Why we need privacy features in Cardano?

Hi everyone,

Blockchain immutability has always been important, but these times call for privacy. Privacy features in Cardano are needed in order to help individuals live within the ecosystem and spend without fear. Now more than ever, we must look to the future cases of Cardano and see whether or not we can make this protocol more private.

Thanks,
Philippe

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Completely agree, it won’t be a problem until it suddenly is. Similar to Zcash I’d appreciate transparent and shielded addresses to provide that element of choice for different members of the ecosystem with different requirements. Also correct me if I’m wrong but I think Charles mentioned in a video that the goal is to get some elements of Ourobouros Crypsinous in into 2020. Big achievement if IOG get that far this year.

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Excellent point! Not sure what it would mean from a technical perspective, but adding catagorised, permissioned & monitised features to our privacy could be a potential solution?

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Totally agree with you @philpa. Thank you for bringing up this crucial conversation.
Privacy should be an important issue early on, because it determines Cardano’s values.

The ethos imo, is that we should always have to predefine situations where someone’s right to privacy is revoked, and on what level, and for how long.
For everything else, if someone chooses not to share, that’s their choice.
Systems should be transparent, people should be free to do w/e they want as long their not hurting anything.

We don’t get to decide for others that “observation” isn’t “interference”, and we all know it can be, depending on circumstance. And as a society, I think we should intervene with the individual only when there is due cause. For me anyway.

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It’s a fundamental right for all to have a choice and not to have it revoked in any circumstances under some predefined determination factors by the community, we are not a law enforcement agency, in my opinion.

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By opting into Transparent Money we can greatly reduce human suffering.

According to the book Moneyland by Oliver Bullough: kleptocrats, warlords, and drug cartels are stealing money in their own countries and laundering that money in the US and in European nations through the use of shell companies, offshore accounts and a corrupt international banking industry. I would estimate that 1/3 of the wealth produced by human activity is lost to corruption. This loss would not be possible if the current financial infrastructure were transparent like Cardano.

I see transparent blockchain ledgers as a way to stop the large scale corruption that causes so much human suffering. Before blockchains, secrecy was necessary for security. If criminals or a corrupt government were aware of your money then they could force you to hand it over in the case of criminals or just confiscate your accounts and deeds in the case of a corrupt government.

But criminals can not use transparent money and governments can not confiscate assets controlled by a private key. As such, secrecy is no longer required in order to have security.

So blockchains make it possible to enjoy the benefit of transparency assuming transparent blockchains can displace the current financial infrastruture.

So when transparent blockchains dominate there will be no more kleptocrats, no more warlords, and no more drug cartels which are all made possible by the world’s opaque financial infrastructure. In order to achieve this benefit however, all people would need to agree to use transparent money.

Of course there are many legitimate reasons why people, corporations, and governments must be able to spend in secret.

To manage these opposing needs I am imagining lightchains and darkchains which could coexist on Cardano infrastructure. People could place their money on a transparent ledger (a lightchain) and enjoy the security of knowing that their money is from clean sources (not supporting criminal activity) and that criminals can not steal and spend this money without exposing themselves.

People could still buy and spend on dark chains when secrecy is required but the money from light chains and dark chains would never mix. @rdlrt pointed out that lightchains can not work without limiting exchanges to those which verify the identity of it’s customers.

I am willing to bet that the incentives for a world free of kleptocracy will cause lightchains to become the predominant form of currency and that human suffering will diminish as a result. I think if people really understood what humanity could receive in exchange for transparency in spending they would only opt out when it was absolutely necessary.

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In my opinion, trying to keep money away from drug lords at the cost of our own privacy is not worth it. Thinking about drug cartels, they are in the business of praying on the weak for their own financial gain. I live in Antwerp, which is probably the biggest entry point of cocain and other substances into Europe through the harbour here. I wonder what would happen if we make it all legal and free of cost? What if we decided to help the vulnerable to satisfy their addictions for free while under limited supervision? We gain access to them and we can grab opportunities to help out. Price of production and sale could be controlled and the supply chain monitored.

