Privacy vs. Trust On The Internet: Cryptography A Win-Win Solution

Events of the last few years have begun to highlight in earnest those areas where the Information Revolution has fallen short, or been misused, or failed to live up to its lofty aspirations. Chief among people’s concerns is the apparent conflict between trust and privacy.

Given fears about “fake news” and other forms of misinformation online, the need for trust in the information that surrounds us is paramount. But trust at the expense of privacy — having to share all of our personal information to prove we are not impostors or scammers — is unsustainable for humankind. When it comes to issues relating to privacy, we need to build a better common ground.

Cryptography offers a way. Cryptographic technology is the basis for many technological breakthroughs over the past several years, not the least of which is the blockchain. What makes this technology potentially revolutionary is that it can facilitate trust without intermediaries. These intermediaries — whether credit rating businesses or social networks — and their financial incentive to profit from the information they control has amplified many of the problems we now encounter.

Cryptography has to reshape commerce for the better. The blockchain revolution — which is real and growing, notwithstanding the noise about ICOs and token prices — has already given the world smart contracts, in which funds are automatically escrowed subject to the fulfilment of required criteria. This eliminates many inefficiencies inherent to traditional agreements, in which payment can be unjustly withheld or a vendor can try to pass off incomplete services as a job done. More ambitiously, token ecosystems are being developed in which all kinds of contributions are rewarded and constructive behavior in the marketplace is incentivized financially. As cryptographic capabilities continue to improve, they have the potential to address some of the key shortcomings of the global commercial system.

Let’s imagine what trust without intermediaries might look like. Cryptography allows a person to prove a piece of information without sharing other information for corroborative purposes. A driver’s license is a good example of information that is possessed and controlled by the holder. Its owner can choose with whom and for how long to share this information simply by showing or not showing the card. When the owner puts the ID back in his/her pocket, the counterparty does not retain a copy. Cryptography can allow for a greater level of discretion and control for all information.

A person applying for a loan could verify creditworthiness without the need to share their name, address, date of birth, Social Security Number, and other sensitive information with the lender. The realization of both more privacy and more trust can help us reach a sort of equilibrium in which economies and the commons in general establish a virtuous cycle of interacting and sharing. This would be a clear contradiction of today’s environment, which can seem like a dangerous sea swarming with pirates.

A world where commercial ecosystems foster security with transparency, as described above, is an everyday reality that is within our reach — we just need to build it. As commerce, politics, and personal relationships continue to shift to the digital realm, we must find an equilibrium between ease of transacting and security of information. As someone who has spent a career in cryptography, I know its power to improve both the efficiency and the security of digital interactions. In an increasingly virtual world, we must work to harness this power. If we succeed, we can make life easier, happier, and safer for everyone.

Alex Leverington is the founder of Entropy Labs, which builds and incubates blockchain-based technology and platforms, and was previously a core developer of the ethereum blockchain.