3537: Why Aztec Labs is Building the Endgame for Blockchain Privacy

[00:00:04] What if the missing ingredient for mainstream crypto adoption was something as simple and as complicated as privacy? This is a question that lingers every time someone looks at a public blockchain and realises that their entire transaction history sits in full view for the world to see. Well, my guest today will argue that this is the biggest reason that crypto still feels more like a speculative hobby than an everyday tool.

[00:00:33] And he will explain it in a way that is surprisingly relatable because today I'm joined by Joe Andrews, co-founder of Aztec, and he spent the last seven years of his life building a privacy first layer on top of Ethereum. And he compares today's blockchain world to the pre-SSL internet, a time when you could not safely enter a password online, let alone do something as normal as booking a ride for or paying for your groceries online.

[00:01:03] And today he's going to unpack that analogy and it will instantly reframe the entire conversation about where the industry goes next. Because I think Joe brings a much needed sense of optimism to a space that can often get lost in noise. And he will lay out how zero knowledge proofs let you prove a transaction is correct without exposing any of the sensitive details hidden inside it.

[00:01:28] And also why that protects both people and smart contracts and how new wallet features will soon become possible once identity can be verified privately. So today I invite you to join me in a conversation that will attempt to strip away jargon and get right into the heart of how privacy could reshape the next chapter of crypto. Here at the Tech Talks network, we now have nine podcasts and approaching 4,000 interviews.

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[00:02:54] But now, let me introduce you to today's guest. So a massive warm welcome to the show, Joe. Thank you for joining me today. Can you tell everyone listening a little about who you are and what you do? Yeah, thrilled to be here. Thanks for having me on. So yeah, my name is Joe. I'm one of the co-founders of Aztec. And we're building privacy there for all of Ethereum and kind of Web3 in general. So yeah, it's a layer two blockchain running on Ethereum.

[00:03:22] Well, thank you for joining me today. And the crypto scene as seen, it's been a roller coaster ride to say the least. It's, I don't know if crypto winter is going to stay forever. What's your feelings on the crypto scene at the moment? In particular, I would say the UK crypto scene, because we were talking before you came on the podcast today and feels like there's so many opportunities missed there. Yeah, I think in general, you know, this time of year is always in the markets.

[00:03:52] People are a bit scared. Like they're just, they're just scared. They're not sure what's going to happen. I think we just want it to get to Christmas and Bitcoin still in a reasonable spot. But yeah, we've seen some jitters, I think, in November in the markets. I think more generally. Yeah, we've been in the UK building Aztec for seven years now. And we've seen a lot of different government figures come in and try and pretend they're doing stuff in crypto to others just not care at all.

[00:04:22] And I don't want to get political, but I just think it's, we have a lot of talent in this country and in Europe in general. And it's, you know, sad to see it being kind of maybe squandered by just not unclear regulations, basically, and just no, no support really for the industry. But we don't, we don't have to make it too negative. I just, I think we're focused on the wrong things, maybe as a country when we could have been, we could have been seizing the opportunity.

[00:04:51] There's a lot of crypto companies and actually builders in London and the UK, but I probably see them more at conferences around the world than I do in London, which says probably all you need to about the crypto scene at the moment. I think it's trying to come back. There's been a resurgence, but it's, you know, it's maybe death by a thousand cuts is a good analogy. Yeah.

[00:05:15] And there is, I think to get a positive out of this, there is a passionate community here and they are, you know, many from the UK, many from Europe. I've spoke to many in the US, many have left the UK, gone to Dubai. There's a big scene there and Switzerland, et cetera. But tell me more about that scene. Cause we do hear a lot of the bad news, but as you say, the conference scene, there is a passionate Web3 community out there. Tell me more about that and the kind of people that you talk with them and the feeling there.

[00:05:45] I mean, globally. Yeah, it's, it's, it's never been better. I just got back from Ethereum's DevConnect conference in Buenos Aires. And I think sometimes you see on crypto Twitter that like, you know, Ethereum is losing its crown, but I can tell you coming back from a conference like that, I've never seen more, more people in a multiple sprawling conference venues, talking and building and doing things on, on Ethereum. So that was very, very motivating.

[00:06:14] I think, yeah, there's, there's lots of conferences obviously around the world, but the DevConnect and DevCon ones from Ethereum are the ones I'm kind of most excited about. They're less, less chilly and kind of more about the technology. And that's ultimately what I think drives people into the space who are in it for the long term. So those are the ones I like to go to. And for saying you've recently come back from one of those events, any big key takeaways, anything you were thinking about on the plane ride home?

