licensed the brands credential stuff and uh other other things like that we're trying to get people to start using those things you mentioned of like you had this amazing group of researchers around you I'm just

curious if any of them went on to do things we might know I mean Ian Goldberg of course uh his PhD thesis was essentially the freedom Network and um onion routed interactive uh privacy systems oh uh actually uh vitalic was a research assistant of Ian at one point I think I've had one of his PhD students on the show I've never interviewed him here though but yeah it would be fun to do that um Ian also invented the uh Sphinx mix format which is um our co-author on that on the paper um and that is used in uh bitcoin's lightning Network when I saw that come out when I was at blog stream I encouraged Rusty to adopt that at the time and uh it was you

know it's it's been a lightning would not be as good without it Ian has been influential in in many many ways I shared an office with him um when I was at zero knowledge and uh learned a lot from that man cool and I'm interally grateful for that time the number of people who then went into cryptocurrency from just that group you know we had Adam we had Austin Austin was the original CEO at blockstream and uh he and Adam were sort of the impetus for that company to uh form and were able to get everything off the ground with that initial $21 million arrays that uh Austin managed to pull off with just a white board essentially wow it's a good

number yep yep exactly that was that was intentional um nice yeah I think they hit like 15 and he's like let's go for 21 let's go for 21 nice do you remember anyone else other people who were at zero knowledge on that uh research team um Adam shock who later went on to um do a lot of stuff at Microsoft and and so forth especially in the threat modeling area Al mher wasn't I can't remember if he was on the research group or if he was he was just a cryptography engineer I believe the latter um but uh he was also very involved in writing um uh open SSL and um Mike shaver was over at Netscape at the time that um if I recall

correctly that we hired him um he was doing like open source for them came over to Zer knowledge to get our code out there for freedom to be uh also fully open source um and help uh spearhead that effort who else was there I mean obviously Adam back and his you know contributions to the big Bitcoin space are are you know Legion it's worth going through and reading some of the old Bitcoin talk archives there's a lot of stuff there in some of the um you know Theory and so forth areas that you'll see a thread with him and Greg Maxwell going back and forth on something or him and uh and there's a lot to learn and W there's some really cool stuff there so let's

talk about Freedom when we chatted last you mentioned that freedom had been built on the same work that led to tour not that freedom evolved into tour but that they had the same route so what Drew you to work there was it Freedom or was it the company in general um it was the idea of working on a system like that like something that would enable anonymous on the on the internet um even back then people knew that certain things were going to be an issue it was essentially a great idea just too early MH the Tor Network was influenced by things like U Mixmaster which is a a remailer system had similar sort of uh

characteristics but it was a non-interactive system so you didn't have to have you know real-time traffic so the idea of applying that kind of thing to an interactive network was obvious but but tour was definitely influenced by the the work that was done on freedom the structures are pretty much the same when we were putting together the freedom network uh as a commercial Endeavor uh the idea was to pay the node operators and uh so that you had you know reliable high bandwidth connections and so forth and Tor obviously was just anyone who had the code could run it and that led to a lot of issues over the course of time some of the bigger problems with tour was was

never really meant to be used against any real powerful adversary it was only ever intended to be protection against your ISP seeing what you're doing not necessarily um someone with a with more you view of the network like um when the Snowden Revelations came out we found out that they' been able to uh de anonymize at least a certain set of users even back in I think if I recall correctly the note dating from like 2009 or something that uh was found in the archives that came out in you know 2014 was it and so it was known that if you had a view of the full Network you could or enough routers in the way of the

communication path you could easily see who was communicating with who on just timing issues um you didn't have to even do anything more than that uh you know compare it to like a second world war kind of um career network using motorcycles if you have a satellite Network watching the area um it doesn't matter if how many stops The Courier Network makes on the way you know where they start and where they're Landing message you see the message go from one place to the other you don't necessarily know what it is from just that but that's that's often enough to tell you what you need to know yeah so that's essentially what tour is it it it does only that um it takes your your messages passes it through several Hops and it

comes out the other side H but Freedom was Freedom different then Freedom actually had a few things at least that were uh better protection so there was cover traffic so a whole bunch of extra packet were getting sent around that were extraneous so you had to follow a lot more of these Superfluous messages in order to see the real messages that were intermixed among them so it was more secure in in that sense um it wasn't a full mix Network that like some of the more modern designs for this kind of system but it was a lot more secure than what Tor wanted to being the cost to run that cover traffic though was it didn't come for free it was definitely an extra uh cost that was born essentially by zero Knowledge from