My point is that governments have the tendency to solve a lot of things with oversight, while most solutions should be found outside of that. This is not limited to drugs. Most likely, war lords could be disempowered through similar means.

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Spot on Philippe,

The only thing missing after the roadmap goals is privacy…

But this should be top priority in my opinion so I hope CIP’s will be created to facilitate this

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I think you are not giving enough weight here to human nature. All the things you mention predate the digital and financial systems.

Corruption and crime are not the same thing. I think everything you say makes a brilliant, imperative point against corruption, but not crime.

To me the line is very clear - organizations, leaders, systems, and anyone with power over others, should be totally transparent in those respects, as much as possible. Eliminate all secrecy except where explicitly integral. Or just all of it.

People however, are a different story -
It’s not that they get to choose to be, or not be, transparent. It’s that you don’t get to “see” what they are doing in their private (a.k.a. don’t hold power over others) affairs. You don’t have that right. IMO.

If we are talking about private individuals’ money, then yes, I think most of it should be private and hidden. Anything the state, the corporation or the authority is doing - out in the sunlight.

If you want my anonimized(!) financial data, you better be paying me :wink: .

The issue of drugs is complex:
While I never use recreational drugs or drink alcohol myself, I agree with you that it would be less harmful to our U.S. population if we would legalize the less addictive drugs like marijuana. Especially since sale and possession is being used as a pretext to keep our jails full of black people. This pretext only exists to keep our police and prison industry fat and happy while destroying our nation’s spirit and the lives of countless black people.
However in the United States we are in the middle of an opioid crisis because doctors have been prescribing them too much. So we have legal opioids in the United States and it’s causing horrific damage to our people.

But getting back to the topic:
While I agree with @philpa: (We need a privacy option in Cardano), We also need a transparency option. We have all heard of proposals where blockchains are used to certify expensive products against counter fit. Now consider the certification of diamonds to prevent the sale of blood diamonds. This does not involve government at all - consumers are enforcing a ban on blood diamonds just by being able to tell the difference. If Cardano is designed with this in mind then money itself can be certified like diamonds to break the market for blood money.

Has anybody been watching the videos that Charles makes?
He’s not about the money - He is trying to make a better world.
But for those focused on wealth, consider the following:
If 1/3 of human wealth is lost to corruption, and we can end corruption, then all of us get richer - much richer.

Yes please, give us a privacy option.
Give us a transparency option too.

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Hi @rin9s

Hmm, now you have me thinking…
I imagine that there is a market for a transparent cryptocurrency.
If Cardano can give me a coin where all funds can be traced back to real individuals then I will buy those coins. The coins will greatly increase in value as people come understand how much richer they can make the world (themselves) when we agree to use transparent money.

I hope Cardano will make this available, but if not I will start the project myself.
Seems like Cardano could do this as a side chain.
If I do it myself then probably a smart contract is the way to go.
Either way, I expect to make lots of money.
Thanks for the idea. :slightly_smiling_face:

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Can’t take any credit, it’s not my idea :slight_smile: . Maybe you’ll also like this one.

Maybe we could go with -
Let’s give ordinary individuals the choice of privacy, and see what happens.
Everybody else should start lining up to be transparentized :flashlight:.
I’m sure reality will prove more complex and nuanced at the end anyway.

For the individual they may end up being a target if they were transparent on how much wealth they hold.

Companies may want the competitive edge and therefore wish to have privacy.

I still stand by having privacy as a choice and not forced to go in either direction.

However if you wanted to know about a companies wealth and they’re Public then they have to disclose that to the shareholders each quarter but obviously in fiat not crypto however this may change with adoption and they may have to show crypto on reports.

It’ll be interesting to see how things pan out in the coming years, for Public companies.

Yes agreed but if all of the victim’s funds are in a transparent smart contract or sidechain that can only send money to known addresses then the criminals would have no way to receive a payment even if they force account owners to give up their private keys. Criminals would be much better off attacking Monero holders. So transparency is a deterrent not an incentive for attack because transparency makes the assets worthless to criminals which increases it’s value to the owners.

