Source: Bankless
Compiled by: Yuliya, PANews
Editor's Note: Zcash is experiencing its first real narrative moment in years. In this podcast episode, host David sits down with Multicoin Capital co-founder Tushar Jain and Helius CEO Mert Mumtaz to dissect why privacy might be the missing primitive for value storage in cryptocurrency, why Zcash is positioned as "private Bitcoin," how institutional adoption will normalize privacy assets, how AI and on-chain surveillance have changed the privacy debate, and why the risk of quantum computing could become Zcash's real catalyst.
Zcash Survives the Death Cycle, Privacy is Crypto's Final Puzzle Piece
David: Mert, you've been talking about Zcash for the better part of a year. Tushar, Multicoin recently publicly announced a major investment in Zcash. Tushar, what made you decide to invest heavily in Zcash right now?
Tushar: It was a combination of several factors. First, I must admit, Mert spotted this earlier than I did, and I was initially skeptical. I've known about the Zcash project since its inception, but for a long time, it was essentially treated by the market as a "dead project," ignored by everyone.
Last year, I noticed a sudden surge in discussion around Zcash, and its price rose. But I wondered: Is this hype? Can it last? Later, the market corrected, cryptocurrency faced a macro bear market and serial liquidations, and Zcash's price also fell. What surprised me was: First, the people who supported it before still supported it; second, its price support level after the correction was much more solid than the price when it was ignored in previous years. It withstood the market washout, the core team stayed, the community remained. This proved to me that its consensus is sustainable, which is the main reason we decided to invest.
David: Mert, everyone used to know you as a "Solana die-hard," now you're almost becoming the "Zcash spokesperson." Tell me about this shift. What did you see in Zcash?
Mert: Two years ago, Zcash core developer Sean Bowe asked for my help evaluating their scaling solutions. I also thought Zcash was dead at the time, but after deep research, I found that its ZK technology is incredible and actually works. However, they were terrible at user experience, hiring, marketing narratives, and market positioning.
By the way, I'm still "Solana-first"; my company builds Solana infrastructure, and we're even developing a privacy layer on Solana now. My personal investment strategy is a "barbell strategy"—one end is Bitcoin and Zcash, the other end is Hyperliquid and Solana.
Later, as cryptocurrency became more "institutionalized" (e.g., Wall Street entering), I became confused. Everyone is into defense tech, drones, cutting-edge AI labs. I thought, what is the crypto world even doing? USDC is cool, but frankly, it's just an API interface for the dollar. I felt cryptocurrency had deviated from its original purpose. I realized, "privacy" is the final forgotten puzzle piece of the crypto world.
The development of cryptocurrency has several stages: Bitcoin proved cryptocurrency works; Ethereum (Vitalik) proved it can be programmable; Solana (Anatoly) proved it can scale. But in the effort to prove "cryptocurrency isn't for crime" for legitimacy, everyone discarded "privacy." Now the regulatory environment may be improving, we have a window to bring privacy back into the crypto world, returning it to its roots.
Why Choose Zcash, Why Now?
David: So, this is truly a return to the cypherpunk ideal. But there are other privacy coins on the market. Why Zcash specifically? Why now?
Mert: There are several reasons Zcash is gaining attention in the current market, institutionalization being a key factor. Events like the BlackRock ETF, Bitcoin derivatives, and Jane Street have reignited market attention to privacy assets. At the same time, the participation of well-known figures like Saylor has brought more exposure to Zcash.
Second is the explosion of AI. Initially, I thought AI was overhyped, but then I realized AI is a supercomputer for processing "unstructured data" (scattered information online). Data used to be tabular, now AI can piece together your real identity from your scattered comments on different social networks. As cryptocurrency becomes more compliant, with more fiat on/off-ramps, if you or your counterparty makes one small mistake on-chain, exposing a wallet address, AI can trace it and dig up your entire lifetime of on-chain transaction history. AI makes the consequences of lacking privacy extremely terrifying.
Then there's the macro environment, like California trying to levy a wealth tax, the Netherlands trying to tax unrealized gains. There's a global trend towards extreme wealth redistribution.
