Is the hyperfinancialization of crypto anti-cypherpunk? (feat. Sebastian Bürgel)

[00:00:00] Ray Salmond: Crypto is for everyone, not just rocket scientists, venture capitalists, and high-IQ developers. Welcome to the agenda. A Cointelegraph podcast that explores the promises of crypto, blockchain and Web3 and how regular-ass people level up with technology.

[00:00:24] Jonathan DeYoung: The crypto and blockchain ecosystem has dramatically evolved from its original cypherpunk roots of programmers and activists trying to build uncensorable peer-to-peer money with Bitcoin and build a world computer with Ethereum. 2024 only amplified this evolution. Memecoins exploded in interest, Wall Street and politicians alike embraced crypto, and the space’s total market cap reached a new high of $3.8 trillion.

[00:00:52] Ray Salmond: While many in the community have welcomed this new attention and the spectacular new price highs that have come along with it, others remain committed to crypto’s original cypherpunk roots, and perhaps even fear that the crypto space has veered too far into the realms of financialization and mainstream co-option.

[00:01:11] Jonathan DeYoung: So, today, we are joined by Sebastian Bürgel, the vice president of technology at Gnosis and the founder of privacy protocol Hopr, who is here to break down his cypherpunk perspective on crypto as we kick off 2025, as well as school us a bit on the Gnosis ecosystem, the state of privacy today, and much, much more.

All right. So, welcome, Sebastian. How are you going today? How are you recovering from Devcon? Have you recovered yet?

[00:01:39] Sebastian Bürgel: Yeah, I did, I did, thank you. I’m back in Europe now, and yeah, I had a wonderful time speaking to fantastic people at Devcon Southeast Asia.

[00:01:48] Jonathan DeYoung: Sounds great. So, I think we can start with Gnosis. Start with just a high-level overview of what Gnosis is and maybe what your role there is.

[00:01:58] Sebastian Bürgel: Yeah. So, actually, Gnosis is a project that has been around since, I would say, the Stone Age of crypto. So, Gnosis started with a prediction market, and Gnosis was, in fact, actually one of the first working products on top of Ethereum when Ethereum launched back in 2015. Gnosis building the prediction market, raising an ICO and ran into a bunch of issues that nobody else did solve, and built products to solve all these practical issues and spun them out largely in separate projects by now. So, the biggest one that many people have heard of is Safe, previously called Gnosis Safe. Most known and biggest non-custodial multisig account out there that, yeah, just secures your assets on top of Ethereum and other EVM chains. A self-custodial and secure way. And the next one to mention is CowSwap, a kind of not just DEX aggregator but also something that feeds back this malicious MEV, that other kind of nasty players out there trying to extract, and feed it back to the traders. That’s a pretty cool dimension that Gnosis also kicked off.

We can talk later about what Gnosis is currently doing is building kind of a next generation of really interesting and ambitious projects, and I’m overseeing those projects as a technical person within Gnosis. And yeah, really trying to lead to the next generation of projects that come out of Gnosis and, of course, Gnosis Chain that Gnosis is running as a sidechain to Ethereum. And really contributing to a healthy Web3 and Ethereum ecosystem overall.

[00:03:35] Jonathan DeYoung: Gotcha, gotcha. Thank you for that explanation. So, I know a couple of people who are building on Gnosis. Breadchain, if you’re familiar with that. We’ve had both Joshua Dávila and Larry Williams Jr. from LaborDAO — Joshua Dávila, The Blockchain Socialist — who are helping to build Breadchain, which is like this, what they call a post-capitalist project that they’re building specifically on Gnosis Chain. And there seemed to be quite a few of these like real-world application or sort of more alternative finance, edgy... And I don’t mean that in like a memelord, edgy way. I mean that quite literally, like going against the order of things, that are building on Gnosis. And I’m curious why you think that is. Like, is there something particular about Gnosis that attracts maybe these more, not necessarily cypherpunk applications, but these, like, kind of applications that aren’t as concerned with making money or institutionalization of crypto? Why do you think that is?

[00:04:40] Sebastian Bürgel: I think you caught that exactly right. And I do personally like the cypherpunk values very much, which I see currently, funnily enough, as a counterculture to memecoin, get-rich-quick, or, as I sometimes like to call it, hyperfinancialization. So, I do see Gnosis as a counter-movement to this hyperfinancialized world that wants to see number go up at all costs. Gnosis doesn’t ring that way. Gnosis doesn’t go that way. Gnosis is really all about resilience that empowers the individual. And that’s how I see my personal values and Gnosis highly aligned.

So, Gnosis really tries to build infrastructure... Again, think about Safe, right? Safe is something that brings you the most secure and truly self-custodial power over your own money. And Gnosis, again, with CowSwap, you might see CowSwap as part of DeFi going against the trend of value extraction at the cost of users that people call MEV, and trying to give back to the individual. Empowering the individual is, I would say, a common denominator here. And also, what we’re building now with Gnosis VPN goes in that very same direction. So, I do think there’s just a lot of alignment from the founders throughout the team, in the projects that they built, of something that’s not just optimized for get-rich-quick but trying to really contribute to society and the larger ecosystem here.

[00:06:07] Jonathan DeYoung: So, if I’m somebody that does want to just make... The healthcare shooter is like a big topic. Maybe it’s not appropriate to go into on this podcast. But if I want to go on to Gnosis and make some memecoin, and I do want to make a ton of money, and that’s all I care about, are there limitations built within the protocol itself to prevent its hyperfinancialization? Or is it more on an ideological level in terms of the priorities that you take and the decisions you make and what you want to build and who you might want to work with on an organizational level?

