Last December, Roger Ver appeared on the Tucker Carlson show. Taking the time to outline his history as an old Bitcoin fan, and staunch economic freedom advocate. He raised his concerns about how Bitcoin was ‘hijacked’ by nefarious forces to neuter its utility as anything other than ‘digital gold’. Roger’s take on Bitcoin’s flaws are incredibly compelling, partly because it is backed by some real history. I raised many similar concerns when I spoke with Mathew Crawford and Hrvoje on Geopolitics & Empire. It is concerning however, to see this Bitcoin ’limited hangout’ used to promote a very suspect cryptocurrency.
Roger is currently being prosecuted for tax evasion, despite renouncing his citizenship and “becoming a citizen of the world”. He believes this is a politically motivated prosecution. In her interview with the co-author of Roger Ver’s book ‘Hijacking Bitcoin’, Catherine Austin Fitts points out that how Roger is being prosecuted is highly irregular. The public petition in his name has currently reached over 18 thousand signatures. The petition has been signed by notable names like Tucker Carlson, Bret Weinstein, Jeffrey Tucker, Aaron Day with many others.
In his conversation with Tucker, Roger Ver argues that the only way to preserve financial privacy and autonomy is for humanity to adopt cryptocurrency, but specifically private ones. This is because while there are many cryptocurrencies, many of them are perfectly transparent. This creates privacy concerns. While private cryptocurrencies are absolutely worth exploring, Roger Ver has a few specific solutions in mind. Leveraging the fear of state abuse via central bank digital currencies, he argues we need to rush into more cryptocurrency projects. Saying he would be embarrassed to promote Bitcoin today, but he explicitly promoted two other cryptocurrencies Monero & Zano. I had already been familiar with Monero which I consider one of the few decent cryptocurrencies, but I had never heard of Zano. What I found looking into Zano I found highly troubling.
I am choosing to highlight Zano for two reasons:
- Some quite prominent figures vocal about decentralization and privacy have promoted it.
- It’s exemplary of what one should avoid if they are to consider cryptocurrency at all.
After spending a significant amount of time digging, and comparing notes with others even more knowledgeable than me, my mind is made up. I am strongly convinced that there is something nefarious in the promotion of Zano.
What’s wrong with Zano?
Zano is a cryptocurrency that has a great deal of red flags. These particular red flags put it in the same league as many failed projects and outright frauds. In many ways, it is an excellent example of how predatory the cryptocurrency market can be. Even people who may be familiar with Bitcoin itself, may not truly be able to appreciate the significant differences between it and other cryptocurrencies. There are many fundamental differences to these digital assets that can have a profound impact on how they work, as well as their future.
The liquidity problem
Making a small cryptocurrency popular is no simple task. Bitcoin has had over a decade to gain familiarity and access, but almost every other cryptocurrency has to compete with thousands of others. It is incredibly hard to stand out without at least promising truly innovative features. It’s very straightforward to download the source code of a cryptocurrency, make some trivial changes to function and branding to make a new one. These slight variations are often shameless attempts to ride on the coattails of a more successful project, but also create a “spam” problem for exchanges.
Exchanges are online platforms where people generally buy their cryptocurrency. There are a huge variety of them, and they all have a different selection of cryptocurrencies. Some are naturally more popular than others. When one creates a cryptocurrency, it is not automatically listed on any exchanges, especially not the centralized ones. These exchanges effectively operate as “on-ramps” for people to acquire cryptocurrencies and trade within them.
For smaller cryptocurrencies, this creates a bit of a “chicken and egg problem”. To be listed on an exchange, the coin needs to be sufficiently popular and liquid, but to be sufficiently popular and liquid it needs to be on exchanges. A potential solution to this is DExs (Decentralized Exchanges), but these are generally not as popular among users. This creates many problems, but especially for cryptocurrency investors.
