Exolix Roundtable X Space Recap: Cypherpunk Values vs Mass Adoption

Exolix held the second edition of the Exolix Roundtable on June 18 with participants from Zano, Sumex, Cake Wallet, DigiByte, as well as members from the public community. These individuals discussed the hottest topic in the cryptocurrency world today - the debate between cypherpunk ethics and mass adoption. Watch the entire Space here:LINK.

This discussion covered topics such as privacy, self-custody, regulations, stable coins, institutional adoption, user experience, and more.

How do you see the balance between cypherpunk values and mass adoption?

Zano: In our case, the balance begins with one idea - privacy has to be the prerogative of the user.

We provide privacy infrastructure, which means that we need to consider the issue of liability and exposure to regulations. The one way to do this is to not charge any fees from the protocol and from the projects that use the protocol. This will help us avoid the issues associated with the direct control and monetization of users' activities.

However, the key idea here is that compliance, if any, needs to be done under the full control of the user. It cannot include any backdoors, special access, or any other ways to violate the privacy of users without their consent. If a user decides to disclose some information, the means for that can be provided. However, the control should be still in the hands of the user.

It is a fundamental element of our model. Privacy works only under the control of the user.

Can a company build cypherpunk tools and still operate in the real world?

Cake Wallet: It is definitely difficult, as the straightforward cypherpunk answer would be to say: no compliance, no compromise, no collaboration with regulatory agencies. However, if you are running a business, then things get complicated.

Here at Cake Wallet, our goal is to create tools that do not necessarily need us. We are creating an easy and accessible bridge between the user and protocol level freedom and privacy technologies. Monero is one of those examples. Another one is Zano. These are platforms where privacy is embedded in the protocol itself, and we are here to make things easy for the users.

The question is to identify what freedom you still have and work within it. It may involve working with certain jurisdictions, defending open source development and being vocal about the regulations that harm users.

It all comes down to creating tools that are viable in hostile environment. We cannot assume that any government or institutions will be acting in favor of users. Thus, we have to provide them with other choices.

Are we losing the original crypto vision?

Sumex: I believe that our situation is not good as an industry.

The industry requires more users. However, these users come from the Web2 world and require simple and straightforward products and onboarding processes and experiences. In order to create such experiences for Web2 users, the industry relies on institutions, and institutions bring all those boring stuff like bureaucracy, KYC, regulations, and control.

Here we have a vicious circle. We need to grow but the way we grow will take us back to the old structures.

The initial vision of the technology was permissionless, trustless, and user-oriented. However, if you want to attract users, enter mainstream markets and attract money from institutions, you have to live according to their rules.

That is the problem. The technology will survive but the initial idea will be absorbed by institutions.

Is mass adoption really the main goal?

DigiByte:I believe the very first thing is whether people really want to be free.

Everyone talks about freedom, privacy, and self-custody. However, when faced with a decision, most people prefer convenience over everything else. This is one of the major issues that this whole industry is facing.

At DigiByte, there was never any company, CEO, insider allocation, corporate ownership, or centralization of control of this project. We run completely voluntarily and our network has been operational since 2014 and we still believe in decentralization, proof of work, security, and self-custody.

But the only thing is that because we don't care about "number go up" things much, we are always ignored. The entire industry has become obsessed with hype, VC funding, and speculation. Those who remain true to the values of the industry are labeled as old-fashioned just because they aren't following any narrative.

Mass adoption is necessary, but at what cost?

Is the cypherpunk side of crypto already lost?

Cake Wallet: Sure, I get the feeling of pessimism, but I don't think the game is over yet.

All useful technology will eventually become mainstream. After this happens, it will always seem that the original dream is lost. That was how things turned out with the internet, encryption, and crypto as well.

On the other hand, there are now more users than ever who are using these technologies to protect themselves, transfer funds, exit bad situations or simply get free in hostile environments. The number of crypto users is much higher than at the beginning.

And while the aim is not to turn everyone into cypherpunks, the aim is to have technology available for those who need it. If one needs to opt-out, secure his funds, use some privacy technology, or avoid being surveilled, then such tools should be available.

This is why usability is so important.

What principles should never be compromised?

Zano: Self-Custody is the dominant one.

It is not just self-custody of your money. Self-custody also applies to your privacy. You should have full control over what you expose, when you expose it, and to whom you expose it.

When privacy is contingent on a back door or an administrator's switch, then it cannot be considered privacy at all. Every back door will sooner or later be exploited or exposed.

Thus for us, the rule is simple -- privacy is default and exposure is voluntary.

How should builders approach regulation and real user needs?

Cake Wallet: I believe that developers should pay less attention to the ideology and pay more attention to people's problems.

For instance, a lot of people believed that in case of the failure of fiat currencies, all would switch to using Bitcoin. However, the problem that people had wasn't simply the problem of inflation. People needed a currency that could serve as a means to carry out transactions and payments.

That is why stable coins became so popular - they served a practical purpose even if they didn't fit the cypherpunks' ideology completely.

What is important is that we should build something that serves some practical purpose today, and then we should develop it in such a way that it will empower people, not companies.

In the case of Cake Wallet, this means building products of privacy and self-custody that people will actually use.

Are stablecoins helping adoption or weakening crypto values?

Zano: Stablecoins are complex.

First of all, they attract users to the crypto world. This is where people learn what it means to have a wallet, custody it by themselves, make transfers and use blockchain-based payments. The one who joins the crypto universe through a stablecoin is way more likely to deal with privacy coins or any other decentralized technologies in the future.

However, leading stablecoins have the potential to act as privately-owned CBDCs. These are subject to freezing, control and tracking.