[00:06:38] Sebastian Bürgel: Yeah, that’s a great question. I would say, of course, but maybe to some people, it’s not so obvious, there is no limitations in the protocols. So, if you wanted to build a memecoin on top of Gnosis that does some really bad stuff also, we couldn’t stop you. So, Gnosis Chain, of course, and all Gnosis technology strives to be entirely permissionless and non-custodial. So, on Gnosis Chain, if you want to do the biggest memecoin casino, we could not tell you no. We could not stop you. And in fact, I would say, actually, Gnosis is a pretty good chain since it’s also very cheap and reliable and very decentralized. There is nothing that stops people from doing that. But I would say the Gnosis value compass is very directed towards a libertarian mindset. And hence, yeah, there are no things in place that would stop anyone from doing anything on Gnosis Chain because, again, it is highly decentralized technology that doesn’t have central levers, just unlike many of the L2s that we see right now that could censor. On Gnosis Chain, you cannot censor, and it is designed with that very much as a goal, as a mindset.

[00:07:43] Jonathan DeYoung: I’m just kind of curious, both maybe on a personal level for yourself and then for your vision at Gnosis, like, what is the world that you’re trying to build? That’s a very big question. I’m aware, and I’m sure as we keep talking, we can pick a little at some of the specifics of what that looks like. But like, very broadly speaking, what are you trying to build in this world with Gnosis, with Hopr, with various things that you’re working on?

[00:08:13] Sebastian Bürgel: So, it’s kind of hard to tell where my personal values end and Gnosis starts, but I think it’s broadly very aligned around building technology that has resilience at the core, and resilience to empower the individual versus nation-states. We don’t want autocratic regimes as we see, unfortunately, popping up in more and more parts of the planet to take over our civil liberties. We want to defend the individual and stand up for individual liberty, and also to defend humans against the increasing powers of large multinational corporations. Because if we think about it, corporations more and more have features that formerly used to be only limited to nation-states, like identity.

If we think about identity, that used to be a passport that is obviously issued by a nation-state. Today, if we look at the digital world, we log in with Gmail, Facebook. This is basically an identity layer that is controlled by large multinational corporations. And that’s pretty scary. And the next obvious one is the race of totally non-open AI. So, AI that got captured by the interest of billionaires and their companies. That’s bad. That’s not good for humanity. And Gnosis wants to provide innovation towards a world that takes power away from these billionaires and their billion-dollar companies and really levels the playing field that allows individuals to innovate, to transact and to work with one another. And that is really the world that we would like to see and build products towards and bet on that we can make that happen.

[00:09:53] Ray Salmond: Okay. I’d like to ask you or just point out that incursions into citizens’ rights, self-sovereignty and our right to privacy, incursions into these different spaces of our existence appear to be accelerating from the government side and globally in the West, in continental Europe. People were hurt by inflation. People were hurt by, ravaged by, the impact that Covid had had. Climate change is accelerating migration across the world, which is putting pressure on governments’ budgets. So, people are exchanging their civil rights and their freedoms and their privacy in exchange for security, or for populist leaders or for autocrats.

With that said, do you think this kind of redefines the purpose of crypto and blockchain and cypherpunk ethos? Because crypto has long been financialized, and I think it will continue to be financialized. But at the same time, there’s this group of freedom-oriented people such as yourself that say, these are things that we stand against. Yet the things that we stand against continue to eat away at the territory. Like they’re pushing against the thresholds of personal freedom. So, do you feel your reason to be has shifted into a new reason to be? And how effective can cypherpunks and people like yourself be in this battle?

[00:11:22] Sebastian Bürgel: I would say it has just shifted back. So, crypto started as a cypherpunk movement. There have been cypherpunks pre-blockchain, obviously. So, if you read, for example, the Cypherpunk Manifesto, which I would really recommend to a lot of people out here, it’s like, has this been written last year? No, this has been written decades ago. It’s surprising, and it’s yet so applicable right now.

But even if we think about the very start of Bitcoin, which really kicked off all these crazy magic internet money world that we live in right now, the genesis block of Bitcoin said, chancellor on the brink for a second bailout for banks. So, that was a direct reference to the financial crisis, to what happened back then in the UK, but very much also in the US, in other parts of the world. And so that has been the very reason for all of this to exist. In between, things got captured by greedy people, by investors, obviously by traders, by people who just were here to get rich quick. And they’re still around. But that is something which is counterproductive. Like there’s people who say, well, the whole reason for blockchain to exist is to be a financial settlement infrastructure. No, I very much believe in, that’s at least how Ethereum was pitched early on: a world computer. Yes, you can use the world computer to build financial products, but you can also build it, use it to build ultimately resilient communication infrastructure. Data storage infrastructure. New forms of credibly neutral social networks. Hopefully, actually neutral grounds for AI agents, which I find very interesting. All of that is the very fabric that we build here.

[00:13:06] Sebastian Bürgel: It’s not just about this hyperfinancialization. Hyperfinancialization of blockchains and decentralized infrastructure corrupts the system that we built. And we see this not just in Ethereum, also Solana. People are waking up to it that MEV is actually something that hurts users. It really corrupts the infrastructure of what we’re building there, leading to centralization, leading to the ability to censor. So, a lot of the infrastructure that builds blocks, that settles your transactions, if you buy some shitcoin that settles on a blockchain, in order to get into a block, it goes increasingly through centralized infrastructure. That’s bad, right? We see the direct implications of that today.

So, yeah, it has shifted back. My whole reason of being here are these cypherpunk values that early crypto people had. I think it is more urgent that we see the value of all that today. So, I’m very happy that, actually, also thanks to Vitalik, quite frankly, bringing that back on the agenda. He wrote this post quite exactly a year ago called Make Ethereum Cypherpunk. You know, that’s great. That’s what I’m here for, and that’s what I’m happy to contribute to.

[00:14:17] Ray Salmond: Right. So, what role does privacy play in your vision that you’ve described of a world computer? Because, you know, blockchains, they’re transparent, and privacy-focused blockchains are basically like delisted from financial markets. I think freedom of speech... Obviously, in authoritarian governments, freedom of speech is like not a given, and it’s dangerous to speak freely. And I think in America, that is becoming the case with the incoming administration. Well, I mean, that’s a political statement, so I can’t separate myself from it. But our incoming president has said things about the press should be censored. Certain news outlets should not be allowed to go to press conferences. The White House does not need to speak to the press. Within like the party politics, anyone who spoke out against Trump, that was like a senator or a congressperson, could get recalled or basically pushed out of office. He could mobilize his MAGA army against them to go vote them out. Allegiance and loyalty are valued, which means that people that are dissidents and like divergent thinkers are going to be pushed into a corner and silenced. And that’s something that’s probably coming to the American citizen, whether they are aware of that or not.