The biggest problem when trading a small coin is that you’re effectively at the mercy of the few exchanges it is sold on. Even if you ‘mine’ your own coins, you won’t have many places to sell. What’s worse, is that all kinds of market manipulation is possible by even relatively small players on obscure coins and exchanges. To make a bold statement, this means that there is no such thing as organic price discovery for coins not widely listed. Prices can wildly vary between smaller exchanges. All of this together gives larger holders of smaller coins very powerful economic influence over the ecosystem. Specifically in the case of Zano, over 85% of its known daily trading volume (at the time of writing) takes place in a single exchange. Yet even at the most popular exchange Zano isn’t very liquid.
Hijacking privacy
The Zano project seems to have a lot of resources to throw around and buy influence. This on its own is a huge red flag for me. It wouldn’t be the first time a nominally ‘decentralized’ project that used its own tokens to buy up positive PR. Odysee/LBRY had a program where they would sponsor creators with a significant amount of LBRY credits to be unlocked after a particular time. This meant that many popular figures had a huge incentive to promote and speak well of the platform no matter what the reality. Many well-known figures, may promote various cryptocurrencies, without being able to properly communicate the massive risks in playing with unproven cryptocurrencies. It’s often the case that many of these personalities themselves may not be able to reasonably tell just how bad a particular asset can be. This is because cryptocurrency projects all have very important details that often get glossed over by people getting excited about rapid price increases.
I am highly suspicious that Zano has effectively “bought its way” into the online discussions it’s featured in. Regardless, the plug in Roger Ver’s Tucker Carlson interview has effectively done this. It’s so easy for somebody enchanted by a beautiful website, rising price, and growing popularity to overlook many glaring signs of trouble. Technical details take time to prove. Software requires testing and validation to truly prove that systems work as intended. It’s incredibly common for catastrophic bugs to come out of nowhere, just ask Crowdstrike. But price rises come a lot faster than technical merit. It’s incredibly easy for a new cryptocurrency to become multiples of its current price on small exchanges before most people even hear of it. This in combination with project creators (and investors) maintaining control over the token supply with a huge pre-mine makes for a very predatory arrangement.
Rigging the game
Zano actually had multiple opportunities for insiders to take significant control over the token supply. The pre-mine allocated nearly 30% of the total token supply to fund the project. This means that as the cryptocurrency launched, a huge share of the total supply was under control of the project team. Some argue that this is a good thing, it gives those working on the project a means of funding development of the project. Unfortunately, this is also a very popular means for outright frauds to run straightforward pump and dump scams. For some cryptocurrencies, they use ‘Proof-of-Stake’ as their consensus algorithm, which makes this circumstance even more dire. Because under a proof-of-stake system large holders have a significant control over the currency itself. In addition to this, large holders can maintain a permanent advantage by receiving profits from staking their large holdings.
While Zano had a very generous premine, that wasn’t the only opportunity for insiders to acquire a large stake of the supply. In a highly unusual move, holders of a different cryptocurrency called Boolberry. This meant that those who held Boolberry were able to exchange their tokens for Zano at a 1:1 ratio. In another unusual action, the window to swap tokens was relatively short. Lasting around a month, one can assume that only the most ‘in the know’ holders would have had the opportunity to swap. Large holders of this highly obscure and relatively inexpensive token can potentially have a significant stake in Zano. Since Zano is intended to be a private cryptocurrency, there is no known way to learn how much of the supply is dominated by insiders.
In yet another unique move, Zano uses both Proof-of-Work and Proof-of-Stake. Proof-of-work is where computing power is used to validate the network. Proof-of-Stake instead has holders of the token ’lock up’ some of their funds to participate in exchange for a share of block rewards. Because (like many others) Zano is a relatively new cryptocurrency, its proof-of-work consensus is at risk of being dominated by those with significant computing power. The creator argues that adding proof-of-stake is a means of overcoming this initial weakness. On the other hand, there are other solutions that don’t create immense profit for insiders. A popular solution other cryptocurrencies use is ‘merged mining’ where the cryptocurrency can be ‘mined’ in parallel with other larger coins, encouraging more computing power a lot faster.
