Crypto is Growing Fast, Will Privacy be the Next Trend? | Andrey Bugaevski of Incognito (FTC 12)

Categories: InterviewsPublished On: January 22nd, 202122.1 min read

Crypto is Growing Fast, Will Privacy be the Next Trend? | Andrey Bugaevski of Incognito (FTC 12)

FinTech Chat (FTC) is a series of educational & informative interviews with world professionals in the FinTech / Crypto / Blockchain communities. We aim to provide content that is digestible in multiple mediums such as video, audio (podcast), and written (blog) form!


FTC Episode 12 – In this episode, we will meet Andrey Bugaevski who serves at the Growth Lead for Incognito, a company working on privacy and anonymity. From his sharing, we can understand more about the importance of privacy, even in personal finance. We also feel the ambition of the Incognito team through their products in this potential blockchain market.

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos and grammatical errors may be present.


Intro: Interviews on Crypto, Blockchain with your host, Blockchain Wayne on FTC.


BLOCKCHAIN WAYNE: Hey and welcome, thanks for watching. Today we’re joined by Andrey. Andrey is a project lead over… at Incognito. We’re going to learn more about what Incognito is doing, some amazing things. But first and foremost, Andrey, thanks for joining us today for this interview. 


ANDREY BUGAEVSKI: Hi Wayne, yeah thanks for inviting and I’m really happy to share more about Incognito and our development here. 


BLOCKCHAIN WAYNE: Awesome, awesome, appreciate that. Now first and foremost, before we jump into Incognito… Incognito and you tell us all the great things going on there, share with us a little bit about your background, what kind of led you into the space dealing with maybe privacy and cryptocurrency or both that led you to where you are today? 


ANDREY BUGAEVSKI: Yeah, yeah, sure I mean happy, happy to share it and maybe happy to share it even more like other founders because their story is much much brighter than mine. So my story is quite simple. I got a master in physics after university and since when you have a physics fundamental background, you simply can do anything. I… this is what we like in our university people say. And that’s actually true like I was working in different fields and… but all related to the IT and software industry. And since in 2016, I mean I graduated 2012 and then during the four years, I tried to find myself and then in 2016, I was working on a cyber identity project when… which when we tried to redefine the… people’s identity when we’re supposed to have like… your face is like your identity. And that was like some kind of paradigm shift which we wanted to bring in and we began 2017. We started looking for some kind of decentralized data storage and then we started researching about blockchain and then that match was this kind of hype with it happening that time which brings even more attention to the technology. And then during the 2017 like we stopped that project and we found out like the opportunities about the blockchain in general. And we found also that simply some kind of maybe it’s not a problem but traceability for some industry, the blockchain traceability is an opportunity for some industry and products, it’s some kind of problem. And I remember I did my first fork of Monero in November 2017. And I just tried to dig in to play with the quad and then in 2018, spring 2018 like we will start like doing some much deeper research. So we bring some cryptographers here in Vietnam and we start diving into research on a bigger scale what… what can be done with privacy and blockchain. And then there’s an interesting story about the other guy. His name dewey. He also… he simply started this kind of research from a different side. It was really interesting because we lived in the same city. We were doing similar research but we didn’t know each other for like… maybe one year. And then one of our common friends introduced us to each other. And then we started building Incognito together. And his story is like he’s even more excited… he became a phd student in computer science when he was 19. He was like the olympic… how it got like, world finalist of olympic computer science competition. He got a grant from NASA before Incognito. He also funded a company which calls Autonomous AI. It’s quite popular in the states and companies like I think this company is like a unicorn already. So yeah in this perspective like we have from, I believe we have the superstar team which already has reached some kind of level in their lives. They got some success and what we try to do with Incognito is to bring something new in the world. Actually we aim to build technology which will be able to change some kind of part of the industry, or in the world, or like in general. 