[00:06:44] Because usually when you leave these conferences, you've come out with so many different ideas and there's certain themes. Any big themes coming out there that you were thinking about on the way home? Yeah, one that's refreshing actually is privacy is, is getting its, its moment in the spotlight, both in Ethereum, both, but all over kind of like the, the crypto kind of landscape.

[00:07:06] I think for a while it's been either something that's been shunned because of, you know, regulators kind of like having a war on privacy or it's just not been top of mind. We've obviously been building towards a future that has strong privacy guarantees for six, seven years now.

[00:07:25] But I think the main takeaway we saw coming back from DevConnect is so many other people are talking about privacy, whether it's network layer privacy, messaging privacy, or similar things to what we're building as tech. It's, it's yeah, privacy season, I think is the right way to talk about it, which is, it's just really exciting that I think a lot of people are seeing the, I guess, the shortcomings of blockchains that don't have privacy built into them.

[00:07:52] Um, I like to think about it a bit like the internet pre SSL certificates. And, you know, we enjoy a large amount of privacy on the internet. And I think I've said this many times on, on, on different podcasts or, or at events, but the internet was useless before SSL. Like it was, it was kind of, you couldn't have passwords, you couldn't have user accounts, you couldn't do payments, um, Uber, all the things we kind of enjoy and like get to use.

[00:08:22] Um, uh, as part of the internet, they require SSL and encrypted traffic to be sent across the internet, which is privacy. Um, and blockchains are kind of in that state right now where there are great speculative tool. Um, but you know, for the most part, like reaching into the real world, they haven't got there yet.

[00:08:43] Like there's lots of people trying, but if we try and onboard hundreds of millions of people to these networks with no privacy guarantees, um, it's a bit of a dystopia. Like you could see all someone's entire bank balance on chain, just by looking up their address, all their transactions, where they were last night, what they spent at the pub. Like those things are not, uh, not, it's not really the world you want to live in.

[00:09:06] Um, and so, yeah, I think just kind of coming back from DevConnect, just seeing other people realize this and, um, kind of jump on the privacy bandwagon was, was, you know, uh, uplifting. Uh, you made some great points there about the history of the web and the importance of privacy and security and how it transformed the web into what we now take for granted largely.

[00:09:27] And one of the things I try and do on this podcast every day is talk about things that many may find complex or overwhelming and try and demystify them. So, especially those people that might be listening today, maybe feel a little bit overwhelmed by the web three space, crypto space, et cetera. So for those people listening, how would you say privacy first layer two solutions can actually help reduce exposure to risks linked to new wallet features, for example, because it's so much great work going on here, isn't it?

[00:09:56] And it doesn't get shouted about enough. Yeah, it's a great question. Maybe I think it's worth just explaining like at a high level, like I guess my, my worldview of how blockchains work and how they work with, with privacy. And so currently it's like a blockchain to function, like in the web two model, like basically what we relied on was the trust of a, of a brand.

[00:10:18] So if we had like a, you know, an accountancy firm, well, you would send your transactions to the accountancy firm, they would update a ledger and, you know, you'd effectively get a seal of approval based on how reputable that accountancy firm or bank was. In kind of the web three world, we delete the accountancy firm and we replace it with this, you know, distributed network of nodes.

[00:10:43] And they all basically update the ledger as, as a group in order to do that, though, the ledger entries have to be broadcast to everyone in the world, which, you know, it's a great system for making sure no one's cheating and no one's lying. But it's a terrible system for privacy because like everyone who's observing the network can just see all of the transactions, all the inputs, all the outputs. And, you know, you can, you can build up the kind of public dystopia we have of blockchains today.

[00:11:13] When you kind of start at privacy, we, we use this technology called zero knowledge proofs. And the way we use it is we still let the blockchain kind of validate what happened, but we effectively with some advanced maths, we encrypt the logic of what happened in, in a, in a program that's encrypted, a zero knowledge circuit. We send a proof of that to the blockchain.

[00:11:37] The blockchain validates it's correct, but it doesn't learn anything about the underlying transaction other than it was correct. And so it's, it's akin to kind of encryption, but it's like encryption in a blockchain context.

[00:11:50] And this means that we can now put sensitive information that you don't want broadcast to the entire world into the transaction pool, into the ledger and still get the guarantee that, you know, all of the nodes around the world have verified it's correct without them actually learning what it is, which sounds a bit like magic, but it's, it's a lot of cryptography and like years of research have got to this point.