Therefore, stablecoins are useful for onboarding, yet cannot be considered the end result of crypto liberty.

What does privacy actually mean in crypto?

Cake Wallet: Privacy implies user choice.

It is not true privacy if your information is hidden from the public eye and at the same time accessible to a third party. It is not a privacy if you allow access by default to a regulator, to a business, or to any service of surveillance.

The actual privacy would mean that the users are protected by default against exposing their finances to everyone. Any information disclosure would depend on your decision.

It is for this reason that the protocol-level privacy is critical. In cases like Monero, and in cases like Zano where such principles are used, privacy becomes an integral part of transactions. Users do not need to make additional effort in order to protect their information.

The privacy is not a marketing term.

Why do some projects avoid calling themselves privacy coins?

Zano: Positioning in privacy projects may be problematic.

In case the project positions itself as a privacy coin, it may attract more trouble in relation to exchange integrations due to the riskiness of the concept for such platforms.

There is one more problem related to privacy projects. Due to technical complexity, many platforms are accustomed to working with EVM chains or Bitcoin forks. In case the privacy project utilizes another type of infrastructure, it may require platform adjustments, scanning service running and other steps from the exchange in order to get integrated. This means that sometimes the problem is not just regulations but also technical challenges.

This is the reason why we work on the facilitation of Zano integrations through the creation of new addresses.

Is crypto anywhere near real mass adoption?

CryptoEnforcer: However, I believe we are not there yet.

Mass adoption is said to be close because lots of people trade cryptocurrencies and use tokens, but this does not mean actual adoption. Actual adoption is possible when you ask your neighbor to send you cryptocurrencies, and he can do it right away. People would be able to use privacy, self-custody, and P2P payments in their everyday life.

Currently, most activities take place among traders and opportunistic users, and while it is not a bad thing, this is not where we want to get.

The technology already exists. Privacy technology exists. Self-custody exists. However, people need incentives to use them. As soon as the need arises, more people will become educated.

Nowadays, the priority should be placed on creating useful technologies and educating users about them.

Can privacy and usability exist together?

Digital Awareness: This is among the major problems.

Many believe that the technology must operate in the same manner as traditional finance. However, the ultimate objective is to provide self-custody and decentralization in a way that can be utilized by anyone.

If the technology is overly complex, then people would never use it. Also, when the technology is too centralized, then the very purpose is defeated.

Therefore, the problem here is to provide privacy and self-custody in such a way that it does not become traditional finance with blockchain front-end.

Can practical products keep cypherpunk values alive?

Cake Wallet: Sure, and CakePay provides an excellent example of that.

The most cypherpunk future will be the one in which people can pay using their private money everywhere and anywhere. However, that is not the kind of world we live in today. In most cases, merchants do not accept payment via crypto.

Thus, what we try to do at CakePay is to meet people halfway. People can use gift and debit cards that work with cryptos and even privacy coins while making sure we do not gather excessive personal data on our users.

This is how you can create a tool that gets people as close to the cypherpunk future as possible.

What is coming next for Zano?

Zano: Our upcoming hard fork, Hard Fork 6, will be approaching soon.

The new hard fork will provide better security, as well as a new gateway address, thus making it more convenient for integrating Zano with other platforms, particularly DEXs.

It is important that privacy coins cannot be completely reliant on centralized services. Integration with DEXs is one of the key steps ahead.

Thus, users need to keep themselves up to date and follow the project.

What should users know about Sumex?

Sumex: Sumex is a super app for managing your crypto portfolios.

The app is aimed at various user categories. In case you are a professional trader, we have solutions for this category. In case you are an amateur crypto investor using CEXs, DEXs, and multiple blockchain platforms, the app helps you manage all in one place.

Among the key principles of Sumex, one should highlight that any user should be able to see his or her whole portfolio irrespective of which chain it is stored on. The app does not require registration, KYC, and any payments.

The idea is to make the management process more comfortable and frictionless.

What is next for Cake Wallet?

Cake Wallet: Privacy on many different chains continues to be a priority for us, however, one of the main priorities this year is desktop.

Cake Wallet has supported desktop wallets for quite some time now, however, they were never the center of our attention. That's all changing now.

Desktop provides much more room for advanced development than mobile does. It allows us to develop more sophisticated functionalities like atomic swaps, decentralized exchanges integration, as well as better privacy and security tools.

Our aim is to create a Cake Wallet which is beneficial not just for mobile, but for those who require an advanced desktop wallet while preserving privacy and self-custody at the same time.

What is happening in the DigiByte ecosystem?

DigiByte: There are many things going on.

DigiDollar is one of the big things coming. It is almost mainnet. This is a decentralized stablecoin running on top of DigiByte, without any margin calls, liquidations, and with self-custody using the core wallet.

There is also a lot of community-based tools such as DigiScope, where people can educate themselves on the blockchain, analyze data, do side quests, and interact within the ecosystem.

There are also mobile wallets as well as a web wallet for DigiByte in development by community members.

The point is that DigiByte still maintains the decentralization, self-custody, and utility of the currency. There is no corporation behind it, there is no CEO, there is no centralized ownership.

Closing

From the second roundtable of Exolix, it became clear that the conflict between cypherpunk values and mass adoption is not straightforward.

Crypto has to improve usability, user base, and utility in terms of products. Yet, it still has to preserve the values that make crypto important: self-custody, privacy, decentralization, permissionlessness, and user control.

This is what came out clearly from the discussion: mass adoption cannot mean the abandonment of the initial crypto values. It must mean their improvement in usability.

Thank you, Zano, Sumex, Cake Wallet, DigiByte, and all other community representatives who participated in the discussion.

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