Venture Capital but what does that mean like the servers like that there was a heavy computational load like what oh just Network bandwidth um bandwidth back then cost a lot more than it does now oh okay so in 2000 if you were doing a few extra gigabits of traffic a day in cover traffic it it it added up very quickly wow crazy yeah it sounds very ambitious and sort of as you described it maybe ahead of its time um when you joined how much of it was built it was live when I joined so it hadn't been running for that long I think it might have gone live maybe between the time I interviewed and the time I joined even but um it had been live for some period

of time but um a lot of the attacking on attacking the network hadn't been done it hadn't been audited properly it hadn't been really beat up in any significant way so the people running the security for that came out of the internal group uh doing desktop support for CN rail oh CN rail like the Canadian national rail Canadian national rail so they did the desktop support for the internal people there and that was the background and that wasn't really the same kind of background you'd want to run and you know publicly facing privacy focused and security critical kind of resource at the time so uh we buted

heads a little bit they insisted that I not uh analyze these things but obviously that was my entire job yeah wait what was your title again adversary adversary like you were brought on to break it it sounds that was that was the whole point of me being there was to do things like that there was a a little bit of iing that uh was involved I I made friends with the people who were actually doing the the work under them and found a bunch of bugs we fixed them on the sly and then uh officially got permission to do the work did things out of order but it was important wow so and of course they had no idea what was going on so that demonstrated again how uh out of touch out of loop they were um cuz you know the people who were running

the systems knew exactly why this was important they had no debate about it and we we we basically had to conspire to get the work done uh as fast as possible and and properly were these guys sorry I missed it but were these out external or were they in the company the CN rail folks oh no they they had come from CN rail but they were they were the people who were um network operations uh directors or something like that got it at the time were there were there any auditing firms back then the only people who did audits were accountants they were sort of the big five consulting firms and they had very small but rapidly growing groups that would do some security auditing when they were on uh on site so that was actually the the big

market for the tool that we wrote uh ballista at security networks was um we had people from Price Waterhouse were our clientele they were an auxiliary kind of uh group inside the uh financial accounting firms wow who then would do some anal of your network security and it was mostly just you have a firewall um kind of stuff is this why we call it auditing today this almost sounds like this is maybe why like the term was borrowed I'm sure that's why yeah that's where it s flowed from yep that's so funny I didn't know that yeah so you joined you were the adversary you're working in this office were those people was this is actually a question I have about zero knowledge systems like

you know today we're used to very remote work but was everything in an office there like did everyone come over to work in this office or did you have colleagues that were like in a different country um no it was everyone was there everyone had moved there from you know all over the world in fact um you know Al was there from Germany um Adam was there from the UK a whole lot of people you know had moved for this job um I'd come from Calgary at the time and uh there was an initial office on S laal yeah yeah yeah and uh that's something that I mentioned in the little bonus episode that I recorded a few weeks ago uh the address was 3981 s ra that sounds

right and I think I told you this when I met you but this was across the street from a bar that i' had been hanging out at at the time which is a crazy coincidence anyway I think I told you about that this was this was you know a a workplace ahead of its time you know there had been some previous office before that one I think um or maybe it was they did a redesign of the offices in that building at some point but uh there'd be a coffee shop on the first floor and they just basically adopted the coffee shop moved it into their uh you know fourth or fifth floor offices and it was just this is the coffee bar it's coffee free and but they just all the people who had been previously serving their coffee they liked them so

they just brought them in house W um and uh you know Austin has always been very at the Forefront of this kind of thing and and and you know play and a lot of those other things he knows how to create uh a space that people find you know effective and appealing and um after I'd been there for maybe a month or two if I recall correctly we shifted over to the new offices which were on um what's that mean Street uh de East yeah East West yeah deu um and it was basically right above one of the metro line stations I mean I I know this from the trademark documents that led me to this company in the first place and it was like 888 Dees of right yep it was

