Technology

&So whatgoing on here then& I ask. &Two good friends just got even better [friends],& replies TransferWise co-founder Kristo Käärmann laughing, while Monzo co-founder Tom Blomfield, who is also on the video call, smiles approvingly. &Sorry for spoiling your news,& I tell the pair, who I&m interviewing ahead of an announcement today that the two companies are working together.

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank750,000 customers. It is the second new bank partnership that the fintech unicorn has unveiled this month, after announcing that it has begun working with Francesecond largest bank BPCE Groupe.

TransferWise also powers international money transfer for GermanyN26, and EstoniaLHV. However, a previously announced partnership with the U.K.Starling Bank never materialised and has since been disbanded.

Asked why Monzo has chosen to work with TransferWise, Blomfield reiterates the challenger bankgoal of becoming a &hub or control centre& for your money. This won&t necessarily all be done by Monzo, he says, &but with partner organisations who plug into this hub&. TransferWise is the first of these.

International payments has also been one of the most requested features by Monzo users since the challenger bank posted a roadmap of things it intends to &fix& over the next three months now that the switch from a pre-paid card to a full current account has been completed.

&I&ve personally been a TransferWise customer for five or six years and the service is amazing,& says Blomfield. &Compared to my old bank, itreally, really transparent, the fees are really fair, and they&re continually working on bringing fees down and to make transfers more instantaneous. So I can&t think of a better a partner to do foreign transfers with than TransferWise&.

I ask Käärmann how different the conversation is with a challenger bank like Monzo — which arguably has nothing to lose by partnering with TransferWise and will generate affiliate revenue on each transfer — compared with larger incumbent banks who have historically generated fat margins on foreign exchange fees. He says it is similar, and usually centres on the fact that customers are already using TransferWise and that if a bank wants to put those customers first it makes sense to offer TransferWise functionality within its own app.

&When we announced the large French bank, which is clearly an incumbent — a massive incumbent — they were thinking about their customer,& he says. &That maybe does feel a little bit rare for banks to think this way, but they figured that ‘if we are going to do this, then why don&t we do it properly&. They were actually fully driven by their users and thinking about how to get the best user experience&.

The TransferWise functionality will start rolling out to Monzo users as of today and will let them send money from their current accounts to 18 of the most popular currencies, with &more being added in the near future&. The user experience will be near-identical to TransferWiseown app, and will see transfers happen at claimed ‘mid-market& rates in addition to TransferWiselow and transparent fee. This means you&re told upfront exactly how much you&ll pay in fees and the amount you&ll receive in the exchanged currency.

The integration is pretty deep, too. Monzo customers who don&t have an existing TransferWise account will have an account automatically created for them when they first initiate an international money transfer. If they already have a TransferWise account, they can use their existing details to authenticate with and link their account to Monzo. This means that any international money transfers made from within Monzo will also show up in your TransferWise account and the TransferWise app.

&One of the coolest things for us, other than just working with cool people, is thereanother bank in the U.K. who is transparent with their international fees,& says Käärmann. &We&re kind of getting to the place where once there is enough banks who are as transparent in their foreign fees as Monzo is then it becomes quite untenable for everyone else to keep hiding their fees and thatvery interesting. Not just for us as companies, but more generally in terms of how banking works&.

One notable dynamic to TransferWise adding another bank partner is that the fintech giant recently launched a banking product of its own. Positioned as a companion to your existing bank account, the TransferWise &Borderless& account and debit card lets you deposit, send and spend money in multiple currencies. Acting like a local country bank account, it is primarily designed to solve the specific problem of earning, receiving and spending money abroad and TransferWise says it is not intended to be a fully fledged bank replacement — at least not yet.

&We&re pretty chilled about it,& says Blomfield when I ask him if TransferWisetentative entry into the bank account space was in any way a concern. &Honestly, we are not competing with TransferWise. Both of us are looking at the big high street banks, as either partners or competitors. Our customers come from Barclays, Lloyds, HSBC and RBS. I think anything that increases both of our brand awareness is a really positive thing. We have 750,000 customers, which is something like 2 percent of the adult population, we&re targeting the other 98 percent who are still using the big banks. I just think there is so much headroom in this space that it would be crazy to think that we are competing with each other&.

&If we take a step back, what is the problem we are solving& says Käärmann rhetorically. &The problem we are solving is that moving money across borders is expensive&. He then reiterates a point that TransferWise co-founder and Chairman Taavet Hinrikus has made often, which is that the company is entirely agnostic on how customers access the service. The more money moving via its infrastructure, the better, with economies of scale also meaning it has been able to lower fees on an increasing number of routes.