Finally, and most critically, is the maturation of ZK (zero-knowledge) technology. Everyone in the industry knows ZK, but for many years it was practically unusable at scale—slow, poor experience. It's only in the last two years that ZK has truly become usable. Zcash is the pioneer of ZK technology; it suffered a lot early on due to immature tech, but now it has finally endured. Now Zcash has a trustless shielded pool, the Zondal (formerly Zashi) team has made a great wallet experience, you can even do cross-chain intent-based trades via Near, or trade on Solana and Hyperliquid DEXs, no longer reliant on centralized exchanges.
As for why not Monero? Because Monero uses "ring signature" technology, which is a form of "obfuscation" (one real transaction mixed with 16 decoys). In the face of AI and powerful computing, this obfuscation will eventually be cracked. Zcash's ZK technology truly hides data cryptographically. Also, Zcash is a Bitcoin fork; you can directly understand it as "private Bitcoin," a concept very easy for the market to accept.
Institutional Adoption & the "Trojan Horse" Strategy
David: I've heard Zcash has a path to institutional acceptance. A Bitwise executive said once institutions push Bitcoin mainstream, it will create space for Zcash. Tushar, why would institutions accept Zcash?
Tushar: I think Zcash's brand positioning is perfect for the masses and institutions. Mention Monero, people's first reaction is "that's for criminals." But Zcash is positioned as "privacy for ordinary people."
Ordinary people need privacy not to do bad things, but because they don't want to expose all their financial records to the world. Zcash has both cypherpunk hardcore spirit and is understandable and acceptable to the public.
Mert: To add, Zcash has a "Trojan Horse" strategy. It has both a transparent mode (like Bitcoin) and a privacy mode (shielded pool). Institutions can first buy Zcash in transparent mode, which brings capital and attention; subsequently, some of that attention converts into usage of the privacy mode.
Privacy is a fundamental human right. If we only sell privacy in dark corners of the internet to fringe groups, it will never grow big. We need institutional capital as a Trojan Horse to grow the pie, to truly bring privacy to the masses.
David: So the bullish thesis is: there's a group genuinely needing hardcore cryptographic privacy, forming a base; meanwhile, Zcash's transparent mode allows institutions to enter. Combined, the market cap takes off?
Tushar: Exactly, but also remember: Zcash competes in the "store of value" space, like gold and Bitcoin. Store of value needs consensus.
- Why does everyone agree on gold? Because it's rare, shiny.
- Why agree on Bitcoin? Because it was the first to solve double-spend.
- Why agree on Zcash? Because it's now the largest market cap, highest-profile privacy asset; people naturally buy the #1. As more people use it to store value, its consensus grows stronger.
Privacy Coins Aren't Mass-Market Products
David: Playing devil's advocate. If Zcash falls back to $40 in a year, people will surely say, "See, no one cares about privacy." People hyped privacy before, and it failed miserably. How do you counter that?
Mert: Satoshi actually wanted to add privacy to Bitcoin originally, but the technology wasn't there; he didn't know how to prevent double-spend while protecting privacy. From a risk-reward perspective, Zcash has an extremely high payoff now. Even if it fails, it's a worthy endeavor.
Tushar: We don't need everyone to care about privacy; enough people caring is sufficient to support its value. The data from the past 18 months proves there is a group of people who desperately need private value storage. They didn't use Zcash before because it was too hard (needed DEX KYC); now the technical bottlenecks are removed, adoption will naturally rise.
Mert: For example, ordinary people buying ETH or SOL achieves "bankless," but there's a group of "offshore wealth" individuals in the world who need a "Swiss bank vault in their pocket." They need absolute privacy to prevent asset tracking or seizure. Just capturing this high-net-worth demographic gives Zcash a very high floor price.
Era of On-Chain Surveillance, Zcash is Forked Bitcoin
David: I previously interviewed on-chain tracking company TRM Labs; they said agencies like the FBI love the current blockchain because everything's on-chain, investigations are so easy. That gave me chills.
Tushar: Exactly. Many think "government catching bad guys is good." But you must understand, the powers you give the government can one day be used against you by your political opponents. In traditional finance, the government needs a subpoena to see your records; on a public blockchain, they can look at all your business with AI, no warrant needed. Privacy is the last line of defense for ordinary people against power abuse.
Mert: When arrested in the US, police say: "Anything you say can and will be used against you in a court of law." In the crypto world, it's: "Everything you do on-chain is recorded forever and may be used against you in the future." Peter Thiel was disappointed in cryptocurrency because the FBI found Bitcoin easier to surveil than traditional finance. The market for protecting personal dignity and freedom is orders of magnitude larger than the market for criminal money laundering.