basically um at the the bottom of s and um it was interesting office there was like a center Atrium that was sort of just you could see down to the the mall levels below it was a beautiful office uh a lot of glass a lot of a lot of light offices enough for everyone server room there was was epic you know it was the kind of thing you might imagine seeing in a movie kind of thing it would have all been on site right like was there no like insal data centers there were um but they were like you know there were Big Data Centers down in California in fact um zero knowledge for a while had uh its most profitable asset was a data center lease down in California in like Mountain View or something and um I think they' least

more space than they could use in the leadup to the Pinnacle of the dotcom uh hype and they had then sublet some of that space to other Tech compan and the demand had gotten so high at that point that it was it was a you know millions of dollars a month even or something something ridiculous I don't remember what it was wow but um uh and then that just poof gone so it was a it was a very uh feverish time for for that that whole space I think you hear about like the tech boom and bust the dot bust there was pets.com like everybody was investing a lot into startups their Super Bowl ad was one of those like markers right but like was Zero knowledge systems then kind of one of

those companies like did it just did it raise a lot at the right moment and like took off it did raise a lot at that moment and and was but it was you know some of these companies it was like that didn't make any sense it wasn't one of those that you know someone who had a had studied computer science somewhere and and you know happen to be in the right place at the right time just saying you know let's do the uh internet of C you know whatever anything um you could at that point you know there were people who would invest in anything if you just said internet or you just said uh no we've seen that also in blockchain and more recently I mean it happens any any any cycle um once there's hype you

know we've got it into the AI right now totally um and the nonsense people are are going to throw money at on the off chance that they get lucky is always happens but what Zer knowledge had built was something that was NE it was just at that time the biggest problem was people didn't know that they needed it or if they knew they thought that that those protections should just be provided if I'm paying for my internet I should why why should I be trackable like and you know of course now we know just the level to which we're being monetized on a daily basis and uh our data sold and resold so you you were there for the period that it was that freedom was being built but Freedom like you say it was launched it was out there but what

actually happened to that project like did it ever gain any sort of traction it had a it had some traction um there were a lot of people using it it just wasn't enough people to support the business that uh that they had when I interviewed there maybe a couple hundred people in the company 6 months later there were probably about a thousand the HR team was on boarding like uh a few dozen people a week kind of thing it was it was that kind of hyper growth thing that Venture Capital seems to demand and respect and encourage and so you're either if you're following that ramp they push you a certain direction and you wind up with a lot of people then they try and get you to IPO and if you manage to get there then you know people expect a certain size of company if it's

going to be uh iping at a certain valuation so they just try and make those things match regardless of uh other factors what they built was something very valuable and something that we still don't have a good replacement for to notwithstanding uh never quite made it there and certainly if yeah zero knowledge of the company had been around and managed to somehow survive uh what would have been built over the in the intervening years would have looked a lot different than what Tor wound up looking like you you sort of mentioned these other experiments that were being created in this research group did any of those become anything producty or like did they go on to to be built into something else I mean the

Brand's credential stuff keeps getting rebuilt or proposed or it's a solution in some small product here and there uh the brands credentials for those who don't know it's um a system by which you can reveal only certain aspects of uh your identity if I've got a driver's license uh a digital driver's license I don't need to disclose the fact that you know here's my address here's my name here's my gender here's my um uh height weight and picture um if I'm going to a PG-13 movie all they care about is I'm over 13 MH so it was a way of saying yeah providing a I'm over 13 certificate to um that context or I'm over 21 if I'm buying alcohol or um you know over 18 in

Alberta whatever it is being able to just have that limited disclosure is is a valuable thing and something that certainly our team was trying to persuade people to do and um limited success unfortunately it's interesting because that's something that's still discussed today there's a bunch of teams today in the ZK space where using zkps to like have your passport sort of scanned into a proof and you can then prove things about that passport to a third to a new another party and it's funny because like now some of the tooling is really there that like you can make some of these things in like hackathon project like they can be made quite quickly back then I guess it was just the concepts were still being developed like do you know if that was the first time that idea was kind of

brought to life I mean stepen Brans had written his his uh book on them on on selective disclosure of credentials um but I don't think there was an implementation anywhere else I think it was probably the first time it was put into code outside of Steven Brand's laptop maybe or desktop at the time probably nice I want to ask you one more question about the zero knowledge systems office and maybe the first office you were at and then I want to talk a little bit about what you've worked on since because I know you've had like a a big career since then and I'm asking you to go back to this little SLI of time roughly 25 years this company for a year 25 years ago but I have one last question and this is this

