Zero Knowledge: Privacy and Transparency's Beautiful Co-existence by Anna Rose

[Applause] okay hi today I'm going to be talking about their knowledge cruises and how zero knowledge proof kind of enabled beautiful coexist with privacy and príncipe transparently drug first off my name is Anne Rose I'm the co-host of a podcast called zero knowledge podcast I also throw an event called thisor knowledge summit and the next one will be in San Francisco on October 26th so I hope to see you there just FYI I have a podcast I'm not so used to giving public speaking where there's no editing so please bear with me alright I'm speaking this be ten and I believe this is the privacy track so I'm sure you've already had the zero knowledge proof defined for you I'm assuming that most of you know it but in case you don't zero knowledge proof is a technique for showing that a statement is true without revealing any additional information other than the fact that the statement is true so for example if I know a password I could potentially prove to you that I know a password without revealing what that word is you just know that it is true with zernov proofs you'll have a proven a verifier the underlying information is kept secret private the verifier knows that the information is accurate despite not having an entire picture in this case there's no need for the third party to act as a sort of certifier that this is true the zero knowledge proof itself the cryptographic in underpinnings or what confirm the truth of the statement so here's a little example later tonight I might want to go over that I might want to go to karaoke bar actually and I learned that the drinking age here in Japan is 20 now I'm Way over 20 but I mean I may want to prove that I'm over 20 without revealing my age and I could potentially do that with the zero knowledge proof so here the bouncer would know that I am over 20 but he wouldn't actually know my age okay so in this talk I'm gonna be outlining sort of privacy and blockchain as well as transparency walk in and help it's you're not proof interactive both of those so first let's talk about privacy to privacy in the blockchain blockchain isn't actually private on its own but I didn't turn ultra proofs can make the transactions on the blockchain private so the most famous sort of the first example of this was the zero cash paper written in 2014 or they actually proposed a model that allowed for confidential payments since then there's been a lot of protocols that are emerged when they're using this kind of underlying idea and they're creating you know like for example Z cash they're creating a shielded account model and what that actually means going back to my example with the bouncer if I have to pay my cover I could potentially pay the cover from my account to the bars account and no other information would be made obvious to the bars account for example the bar would not know what I've transferred before what I plan on doing in the future the bar would not know my balance and yet using as your knowledge proof I can guarantee that there's no double spend so I could guarantee that I have those five tokens that I'm transferring and that I haven't transferred five tokens twice although five tokens for an entry if it's caramel if it's C cash would be very very expensive so I'm hoping that my night all right so in a traditional payment system this makes total sense like you should not have to reveal what you've done before what you've done after and like sales a business I paid your invoice I would not want you to then be able to see other invoices I've paid in the past or plan to pay in the future and so here we can see why privacy is valuable for the blockchain and I think if we want watching to be adopted on large scale it definitely needs to be secured accurate but private ok so now let's talk about transparency in the blockchain okay when you think about like Bitcoin and other distributed open block chains you will see all the transfers being made and even though it's just account numbers there are I mean I think we all know this there are methods for tracking money I'm watching keep they're using on and off ramps like exchanges or cracking mixer like systems there are in tight like there's analytics companies dedicated entirely just to figuring out who's who on the blockchain in fact criminals have been caught because these Bitcoin not displayed it and that's actually a really good thing like transparency is a good thing you can actually see all the whole things you can seal the transactions if you want you can actually take like keep an authentic copy of the ledger transactions are mutable and you can see them yourself in this case you can actually audit any transaction and there's no middleman needed and that means you know where your tokens are going how they're being used and who touches them but if you think back to the traditional financial world large banks and other institutions will lose customers funds in ways that the user may not be aware of and in ways the user would never want so there's definitely value in this transparency into these larger systems this is why transparency is valuable for the blob chain okay so now I've outlined the tension between these two forces there's privacy and there's transparency there's private we want our you know we want some of our data to be confidential we also want some key information to be verifiable and honorable and even though it seems contradictory during all the proofs and blockchain enable both of these things it's kind of cool so yeah in this example so what I wanted to now is talk about human examples of hauser knowledge proofs and watching could potentially help with compliance and Trust building for the end-user now when I was preparing these lives and this presentation I wanted to use examples from like healthcare or phony or even taxes but in fact a lot of those are not very developed and so instead the focus of these examples are in the financial sector and I think it makes sense because there's so much activity on chain that could be verified it's like it's all the numbers are there and so I think a lot of these systems will first emerge through the financial sector I want to talk to start about compliance this is probably a bit of a dirty word here in this audience but I I think this is actually really cool like what you could do is earn all proofs is you can potentially cryptographically prove like a fund could cryptographically prove its operating compliantly without having just disclosed all the details of their actions and at the same time regulators could be given visibility in the general fund information but not access to other confidential stuff like investing half of activities lp's or a lot of these examples come from a specific project called Endora actually this talk was inspired a little bit by Ben fish who is one of the cofounders of fedora in one of I think who I did an interview with him and in that interview he just sort of mentioned like how you could actually use your knowledge proofs to do selective disclosure and I think that is one of the powers of this of this technology and fedora what they actually do is they use your knowledge proofs and multi-party computation which they related an equally powerful tool to provide both privacy and transparency and I think