A hybrid consensus algorithm is a bold move that may encounter un-intuitive complications. The introduction of Proof-of-stake itself may not have been done for system security reasons, but possibly for profit. The combination of a pre-mine coin and proof-of-stake “pump and dump” is a scam that has gotten very old these days. It’s almost comical. Zano is possibly in the worst of all worlds given that there was a massive pre-mine, a large amount of Boolberry trade-ins, which will all be able to profit off staking rewards in the future. To discuss this and other issues in a Q&A with the Zano team, ‘Untraceable’ effectively argued this was a “dev tax” on Zano in perpetuity. Meaning that the developers would have the capability of profiting off the system at the expense of participants. It is worth considering that it is not just merely the developers, but also unknown insiders who may also be able to reap significant staking rewards. To the degree it works out this way, it a frustrating re-creation of all the things cryptocurrencies were ideally invented to eliminate. If we are willing to passively accept the owners of a cryptocurrency dominating the consensus algorithm and profiting off the ecosystem itself… are we really any better off than with central banks?
Zano is attempting to corner the market on private digital currencies (and assets!) while maintaining significant control over the token supply. A digital currency using proof-of-stake with a consolidated supply is truly just a CBDC with extra steps. It’s really worth considering how many of these projects directly aimed at enticing ‘freedom fighters’ are “wolves in sheep’s clothing”. Since at least the FTX collapse, it’s clear that there is a desire to build a CBDC issuer that’s technically private. I wholeheartedly believe that Zano is an attempt to encircle the private cryptocurrency space and neuter it, because it’s possible that alternatives are far too resilient to tolerate. If Zano is given preferential treatment compared to Monero by exchanges, you will be able to be certain that this is true.
The bigger picture
One can argue, that none of this matters. The Zano team effectively did during their Q&A. As somebody who has watched the cryptocurrency space when people actually cared about decentralization, innovation, and potential it’s truly awful to witness. It seems that the simple strategy of setting up yet another cryptocurrency and hyping it up is itself so profitable it distracts from sincere attempts to build real solutions. What concerns me the most about the Zano platform is that it seems perfectly suited to operate as a means to recapitalize on the memecoin hype, without delivering much in tangible innovation. I’m quite sure that sounds harsh, but regardless of whatever price movement Zano makes, I am incredibly skeptical it will accomplish stated objectives.
It’s clear that there isn’t a lot of interest in pointing out the flaws of various cryptocurrency projects. The time and effort to validate well-funded marketing in an area the majority of people don’t understand is daunting. It’s not just myself. If you listen to the Q&A, Untraceable is very knowledgeable and has clearly done his homework. But I fully expect this to be ignored as the price may well continue to rise despite it all. I made an attempt to reach out to others much more knowledgeable about cryptocurrency than me, and received variations of the same question: “Why are you even looking at this?”. Those I know who have a serious grasp of the fine details can’t take this project seriously, but is your favorite parasocial hero going to tell you this?
But all the major red flags: the premine, the token swap, decisions made about the consensus algorithm, lack of technical documentation, are all worth keeping in mind for any hyped-up asset. When one watches the cryptocurrency market with a healthy dose of skepticism you will see many doomed-from-the-start projects rise and fall over and over. One of the things that makes Zano particularly noteworthy is that it is not merely cryptocurrency, but it also intends to be a platform to launch other digital assets. As Untraceable pointed out in the Q&A, Zano doesn’t support smart contracts. This means that any digital assets launched under Zano are ‘dumb tokens’ that currently are under centralized control. If Zano becomes significantly popular, the platform itself can become a haven for pump-and-dump memecoins that have no utility. The centralized issuance and lack of ability to create smart contracts makes any of these assets suspect.
Kaurma: Not all that glitters is gold
Bitcoin may be very successful as ‘digital gold’, but many people are very disinterested in the current trajectory of the Bitcoin community. The race to seek out the ’next Bitcoin’ is very intense these days. Many are desperate to recapture the vision, or the dream of peer to peer digital cash. Building a project to take on this ambition is laudable, but actually achieving it is no small feat. If Bitcoin was ‘hijacked’ or otherwise unable to function as a medium of exchange, any new project has massive shoes to fill to even make the attempt. In public discussions, there is a huge lack of serious consideration for what lessons could have been learned. Privacy, scaling, decentralization are all secondary concerns to marketing the next hyped up asset.