&For us, it doesn&t really matter if the money is in a bank account that is connected directly to TransferWise or if it is in the Borderless account,& he says. &Therereally no difference, and I know the user experience is better today if you&re banking in the U.K. with Monzo, so thatwhat users should do&.

At this point I can&t resist mentioning Revolut, the digital bank startup and newly crowned unicorn that, on paper at least, competes with both TransferWise and Monzo. Revolutoriginal &attack vector& (to borrow Blomfieldphrase) was cheap foreign currency exchange coupled with a debit card for traveling. And although not yet a licensed bank, it has rolled out bank account features at a shockingly fast pace, putting it on feature parity with Monzo in a number of instances.

Rightly or wrongly, I put it to Käärmann that there is a market perception that Revolut is often the cheapest option when spending or sending money abroad, even if questions remain about how it determines prices, especially at weekends, or if the startup actually makes money on foreign exchange at all.

&When you talk about other people getting into that space, we should be happy if someone figures out how to do parts of it, some routes, better than us or faster than us or cheaper than us,& he says, somewhat diplomatically.

&I wish these things were sustainable as well. We&re super anti-subsidising, just because we think that over the long-term it doesn&t make sense to get some users paying for other users& transfers or for some routes to pay for other routes. Progress is going to be faster if itclean. But, at the end of the day, if therea better solution, we actually endeavour to recommend that better solution. It would be nice if that better solution was also transparent and we can confidently say that they&re not just better in the next 5 minutes but that they are going to be better for the next 5 hours when you can put in your transfer. Itonly fair to the consumers — they&re not stupid — that they should go wherever is cheapest, if they need that, or somewhere that is more convenient&.

Cue MonzoBlomfield to caution me not to get too caught up in the London fintech echo chamber. &Most people in the U.K. have never heard of Monzo or Revolut or TransferWise,& he says, &and so our mission over the next five years is to take market share off all of the big banks, who I think are gouging their customers on things like foreign exchange. Thereso much open space in front of us because big banks just aren&t able to keep up&.

Suppressed in Japan. Championed in New York. Accused of betraying the billion-dollar community he created with an arcane and byzantine ritual, while accidentally solving — maybe — a transnational clandestine mining mystery. All this while leading the rollout of some of the worldmost cutting-edge cryptographic technology into production.

Itbeen an interesting six months for Zooko Wilcox, cryptographer, engineer, and CEO / driving force behind Zcash, one of the worldmost valuable, technically interesting, and politically fraught cryptocurrencies. Thoughtful, soft-spoken, quick to laugh, and eager to see all sides of every issue, he doesn&t seem like a man to inspire bans and rancor. But thatthe crypto world for you, these days.

When it comes to Zcash, &crypto& means both &cryptocurrency& and &cryptography,& for once. It is essentially a fork of Bitcoin which uses a mindbending branch of mathematics known as &zero-knowledge proofs& (which I&ve been writing about for years…) implemented in a form known as &zk-SNARKs,& to allow users to preserve their privacy by concealing both the participants and the amount of any given transaction, even though it is recorded on and guaranteed by Zcashpublic blockchain.

This privacy makes it a knee-jerk target of thoughtless governments and regulators, in the same way that cryptographic protection of your phonemessages and data has become a knee-jerk target of law enforcement agencies who protest that they are &going dark.& Recently, in the wake of a $500 million hack of Japanese exchange Coincheck, which has been linked with North Korea, Japanfinancial regulator cracked down on privacy-preserving cryptocurrencies … even though they were not what had been stolen.

Zcash is not the only privacy-preserving cryptocurrency, of course; others include Monero and Dash. But it is the most cutting-edge. To an extent this has hampered it, as the first version of its zk-SNARK transactions were quite costly to process. Zcash has recently rolled out a new alpha version with remarkable improvements, though — you don&t often see a 98% improvement in anything in engineering — and we can expect a steady rise in zk-SNARK transactions once this hits its mainnet.

This vanguard position has not gone unnoticed. Ethereum made zk-SNARK primitives available to developers as part of its Byzantium release last year, though they have not yet been widely used. JPMorgan Chase has partnered with Zcash to implement privacy technology in its own corporate blockchain research. Perhaps as a result of this, and/or a deeper understanding that privacy is in fact important to the financial industry, New York StateDepartment of Financial Services recently named Zcash as one of the six approved cryptocurrencies on the heavily regulated Gemini exchange. Yes, even as it was being suppressed in Japan. We live in interesting times.

Meanwhile, Zooko is being accused by his own community of turning turncoat. The reason ASICs.

