Blockchain believers hail the distributed ledger technology as a transformative means to enhance trust and transparency. But how does it impact privacy?
Cyber Security Expert and UAT Adjunct Professor Damian Chung empowers his students to develop blockchain solutions for real-world problems. Despite his enthusiasm for blockchain technology, he still preaches caution:
“Companies looking to implement blockchain solutions will have to consider how much anonymity and privacy is required so that the proper architecture is designed. The more restrictive the environment, the lower the user adoption rate. Naturally, a permissioned blockchain would have less nodes but contain better privacy. Even in a privately managed blockchain, would you trust the company who controls access to the system?”
Several startups that aim to solve the blockchain privacy problem are popping up. For example, Oasis Labs recently garnered $45 million in VC funding. Their mission is to create a “privacy-first cloud computing platform on blockchain.” They have already began testing their ideas by initiating new privacy safeguards at Uber. Developers can apply now to join the Oasis Labs private “testnet.”
Bitcoin, the world’s first decentralized digital currency, enjoys a sort of pseudonymous privacy. Web merchants leak data about purchases. Online wallet service providers remain prime targets for hackers. Government entities seek to increase regulatory requirements on exchanges, which could open access to users’ personal information. Professor Chung breaks it down:
“Bitcoin transactions are easily searchable because the blockchain is publicly accessible. The identities of individuals may be hidden by use of a public crypto key, but it is not impossible to draw a connection to a real identity. As soon as that real person goes to exchange a cryptocurrency for hard dollars, they have to reveal themselves.”
He poses this question to his students: “Should you trust anyone even when everything is encrypted?”
If you want to develop blockchain solutions that protect people’s privacy, check out the University of Advancing Technology’s cyber security degree program here.