Zac Williamson, CEO of the Aztec network’s Ethereum security layer discussed what the future of Web3 privacy might look like after U.S. government sanctions widely criticizes Tornado Cash.
Williamson believes that future networks may align with regulators’ goals while protecting user privacy, but will not fit into existing regulatory structures. He also asserted that regulators went the wrong way by banning Tornado Cash.
“A forward-thinking government will consider issuing base money directly into networks like Ethereum”
“When combined with surrogate real-world assets, personal self-management, and low barriers to entry from open networks, we will see the dawn of a new financial renaissance.
He argued that under the current sanctions regime, hackers from North Korea or elsewhere would still use Tornado Cash or a copy of it.
In light of the TornadoCash ban, I have some thoughts on the future of privacy networks that I would like to share with you all.
Despite the dark circumstances of the present, there are grounds to be optimistic about the future for web3.
A short 🧵 on why…
— Zac Williamson (@Zac_Aztec) August 16, 2022
Williamson said in the near future, private networks could split into four: private by default; fully decentralized; user-side compliance – users can selectively prove parts of their identity (not on a sanctions list); and open and programmable.
He explained:
“Programmable privacy will create exponential growth opportunities for cryptocurrencies. Once a user is able to link an encrypted identity to a cryptocurrency account, off-chain assets can be issued and traded on-chain without the need for an intermediary to supervise.”
A future in which the need for user privacy and the “openness” of decentralized protocols will lead to two distinct areas:
- Compliance network – crypto applications and assets ” are in line with current regulations, but regulatory changes are needed to comply.
- Dark networks – applications and digital currencies without built-in compliance at the protocol level.
“There’s a place to regulate in Web3. It’s not at the network level. It’s at the application level; companies and organizations access Web3 to provide services to users and businesses. For example, the cryptocurrency on/off slope and the wallet is stored. ”