was something we had talked last time we spoke but it was a bit about that building I think I told you this that you know I had been at the time that zero knowledge systems was on S raw I had actually been hanging out a lot at this bar across the street have you did you ever hear of a bar called blizzards did you ever go there I I couldn't say for sure if were across the street uh it's almost certain that like we went there uh a couple times I I don't really remember the names of any of the places I went to back then um but I do remember you know lunchtimes we go to uh a number of places just around the corner from there for for meals and so forth so it's I can almost guarantee I it was there at

some point you're around yeah certainly certainly around yeah um I didn't live very far away from there either so um cool yeah and you had also told me that there there was a sign so at the time I mean zero knowledge was pretty well known in the city because the pool of engineering talent for software engineering talent in Canada was not huge and a lot of it was focused on and and centralized in Montreal because there was a huge um 3D modeling uh um software there's like a film industry there so like two or three different uh companies that were doing um CGI stuff and um some of the Cutting Edge stuff at the time like there was soft and MJ

there was um TR with some of the other company names but there were two or three and so if you wanted software Engineers you were basically poaching them from someone at that time and um so Zer knowledge had these uh trucks that would go around the city with like their really high gloss like very well-designed uh ads on a big um trailer and they would park them outside of some of these offices and and you know have people there trying to you know talk to the people who are coming out of the offices and and trying to steal them away giving out flyers like going up to them uh stuff like that yeah like apparently yeah there was there was a

pretty hard s true gorilla HR recruiting right there yep yep definitely wow um I hope I get a chance at some point to speak to maybe one of the founders like someone who might have organized some of that because I'd be so curious to hear like how effective it was or yeah where in the city I I'll definitely put you in touch with Austin and he'll he'll have a lot to say about that Austin um was very creative about about that kind of thing and um he enjoyed doing some of these outrageous things cool um I want to now ask you a bit about like you leaving this project so you had joined because Freedom was cool you were you know you were going to

break freedom I guess you got in there security like at first there was some resistance to actually fixing the security but then you were able to fix some of the security why did you leave so what happened was it turned out that zero knowledge Freedom uh wasn't going to pay the bills uh for a company that size and so they got into licensing one small part of the freedom system which was there was a personal firewall that was basically built as as as part of the uh interface to the network so it was you know a small d that ran on your windows box and it would take the packets that you were sending out to the network and then instead of just it would prevent any other packets coming

in in the first place so you weren't vulnerable to certain uh exploits of the time but it meant that all that all that code there made for a pretty good personal firewall and so they were started selling it as a um add-on for your internet service uh like a subscription thing for like a couple of extra dollars a month you for like $2.99 a month you got a personal firewall with your um internet con connection that turned out to be a you know a fairly profitable uh thing to do required farless Manpower at the time the idea of just working on a personal firewall for that Telco did not appeal sound so it had lost a bit of its like like it was so edgy and it was so Grand the idea it went from a cipher Punk thing to a you

know yeah Cog kind of yeah yeah it was basically foris I think at the time is who was buying it so that just didn't appeal um it was also my last winter in Canada and after many many Winters in Saskatchewan um I did a winter in Montreal and uh tromping through that for for months on end uh did me in so I uh headed to Sunny your climbs in California got it so did you part in a good way when you left um so it was a pretty amazing story so I had gotten sick of dealing with the um people who are running the it stuff for the company uh after buting heads with them and them

resisting any sort of real security and I went to uh Austin and said look if you make me CSO Chief security officer um I will stay and I will do that but uh since you're ditching the whole um uh Freedom network uh that's about the only thing that would keep me here and um of course he uh did the only same thing he could and said no we'll see uh enjoy I wish you your best on your future endeavors but um uh you know few years later when BL stream was coming together uh you know and uh I'd actually been talking to Adam directly about a lot of Bitcoin related things at the time um I'd W up working with Adam at Microsoft

for a number of years okay after he left he done some storage uh startup and then I'd gone on to a few other companies and you know we're circling back and I was trying to do a startup that was going to do a personal security proxy that would be able to do do man- in the-middle on all your SL connections and clean up headers and make you uh less easy to track and make sure that there wasn't anything funny going on in those connections and uh he was getting into uh Bitcoin more heavily at the time and um we were both trying to recruit each other and he wed up uh meeting up with Austin Getting Austin really into the whole idea of uh of Bitcoin and um uh they then got some money together from