So, with blockchains being something where everything you do and say is pretty much transparent, we’re going to have to be careful about who you affiliate yourself with, what you say, where that’s recorded, what your opinions are, and where you say them. So, what role do you think privacy will play in this vision of the world computer?

[00:15:53] Sebastian Bürgel: I think privacy is one of the most important underpinning values of decentralized technologies such as blockchain. So, like blockchains being transparent and fully publicly readable has been a bug from the start. I think there’s been this quote from Hal Finney, and one of the earliest Bitcoin supporters, who very sadly passed away way too early, of he stated, I think on Twitter he wrote like, thinking about bringing privacy to Bitcoin. It’s been an obvious bug from the earliest of times. And sure, there have been some privacy coins that have been delisted by American exchanges because some American exchanges just proactively wave the white flag, give up the values of all of crypto to make some, many times corrupt, individuals in the financial regulations world happy. I think it’s bad. And I think delisting privacy coins is something that should be called out. This is against the values of crypto.

And again, privacy and anonymity is the thing that might defend humankind from descending into another era of the Dark Ages, where some autocrats, not just in the US, but also in other parts of the world, we see autocratic regimes very unfortunately gaining power and popularity. So, this decentralized world computer that is censorship-resistant and anonymous and providing privacy for the users cannot come fast enough. It might be the very thing that prevents us from descending into another dark era. And so that’s why, for me, it is ultimately important.

And funnily enough, if you talk to like strangers who have never touched crypto, and you tell them, hey, I have this great product here. It’s my wallet, or it’s some yield-bearing asset or whatever it is. And you tell them, when you transact on it, everybody can see what you did and how much money you have on it. They’re like, dude, that’s weird. That’s broken. And like, it’s only in DeFi, like DeFi degen people that say, hey, you know, privacy doesn’t matter. So, the normal man on the street sees that as a problem. It is kind of only DeFi and hyperfinancialized crypto people of today, which again, to a large degree, are only here to make a quick buck. They don’t care. Humankind does care about privacy and anonymity. I presented like some products that we’re working on to my mom, and she was like, so everybody can see when I spend money in a shop, how much money I have in my wallet? And she’s like, I don’t want that. So, if my mom gets it, I’m pretty sure a lot of people out there get it. And so, it’s been an obvious bug. Privacy and anonymity is here to fix that. So, I’m very bullish on all of that technologies on all layers of the stack, including onchain privacy.

[00:18:31] Ray Salmond: But wouldn’t it be great if, in real time, we could see every penny that the US government is spending on stuff, like in an open ledger? That would be awesome to be able to see exactly what the taxpayer dollar is being used for in real time, in a way that’s transparent. So, there’s something going on there where people don’t want their personal transactions made public, but then want to know everything that the government is spending money on. But then it’s funny, like you say, in crypto, we don’t really care about our transaction being public. And really, if you don’t care, maybe you could make multiple wallets and try to obfuscate your presence in certain circles. But with all like the Nansen and all the onchain stuff, it gets a little bit harder to be anon.

[00:19:18] Sebastian Bürgel: Yeah, definitely.

[00:19:20] Ray Salmond: So, something you said at Devcon in Southeast Asia, it almost made me spit out my coffee. Quote: Ethereum is Bernie Madoff’s wet dream, and that it is broken. So, what is the primary issue you see plaguing the Ethereum network?

[00:19:36] Sebastian Bürgel: Oh, where to start? First of all, I want to disclaim: I’m not an Ethereum hater. Ethereum is one of the most amazing things that came my way, that made me quit my previous academic career and go all in on crypto and Ethereum, specifically. So, that’s cool. But a lot of things on Ethereum are currently in a very sad state because of this hyperfinancialized attitude that current contemporary DeFi crypto people have, who don’t care about privacy, who don’t care about empowering the individual, who just care about making a quick buck. That has led to people wanting to build settlement infrastructure called blockchains, or layer 2s on top of blockchains, that are faster. So, we have to settle faster so that we can compete with Binance and trade more. Trade larger volumes. Bring up that TVL. That’s all they care about.

So, what that has led to is, a), centralization. So, if you trade on Base, for example. Base is an L2 on top of Ethereum that is run by Coinbase. The difference between trading on Base and trading on Coinbase are actually not as big as people think. And for example, if you deposit money into Aave to earn some yield on your stable tokens, for example, which is actually kind of interesting right now because yield is quite high, they can actually hold you hostage, right? So, Coinbase is in a position where they can hold the money that you deposit into Aave and prevent you from ever withdrawing them. That’s crazy.

So, how did we get here? We got here because people care about making things faster, increasing TVL, and not giving a shit about centralization and lack of privacy. That is really bad, and we need to push back against that. And me speaking out here with you, and that’s why I thank you for having me around, is like, I want to push back against that. I want to bring attention to the fact that there is more in the world than just a few DeFi traders who want things to be faster, higher TVL and more DeFi casino. That is also largely what we think at Gnosis and build products for. So, again, coming back to CowSwap. I’m shilling CowSwap may be a bit much here as one of the spin-offs from Gnosis, but it is a good example of that. Maybe another example to be mentioned here is Shutter. So, the Shutter network is something that we’re trying to build where you send encrypted transactions. So, encrypted transactions prevent others from reordering it and injecting other things right before or right after it to extract money from my swap on Uniswap, for example.