[00:12:12] But to answer the question on like, how this helps and kind of helps, you know, I guess security and adds, as new features to wallets right now on blockchains, your account is like a pseudo anonymous string of hexadecimal numbers. Like you've seen zero X, A, F, whatever. And you have a private key effectively that secures all the funds on that account. It's not linked to who you are. It's not linked to Joe or, uh, and, or Neil.

[00:12:41] Um, and so like in order to do that, you need to put sensitive information onto the blockchain to identify who you are, but you won't want to do that in a public world. And so our kind of like big unlock that we think is happening kind of over the next, you know, six to 12 months as this privacy technology becomes mainstream is that you can tie your identity to a cryptocurrency account, but still keep it private. So you can selectively disclose if you need to that I'm Joe, I'm from the UK, but you don't reveal that to the entire world.

[00:13:10] You just reveal it to your counterparty in a transaction. And this means that you can build wallets and systems that are much more kind of like secure. Um, if you forget your seed phrase, you can have redundancy. You can have things like, you know, log in with your email, um, things that we're used to in, in web two, um, that we haven't had in crypto for a while because we wouldn't want to link our email to our cryptocurrency account because everyone could just spam you.

[00:13:34] So all of these things tied together basically mean that you can get a much stronger, um, kind of sense of identity on a blockchain, but still do it in a way that preserves privacy and a user's kind of like, uh, kind of need for privacy. So I think it's, it's going to be an exciting, uh, six months. It does feel like an exciting time. And one thing that stands out is we often talk about privacy and security in completely different conversations, but privacy and security innovations.

[00:14:04] Most surely evolve together as a theory and smart account features begin to gain traction, right? Yeah, I think so. I mean, like security can mean a lot of things, right? It can mean security of a contract, like how secure your funds. Um, and it can also mean like how secure is your, your custody. Um, and I think. Like the simplest form of like attack on your security is like the $5 wrench attack. Like, if you know, like how much money is in my crypto account when I pay for a coffee with it, like you'll just wait till.

[00:14:34] Like, you know, get around the street corner and you'll, you'll attack me. Um, so like that's a form of security there, right? It's like, it's like you, you get, um, uh, security through privacy because, uh, you, you kind of can obscure, um, uh, how much money is in the account, which means you're no longer a target. Uh, and so there's spectrums of that, like, uh, even through to kind of like smart contract bugs and attacks.

[00:14:58] Like a lot of the attacks we see in public, um, defy and like, uh, hacks on large smart contracts. They happen because there's public balances that people can like, you know, uh, like, uh, people, exploiters, like, um, people who are attacking smart contracts can look at for many months, many years. Um, and say, Hey, there's $2 billion in the smart contract. This is worth me spending my time trying to figure out how to exploit it.

[00:15:26] If, if that was encrypted, um, you know, you just see a load of gibberish, um, that you can't really pass. And so where you direct your time, uh, as a potential exploiter becomes harder to, um, you know, uh, like get, get like a large exploit under your belt because you just can't see what the target is. So I think there's a few ways that security and privacy go, go hand in hand for sure.

[00:15:53] And to find out more about Aztec labs, obviously you've got, I think I have a 200,000 followers on, uh, X. So you've got a huge, uh, following their massive community, but for people that are hearing about you for the first time may have heard Aztec as the private world computer, which I think is the tagline there. How would you describe what you do at Aztec labs and, and what it is that you offer the problems you solve, et cetera? Yeah.

[00:16:19] So in short, we're building kind of a, uh, a programmable private version of Ethereum. Um, so we built that as a layer too. Um, and it started with the premise of, you know, what if smart contracts had encryption and private state as a, as a first class primitive. And that's what was missing from most, most blockchains today.

[00:16:39] And so we've built a network that, um, inherits all the properties from Ethereum because we're a roll up, but we've added privacy as a kind of first class primitive. So developers can use that to build very advanced applications that, you know, mimic traditional finance, um, and actually can help to onboard the world onto these, these new crypto rails while still maintaining privacy. In terms of how we got here. Um, yeah, it's been a kind of multi-year journey.

[00:17:08] We actually didn't start out trying to build privacy on blockchains. We were trying to build a product. Um, we were trying to build a loan issuance platform for kind of, uh, city banks in London. So they could issue loans and bonds onto Ethereum. And we kept running into this problem of, this is great. Like you're going to save us money. You're going to save costs on issuance and tradability of these loans, but we need the loan terms to be private or, but we need our portfolio to be private. And we kept running into this, into this wall.