Austin's uh VC company at the time and uh I met them for coffee or something in downtown San Francisco and uh Austin said we're getting we're getting the band back together so uh uh I was like I'm in cool let's do it this is pre founding a block stream so were you into Bitcoin at this point like had you been playing with it a little bit um so I had uh uh you know heard about it it was not the first ecash system that I heard of at that point if you were into that hole you know cyer Punk kind of scene these things came up every once in a while and you know you'd be oh well I'll play Al

with that and see what it happens but you know it wasn't it really hadn't caught my attention to any great extent but um then Adam mentioned that uh there's something there he was investigating it he was he down in town we met up I had a meal or two with him and some other folks who were working in the space uh Matt Cara was there I don't remember everyone else that was you know probably the first time I met him who's that uh Matt Carl blat okay one of the bitcorn cor core developers um he's over at uh block now uh working on the Bitcoin developer kit I believe yeah so I learned a little bit about it was was getting into it a bit and then um I got a call to do an interview at um Co

oh and uh that was already there coinbase was starting okay yeah it was basically 2013 wow and I W up going interviewing there and um then did a short contract for them when they had uh some security issue and so I wanted what a little bit of Bitcoin is my payment um I then spent a lot of time getting into some of the trading stuff with it um I was on a combination of bitstamp and bitfix which is in it's infancy at the time and I wrote a bunch of uh libraries for automating their um their apis and and sort of did a bunch of crazy trading stuff that was quite psychotic and um uh lever leverage and and so forth at the

time which was was not not a good way to trade Bitcoin but I learned a lot um the the amount of money that that represented at the time was you know hundreds to thousands of dollars uh but uh you know uh not quite Bitcoin pizza money but uh it would have been a substantial amount wow certainly but uh I discovered this book uh after doing this for months and months um it was a book by um Richard woff and it was probably how I trade and invest in stocks or or a similar book to like that and it was basically all of the things that he's done or he did at the time have been banned there were there were techniques like uh painting the tape so

back then stocks were traded and the news of the stock being traded was was sent around on ticker tape mhm and so you know every tick of the um Market did it go up or did it go down and so there were things you could do like if you made the last trade in a tick you would either mark it red or green um so if you got the last uh trade in and it was and your uh it was an uptrade it would be green by timing your trades you could make it look like the market was green when wasn't necessarily you know these these sort of things if you do them on a publicly traded stock you would get in trouble um I noticed that if I did this it would make people pay attention and probably buy and so essentially like I I

went through this book you know after doing what I was doing for months and it was like oh this I mean that's why it works that's what it is that's what it's called oh that's so funny I mean there's so much of that like pump and dumps they've been around since the 20s cuz there was no regulation there was no laws about this stuff back then yep and so much of the stuff you see yeah um like binary trading and and and uh they had what were called bucket shops which were essentially you like a lot of these highly leveraged um exchanges if you are going to trade Bitcoin at 100x leverage you're going to go broke it's just a matter of it takes hours or days um it's too volatile a thing to do that way and

the people who are running these exchanges they know that they're they're just doing it to take your money because this an effective way to do so all of these things none of them are new um but it was it was I was amused to see how many of these things that i' sort of figured out on my own turned out to be oh wellknown from the 1920s first of all um and uh maybe some of them even more ancient like ancient markets would have had some sort of game that people were playing I'm sure that's funny it's also just interesting to see what kinds of things and how the laws evolved you know these things were were you know he wrote a whole book about it because he thought it was a legit thing to do and people bought that book and took and did those things for some

period of time before the SEC existed or um you know came and cracked down when is that book from is it from the 20s um yeah no it's from um 1922 I think oh wow yeah interesting so you know these things were the things that probably caused the stock market meltdown it was a very interesting way to come across that knowledge and to have uh seen markets like evolve from nothing you know like everyone was learning those things at the same time cuz you had a whole bunch of people who' done tag had never traded and then you had a few people who were just uh coming in from uh stock uh exchanges who were sharks honestly you know they knew all these