So, these are all innovations that we are supporting on the Gnosis side to bring resilience back into the game. And if that means that Gnosis has less TVL than Base right now, well, fair enough. But we stand up for those values that make sense to more than the 0.01% of humanity that are trading on DeFi right now, because those 99.99% of humanity is who we have to bring here. We have to bring them resilient settlement infrastructure so that autocratic regimes cannot take their money and their power and their civil rights away from them. And that’s something we get to through hard work, technical innovation and not cutting corners.

[00:22:53] Jonathan DeYoung: You’ve been kind of mentioning this idea of disliking the hyperfinancialization of crypto. And you specifically have been calling out decentralized finance as a problem in this regard, or as one of the instigators, perhaps. So, I’m curious, to you, like, what is the role of DeFi within crypto? What is the role of financialization within crypto, if there is one at all? To me, it seems like DeFi, at least on an ideological level, fits in with this idea of freedom. If you’re a minority group in a country that doesn’t give you equal access to banking, decentralized finance, theoretically, could provide you an avenue to get a loan where you wouldn’t be able to get one by going to a bank because they don’t like your political views, they don’t like your religion, they don’t like whatever the case may be. So, is the issue that these financial products exist at all, or is the issue that they’ve become hyperfinancialized to a degree that is unhealthy? And where do you draw the line between a healthy financialization in the use cases for blockchain and an unhealthy one?

[00:24:06] Sebastian Bürgel: Just to clarify here, I think DeFi, in and by itself, is not bad, right? Actually, DeFi, in and by itself, is really awesome. Having free and censorship-resistant access to trading is something that, to me, is very close to a fundamental human right. The freedom to transact, which I find extremely valuable. The ability to issue financial products in a censorship-resistant fashion is extremely awesome. Having a token that you can issue, and some of them being stable tokens, is extremely valuable.

But that being said, the thing that bothers me is the mindshare that it gets in the crypto community, right, here, specifically, if you look at Twitter, or some people call it X now. If you look at the mindshare, even all the way down to designing systems just so that you can trade faster, that is bad. DeFi in and by itself is not bad, but the attention and the ability by a few people who are very eloquent and good marketers and a lot of people listen to, and design systems very specifically exclusively only to that, that is bad. That is bad and had led to the outcomes that I just mentioned. But again, like DeFi, in and by itself, is awesome.

But like to differentiate that, for example, some parts of DeFi are bad. So, for me, as I’m not an American citizen, and I’m very concerned about hyperdollarization also. USDt and USDC are dollar-based stablecoins. These dollar-based stablecoins can be censored, shut down and entirely rugged by an erratic US, not just government, but as we’ve seen also, frankly, what has already happened with this operation Chokepoint 2.0 in the US, of shutting down access to crypto companies’ bank accounts. That’s horrible. That is extremely scary. So, also there, on the stablecoin front, I’m very concerned. I’m very concerned about just aligning with the US government. I think everybody in crypto understands that central bank digital currency is dangerous, right? We don’t want central banks to take money away from everyone. That’s really scary. But at the same time, you know, USDC and USDt brought us very close to that. So, we need an alternative. It doesn’t help us if we just bring a totally ruggable, US dollar-based stablecoin system to the world. Like, congrats. That just increased the power, the political power that the US has over free people in other parts of the world. That’s bad.

So, I really appreciate thinking out of the box and thinking about alternatives in DeFi that don’t just go in that direction. And granted, that’s hard because the US dollar is kind of cool. Dollar is something that every human on the planet somewhere probably accepts, even if it’s not the preferred choice. But the dollar is a good way of payment. Replacing that is hard, but thinking about replacing that and coming up with alternative systems is extremely valuable. And that’s, again, DeFi is the answer to a lot of that.

[00:27:06] Jonathan DeYoung: I’m ashamed to admit I haven’t really thought about, until you just mentioned it right now, the fact that basically all the major stablecoins are in dollars. And you often hear the narrative that that’s a highly positive thing, that you’re in an economy, you’re living in Venezuela, your inflation is crazy. You can put your money into digital dollars, and you’ll be able to preserve your purchasing power better than if you were to keep it in the local currency. I do believe there’s some truth to that, but it makes me wonder if, like, is part of the institutionalization and government adoption and politicization of crypto... Because a lot of that has taken the form of like trying to put infrastructure for stablecoins and regulate stablecoins and figure out stablecoins. Is part of that because of the potential for financial imperialism, if I may be so blunt.

[00:27:59] Sebastian Bürgel: That’s what it is. That’s not blunt. That’s literally what it is. So, I mean, I would say this financial imperialism, that’s what actually DeFi is facing right now. So, literally, there’s probably five people somewhere around Washington or New York who can, through financial imperialism, rug and shut down all of DeFi by basically shutting down USDC. If USDC is shut down... USDt obviously also, but USDt is so questionable that I think not even the US government has an easy way of getting access to it and shutting them down, for better or for worse. But like even for USDC, there’s probably, again, five people which can shut it down, and all of this implodes. Aave implodes, you know. Sky/Maker implodes. Uniswap, all the large pools are going to get drained as a direct consequence of that. It’s all going to implode. That is bad. And that is what we have today. And I personally don’t find that great. And I really applaud people who are thinking outside of the box and trying to come up with new ideas to improve that. Sorry to interrupt you there.

[00:28:58] Jonathan DeYoung: No, no, no, you’re fine, you’re fine. So, I want to pivot back again into the privacy topic. So, you’re also the founder of Hopr. And so can you just give us an overview of what is Hopr? What exactly is transport-level privacy? And why is that important?

[00:29:14] Sebastian Bürgel: Sure. Yeah. So, in the blockchain world, we’re thinking about settling transactions. And there’s some people who are familiar with Tornado Cash. If you’re listening to this in the US, unfortunately, your government wanted to forbid you from using Tornado Cash. It turned out that, called them back and said, hey, you actually cannot censor a smart contract. Well, that was actually great, just to call out also some positive news from the US. That was pretty cool. But there is some onchain privacy, which is very important.