To oversimpify: (Almost) every cryptocurrency is secured by &miners& who prove they have solved computationally intensive problems, in order to show it would be impossible for anyone to have overwritten the consensus record of transactions unless they control more than half of the networkcomputing power. In exchange for this service they get shiny new cryptocoins.

Bitcoin mining has long been taken over by mining companies / consortiums who use custom-built &application-specific integrated circuit,& chips to mine with hardware specifically dedicated to solving these problems, known as &hash functions,& with speed and energy efficiency that general-purpose processors cannot match.

In an attempt to democratize mining, many third-wave cryptocurrencies chose hash functions which were thought to be ASIC-resistant. Zcash was among them. However, ASIC designers are smart people too, and have announced ASICs for essentially all cryptocurrencies. Interestingly, when an ASIC was announced for Monero, its developers promptly changed their hash function to foil the would-be miners … and their &hash rate& dropped by nearly 50%, indicating that someone had likely secretly been mining Monero with ASICs for some time.

This is big business. Across all cryptocurrencies tens of millions of dollars a day are at stake, not even counting the costs of a so-called &51% attack& which have victimized a few smaller currencies of late. So when ASICs for Zcash were announced, and Zooko did not immediately move to change the hash algorithm as Monero did, he was accused of betrayal, and of being in the pocket of Jihan Wu, CEO of the miner manufacturer Bitmain and, if you believe the frothier corners of some cryptocurrency subreddits, all-around evil crypto boogeyman.

Every tradeoff in a billion-dollar market is going to hurt someone. In this case, on the one hand, you&d want the stereotypical &Venezuelan with a GPU miner,& whoproviding for their family with Zcash, the opportunity to keep doing so; on the other, ASIC mining means more dedicated hardware keeping the entire Zcash network more secure. Onn the gripping hand, drastic changes in mining capacity raise the spectre of a 51% attack. Zookocurrent notion is to try to support both GPU and ASIC miners, by dividing the mining rewards between them.

In passing he may have accidentally solved the secret Monero mining mystery. A fascinating thing about the cryptocurrency world, a way in which itincreasingly a synecdoche for global geopolitics, is that itdivided between a Chinese sphere and a Western sphere, and the two seem to be mostly tethered by bonds of mistrust, miscommunication, and misinterpretation.

Zooko was less inclined to believe that Jihan Wu was a Bond villain, because, as he puts it, &I&ve met him, at a conference in Buenos Aires, and he just seemed like a nerd like the rest of us. And I like nerds!& So he decided to communicate; he called up Wu and asked him if he was responsible for the stealth mining, and found Wudenials convincing. Then he called up Innosilicon, the other main mining company, asked if they had a Monero mining farm going back to last year, and received the hilariously casual answer &Yeah, I think so& None of this is at all dispositive, of course — but it speaks to how the crypto world often seems to run on rumor and rancor more than open communication.

While we&re on the subject of conspiracy theories: perhaps the single most colorful thing about Zcash is that in order for its zk-SNARKs to work, they have to be initiated by a group of participants who must construct and then discard secret information. If they don&t, and if they subsequently collaborated, they&d then have the ability to create free Zcash out of thin air. Zcash was initiated with a complex six-person ritual, and if any one of those people was honest then the Zcash network is free of this so-called &toxic waste& taint … but obviously this still isn&t optimal, and is a breeding ground for beliefs of betrayal.

However, this underpinning can be replaced. Zooko is looking into new cryptographic developments such as &STARKs& and &bulletproofs& which provide even stronger guarantees. He envisions a world of &non-custodial exchanges,& where people can trade cryptocurrencies without ever giving up control of them. Heplotting to implement Ittay Eyal and Emin Gun Sirer&Bitcoin-NG& protocol to scale Zcash up by an order or two of magnitude.

Meanwhile, the Secret Service has called for action on privacy-preserving cryptocurrencies like Monero and Zcash — after citing numerous cryptocurrency thefts which, er, were not of those currencies — and they&ve felt compelled to respond. All this a week before the Zcon0 developer conference heorganized this week in Montreal … which will doubtless be attended by some people who consider him a sellout in the pocket of the evil Jihan Wu. I&ll say this for the cryptocurrency world: itrarely boring, and for better or worse, Zcash may well be its least boring front.

E-commerce portal Amazon has silently added monthly subscription for its premium Prime service, allowing customers to purchase Prime subscription on a monthly basis for Rs. 129. Apart from the monthly subscription, users can also choose the annual subscription by paying Rs. 999 per year.

Monthly subscription for 12 months will cost a user Rs.