tricks they could never do them on the real Market because they'd been they went through school they they studied for their exams for the their licenses and that was basically what those things covered you can't do this because and here was a market that they could do it on because it wasn't banned so you still see it to this day you know every time there's a a big runup and and there's a bunch of Leverage Investments on some platform you will suddenly see the market turn around and dump through that those leverage shares and you know someone's just claiming that money cuz it's it's money sitting just there what need to be taken yeah so going back to your story though so you were at this time playing around with the stuff but

like blockstream had not yet been founded but you had been approached I it sounds like or you had you had done a little bit of work in that realm so you were familiar yeah and I was very interested um so the things the things that I struck me about it was um back then one of the things that you had as a challenge if you were doing security was that people didn't really care too much about the security of their things like their uh you had these RSA secure IDs for instance so you if you were going to log into a secure server you had to have this little token that was uh you know on your keychain um and it would spit out a different number every few minutes every minute so in order to authenticate

you had to provide a password plus this this code and that was great it was an improvement in security because it was something you had to know and something you had to have um if you were trying to break into a system like that you either had to steal one of these tokens or or otherwise gain access to it or find some exploit in the uh actual server code if there wasn't an exploit like that available then this was pretty good security but the problem was that most people who had these things um you know C men's programmers whatever they they didn't give a about them they would leave them on their desk while they went for lunch and so the actual security you were getting from them was maybe less than it uh should be but I saw when I saw Bitcoin I was like this is amazing CU this is

something where if you use the same keys that people are using for their money for authentication then they're going to care about it you know they're not going to leave their wallet with cash just sitting there on their table when they go for lunch they'll take their cash with them um and so it was a way to you know I hoped to build systems that were going to be more like an authentication tool that you could use in a lot of contexts yeah but it's what you're saying is because you have value attached like it's so funny you're not you weren't thinking about it like oh cool there's digital currency that is potentially speculative and that you can send it back and forth across the world you were like now you have value

attached to these important things the these kind of security elements you won't throw it away the way you do with these RSA badges or whatever yeah and and also um I saw a path for those things to get more powerful you know if you have a lot of people using them the cost to make one goes down dramatically like if everyone has one in their pocket of some sort they get so much more powerful and we're starting to see that now um you know compare the uh early USB based Hardware wallets M with you know about 10 characters of space to to look at uh anything if they had anything at all like some of the early ones were

just a SIM card that was uh are running Java card and some software that would sign for you but you had no idea what it was signing you just plugged it in and it signed something for you and you hoped that it was signing the right thing sending the transaction to the right address then you know you had the ledgers and the treasur and they had a little tiny screen and then you had Co card with a much bigger screen Co card Q finally has a decent Siz screen and um the foundation devices passport and the passport Prime which is coming up soon um that's going to be very very cool device and um has a lot of applicability not just as a Bitcoin wallet but as as other things like the uh Ledger one that came out we encouraged them I had a

meeting with them to discuss what they had and I was like you know what you should do you should do an SSH agent for this and that would be amazing and if you could use that key and it could be recoverable key instead of being like some of these other systems like a UB key which you know you couldn't copy but if you had to yui where you could have a seed that you could then restore from that would be a much better thing and so a lot of those things have been realized finally that's cool you know the idea of having your pgb key recoverable in metal uh never really caught on right but now you can have a long-term key store that you can plausibly manage over over the course of a lifetime and through

disasters potentially it almost seems like there's been this Mass massive education of like private keys and signatures and and like just knowing that you have this item that only you can can ever access and how to protect it but then there's also this move towards more custodian like like or I wonder if you see it that way like do you think it's becoming more in the direction that people have their own keys or do you think that actually they'll be kind of this you know not centralization but like this this grab this kind of land grab to bring back under one umbrella where they don't have to deal with the key themselves well I think it's it's it's always going to be a push and pull like people who are in

exposed to the idea of of crypto and and a lot of them are just like oh well that's cool um I can tokenize my you know art or or whatever else it is um or land or or all these things but you know those things only work if Bitcoin is worth a certain value like if you tried to put all of the property on a blockchain all the property in the world you know if ownership of every single square meter of the planet was recorded on uh bitcoin's blockchain and it was the authoritative source for everything there would be some hedge fund that was going to spend as much money as it took to rewrite some of that history and it would be a profitable Venture so they would do it but um you know we slowly