But that’s not all. Blockchains are basically peer-to-peer networks. People run nodes, other people have wallets, and there’s data that flows from your wallet over the internet, typically RPC providers such as Infura or Alchemy. So, for the ones who are not so familiar with how a crypto wallet actually works, it’s actually a pretty dumb piece of software that you just start, and it asks some server, how much money do I have? It gets back a number, and it shows you that number. When you send a transaction, when you want to send somebody some ETH, for example, it signs that locally, and it sends that transaction around. So, whatever you do, you send data from A to B, no matter what you do. In crypto, in the Web2 and Web 1.0, everywhere, you send data from A to B.

Now, unfortunately, the internet has not been built with privacy in mind, and this data transport layer is basically just a clunky way of calling the internet when you send data from A to B. Even in this video conversation that we’re having here right now, my device here is sending information to some server that is recording a video. In the process, that server, no matter what it receives from me, a video, a crypto transaction or whatever, knows my location. It knows my home address. My home address on the internet is called an IP address, and it can use this IP address to basically collect metadata information. What services I consume, metadata about my devices, what other devices are in my home right now and are connected to the internet, and all that is exposed. It is exposed and can be used to fingerprint me, to single me out and to track me throughout wherever I am. And that’s pretty bad. But that’s just how the internet has been designed, and we want to fix that at Hopr. We want to fix that by bringing anonymity to this data transport layer, sending data from A to B.

So, basically, if we use Hopr... It’s early times for Hopr still. When we will be able to use Hopr for any sort of application, there are no servers anymore that can track who you are, where you’re coming from, and what service you use. And again, coming back to the earlier parts of our conversation, this directly ties into kind of civil liberties and our ability to be uncensorable, untrackable and just do whatever you want to just because that’s your right. When you talk to your friends in the street, you expect that other people are not having this huge microphone from the other side of the street and listening in on your conversation. That would be creepy. And yet, that exact creepiness is happening on the internet when you have a digital conversation. So, we want to protect you when you have digital conversations, transactions or businesses, whatever services you consume there, to bring you that same expectation of anonymity and privacy of your data. And to that end, we’re building the Hopr network, through which you can send data, and the data that comes out is unlinkable, and nobody can figure out that it came from you.

[00:32:37] Jonathan DeYoung: Okay. How this compares to if I just download NordVPN because I watched a YouTube video that advertised it, because every single YouTube video advertises NordVPN for some reason.

[00:32:49] Sebastian Bürgel: It’s crazy, right?

[00:32:50] Jonathan DeYoung: Makes me not trust it.

[00:32:51] Sebastian Bürgel: Yeah.

[00:32:52] Jonathan DeYoung: So, I download NordVPN. I have some private data that I want to send to somebody. So, how does this differ than that? And I’m also curious: We’ve had on the show a couple of times Harry Halpin from Nym. So, Nym is also building a mixnet, and they have a VPN service. So, I’m curious how Hopr compares to services like Nym. What some of the differences are there.

[00:33:15] Sebastian Bürgel: Yeah, sure. So, first of all, I think you’re totally right to be suspicious about NordVPN being advertised everywhere. And maybe for the listeners who are just not so familiar with how a VPN works, a VPN is a very fancy word for just another server, okay? So, when you connect to, let’s say, OnlyFans, these two things can be linked to one another, and people find out what you do on the internet, and that’s weird. And you have a right to find that weird. Now, you think, hey, I connect to a VPN server like NordVPN, and what happens now? How does this actually work? Well, all your traffic goes through this one server that is operated by NordVPN and, from there, going to the website. So, instead of trusting the website, you’re now trusting NordVPN. And to make matters worse, you’re trusting NordVPN with everything. Every app, every website, your entire browsing history is known to NordVPN. So, NordVPN cannot read your passwords. They can’t read your mail. But they know all the services that you connect to. And I mean everything. So, that’s pretty bad. And I don’t trust them. I think that’s a design that is not perfect. I also don’t trust them because I do not trust US corporations, especially mega-corporations, to have any good intentions with my personal data.

So, what we’re building, and we’re building a product on top of the Hopr network that is actually called Gnosis VPN. So, that’s now how a little bit my two sides of Gnosis and Hopr come together. We’re building a VPN on top of the Hopr mixnet that allows you to route traffic privately. So, there will be no single point, as is the case, unlike NordVPN, that can see what services I was consuming. So, instead of routing traffic via one single server that is operated by NordVPN, you’re operating it through multiple hops of nodes that are Hopr nodes and that obfuscate where data came from and where data goes to. So, yeah, we will have a proof-of-concept that goes live in February. So, in February, you will be able to, if you’re at least somewhat technical, play around with it in an early stage.

And yeah, to your second part of your question, that is indeed kind of similar to how Nym works. Luckily, we are not the only ones in this mixnet and VPN space. There are some others out there. I’m very happy about that. There’s more privacy researchers that have good ideas and play in this direction, and indeed, the Nym mixnet and Nym VPN goes in a similar direction. There are a bunch of similarities of how we approach it. So, Nym is kind of very much based in a Cosmos ecosystem. Hopr is based in the Ethereum ecosystem. Nym is leveraging their own blockchain. We think, hey, there’s a bunch of really good blockchains out there that we just use. In our case, we use Gnosis Chain. I’m really looking forward to using Gnosis VPN. We aim for being the most private VPN out there that can still be used by normal humans. You don’t need to understand crypto. You don’t need to understand how a blockchain works or how a Linux terminal works in order to run Gnosis VPN and use it.

[00:36:22] Ray Salmond: How do you bootstrap and launch this thing? Because, one, it seems like the VPN space is saturated, like there’s a lot of US-based companies that are providing this service. And like Jonathan said, they have commercials on TV, YouTube, so on and so forth. There’s like ten of them, right? Webroot. Nord. The list goes on and on. Surfshark, blah, blah, blah. There’s like so many of them. And the crypto space, there’s a lot of them also. Some are better known than others. Some market themselves on the decentralization aspect and the you’re part of a computing network DePIN type thing. Use your unused computing power to support this decentralized network that protects people’s privacy, and we give you a token in exchange. So, how do you bootstrap and get this thing going? Because it seems like the general practice in this space is medium variable product. Venture capital. Token launch. PR campaign. Launch. Token listing. Binance perps. Airdrop. Pump and dump. Nobody uses it anymore.