One of the things I stumbled on while looking into Zano was Aaron Day’s ambitious project Kaurma. The Zano profile on X shared a video of Aaron Day explaining the dangers of CBDCs and economic surveillance. Arguing that you ‘defeat surveillance with privacy’ and therefore we need to use Monero, Zano and his new project, which is planned to be built on top of Zano. The choice to build on top of Zano is interesting, given the details above. In defending this choice, he argues that a “fair launch” isn’t really important. This certainly raises concerns about his ability to fairly steward a stablecoin project.
Aaron Day wrote:
Tether will either blow up in a scandal or will be co-opted by the establishment and will become the de facto CBDC for this US. Either way, the end result is digital tyranny.
This is why we are launching Kaurma - a gold-backed privacy stablecoin on Zano.
The world deserves private, P2P digital cash.
A “gold-backed privacy stablecoin” is quite the mouthful. It’s also at least an order of magnitude more complex than actually succeeding to build a peer to peer digital cash system. The intention appears to be to build the stablecoin (a digital asset with a stable value) with Zano’s “Confidential Asset” system. There are significant concerns about how these assets are centralized. In addition to this, tying the physical world (like with gold) to cryptocurrencies is no simple task either. There are many cryptocurrency projects that have ’tokenized’ gold, but none of them are truly decentralized. Despite many people being attracted to cryptocurrency for decentralization & privacy, it seems that one is going to have to trust the operators of Kaurma to back their end of the bargain. While it’s almost guaranteed that Tether has problems, is building more Tether-like entities truly a solution?
Those genuinely interested in decentralizing financial power have to understand that the fine details matter. Being overly ambitious without due caution is at best a recipe for making others pay for your foolish mistakes. The problem is that this is largely a question of values. Being okay with your “allies” being fleeced by endless frauds and scams is a road to de-facto sabotage. There are values that served those who got into cryptocurrency early, that have largely been forgotten as the market has been refined into a parasocial plundering machine. It is highly suspect that those with the means to rise on centralized platforms always happen to have a ‘solution’ that requires people to hand over their money and data for empty promises.
Can we do better?
Decentralizing is hard. Adopting a cryptocurrency in 2025 is not going to meaningfully protect people from CBDCs, de-banking, or state surveillance. For the vast majority of people their real weak-points are employment and ability to pay for necessities. Neither of those are going to be transformed overnight. If your goal is to just make enough money off suckers to ’liberate’ yourself from today’s major inconveniences, then maybe that can work. When one is truly interested in rebuilding the foundations of our digital experience, a lot more fundamental work is required to make meaningful change. The desire to do something to oppose tyranny is wonderful, but it’s also something that can be weaponized against you.
At some point, thought leaders need to demonstrate their willingness to walk the walk. If they talk a big game about innovation, decentralization, and protecting privacy, how much do their actions reflect this? It’s easy to be skeptical about what you’re being told, but it’s a whole other challenge to consider what you’re not being told. In an age where people’s digital experience is being confined to increasingly controlled devices, the systems we slather on top are never going to make a meaningful difference.
I am incredibly disappointed that I am even moved to not only write this piece, but make it as long as this. One of the prime motivators for me to begin writing about technical topics was the complete un-seriousness they are given in so-called freedom loving circles. I am convinced that at least 99% of the cryptocurrency ecosystem exists to build a cargo-cult that keeps motivated technical minds away from real solutions. Bitcoin was released in 2008, do you feel more or less digitally free since then? Almost everyone who is old enough to remember would admit that things have gotten dire. Has the plentiful variety of cryptocurrencies available meaningfully enhanced your digital experience? I certainly doubt it.
The most important way to make progress is to work against people being forced into digital systems not herd them into yet another unproven ‘solution’. If it truly is the answer, it can absolutely catch on organically. Technology can be a powerful force for helping people with all kinds of problems, but things will continue to get worse if we continue to be careless. New tools are needed, but at a much more fundamental level than mere software. It is distressing to see well-meaning people lured into blatant scams by appealing to their justified fear of tyranny and abuse. We should expect better from our thought-leaders. If they are so careless to look into the fine details, who needs enemies?