To further increase security, I would code the smart contract so that you could sent a silent distress signal to law enforcement when the funds are sent under duress.

Still, one could argue that if a criminal sees the balance they might hold the owner for ransom and let the family figure out how to come up with the funds. But this could happen if you have a nice house, a nice car, a business or any other show of wealth.

The game is changing. As cryptocurrency becomes ubiquitous everyone will know you have cryptocurrency because everyone will have it. And people with nice houses would typically have more of it. If you keep the public addresses a secret then you could be forced to turn over your funds and no one would ever know what happened if no witnesses were left.

Secrecy is no longer security.
Transparency is the new security.

Citizens now hold the private keys for their money.
So no one can take it unless you let them.
Keeping the public addresses a secret and hiding how the money flows is how you let criminals take your money now.

Privacy should be a choice.
Full transparency should be a choice too.

I hear you my friend however there is more than one way to skin a cat other than putting a gun to someone’s head, as you have seen by recent events.

Unfortunately we can’t cover every scenario or event as there is one major player and that is the person, that’s why anti virus/malware can not be 100% effective.

All we can do is not to make it easy for the would be criminal. :vulcan_salute:

By revoking privacy or alike we are giving criminals targets and it should be a choice for the individual as to whether or not to disclose.

We could make it one of the first governance issues to vote on. That and the development of ZK-Snarks stable coin.

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Yes, @precious_access this is an issue we must bring to governance for vote.

Thank you all my friends in this forum for making your views on this matter known and for helping me form opinions and work on my arguments.

I understand the benefits of secrecy and I agree there should be a way for you to store and spend your funds in complete secrecy. I think that Cardano should focus on that issue as a top priority.

I wish to keep and spend my funds in a completely transparent echo system where kleptocrats, warlords, and drug cartels can not go. Why can’t Cardano work on this too as a top priority?

These goals are not mutually exclusive? We can have both.

There is an issue about transparency that concerns the secrecy group:
At 7:53 in the video above we hear @philpa say we should all pay our taxes “but” he is concerned that the government will be able to use software to figure out what we owe.
To this I would say he is not considering the power of the private key.
Through the private key, citizens hold absolute power over their own funds.
The serfs are no longer tied to the land.
We now have full control of our money which we can take with us anywhere and spend in any country. So now citizens can shop around for countries that give the most service for the least cost. Many of my friends have moved from my home state to live in states where the taxes are lower. Now we can do this with countries too. Countries will respond by trying to provide the nicest place to live for the least amount of taxes. Citizens will respond by setting down roots and gladly paying their taxes to the country that has given them the best service at the most reasonable cost. Market forces can now control taxes and tax policy. So we do not need to hide our money from the government.

Now imagine what we can accomplish if citizens use the power of the private key collectively.
Remember the Boston Tea Party?
If you understand the power of the private key then you understand that there is no longer a distinction between the collective spending power of our citizens and the actions of our government.
We are now the government.
If we want our government to be transparent then we must be transparent.

Soon Cardano will be the nervous system of our people’s collective will.
So we had better build it well.
What do you want in your government?
That’s what you should build into Cardano.
Cardano must be transparent so that we can see how it’s working and make repairs if it is broken.

Yes please, give us a privacy option.
Give us a full transparency option too.

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Good point well made, i think one of the other issues (especially for big bag holders) criminals could target someone with large assets, this will be more of an issue as ADA price increases. In the normal world people can only guess at what you may have, open blockchain wallets and balances add an additional risk so privacy does need to be managed responsibly.

I couldn’t agree more, but this is down to the individual otherwise its a dictatorship.

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Agreed, finding the balance is really where i was coming from, i.e. the default position should be to protect the individual by default ,as not everyone is tech ‘savvy’ ,in my view you have responsibility for yourself and the infrastructure should be easy to achieve that safety not difficult.

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