BLOCKCHAIN WAYNE: Nice, nice so Incognito, I notice looking at the website and browsing what you… what your company has to offer a big focus on privacy. And for those watching, some people may question, not you and I both understand the need for privacy, but some people are hung up on… you know, they may not need privacy, why do you think privacy is important in… in transactions and in… you know, you know tracing? 


ANDREY BUGAEVSKI: Yeah, I mean simply the first time we faced this… this problem is also like it was several years ago. I mean when… when the stablecoins get mainstream like 2018, we have like we had different teams like some kind of freelancer, some kind of workers around the world. And we start paying people in stablecoins and that was the first moment when we experienced the privacy is important, because simply you cannot pay like from one account to all your employees, because they will first thing, they will trace each other’s salaries, then it will affect on the… in team some kind of communication. And it was also one of the ideas why we like… kick start like this research, and why… why the stablecoins traceable… you know, like if we want to do payroll, why everyone should note it. So that’s one of the problems which we already experienced and companies which pay in stablecoins or even freelancers which work with crypto, everyone knows it. And I mean shame to me, but even myself when I were like receiving some kind of payment in crypto time by time, you always go to explorer and check from where this money comes. And you know, like simply you like to dive into the wallet of other people which I feel is not right, but it’s public there. And then if… if we move this forward right, if we believe that cryptocurrency is eating the world and especially this year, like the huge stablecoin adoption when the latest news when Visa and Circle partner in terms of bringing stablecoin USDC to Visa which means they will proceed transactions. And I don’t know if you go on like Pornhub and you buy a subscription then… you’re it’s like traceable, this kind of thing. There’s a lot of direction in your personal finance which you don’t want to show even to your family, even to your friends. There’s something like our finances always private. So this is our bet we see that the cryptocurrency like growing dramatically stablecoins regulation brings a lot of attention to cryptocurrency. And we bet that when cryptocurrency everywhere, privacy will be like the next big request from the community and from everyone. And we are… and we are there. 


BLOCKCHAIN WAYNE: Yeah, you know, those are great examples. I’ve heard people say… you know, the transparency of current blockchain is good when you say… you want to look at it. Say a charity or organization’s funds you want things to be transparent, but you’re right. When you send someone funds, you don’t want them to go back and see not only how much you have in your wallet, but also where you sent transactions to not… you know, most people immediately think well privacy is for illegal activity, but it’s not. There’s so many reasons why your average person needs privacy and you mentioned those, so those are some great examples. What can you tell us about Incognito’s program? So tell our viewers what can they expect if they go to Incognito and to utilize some of… some of your services? 


ANDREY BUGAEVSKI: Yeah, let’s say we will deliver this message to the more advanced people who already have cryptocurrency or like use stablecoins or bitcoin or any other cryptocurrency and people who are aware about like privacy coins like monero or zcash. I think first the most important thing to know about Incognito is that we’re not trying to build a new privacy coin like nobody needs monero 2.0 or zcash 2.0. And we simply understand it so we just like to move this kind of… I don’t know communication collaboration further, because we’re not aimed to have a new privacy coin. What we aim to build is a privacy layer for public coins. So Incognito is a… is your privacy for bitcoin, your privacy for Ethereum, for USDT, for USDC, simply we are like a layer on an overall umbrella, on a privacy umbrella on top of like this networks. It’s already live so we launched the network like more than one year ago. We launched the bridges to Bitcoin and Ethereum and Binance and Neo and built bridges to the Polkadot network. So simply that we Incognito is a privacy for all kind of digital assets and all kinds of decentralized applications, so beside them, anonymity for your bitcoin, you’re able to experience privacy for the apps like Kyber or Uniswap or Compound or something like this. And in simple words, if just to explain, Incognito is a place where you can experience privacy for your bitcoin, when you can store, transfer, trade, and even invest bitcoin and earn interest on top of the Incognito layer. We have a decentralized exchange when you can provide liquidity in bitcoins. And then earn like interest on top of these bitcoins. 



BLOCKCHAIN WAYNE: Okay, nice nice. So it’s Incognito… all right, so the… the… I notice you have a wallet, an exchange service, how does the wallet come into play? Is that a… is that a self-custody wallet or is that a wallet where Incognito has the… the keys? 