been growing the amount of value in the network and as that value go up the kinds of things you can do with it get larger because the security is so high it starts to harder to corrupt it by like the 51% attack actually can you you can do that in Bitcoin right that's the the threshold the 51% um that kind of that's the sort of Threshold at which you can you know plausibly rewrite um or cause uh cause reorg of the of the chain you can't rewrite something early on or anything like that but you know you've got a chance of winning a a a reorg later on so it's not a super um effective attack but it is something

that can make money if people are making mistakes so if I have uh if I'm depositing a million dollars to a Bitcoin exchange and they make that available in my account after you know one one confirmation and they'll also you know if I make a trade and I can move it off the exchange as well then I could do something like move money in trade it for some other currency send that currency to myself and then rewrite the blockchain for one two block reor and that initial send to that market is canceled out and I just send it to another address that I control that's the kind of thing you would do if you have a lot of hash rate and people played these games for a while early on when uh when I was just sort of getting

started because it didn't require that much um and people have definitely taken advantage of some of the other blockchains that don't have the hash rate you know every once in a while you'll see uh Fork coin get destroyed by this or people get trounced but um you know this is basic blockchain security if you're going to transfer a lot of value you wait more blocks did you ever get into the ethereum world or have you would you say you stayed more in the Bitcoin side of things I from the from day one I was skeptical about um ethereum it was basically um vitalic had gone to the Bitcoin community and and and some of the forums IRC channels and he he' basically ignored any advice that was given to him and um uh so there were

like things about do you have an account or do you have a ux um and and basically he just went said I'm just going to do it this way anyway and you have the show that the ethereum foundation is you know it was they they have managed to do a lot of stuff yeah but the value of that stuff that they've done is questionable uh you had basically uh pull after rug pull after rug pull of of these someone releases white paper no code ever gets written Ico Etc there's been pwns it's like it's a repeat cycle actually it's like the Ico and then it was the nft and then it was now the meme coin it's not even on ethereum anymore it's it's also

on salana and and the the meme coin stuff is is so ridiculous because you don't even have to write a white paper no you're just you're creating a name you you're you're seeing if like a casino you know Foo is going to be popular this hour and and it's it's gambling but it's it's entertaining for people I'm sure but the relationship to anything productive is is is far from uh clear what was your I want to kind of go back to your story though so we because like blockstream you were part of the founding team how long did you stay there because you don't work there anymore no I was there from early days when it was before we had a name before

we had any of that um when we were trying to get a team together so I guess it was probably uh late 2013 when I met uh Austin and Adam or maybe very early 2014 um when we had that conversation about getting the band back tlor we had a few meetings where it was like some of the core developers who were you know Greg was working at uh Milla I think at the time and um Peter was working at Google and Matt was finish off his uh degree and um Mark was working at Nasa all these people were doing a lot of engineering on their in their evenings but there was no actual anyone really who was working on the core protocol wow who had a day job just doing that

everyone working on bitcoin core at that time was doing it as had some other thing that was yeah yeah exactly so um Greg was doing codec for um media at missa for instance um and so what Adam and um Austin were trying to do is get some sort of company together that would allow Bitcoin to grow from that um and Bitcoin didn't have a some fees going devel to development for the project or or you know there was no core core team allocation or anything like that so getting block stream off the ground was sort of like the the first way to support those Engineers is that what blockstream is today like is that what it is is it sort

of like a Dev shop that's working on bitcoin core um so initially it was conceived of as let's get something together where the core developers have a salary and and are focused on building stuff for Bitcoin and focused on making Bitcoin better and the number of commits that happened in that first year to the Bitcoin codebase was you know some multiple of what had been done in the prior several years W and a lot of them were substantial changes not just like you know fixing a spelling error or something like that and so it was a success in that regard I would say there was whole bunch of projects Bitcoin elements a whole bunch of things that were proposed and then adopted into uh

the core protocol a lot of bips written things like that that was uh you know a good time for Bitcoin I think um there was a lot of criticism directed their way there was a lot of um suspicion directed the way there's a whole bunch of conspiracy theories on on Reddit and so forth I don't know if you were around that at that time I got into this whole world in 2017 so different era so blockchain uh Block siiz Wars yes back then um but uh I think by that point a lot of the battles have been won the shouting wasn't over but it was essentially done okay they'd already gotten some of the seg segt stuff in and um the miners were resisting it but when the blockchain was actually full they