[00:37:31] Sebastian Bürgel: You forgot the exit scam part.

[00:37:33] Ray Salmond: Exit scam. Yeah, I forgot that one. Exit scam. So, given who you are and like what you represent and what your ideology is, how are you going to launch Hopr and kind of deviate from that wash, rinse, repeat cycle of the crypto DApp launch?

[00:37:50] Sebastian Bürgel: Yeah. No. Exactly. That’s a fair point. So, in the VPN space specifically, it sounds very radical what we do here, right? It sounds like we are replacing the technology. We are replacing the entire concept of a corporation. Like Gnosis VPN will not be operated by Gnosis or any central corporation. There is no operator. It’s individuals that contribute to the network that is censorship-resistant and unstoppable to provision that service. So, that is very radical. But that being said, if you approach it from a practical, technical side, it’s actually not so crazy.

So, there are kind of more advanced VPNs for more privacy and anonymity-minded people such as ProtonVPN, Swiss-based company, or Mullvad, a Swedish company, which, by the way, I really recommend. So, please do not use NordVPN. If you have to use a VPN, just to show some, you know, non-crypto projects that I am totally not affiliated with. Please, today go for ProtonVPN or Mullvad. They go to extreme lengths to give you some good privacy, as good as you can today. For example, Mullvad, you can put money in a physical envelope, and write a number next to it, and send it to them via snail mail. It’s remarkable.

Anyway, so many of these services of these more advanced VPNs already give you multi-hop functionalities. So, my ProtonVPN, for example, I can select that I want to have my first node, which is based out of Iceland, and my second node, which is based in Switzerland. What I described of the first hop being in Iceland and the second being in Switzerland is already quite a bit better than your vanilla old-school VPN. So, what we built with Hopr and Gnosis VPN is just kind of the logical continuation of that. Instead of just having two nodes which are operated by the same company, you have a bunch more nodes which are operated by separate people. And as long as one of these people along your path are honest and actually mixing packets and not all operated by the CIA, you are fine. You just need one node that is good, which, in fact, is even better than Tor. Sometimes, people associate Tor with the dark web, but that’s not fully true. The Tor Browser is a very anonymous way of accessing the internet that people should just play around with.

So, yeah, we are basically taking what is already there, like multi-hop VPNs or Tor, and just thinking it further and driving it to the maximum that is possible today. So, there are people who pay for these services today. So, I am a subscriber to both Mullvad and ProtonVPN, and I pay for it because I get stronger privacy than all these kind of free and apparently non-tracking VPNs. And it turns out, well, they did track me. I’m willing to pay for it today, and I’m very convinced that there are people who are paying a bit more to get significantly more anonymity. So, while I’m not a salesman, I’m not a marketeer. Maybe I’m not the best person to defend the go-to-market, I do see a lot of technical movements that go exactly in this direction, and we’re just the ones who, in the most hardcore fashion, pursue this drive for a maximally anonymous VPN that will be launched under the name of Gnosis VPN.

[00:41:02] Ray Salmond: Awesome. I look forward to checking it out. I also endorse Mullvad. I use it, it’s incredible. Given the direction that the world’s going in, perhaps one positive is that crypto mass adoption is happening. Everybody’s like, BlackRock’s basically telling everyone, if you don’t have crypto now, you’re behind. So, crypto mass adoption could also boost people’s literacy with blockchain, decentralization, crypto itself, and lead some down the rabbit hole of I’m already paying for a VPN, and I’m politically opposed to certain administrations, so maybe I should up my OpSec. There could be some positives there.

So, in your chat at Devcon, you said that DApp user interfaces should be rethought or improved. What do you mean by that?

[00:41:48] Sebastian Bürgel: Yeah. What does DApp even stand for? DApp stands for decentralized application. Now, what do DApp interfaces, for example, in DeFi... I know I’m bashing DeFi a lot here, but I told already that I find DeFi in principle awesome, but the current implementation and the people who are pushing it, I find sometimes questionable. Let me give you one example. Uniswap. Uniswap is great innovation. How do you use Uniswap? Well, you go to app.uniswap.org. Now, anything that ends on .org, .com, dot whatever, that’s bad. That’s like centralized web infrastructure that can be censored, that usually can be tracked, that is usually running on server infrastructure running by large, typically US-based corporations. And that’s bad, and we can do better.

So, basically, part of my rant is about if you’re somebody who’s building or just playing around with Ethereum or kind of decentralized applications, please make DApps decentralized again. And what I mean by that, just to give you one simple example, is IPFS. You can take content, and instead of storing it on Amazon, you can store it on the IPFS network. And instead of buying yourself a domain on GoDaddy and, you know, hosting it on myawesomewebsite.com, you can host it on ENS, the Ethereum name system. So, you can have myawesomewebsite.eth. So, you have the storage on IPFS, and you have the name registry on ENS. And that is an example of how if you’re not super lazy, you can actually do that.

And I encourage everyone here who’s toying around with the idea, maybe I should have a personal website or, you know, maybe I have a hackathon project that should have a marketing front-end website, do that. Like please, go ahead. Register yourself an ENS domain. Do upload your HTML, JavaScript, image, whatever files onto IPFS, and yeah, make your website available that way. Because that is the decentralized web, and the decentralized web is already natively supported, for example, in browsers such as Brave and Opera. By the way, Brave is another fantastic product that I happily recommend to people who think, hey, this was kind of interesting. How I can get more private? So, do check out ENS, IPFS and Brave. It’s a combination that actually works today.

So, that’s what I mean with let’s make decentralized application interfaces actually decentralized. We have the technology ready for it. We can use it. Some more complicated apps are still a bit harder to fully decentralize, but a lot of it can be done already. Let’s use that.

