one of the biggest myths in crypto is that privacy is only for Bad actors but that's not true because there are plenty of reasons to want privacy in crypto like say you're a traitor who wants to keep your strategies to yourself or maybe you get paid in crypto but you don't want the whole world to know your salary I could list examples for days but point is there are many valid reasons to want privacy in crypto now unfortunately you can't really get good privacy as of right now yes there are some projects working on it
but none of them have really nailed the solution yet that is until railgun came along they look to be the game changer privacy solution that we've all been waiting for and in this sponsored video I'm going to explain what they are how they work and how you can try them out today but first let's talk about the state of on-chain privacy because to put it bluntly it sucks most blockchains are not designed for privacy as their transactions are viewable on the public Ledger and with block Explorer and analytics tools like chain analysis tracking is only
getting better over time yes you can get pseudonymity by spitting up new addresses but if you use them enough chances are that people will be able to tie them to you so that's not good if cryptos to be the future of Finance right because that'd be like using a debit card that allows everyone in the world to see your balance and transactions now one easy solution would be to use a privacy focused chain or roll-up but those come with their own set of problems too like we gotta worry about their Bridge being secure their sequencer
being decentralized enough or some other technical considerations and even if those concerns aren't a big deal we still have to deal with the fact that those Solutions are pretty Niche and their liquidity and developer ecosystems are non-existent so yeah overall the solutions out there are just incomplete at best using them would be like saying oh traffic is terrible in New York city so I'm going to move to Iowa instead like sure there's no more traffic but you lose all the benefits of being in the big city in the first place so instead it'd be better
to offer privacy where people already are AKA add privacy to existing dapps on popular chains so people can enjoy the same experience but with more privacy now in just a minute we're going to get to railgun aka the system that fix all these problems but first let's spend a little more time on why privacy matters like why do people even care about this well there's several reasons to care like for Traders and investors you probably don't want to leak all your strategy or Holdings for everyone to see right now people use tools like nansen or
etherskin to follow Pro Traders so if you buy some new coin or join some new defy Farm people can quickly copy you and your advantage would disappear as quickly as you got it also some countries and jurisdictions require companies to protect user financial data and keep it private like gdpr for example so if businesses or Dows want to operate on chain they need to have private assurances in order to stay compliant it so yes these privacy solutions would actually help those businesses stay compliant believe it or not and lastly some people may just want to
do stuff without being doxxed like is that too much to ask for it's why people make secondary Twitter accounts also so they can mess around in peace without everyone knowing it's them and making a huge deal out of it same thing goes in crypto with our financial activity so as you can see there's all sorts of use cases for crypto privacy it's definitely not just for the Bad actors out there now fortunately there is a solution to all of this it's called railgun and you can think of it as a privacy plug-in for defy apps
when you use railgun you get a private address that you Shield your tokens or nfts into and once it's there that becomes your private balance which is hidden from outside view best part is you can use that private balance to interact with the public dapps that you know and love yep you heard me right you can keep your assets private but use them with public dapps let me explain so railgun is basically a smart contract that enables shielded assets and shielded transactions the smart contract can live on whatever chain is deployed on and it's already
live on ethereum BSC polygon with networks like arbitrim coming soon as well because it lives on those chains there's no need to bridge elsewhere to get the Privacy you seek also their approach is immutable and permissionless because anyone can use them as long as those underlying blockchains are around so this is really a beautiful and elegant solution right and the key technology that makes it all work is called ZK snarks those are a type of zero knowledge proofs and on a high level it's just fancy math that lets you prove that you know or have
something without revealing your identity or in this case your public address so basically ZK snarks lets you prove that you have the right to spend X number of tokens in a completely private manner railgun also uses ZK snarks to encrypt everything like your wallet balance transaction history transaction details all of that stays private so only you can view the details of your private balance and only you can control your coins with your private keys but you can also use daps at the same time because ZK Tech lets third parties know for sure that you control
the assets you say you do also another key part of this whole system is a new type of wallet address you get a private zero ZK address instead of the normal 0x address that we're all used to but you can use it in the same way you just need to Shield tokens or nfts into it first and then you can send private transactions to other zero K addresses or interact with D5 apps that are integrated with railgun right now you can already do private swaps like trade tokens in your private balance for other tokens privately
you can also use them with a zero X protocol in Unstoppable domains but in general the more projects that integrate railgun the more useful it'll be and that's why it's a big Focus area for them in 2023 they also have an SDK that makes it easy for devs to integrate railgun and bring privacy to their own dapps and that SDK is a huge reason why I think their ecosystem will grow a ton in the coming years now something else that may shock you is that railgun allows gasless transactions like instead of paying gas in eth
or Matic or some other layer 1 gas token you can use whatever token you're transacting in to pay that fee for example if you're sending die then you can pay the fee and die and this is true whether you use their network of relayers or if you do the relaying yourself but if you do use their network of relayers which is definitely more convenient by the way just know that they're essentially wallets that pay gas and submit transactions on your behalf like say you want to swap 1000 usdc for some wrapped eth you just submit
a ZK snark proof to prove that you have the usdc for that transaction and then the relayers submit the transactions for you on the underlying chain as the originating wallet that way your wallet address is never tied to the on-chain transaction at all outside viewers only see the relay address doing the transaction and for their work the relayers get a percentage premium on top of the overall gas fee so yeah with ZK snarks and this network of relayers railgun achieves amazing privacy without having to mix funds at all let me repeat that no user funds
are mixed ever nor does it need to be with their brilliant implementation by using ZK Tech Rogen lets you maintain control of your own funds at all time they are just a smart contract wallet system after all also your privacy is protected by the total anonymity set in their whole system just think about it this way your 1000 usdc that you swapped earlier it could have been done by anybody that shielded 1000 usdc into their private address or it could even be someone who sent in some other token and then did some private swaps and
then traded their way to 1 000 or more usdc you see to an outside Observer they can't tell who that 1000 usdc was coming from it could be any number of people who shielded their assets and did railgun so the overall strength of your privacy is improved as more people Shield assets into railgun as there's more total value locked in the smart contract and as there's more activity and volume overall every transaction helps increase your privacy over time it is cumulative after all now remember when I said that railgun supports nfts as well that is
massive and it opens doors that I bet you didn't even know existed like did you know that uni swap V3 liquidity positions are represented by nfts that was a big change they made from V2 to V3 but by using railgun you can now be a liquidity provider privately too anyways those are just some of the powerful use cases of railgun and they're live already by the way so the first product in their ecosystem was made by a separate team and it's called the railway wallet it's a wallet made for railgun that you can use on
mobile desktop and web it's super easy to use I've tried it out already and highly recommend you try it out as well if you care about your crypto privacy at all I'll drop a link for you in the description below and another link if you want to learn more about railgun in general
