I caught up with Andy Yen, the founder and CEO of Proton, this year at the Collision Conference in Toronto to discuss his views on bitcoin, encryption, and what trends will affect both technologies long-term. The following is an excerpt of that interview, though it’s been copy-edited for clarity, and some parts of the interview have been rearranged.

Did PayPal’s censure of your initial crowdfunding campaign lead you to accept Bitcoin and adopt it?

Andy: I think when that happened in 2014, what we did eventually – actually, at that moment, was we set up a Bitcoin address and said “Okay, you know, PayPal is blocking us, we don’t know when we’re getting our money out. You can donate with crypto.” And that was the instance that maybe opened our eyes to the power of crypto.

The fact that it’s decentralized – the fact that no government can just come in and block you. The fact that you’re not beholden to a single traditional financial institution that can do frankly, stupid things, because they misunderstand what you’re doing. It’s a sort of liberation and freedom, right?

And the reason that we have been accepting Bitcoin for 10 years, which I think makes us a bit of an early adopter, and still to this day, I think the reason that we hold on to our bitcoins as well, is because we learned the hard way – the value and need for diversification. I would never wish this type of ordeal on any other company. But it does happen, it can happen. It has happened. And I think it’s just prudent that you spread your risk a bit.

What’s your general view on Bitcoin now that it’s matured past these days? There’s a lot of news about institutional support for Bitcoin, such as the BlackRock ETF passing – what do you think about that?

Andy: It’s quite interesting. If you look at BlackRock, well, I don’t think BlackRock needs to be supporting or endorsing crypto to even do what they’re doing. BlackRock is the bank. And it’s not exactly a bank, but it’s a financial institution, right. So, you know, what does a baker do – a baker bakes bread, right? What does the financial system do? It makes money. That is its purpose.

There’s institutional pushes [into bitcoin] because there’s money to be made. So if you run an ETF, you can manage more assets, because there’s maybe a certain fraction of the world that wants the asset class in crypto, and that is big enough, where they can get a good ROI for doing that.

So that’s the obvious reason why they’re jumping into it. And from a technology standpoint, and from a settlement standpoint, [bitcoin and cryptocurrencies] actually do work right and they allow you to settle much faster than SWIFT would do in potentially a more reliable way as well.

So I think it’s sensible that you see kind of mainstream adoption because the technology is sound, but what probably isn’t so sound is the players that have been involved so far – as we’ve seen.

What about the future of encryption – something that is related both to your work running one of, if not the largest encrypted products providers and as an early adopter of bitcoin – how can it continue to be resilient and evolve even in a policy context that seems more hostile?

Andy: I think we need to look at this from a long term lens.

Encryption: there’s always support, there’s always opposition. It comes in waves, it comes and goes, it shifts back and forth depending on the administration, the year and what’s going on in the world.

But having been in the space for close to 10 years now – we started back in 2014 – I can kind of tell you what the long term trend is. And back we started in 2014, it was a truly tough space to be in. So you know, in the very beginning, PayPal actually shut down our PayPal account for a bit of time. […] They thought encryption was was actually illegal, right?

And back in those days, governments across the world really viewed encryption as an enemy. We were like the hostile force that they were afraid of. So that was the environment in which we started out in.

And what has happened since then is, you know, we saw Europe pass GDPR, we saw the rise of state actors like Russia, China, North Korea, Iran, hacking systems and representing the kind of new cyber threats in which encryption is opposition to tackle.

We’ve also seen many incidents where governments have realized over time that security and privacy are two sides of the same coin. So you can’t really rally against encryption, because encryption oftentimes is the shield. It’s the barrier that prevents you from going into the abyss online.

Many of these same governments that in 2014 were strongly opposed to what Proton is doing – today and I can’t tell you which governments because you know, we’re a privacy company. We’re very discreet. But a lot of these governments today, they’re actually our customers, they’re actually buying various programs, services in order to protect their own infrastructure and protect their own communications.

And so I think what that really shows is that if you take a longer lens over a decade, the trend has really shifted right, you know, we’ve gone from things like, try to shut us down. We’ve gone from the famous Apple versus FBI case, to kind of a broad acknowledgement across most governments that encryption is necessary and end-to-end encryption is needed.

And if you look at the number of people in government today that either use Signal, they use Whatsapp or they even use Proton – like if I’m on Capitol Hill, a decent amount of people that I talk to actually are our users.

I will say that the success of these products – they make encryption more mainstream. Getting it into the hands of policymakers, has helped to spur the understanding that encryption matters.

But that doesn’t mean that we’re always in the clear. Of course, there’s always forces that are trying to put more stringent regulations and you see that in UK, the Online Safety Bill. You see that in the EU’s new proposed chat control legislation. These things are always coming up.

And the core conflict here is governments are trying to on the one hand, protect privacy and encryption. But on the other hand, they want to do things like block Child Sexual Abuse materials and things like that to be incorporated online. And essentially, it’s a struggle because they’re looking to legislate a solution that technology is not able to fix.

There is still no way today to build a backdoor that only lets bad guys in. In fact, you may never be able to do that. And the outcome of this is you have legislators who are confronted with trying to solve this problem and if you look at the EU, the chat control legislation and you look at the language – on the one hand, it says well, we need to ensure that privacy and encryption are protected.

On the other hand, the language is saying at the same time, we need to have ways to get access to information to verify that illegal materials are not being disseminated.

And those two statements, which are in the same draft bill, are from a logical standpoint, fundamentally incompatible and this is something that I think policymakers just don’t fully understand yet. So it’s a process of educating them.

And also hoping to understand that legislation is usually needed to fix problems that the market economy doesn’t resolve. But on this issue, whether it’s Proton, whether it’s Apple, whether it’s Facebook, whether it’s you know, Google nobody is financially incentivized to let crimes occur on their platform. And if you take Proton ourselves, we probably have up to 10% of our staff working on abuse. There are ways to tackle this problem without defeating encryption. So I think it is a matter of education to communicate this.

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