the key here is the selective disclosure it's not that everything is transparent it's not that everything is kept private you actually can allow certain information through and keep other information private so the first example that I want to share is this idea of ensuring kyc so kyc know your customer this is something that you need to do if you're running an exchange if you're buying cryptocurrency if you're doing investments what you could do here is actually prove that a participant has passed a kyc by a third party so what you do is you basically take a white list and the white list of addresses and sort of your selection of addresses match that and then provide a proof saying like this like these addresses are on the white list however you wouldn't actually be disclosing which addresses how many addresses you wouldn't have no one looking for the outside would be able to tell who on that list has been kind of went through and so here you see this selective disclosure so another one would be to prevent capital management fraud funds could demonstrate statements about flows even out from addresses belonging to investors versus invest and this could actually prevent ponzi-scheme and embezzlement so another example would be a server couple examples are providing better business practices for trust-building so here's another example where you could communicate better with investors you can actually share more information without revealing the details you could provide on the code to be probe all of the funds current asset Holdings using a public database of assets and liquidity profiles you can share general information about a funds asset without disclosing which assets are actually held or you could do something like a proof of solvency where you can actually demonstrate the value of asset backs back tokens the value of the tokens actually exceed the liabilities meaning like the fund is solvent it actually has the funds it says and you can actually do that without revealing how much or what they are and this is a really exciting example which is it actually uses your knowledge of proof to issue stocks them a ledger and you can actually track these through secondary trades except to the outside no one would necessarily know that you are tracking them you could to see where they're going but outwardly like no one else could see where they're going it wouldn't be able to track them only you'd be able to track them and you can actually do that using certain altar prints as well so some other use cases that I kind of mentioned quickly before and like in general this talk is very much trying to find ways trusts to think about the power of zernoff proofs and I hope that this actually could inspire you to think about more ideas and so other ideas that have been floated or things like taxes and auditing supply chain management and voting there is a project called ZK ledger from MIT where they did a lot of work on the auditing front as far as I know there's no implementations yet and in general a lot of this stuff will need like I mean you'll have to get a lot of authorities and regulators on word I sort of picture it being a combined effort between funds and regulators I don't think it would just come from industry if that was happen but I think it could be really powerful cool so yeah I hope that this talk has helped you to explain I hope that I've explained a little bit how valuable your knowledge proofs could be for our personal and professional lives and yeah and how it provides this much-needed balance between privacy and transparency and before I end I want to say a big thank you to that fish as I mentioned from Fedora because you really helped me work on this talk and come up with those points I think their projects pretty cool I don't work for them but I just I think they inspired us so I wanna say thank you to them this is a very high-level talk the zero knowledge summit is something that I'm thrown in San Francisco at the end of month October 26 if you're into that if you're there please apply that will have actually some of the best researchers around talking about details of their protocols and so I hope that you will consider coming so I don't know if you have any questions or if you actually give any comments given me and ideas that would be really interesting to hear also I think there's only one you get lakhs welcome two men to do this you know inside these 18 digital machines so well I know that there's a lot of projects that are building on top of the air virtual machine using zero knowledge proof stuff and I'm sure you could do private transactions with them but I think what we're talking about here is actually its constructions using this you're an entrepreneur and as I mentioned also NPCs it sounds like you've actually designed systems that allow for the disclosure right now using this ability over a blank there's no logic rules for the Texas and I would say that it is absolutely a challenge to convince eventual ministry to use of these technology it's completely another level of check so all these emulation auditory understand the power of zero knowledge proves but you need to prove it yes for the government that's that's actually one of the reasons why I don't totally see it coming from industry and like having industry pitch it to government but rather like soar through education or through like evangelizing these ideas potentially have people within those bodies come up with those ideas themselves which may be good or bad but I think it's good that we keep an eye on it I find a lot of that though there's a motive I mean Singapore to Authority the launcher kind of like a - notable fortune Plumtree and one on through the implementations is as easy as proof serious importance with much proof for in the bank I mean just just give example I mean I'd be curious to hear exactly what they're doing there because it means your knowledge proofs can be powerful for all sorts of things but here what I'm talking about is like compliance or like some information is revealed and some is kept private so I like I'd be curious to hear exactly where they use it doesn't think it's like there are actually examples in health care of spirit knowledge groups that's so far there's no exams you're an awful person and blockchain that are like really working in the way that a hospital would be known to or maybe you have a counter example they're doing a kind of real-time contentment between pens and so this is kind of they have had let's enjoy our treatments yes and I think the bullet I missed out on Laura it's a pony scented bicycle chain yes undeveloped also into I think is like NASA and all those things I can get back home my pictures to hear from that example if there are actually like is that designed by regulators are set designed by a consortium of banks so big yeah so religion is kind of interesting intelligent I mean not thought it so much in order for this communicates to political lives also it was basically like a call government there were three industry limitations that defunded to do it and the author evaluates and publish the results and their deterrence to a higher Oh are we of three minutes left anyone else have any questions or ideas if not then thank you for listening and yeah I hope this hope you think about these ideas that you guys do [Applause]