Blockchain privacy technologies serie: Introduction - the information asymmetry threat

Privacy matters

It makes possible for us to develop as free-thinking, independent individuals. One common nonsense argument against the importance of privacy is:
I have nothing to hide, so why should I care about my privacy?
Following this logic we go on declaring:
I having nothing to say, so why should I care about my freedom of speech?
There is nowhere I want to move/travel to, so why should I care about my freedom of movement?
I don't believe in any gods, so why should I care about freedom of religion?
And so on... for any basic human rights.

These rights were granted by Law in order to protect from specific threats. What about privacy?
Privacy encompasses many forms and concerns:

  • integrity of family life
  • state oppression
  • value of data
  • true inner self that can only emerge in anonymity or surveillance that causes behavior changes
  • financial concerns:
    • confidentiality of business transactions: hide negotiated prices, avoid signaling when trading
    • security: does not expose the value of your assets to avoid becoming a target for hackers and thieves
    • loss of fungibility: coins are flagged as unacceptable and can't be spent

Our scope is reduced to data and information privacy.

Data privacy & information asymmetry

This form of privacy protects from the information asymmetry threat. Dealing with data privacy we can distinguish:

  • known knowns: security camera we see on the street
  • known unknowns: what happens with the recording? How long will it be stored?
  • unknown unknowns: all the other uncertainities we are not conscious about because we ignore other possibilites exist: e.g processing the footage with a facial recognition software.

People not realizing the importance of privacy is in itself an evidence of these "unknown unknowns". They are also where the asymmetry comes from.
"Asymmetrical" because:

  • we often have no choice as to whether being monitored.
  • we have little knowledge about how much information is collected.
  • all the work of correlation and analysis is done with tools, techniques or computing power unknown or inacessible to us.
  • the predictive outcomes will turn into decisions felt as arbitrary by the people impacted: deny employment, deny credit, restrict movements, refuse membership
  • the collection of data in the name of reducing some risks faced by a larger group (e.g the state) produces new risks whose danger citizens take on: censorship, coercion, oppression of minorities...

Essentially "they" know much about us: Have power over us. While we know less about "them" and can hardly respond.

Acceptance or going offline/"opting-out" isn't really a choice.
Furthermore, the immutability, transparency, openness characteristics of (public) blockchain networks make the relationship even more asymmetrical.

Obfuscation and cryptography for more data privacy on blockchain networks

3 aspects of privacy stand out in the context of blockchain technology:

  • identity
  • transaction data
  • total blockchain state

As solutions to anonymize transactions, obfuscate transaction data or blockchain state, I will structure my posts around the following protocols and techniques:

To learn more about information asymmetry or find answers to the ethical questions raised by relying on obfuscation techniques, I recommend reading Obfuscation, A User's Guide for Privacy and Protest, Finn Brunton and Helen Nissenbaum.


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