[00:17:38] And eventually, um, you know, back in, this is 2017, 2018, we thought other people were going to bring privacy to Ethereum and we could just build this load issuance platform, but it never happened. And, uh, Zach is, um, my co-founder, he had a kind of cryptography physics background, started looking into the maths and ended up making many breakthroughs to invent some of this new cryptography that powers, um, zero knowledge proofs.

[00:18:03] And Aztec as a kind of protocol and network was born out of that need. And then we pivoted full time to kind of building a privacy network to let other people build those sorts of applications, um, in 2019. So we've been building this for many years now to get to a point where the technology is good enough. It's fast enough. And you can actually have a strong privacy guarantees and in smart contracts. Um, but now it's, now it's finally here.

[00:18:29] So, uh, it's really been an exciting kind of, uh, last three months as we, as we gear up for the launch. Yeah. And you said that, I mean, earlier this year you had the public test net launch, which I would imagine would have been quite a stressful, challenging and exciting moment. Any big learnings from that moment earlier this year? Oh, that's a good question. I mean, yeah. So we launched a test net and the main goal was, so we're launching decentralized or we've launched decentralized.

[00:18:58] And, um, the test net was the first time we were kind of testing out this infrastructure, uh, with nodes all around the world. And we've got a lot of nodes running. We had like 10 to 20,000 nodes running all around the world. And it was fairly stressful because we were wanting to run nodes ourself as well as, um, kind of a company just to check everything was running as intended. And I guess over the last like six months, we realized that we were probably the worst at running the nodes. And like the community was just better at us.

[00:19:28] And, um, currently there's a network live now on, on main that we call it the ignition chain. Um, and we don't run a single node and it's been flawless. Like the block times, uh, the block production rate has been like 99%. Um, so yeah, I think, I guess the one learning we had was that we're better at designing the system than running it. So that's, that's been a humbling experience, I guess, over the last, last few months.

[00:19:53] Um, as we record the podcast today, the Aztec token sale is live on chain community owned sale where you set the terms or people set the term, should I say? By the time this podcast goes live, I would imagine the public sale will be up and running too. Tell me about that. It's an incredibly busy time for you. Yeah. So we, we, as I said previously, we've been focused a lot on like, how do you decentralize a network? How do you launch a network like this?

[00:20:22] And, um, there's a few parts to decentralization that, you know, people try different, different parts of, but we wanted to achieve all of them. And so for us, like decentralization means, um, who's running the nodes? Like, do you have a group of people around the world running the nodes? Um, two, who, um, controls the governance of the network? And then three, kind of like who has economic ownership of the network.

[00:20:46] And so we wanted to make sure that all of those were kind of in the hands of, of our community, um, and the people who, uh, want to run, uh, run the Aztec network. And so we decided to do a token sale, um, uh, to, to achieve this. Um, like most people just maybe do one of those. They may do, you know, a token sale or an airdrop, but not decentralized operations of the network, or they'll decentralize operations of the network, but not distribute ownership.

[00:21:16] And so we wanted to make sure we could get both the governance and, uh, kind of, uh, the economics of the network into the hands of the people running it. And so, yeah, we felt a kind of, uh, a token sale was the best way to do that. Um, we partnered with Uniswap on a new, um, auction protocol that they've been building called, uh, CCA, which stands for continuous clearing auction. It's a bit like a dollar cost averaging auction, but it has some really interesting properties. One is it finds a fair market price.

[00:21:45] You start at like a low floor price. And then over the course of like a multi-day auction, the auction will find what the fair price is for, um, uh, for the network. And then two, it creates a liquidity pool, um, at that price, um, kind of once the auction is over. And so you get effectively the auction itself and the community gets to bootstrap its own liquidity.

[00:22:09] Um, so if you're running nodes in the network, you have like a way to kind of, um, you know, pay for your costs, uh, using this, this pool and trade in and out of, uh, of the asset, uh, as you, as you could have participate in blog production. So, yeah, we, we had all these kinds of, uh, goals to decentralize the network and it was great to work with Uniswap to come up with a new mechanism to do this in a fair way on Ethereum mainnet. So, yeah, the public sale is kind of the combination of that.

[00:22:36] Um, it's a four day sale that starts on the 2nd of December that puts all this into practice and lets you effectively, uh, purchase, um, tokens that you can stake on the Aztec network, uh, on mainnet. And that would round off a massive year for you. But as we look to 2026, everyone's looking at new year's resolutions and making big changes, seizing opportunities, building something new, thinking this could be the year for them.

[00:23:06] So, what's, what's your grand vision for 2026? And one of the reasons I asked that is today, I wanted to introduce listeners outside of this space about the importance of privacy first layer two solutions and, um, how you help reduce exposure to risk linked in new wallet features, but also introduce them to Aztec Labs.