[00:44:20] Jonathan DeYoung: Is what you just mentioned, is that scalable in a way where you could legitimately compete with an application that uses AWS? Sure, there may be four times a year where it shuts completely down, and you can’t access anything, but most of the time, it’s pretty fast and reliable. So, if I run my app, my service on IPFS, and I use an ENS domain and everything is decentralized, is that going to offer the same level of convenience if I were to build it on the more traditional route? Like it seems like there’s an argument potentially there to be made for the compromise, where if you want more people to use it who maybe don’t know crypto and, you know, like their Web2 apps, that maybe you need to still incorporate some level of centralization just to win them over.

[00:45:07] Sebastian Bürgel: Sure, AWS has billions of dollars of money behind it to optimize the whole system, so that is pretty good, and that’s undeniable. But still, I really encourage people to just check out IPFS and ENS as a combination. So, how it works is you basically create a website, and let’s say we go super old school. So, we create a file called myawesomewebsite.html. By the way, that’s something you can do with ChatGPT or whatever, and it’s actually a fun project. So, then you run an IPFS node. You run one yourself, or if you’re more serious, you might get yourself a DApp node. One of these little computers that you can run out of your home to actually run it. Or you run one in the cloud, or use a service that stores that content on an IPFS node for you. From that moment, your website is available.

So, then you have this weird hash. And this weird hash, this IPFS hash, as some people also call it, you basically just configure in your ENS domain. So, you configure myawesomewebsite.eth and have something that’s called a content hash. And this content hash, you just copy-paste your IPFS hash of the website in, and boom. Off you go. That’s all that’s needed. So, that does work. That is reliable.

And the actual cool thing about IPFS is what happens if your website gets super popular. You build like the next big meme thing that hundreds of thousands of people actually access. How IPFS works is it distributes it when there is high demand. So, when there’s demand, there’s other people which request that resource, and now, I don’t need to request it from AWS. There’s some other IPFS node near me which has already kind of cached this version of the content and makes it easily available for me, too. That’s why IPFS is awesome. Juan Benet has a much better explanation, but that’s my explanation of why IPFS is awesome.

So, yes, it works. The problem is more that it’s not natively supported in most browsers. I mentioned already that Brave natively has this baked in. But you know, if you’re on Internet Explorer or Safari, it’s not yet supported there. But there’s a solution, which is you add .limo or .link in the end. So, myawesomewebsite.eth, if it is not natively supported in your browser, you enter myawesomewebsite.eth.limo or .eth.link, and your browser can just open that, which is pretty cool. So, yeah, and only by people actually building more stuff like that will we see more widespread support and kind of consumer-facing applications that support that awesome technology. So, that’s why I really encourage everyone, no matter what you’re working on, do think about supporting decentralized technologies and protocols, because only through dogfooding are we gonna lead to mass adoption and bringing the magic of the world computer and related technologies to a lot of people out there.

[00:47:54] Jonathan DeYoung: Yeah. That’s true. Somebody’s got to be the one to take the leap of faith or to work through all the bugs and the difficult times in order to get to the final polished, finished product.

[00:48:04] Sebastian Bürgel: Exactly.

[00:48:05] Jonathan DeYoung: But I’m curious, just back to Hopr for a second and the VPN, one of the things with these centralized VPN providers like Proton, they get law enforcement requests. They get taken to court. They prove in court we don’t have logs. So, with Hopr, how do we trust that what the service is doing is actually doing what it says it’s doing? I mean, I figure it must be open source, at the very least. And then second of all, what happens if some person’s using Hopr VPN or the Hopr mixnet for nefarious reasons, they go to whatever the foundation is behind Hopr, or they go to Gnosis, the entity, and they say this awful, awful terrorist money launderer is using your VPN. We want everything you have on him. What is your response to that?

[00:48:53] Sebastian Bürgel: That’s a great question. So, first one, how do I know it’s doing what it promised to be doing, is, as you rightly said, all our software and products are free and open source. Open source means you can look at it. Free means you can also change it. And that’s important, right? So, you can take that, and you can say, hey, you know, there’s something that looks a bit questionable. I’m going to remove that line of code. I’m going to compile it again. This will take some technical knowledge. But again, we try to make that easy. But yeah, it’s going to take some technical motivation of people to do it. And then you can run your own. Like you can literally rebuild every single thing in it. You can inspect absolutely everything in it and run it yourself. That’s the first answer.

And the second one is what happens if somebody knocks on our door and asks us, like, you have to shut it down, Sebastian. And that is something that is going to happen. So, and we are very conscious about it, and that is something that we designed this thing from first principles for defending against that very situation. And the answer is we do not operate anything. So, neither Hopr nor Gnosis VPN, I mean, Gnosis, the company behind it, is operating any infrastructure. And that’s how the true Web3 was meant to be. It is a properly and 100% decentralized network that cannot be shut down. That has no central point of control or possibility for data extraction. That is literally how the Web3 was supposed to work. Maybe some people don’t like the word Web3. Whatever. That’s how Bitcoin works.

So, what if somebody knocks on Bitcoin’s door and says, hey, you, CEO of Bitcoin, have to shut down Bitcoin? Or you, CEO of Bitcoin, have to give us all information about this user called Satoshi? But unfortunately, it cannot because there is no such thing as operator of the Bitcoin network. That thing does not exist. And in the same fashion, for Hopr and Gnosis VPN running on top of Hopr, these entities, we are, like Hopr Association, which is the entity like supporting the software development behind it, is doing nothing else. We’re doing software development and research. And R&D efforts, you can stop, sure. You can put everyone in jail and stop that development. Even in that case, people who will pick up the development, because, again, it’s free and open-source software that you cannot stop. As long as there are some people somewhere on the planet who run nodes, you cannot stop it and shut it down.

