Bitcoin Masterclasses – It is possible to keep your identity private on the blockchain

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In the second session on day two of The Bitcoin Masterclasses, Dr. Craig Wright talked about keeping your identity private and how to share certain attributes without revealing them all. He explained how we could use specific features of Bitcoin, such as Merkle trees, to do this.

Private identity

For something to be private, we need an identity. Anonymity is when there is no identity, but there is no privacy, Dr. Wright begins. Looking back to the previous session, when he talked about share ownership, he made the point that to prove ownership of something we require an identity.

But while we want to prove who we are and everything about us, we don’t necessarily want everyone to know everything. We want to isolate our information. We can use a Zero-Knowledge Proof to link our identity to attributes without sharing all of our personal information. For example, Dr. Wright says, “my home address shouldn’t need to be copied in order for me to prove I’m over 18.”

“How do you think we can create identities and isolate attributes?” asks Dr. Wright. One of the audience replies that we can use Merkle trees to share specific information without sharing everything.

To illustrate the point, Dr. Wright asks how we can prove that we are qualified investors. He explains that if we had a PKI certificate attached to our passport or other official documents, we could prove we have x amount of funds using a key agreement protocol like ECDH. We can also prove that we have qualifications such as finance degrees or other subjects that qualify us.

“If I need to prove that I have a million pounds, I don’t have to go any further and prove that I have a billion pounds,” says Dr. Wright, showing how we can prove what we need without revealing more. We can even establish that we are an accredited investor without revealing who we are, he says.

“The company does not legally need to know who you are. Marketing wants to know, but legally they just need to know you’re an accredited investor,” he explained.

Merkle structures, attribute changes and more

What does a digital signature sign? Everything in the certificate. We’re effectively signing a hash, which means we can consider tagging it,” explains Dr. Wright. How deep can we make a Merkle structure? “We can make it big,” he says. “At 128 deep, I could name every atom in the universe, probably down to the quarks as well.” The problem with this is that no computer could save them all. Sixteen deep is more than enough for the average person and all their attributes.

What if an attribute changes? Wouldn’t that change the hash? “It will,” says Dr. Wright, saying that change can be written on the chain. We can even keep track of name changes, gender assignments and much more. We can also attach things like rental documents to prove where we are. When we register changes, they happen immediately unless we deliberately use nLockTime to make them appear later, for example after we have moved into a new home.

Depending on how private we want to be, it’s even possible that we could have Merkleized documents like our birth certificate, linking specific details about them like date of birth, name and other attributes individually. Dr. Wright once again points to Ethereum, saying that dragging and dropping entire documents onto a blockchain is idiotic because they will be there forever.

“If we want to do this, we have to design it right. That is why it takes so long, he says.

All of this can allow us to prove our identity, or specific attributes associated with it, without giving up all of our information and relying on a centralized authority.

See: Bitcoin Masterclasses with Craig Wright – Confidentiality, Privacy, Anonymity, Party to Party

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