[00:23:26] And I think we've done that perfectly today, but as I said a few moments ago, you've got a community built up of hundreds of thousands of people and they're going to be listening, just wanting to hear some little teasers about things to come, what you've got in mind. In 2017, I would have said when roadmap, when website, thankfully we've come a lot further than that. So anything you could reveal about the road ahead and your plans? Yeah, definitely.

[00:23:52] So at the moment we've got to a point where the network's live and decentralized, but, uh, it's kind of going for, it's like final checks, uh, like pre-flight checks, I would say, uh, on mainnet. So the gas limit, uh, on the network is set to be zero. So it's running, producing blocks, it's fully decentralized, but it's, you're not able to send a transaction yet. So we're checking that block production and all of the network infrastructure works as intended.

[00:24:20] Like thankfully, as, as we're not running nodes, it's, it's running really well. Uh, but next, next year, the community can, uh, pass a vote, uh, to, to turn on transactions. And so at that point, it will be the first time you can use some of these, these privacy features, um, get the benefits of account obstruction and all the things we mentioned earlier. And so on the company side, like we plan on building products on top of the network.

[00:24:44] We had a previous product called CK money, um, which was like a payments product, um, that let you interact with DeFi. Um, and you know, basically bring, brought privacy to DeFi applications on, on Ethereum mainnet. But we're going to revamp that, um, bring kind of, uh, bring forward kind of like private payments, uh, as a kind of, uh, user facing application, um, and let users kind of bridge their privacy to all of Ethereum, uh, the entire Ethereum ecosystem.

[00:25:14] Uh, so yeah, we'll be going back into kind of product building mode now that the network is, is running and trying to drive adoption of the technology through user experiences and creating things that everyday people can use. Um, so yeah, it's going to be exciting to get back into kind of the trenches building retail products versus, um, infrastructure. So I'm, I'm looking forward to 2026 for sure. Well, I wish you a great start to 2026.

[00:25:40] Sounds like I'm going to have to get you back on later in the year, see how things evolving, what you've built there and, uh, the community reaction, et cetera. But more than anything for people listening, just want to find out more information. They're hearing about Aztec labs. Maybe they even want to join the community and get a little bit more hands on. Where would you like to point anyone listening today? Yeah, I think the best place is if you go to ignition.aztec.network, you can read more about kind of the current network, um, how you can stake in it.

[00:26:08] Um, like the token sale, those sorts of things. It's kind of the, the most up-to-date kind of website. If you're more of a developer, there's also links on there to get into like the, the docs and how to build things on top of the network. But yeah, if you're more on the node operator staker side, then ignition.aztec.network is, is the best. Um, or if you're just kind of like cautiously following our Twitter or X is the best, the best place to kind of stay up to date. So Aztec network on, on X. Awesome.

[00:26:36] Well, I will add links to everything there, make it easy for everyone to find you love to hear from the community, what they think, and also, uh, encourage them to go check you out. But, and I will return again next year. We can have a bit of an update from you, see how things evolve, but thanks for shining a light on this, talking about it in a language everyone can understand. Really appreciate you, Tom. Awesome. Thank you so much for having me and yeah, have a, have a great rest of the year and speak soon.

[00:27:03] I think there was something incredibly refreshing about hearing Joe talk about the privacy challenge in such practical terms there. And he shows why this moment matters because without privacy baked in blockchain remains stuck in their, in its speculative phase, useful for trading, but not ready for the real world.

[00:27:25] And that comparison that he shared to the early stage of the internet, I think will really stay with me because we forget just how limited the web was before encrypted traffic allowed for secured accounts, payments, and everyday apps that we all take for granted now. So with that in mind, it feels like crypto is almost standing at a similar crossroads. And Joe has made a strong case today for how privacy can strengthen security rather than working against it.

[00:27:54] Because if attackers cannot see balances or target huge public pools of money, the incentive to exploit them could fall quite sharply. So their roadmap for 2026, I think also adds another layer of excitement from the community vote to enable transactions on a live network to the return of user facing products like a new ZK money experience. But I'd love to hear what today's episode spot for you.

[00:28:23] Did Joe's point about privacy being the unlock for mainstream adoption, did that change how you see the space? And what excites you most about this idea of a private programmable layer on Ethereum? Share your thoughts with me, what stood out, what you would like us to explore in the next installment when Joe returns next year. TechTalksNetwork.com is where you'll find me. Keep those messages coming in and I'll be back again tomorrow with a completely different topic.

[00:28:52] Speak with you all then. Bye for now.