ANDREY BUGAEVSKI: Yeah so important also to mention that the old products which we built are their self-custody, also important to make sure, because we’re moving in a privacy direction and their regulation is not clear, so we just allow users to be like own custodian. The users hold private keys of… of their wallets also important, like maybe for more advanced people. Like those who watch your podcast, they would ask themselves in terms of interoperability, the cross-chain communication. Let’s say if you want to send your public Ether in a private network, you will ask what kind of connection there is and who is the custodian there and some… some kind of things like this. So the… the breach and communication between the network is also like non-custodian and… and trustless. And let’s say when you send Ether or USDT or like other stablecoin simply your public version of Ether is locked on a smart contract and this smart contract triggers the Incognito network which creates a privacy version of your Ether. And then all kind of activity which you do with the privacy version is untraceable with the similar level of privacy as Monero. And this like frozen Ether is only stayed there in the smart contract and the moment when someone will want to get back to the public network and his kind of breach is live. And it’s open and if you go to Incognito explorer, you will see how fast like funds moving to public private chains. 


BLOCKCHAIN WAYNE: Nice, so it’s all automated with smart contracts? (ANDREY BUGAEVSKI: yeah yeah) Okay, what else can you tell us about Incognito? I know you… you’ve mentioned some things that you are working on things that people have been potentially coming with on Incognito. 


ANDREY BUGAEVSKI: It depends on what kind of audience you want to… to cover just like give me a hint and I will share more. 



BLOCKCHAIN WAYNE: Well, I think in general, I mean we… we have an audience on this show of people anywhere from beginners that may find this on Youtube or on the blog that know very little about crypto and maybe want to learn more… you have some people that may have been increased for several years and experienced. So I or maybe even if you want to talk about something that can appeal… 


ANDREY BUGAEVSKI: Okay yeah, then from let’s say from the… from the beginner, from the beginner part is quite clear, your cryptocurrency bitcoin ether or stablecoins are like traceable. And there’s a lot of companies who like watching your cryptocurrency transactions every second. And if you want to protect yourself, you should use Incognito, so that’s… that’s the first thing to understand. We use advanced cryptography, technology, which allows to anonymize your bitcoin, ethereum, stablecoin transactions on Incognito layer. You also simply… our mission… we just… we mirror all kind of activity you can do in a public chain. We mirror it in a private version. Let’s say if you… if you want to trade on Uniswap publicly, this is actually I’m not sure like when we are going to publish this interview but this Thursday, we are launching efficiently privacy mod for the Uniswap when users will be able to trade any kind of Uniswap liquidity pools from Incognito layer. So simply as a trader, you sit on Incognito but you trigger a Uniswap contract on ethereum, and you execute trade, but it’s not unlinkable. So there’s no way to link you and the trade and so we bring privacy for holding, for transferring. We bring privacy for trading, swapping, we also… yeah, for some kind of investment which I mentioned. You probably heard of the Uniswap launch liquidity program, so you provide some assets for the Uniswap liquidity, and then you earn interest on top of it, so on the Incognito network, we have similar things with the difference being anonymous. So nobody knows how much you provide, when and how much you earn. So that’s like for… for the junior users. For more advanced users, I can say that you guys can consider Incognito as a privacy layer for public blockchain in terms of cryptography. We like to utilize it if you… if you think about Monero like Zcash plus Ethereum 2.0 and if you like to match it together, it will be something like Incognito to understand. So we… We utilize advanced cryptography to high center high receiver high transaction amount and type of assets. So additional advantage of the Incognito network, we have some kind of predefined contract when you can create your own privacy coin. So as a user or as a business or like if you want to tokenize some kind of assets and you consider doing it on public erc20 or on private version, we provide users a private version. Also Incognito, it’s more like for advanced users besides we are proof of stake network, so we simply privacy proof of stake network which implemented sharding. This is why I mentioned Ethereum 2.0. Currently we run… run eight charts which allow us to execute hundred transactions per second in the network so we’re able to scale to 64 with whatever’s demand. And simply because it’s proof of stake, it gives us flexibility in terms of acquiring like more validators in the network. Right now, we have 2400 nodes powering Incognito network, which I think it’s quite a big amount for non people who are not deep in tech. It’s like maybe above us, only Ethereum, I’m not sure if any other like networks because most other proof of stake networks, they run around like two, three, like four or five hundred nodes, maybe thousand. In this case, our goal is actually to be as distributed as an Ethereum. So currently, we have… we are just one year old. We have 2.4 thousand nodes. And we aim to bring more and the reason why we are so confident that we can do it is because we design our own hardware devices which are like very easy to distribute around the world and very easy to get into the network. Actually I listened to one of them like your previous interview about… like IoT, similar, it’s the same… it’s a similar approach. You just get a device, you plug into the electricity, and you become the… the network like a validator. And this also gives us confidence that we can scale the network several times easily. 