were like oh well we do have to do something about this when did you leave blockstream and why did you leave Block Street uh 2018 okay I lost my uh my fiance to Suicide so um took some time off after that and um and just didn't wind up going back to block streaming after that what have you been up to since blockstream uh joined River I was the founding CSO there as well um and uh helped them launch and and um managed their Bitcoin um Holdings uh C bit coin Holdings which was uh which is great we one of the last things I worked for had any impact on before leaving block stream was um the uh psbt work and uh some of that multisig stuff that was uh

kind of a area that was lacking in in Bitcoin um there were a lot of sort of core issues that made multis not quite so safe to use but um Quin kite had released the cold card and um we were able to put together a a very secure setup and I there were something like 6 or 8,000 Bitcoin we were managing with at one point didn't lose a wink of sleep so wow know that Bitcoin reached that level of maturity that it could be managed like that and I didn't have to worry about the Bitcoin getting lost or getting hacked or anything like that because was possible to build a good setup amazing do you feel like a lot of those people that you worked with I want to bring it back to the zero know system story but a lot of those people that you

worked with did you end up crossing paths with them later in the Bitcoin space like did a lot of them end up working on this kind of stuff uh yeah Adam of course did other people from that era I haven't run across a lot of them who weren't also Austin Jeremy is Austin's brother he was working on operations and stuff there at Zer knowledge and um uh we now have a startup together cloaked Wireless uh or cloaked Services one of our products is CLO Wireless and um Sim swaps are an issue for people in the space and we have a system that is uh security Sim swaps given that you've been in security this long when you think about it are

you do you feel like are we do you feel safer or less safe today this is this is sort of actually one of the the interesting questions that we had back in the day at secure networks was how long are these bugs going to be a problem you know the idea was that buffer overflows shouldn't be an issue 10 years from now like the industry will have eliminated this as a bug class no it hasn't okay and essentially there are more people writing code and since there are more people writing code and only some subset of them know how to write secure code you have more and more flaws in the available code out there so overall it's possible to engineer something very secure but 99% of the

stuff that gets written isn't written to that standard so things are probably as secure as they've ever been and they probably on the whole haven't gotten any more secure okay um one of the first systems that I got into uh on the internet was a NASA computer um it was the NASA extra galactic database and it was available on a telet system you just Ted to a certain machine IP address and then if you hit control c yeah you were presented with a system prompt it was just something running in a shell that was connected to the uh port and then you could do whatever you wanted on that system and so there are things just as simple as that today in other platforms

and um there are people who are writing friend of mine has what he calls the giggle test when if when someone's describing the architecture or something if he bursts into uncontrollable Giggles that's a complete fail um and it happens a lot so um you know people are tasked with things beyond their capacity a lot and funny things happen when that when that occurs so um overall uh we know how to write secure code we know how to uh build secure platforms we know how to do these things bitcoin's actually really great proof of that you know the things that are the core of Bitcoin the uptime of Bitcoin is essentially it hasn't gone

down since it was launched and that is something that would be considered remarkable to anyone back 20 years ago the fact that there's a system that is distributed and it just works and it's money and no one's just you know broken that system in a way that has uh disrupted the uh economy that's been built on it and that's that's pretty good that's impressive that said you've got all these other chains secondary tertiary like clones of things and it it's a circus it's it's just a clown show so it depends on how your quality of your engineers that's it's that's the way it's always been so interesting Jonathan thank you so much

for coming on and sharing this story from kind of your start breaking into sort of computer rooms at universities to work at zero knowledge systems obviously the project that brought us to meet each other to the things you did after I mean I joined this space in 2017 I joined it in Berlin which is like an ethereum Hub more than a Bitcoin Hub and so I was sort of I was introduced to a lot of this space through ethereum I feel like my Bitcoin history is not that good I've had only few people on the show who really live in Bitcoin land um so it's really great to get to hear your your story and I mean I do do hope to

get to get a chance to also meet with some of the people who you've mentioned through this episode who also worked at Zer knowledge systems but also worked kind of subsequently in the early Bitcoin and and what happened after happy to introduce you to um anyone uh who I can get you to Austin seems interested in chatting so that's another great start um but it's been a pleasure talking to you and thank you for having me on thanks so much and I want to say thank you to the podcast team Rachel Henrik and Tanya and to listeners thanks for listening [Music]