David: Let's talk about Zcash's tokenomics. How does it differ from Bitcoin? Why is its current state actually an advantage?
Mert: Zcash is a Bitcoin fork, so it also has a 21 million cap, Proof-of-Work (mining), halving every four years. The only difference is, part of its emission goes to a developer fund, voted on by token holders to distribute to contributing developers (like Sean Bowe's team working on the Pacha scaling project).
Tushar: Zcash was a joke in the market for years, price kept falling. It used to have high inflation, was difficult to use, had no marketing. But now, all those negatives have reversed: inflation is down, wallets are better, you can buy on decentralized platforms, and macro-wise (e.g., California and Netherlands wealth taxes) the need for private assets is growing. Investment looks forward, not backward.
David: In crypto, there's a term called "perfect launch," like Bitcoin's birth, Uniswap's first airdrop. I think Zcash is "perfectly forgotten." It was abandoned by everyone for over five years, price bottomed, early speculators long gone. Now it's become a non-controversial project; except for extreme Bitcoin maximalists, almost no one in crypto dislikes Zcash. Everyone can support it, which is a rare consensus.
Mert: Yes, I've found whether it's Ethereum, Solana, or Cardano people, they can all agree with Zcash's philosophy. The privacy narrative has been suppressed for too long; Zcash's revival can boost the entire on-chain privacy sector (like Railgun on Ethereum), which is good for everyone.
Quantum Resistance Advantage & Near-Term Catalysts
David: Final topic: quantum computing. Everyone knows once quantum computers mature, Bitcoin's cryptography will be broken. In this regard, what is Zcash's situation?
Mert: Zcash will almost certainly be the first "quantum-resistant" blockchain. It already has "quantum recoverability"—as long as your coins are in the shielded pool, quantum computers can't touch you.
On a transparent chain like Bitcoin, quantum computers can derive the private key from the public key, directly steal your money, and you wouldn't even notice, like losing your seed phrase. More terrifyingly, data on transparent chains can be "collected now, decrypted later." When quantum computers mature, all your past transaction records will be cracked. Monero's obfuscation won't stop that either.
But in Zcash's shielded pool, there is no physical data (don't know who sent to whom, nor the amount). Once this week's update is complete, user funds will be safe. By late summer, Sean and Dev's team is expected to make the entire Zcash chain fully quantum-resistant. Zcash used to be mocked as a "cryptographer's sandbox," but now, having these top cryptographers is its biggest advantage against the quantum threat.
David: Ethereum is also working on quantum resistance, but Ethereum is too complex. Zcash is simple like Bitcoin, yet has top cryptographers, so it's easier for Zcash than Ethereum to cross the quantum barrier.
Mert: Exactly. And quantum resistance isn't just against hackers; it's about providing certainty for large capital. The reason gold is the king store of value is its extreme stability, no sudden changes. Zcash solving the quantum threat early is about eliminating future uncertainty, making old-school investors comfortable putting money in. Google plans to achieve post-quantum readiness by 2029; this threat isn't far off.
David: Finally, summarize. What upcoming catalysts does Zcash have?
Mert: There are many near-term catalysts:
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Ledger hardware wallets will soon support Zcash's shielded pool (currently only transparent mode).
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Currently, 31%-32% of Zcash funds are in the shielded pool. As price rises and trading increases, this ratio will grow, strengthening the privacy network effect.
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The Zondal wallet (supporting privacy features) has received funding co-led by Paradigm and a16z. This partnership is seen as a rare strong collaboration, expected to further drive Zcash ecosystem development and core technology refinement.
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Block time will shorten from 75 seconds to 25 seconds, significantly improving transaction experience.
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More development teams are starting to build on Zcash. Although Zcash's technical implementation based on a custom cryptographic curve is somewhat complex, its privacy advantages are attracting more developers.
Cryptocurrency without privacy betrays the cypherpunk origins. We've slept for too long; it's time to bring it back.
Tushar: To summarize, Zcash tells an extremely simple, easy-to-understand story: "private Bitcoin." It has both the hardcore values of protecting human dignity and rights, and serendipitously converges all the right timing—technology maturity, macro demand explosion—right now. That's why we're bullish on it.
