Bitcoin Masterclasses with Dr. Craig Wright: Why Anonymity Differs from Privacy
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For years, Dr. Craig Wright has emphasized that privacy and anonymity are different things. In his first The Bitcoin Masterclasses series, the nChain Chief Scientist gave a talk on the topic.
Anonymity is not what many people think it is
“Anonymity is not what many in the cryptosphere are trying to make it out to be,” Dr. Wright begins.
Anonymity is important in situations such as medical research, where people want to have their records handed over and analyzed without having their names linked. However, the records still need to be linked back to real people to prevent things like fraudulent data. So we need a methodology to isolate identity using something like zero-knowledge proof to prove the data is correct.
Anonymity is also important in relation to voting. At the time when voting was public, voters faced problems like peer pressure, and things like buying and selling of votes happened. Once again, it is important to prove that voters are real people who are still alive to maintain the integrity of voting. “Just having a blockchain doesn’t solve this,” says Dr Wright, drawing on his own experience working with voting systems in Australia.
Dr. Wright then outlines how true anonymity (not the extreme version discussed by BTC maximalists) can improve the integrity of academic research. By using tokens, it can be proven that real people engaged in real activity without revealing names or personal details. This proves that the results are not falsified while at the same time protecting the privacy of those involved.
Anonymity and isolation of information
Dr. Wright elaborates on the difference between anonymity and privacy and points out the necessity for businesses to know who they are dealing with. Total anonymity would prohibit business services such as returns and deliveries. However, it is possible for the company to know who they are dealing with without notifying everyone else. That’s the difference between privacy and anonymity.
Isolation of information is a key concept in all of this. Dr. Wright points out that companies like Target, which have been involved in serious data breaches, only collected and stored so much information because they needed to know they were dealing with real people.
With the use of blockchain technology applications, it will be possible to verify this without storing every single piece of information, dramatically reducing the frequency and severity of data breaches.
While using verified identity certificates on the blockchain, it is possible to have multiple pseudonymous accounts on applications such as social media. Yes, it is private because the public does not know who is behind the account, but they can be traced to a real identity by the company that runs the platform. “People will be more careful—it’s a Ring of Gyges thing,” says Dr. Wright.
Ownership of data and identity
“What if you owned your own data and identity?” asks Dr. Wright.
If you own your identity and the attributes associated with it, as well as the data you post there, you can move between platforms without losing said data. While if Twitter (NASDAQ: TWTR ) deactivates your account, your data is gone, in the Bitcoin-powered world, Dr. Wright envisions that data can simply be transferred to another platform and things can continue from there.
The ability to move data to other platforms would have a secondary benefit: the massive data monopolies like Facebook and Twitter would lose their power and would not be able to buy out competitors as they do today.
Bitcoin for Legitimate Unbanked Industries
Dr. Wright then points out that Bitcoin can help many industries that are perfectly legal but have trouble banking. Gambling is one of them, cannabis is another, and others include small breweries, arcade machines and more.
Likewise, these businesses can be made more honest thanks to the traceability of data on the blockchain. Dr. Wright gives an example of casinos taking more money than they should. If the data about their wins and losses is publicly visible, they will have an incentive to be more honest, and they will be caught if they are not.
Other enterprise use cases include file storage, data integrity, improved cyber security and much more. Online platforms like Airbnb, Yelp and others can improve when data is demonstrably true and accurate.
How Bitcoin Can Improve Manufacturing Supply Chains
Bitcoin can also improve businesses involved in manufacturing. For example, a factory that manufactures tablets will likely need multiple suppliers around the world who supply cases, electronics, screens, chips and more.
All data related to these parts, such as who delivered them and when, can be recorded on the blockchain, but not everyone involved needs to know every detail. For example, the man who produces the chip does not need to know where the finished product was sent. This is where data segregation and isolation come in again. Data stored in this way would make product recalls, fixes and more much easier.
All this can be done without compromising the privacy of the owner, but it cannot work as such with the “crypto” concept of anonymity, where no information is known about anyone or any organization. However, the kind of anonymity Dr. Wright talks about, where no identities are linked to the information directly, is possible.
See: Bitcoin Masterclasses Highlights: Identity and Privacy
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