BLOCKCHAIN WAYNE: Right see, I’ve got one of those running on the desk right here. (ANDREY BUGAEVSKI: Oh cool) Yeah, yeah so it’s interesting and exciting to be part of… you know, helping to create that network. I think that’s going to get… that can get more people into crypto as well that have the means to be able to at least… you know, run and run a validating node. So tell the listeners that are watching what… what can they expect? What kind of products are offered within Incognito that they can use whether now are some of the things that we talked about… you know, that you mentioned before the… before the end? 


ANDREY BUGAEVSKI: Yeah sure, I think the… the coolest thing about Incognito is that the… all things we were discussing before is they are already built and usually maybe our… Like advantage or like our difference with other blockchain products is that simply we try to build a product, and then try to find the users, try to improve the product and start looking for product market fit in this direction. So we’re not trying to sell the network itself. We tried, we’re still trying because… simply because we come from the product type of like startups, from startups industry, and we keep looking for product market fit and how it can be utilized and help people solve their problems. So from this point, I want to highlight just maybe two of the most important products which we have right now. It is Incognito wallet. It’s simply the place where you can anonymize your bitcoin. You can store, transfer, like trade, or invest your bitcoin without leaving trace and without like leaking yourself. And I think metrics also show… tells like by themselves, look simply for the Incognito wallet for the last year, the shielding volume like cross 35 million us dollars. Shielding volume is simply the amount of cryptocurrency which was like anonymized from the public chain to the Incognito network. I don’t know… for us it sounds quite cool, we didn’t expect it to get this result within a year. It tells us that there is demand and it’s actually increasing. Interesting to say that in terms of like this shielding volume, we are reaching all time high in terms of volume like last month. And the second product which we like really proud about is Incognito Dex. For people who heard about the Uniswap, it uses… we use similar algorithms behind. The difference is only Incognito Dex is anonymous, so the traits of Incognito Dex are not linkable to your identity… your wallet or identity, is not linkable to the trade, and it’s not linkable to the… the blockchain hash. So you remain anonymous and nobody can say that this guy was like traded 100 times with this kind of coins, And the second like advantage which we bring is it’s blockchain agnostic. So simply we built bridges to different kinds of networks. And on Incognito Dex, you can swap Bitcoin to Monero, Monero to USDT, USDT to BNB, and every… everything is seamless, the same as on Uniswap and just like withdrawal to native network. So this is what we are proud about and also the thing because Incognito is still not a mainstream exchange but so far we attracted more than 17 million US dollars in liquidity which give us some like enough power for our users actually to execute anonymous trades. The trading volume in the recent… The last two months are above 200,000 US dollars every day which is organic. So we do not run any kind of trading competition. It’s how much users want to try it like privately right now. And from this perspective, I can say that our liquidity pool is not that big as Uniswap but from this perspective, I can say that Incognito is like one of the biggest privacy Dex on the market right now. And as we discussed before in the beginning that if cryptocurrency goes mass adoption and people like it requires privacy, and this is where Incognito wallet and Incognito Dex is actually should come. 



