CSW during the Bitcoin Masterclass Discussion

The Bitcoin Masterclasses with Dr. Craig Wright: Why anonymity differs from privacy

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For years, Dr. Craig Wright has been emphasizing the point that privacy and anonymity are different things. In his first The Bitcoin Masterclasses series, the nChain chief scientist gave a lecture on the subject.

Anonymity isn’t what many think it is

“Anonymity isn’t what many in the cryptosphere try to make it out to be,” Dr. Wright begins.

Anonymity matters in situations such as medical research, where people want to have their records given 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 also matters in relation to voting. In the days when voting was public, voters faced problems such as peer pressure, and things like the buying and selling of votes occurred. Once again, it’s 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,” Dr. Wright says, drawing on his own experience working on voting systems in Australia.

Dr. Wright then outlines how real 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 results aren’t falsified while protecting the privacy of those involved.

Anonymity and the isolation of information

Elaborating on the difference between anonymity and privacy, Dr. Wright points out the necessity of businesses to know who they are dealing with. Total anonymity would prohibit business services like returns and deliveries. However, it’s possible for the business to know who they’re dealing with without letting everyone else know. That’s the difference between privacy and anonymity.

The 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 would be possible to verify this without storing every piece of information, dramatically decreasing the frequency and severity of data breaches.

While using verified identity certificates on the blockchain, it’s possible to have multiple pseudonymous accounts on applications like social media. Yes, it’s private because the public doesn’t know who’s behind the account, but they are traceable to a real identity by the company running the platform. “People will take more care—it’s a Ring of Gyges thing,” Dr. Wright says.

Ownership of data and identity

“What if you owned your own data and identity?” Dr. Wright asks.

If you own your identity and the attributes linked to it, as well as the data you put out there, you can move between platforms without losing said data. Whereas if Twitter (NASDAQ: TWTR) deactivates your account, your data is gone, in the Bitcoin-powered world, Dr. Wright envisions that data could simply be transferred to another platform, and things could continue from there.

The ability to move data to other platforms would have a secondary benefit: the massive data monopolies such as Facebook and Twitter would lose their power and would be unable to buy out competitors as they do today.

Bitcoin for legal industries without banking

Dr. Wright then points out that Bitcoin can help many industries that are perfectly legal but have problems with 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 the example of casinos taking more money than they should. If the data about their wins and losses are publicly visible, they’ll have the incentive to be more honest, and they’ll be caught if they aren’t.

Other use cases for businesses include file storage, data integrity, enhanced cybersecurity, and much more. Online platforms such as Airbnb, Yelp, and others can be improved when data is provably true and accurate.

How Bitcoin can improve supply chains in manufacturing

Bitcoin can improve businesses involved in manufacturing, too. For example, a factory manufacturing tablet devices will likely need multiple suppliers worldwide providing casing, electronics, screens, chips, and more.

All of the 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 manufacturing the chip does not need to know where the finished product was sent. This is where data segregation and isolation come in once again. Data being stored this way would make product recalls, fixes, and more much easier.

All of this can be done without compromising the privacy of the owner, but it can not function as such with the ‘crypto’ concept of anonymity, whereby no information is known about anyone or any organization. However, the kind of anonymity Dr. Wright is talking about, whereby no identities are linked to the information directly, is possible.

Watch: The Bitcoin Masterclasses Highlights: Identity & Privacy

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