That being said, what can be done and what is also something that’s worthwhile considering if you run one of these Gnosis VPN servers in your home, maybe there is bad users who want to access bad stuff on the internet, and then people will come knocking on your door and think that you’re responsible for that. And that’s a real concern. And that’s why, within Gnosis VPN, you, as an individual, very rightfully as a US citizen, for example, will say, no, I censor the access to certain internet resources. I, as a European citizen, censor certain access to maybe some other website, and that’s fine. That’s your choice. That’s my choice. And we want to empower people to say what they do not feel comfortable serving through their axis. So, what is legal and what is illegal is a very local matter. Things that are illegal in China are very different from things that are illegal in the US or India and Russia or whatever on the planet. We want to give people the ability to offer lawful services because we do not want to support, endorse or provide illegal activities or services of any kind.

[00:52:24] Jonathan DeYoung: Sounds a bit like Tor then, where theoretically the US government could go to Tor Project, the nonprofit entity, and shut them down for whatever reason. But the Tor network itself is still going to be there. Now, I don’t think that they would go to the Tor Project and shut it down because the CIA uses Tor and all their agents in the field use Tor, so they benefit from it. But yeah, that makes sense to me.

So, my final question then, to wrap things up, for people who’ve listened to this, who have been invigorated, energized, want to take their privacy more seriously, want to enact change in the world, or want to... maybe the crypto folks who are like, yeah, you know what? I want to do something within crypto that’s more aligned with privacy and security and individual empowerment, etc. What is something that maybe an everyday, regular person could be doing to sort of forward this mission? And then, what is something that you want crypto builders or blockchain builders to take away from this conversation we’ve had?

[00:53:26] Sebastian Bürgel: Yeah, that’s a great question, actually. I like that. So, if you’re an individual that is not like super technical, that’s fine. You can still use crypto, right? So, as a first thing, I would encourage you to move your money off of Binance, off of Coinbase, and move it into a self-custodial wallet. So, that’s step number one. Get yourself a hardware wallet and secure your mnemonic, not on your computer, right? Your mnemonic does not go on to anything that touches a digital device. It only goes into, ideally, your hardware wallet. You can buy the cheapest one they have available. You don’t need to spend $300 on it. So, step one: Get a self-custodial wallet, if you’re a private individual, and really experience decentralized applications.

If you are somewhat technical, so you’re somewhere between just a bit of a techie, a bit of nerd, but I would still say get yourself an ENS domain. That’s something that’s pretty fun. You can get yourself a domain. It’s just like in the early internet. We’re back again at this ground zero of everything is starting. You can get a fun domain and, you know, hack around with it. I would suggest, what I said before, is start an IPFS node. Everyone, anyone listening to this, can download an IPFS node, switch it on, dump some content on it, and, you know, access mystupidwebsite.eth. That’s fun. I really encourage everyone to do that because that gives you the experience of how decentralized technologies actually work.

And if you’re a builder, if you’re thinking about starting your own startup, do not just think about the current people that you read on Twitter which want to make more money quickly. Life is short. Try to think what you want to contribute to. Try to think how you can make a positive change on this planet. And I am personally very convinced that crypto and the Web3 movement is the most powerful domain that you could possibly work in in our generation to make a positive change here. So, do think about what you can build. Do not just think about the memecoins. Think further. What do normal people actually want out there? Because, again, we want mass adoption. Mass adoption means that we lean into what people actually want. And people want privacy. People want self-custody. People want to be in control. So, build something that actually helps people, and you will be in for something that’s extremely empowering and feeling good. I hope that many people do take that decision and not just work at Bank of America.

[00:55:48] Jonathan DeYoung: Or they work at Bank of America, and from the inside, they force them to develop a self-custodial wallet for their clients.

[00:55:54] Sebastian Bürgel: That’s fine too. Yeah, I have huge respect for that. I can imagine that’s hard, but I have huge respect for people doing that, imposing change from within. That’s important.

[00:56:03] Jonathan DeYoung: Yeah, I know some people like that who work for the city, for example, who have seen success in changing things, not related to crypto, obviously. Very different topics. But have changed things from within. But for them, it’s like a 15-year project that they’ve been working on, and it can take a really long time.

Thank you for that inspirational note to leave on. I think it’s a great place to leave. So, for people who want to know more about Gnosis, want to know more about Hopr, or just want to follow you and whatever ramblings you have on the internet, where can people find you and the two projects you’re involved with?

[00:56:37] Sebastian Bürgel: Yeah. So, on a Gnosis side, gnosis.io, that’s G-N-O-S-I-S dot I-O, has all the links to all the sub-projects and has obviously our socials, Twitter, Discord and so on. For Hopr, if you’re interested in this transport privacy and what’s coming up on that front, hoprnet, that’s hoprnet.org. Hoprnet.org is our website, and the same one is on our Twitter account. Sebastian Bürgel, @SCBuergel. I have the same username on Twitter, Telegram, and you find me there, everywhere. I’m interested in contributing to all discussions that are in the direction of cypherpunk resilient infrastructure of the Web3, and building a world computer that’s unstoppable. And that’s how Ethereum was pitched to me, and I find it extremely fascinating. I hope that some people contribute to that.

[00:57:30] Jonathan DeYoung: Sounds good. Fascinating conversation. Thank you so much.

[00:57:33] Sebastian Bürgel: Thank you, Jonathan. Thank you, Ray, for having me.

[00:57:35] Ray Salmond: Thank you. That was fantastic.

[00:57:43] Ray Salmond: The Agenda is hosted and produced by me, Ray Salmond.

[00:57:47] Jonathan DeYoung: And by me, Jonathan DeYoung. You can listen and subscribe to The Agenda at Cointelegraph.com/podcasts or on Spotify, Apple Podcasts, and wherever else podcasts are found.

[00:57:59] Ray Salmond: If you enjoyed what you heard, rate us and leave a review. You can find me on Twitter at @horushughes. H-O-R-U-S-H-U-G-H-E-S.

[00:58:09] Jonathan DeYoung: And I’m on Twitter, Instagram, and just about everywhere else at @maddopemadic. That’s M-A-D-D-O-P-E-M-A-D-I-C.

[00:58:19] Ray Salmond: Be sure to follow Cointelegraph on Twitter and Instagram at @Cointelegraph.