BLOCKCHAIN WAYNE: Nice, and I was also looking… you know, so many users doing things from their phones. Incognito has an app, right? Yeah so we… we are mobile first. That’s also interesting as it’s not many people to know, but we were the first team which implemented generation ZKP on mobile. We did it like maybe six months before the Zcash team implemented it on mobile. So this is just to confirm my words that we have really cool talents like engineers. We saw from like our guys, they solve really complicated problems. I mean I know that many crypto projects, they say that they are first in this or their first in that, but simply we… We bring like ZKP on mobile more than one year ago, maybe one and a half year ago. We bring anonymous AMM, our automated market making Dex 12 months ago as well on the market. And it’s also like… like verifiable we build them for… I don’t want to say first, we build the… the trustless bridge to Ethereum which is non-custodial trustless communication which I described before, we built it like 14 months ago. So when nobody talked about interoperability or something like this. And again we design Incognito node devices like maybe 18 months ago. So simply we did these things and the thing which we talked with you before the interview started… you can notice that we are thinking a little bit further in terms of bringing more innovation in the blockchain industry. And this is our main motivation so we want to be innovative… innovative team. We want to drive not only adoption of cryptocurrency, but bring and build products which haven’t existed before, so yeah that’s our motivation. And this is why we like… like Incognito and that’s why we build it. 


BLOCKCHAIN WAYNE: Nice nice that’s some great goals too. So tell people where they can find out more about Incognito if they want to, now they’ve heard this interview and they want to look up more, where can they find more information? 


ANDREY BUGAEVSKI: Yeah sure. It’s quite simple, this is our main website. It’s the We’re not… again, we didn’t try to put all the information there. There’s key messages about our two key products which we highlighted and then we have a forum when all communication is going to go, going on our forum which is and there you can find the Incognito core team, our researchers, our developers. We are super active there. I am also quite proud of how our community grows. We also cross around 60000 monthly visitors on our forum simply because most of these people, they’re privacy enthusiasts. Some of them like crypto enthusiasts. But I think the really cool thing is that more people not from crypto space but from privacy are actually coming to Incognito and it also gives us some kind of fresh air and energy. Because you know like the crypto space is some kind of vacuum. There’s mostly similar people, same projects. They talk about similar things and then when someone jumps from outside like someone who brings a question about Tor and about how to like make Tor better or like how to this kind of thing. So yeah we are quite happy we are growing, yeah and 



BLOCKCHAIN WAYNE: Nice nice and the app you said is… it’s on… is it on app store and google play store? 


ANDREY BUGAEVSKI: Oh yeah yeah, so you can simply find it by searching Incognito Wallet and and you can see that again, the name right, we like to try to… like come with the brand name which exactly tells what kind of mission. We want to deliver privacy and we believe that in the future then Incognito, it will be like… you know, more like… more like a name, brand name than like description itself. So if we succeed then we can record and remember this video, you know like maybe in 5-10 years, we can just come back to this video and check if I was right or wrong. 


BLOCKCHAIN WAYNE: Yeah absolutely, absolutely. All right, Andrey, I appreciate the time today, thanks for joining us. It’s been a pleasure, man. Thanks for sharing all the information about Incognito, any final words? 


ANDREY BUGAEVSKI: Yeah, thank you for inviting and just… I don’t know… looking for… for more communication, more chats. We are always happy to share the latest news and invite everyone who cares about privacy or who believes that in the digital age, privacy is like one of, like the most important things. Just join us and just build with us. We… we all… oh sorry, the last word we have also like quite a good… like foundation program for like startups, for entrepreneurs and if you believe that your next product or startup should be… should use privacy features, then you can start building, and we’re happy to fund and support the development. 


BLOCKCHAIN WAYNE: Nice, nice all right, thanks again, Andrey and thanks everyone for watching and we’ll see you on the next episode. 


ANDREY BUGAEVSKI: Yeah, thank you everyone. Bye-bye!

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