Dusk Network co-launches the Leading Privacy Alliance

As a founding member of the Leading Privacy Alliance (LPA), Dusk Network was proud to co-host the launch event on October 9 in Bogota, Colombia, prior to the official DevCon event taking place.

The Leading Privacy Alliance is an alliance for Web3-based companies
that are eager to integrate privacy by design and to make the web a more
private place where its users are in complete control of their own data.

LPA’S motto is “Privacy is not about hiding, it is about freedom”. Its
ultimate goal is to raise awareness about the current state of privacy,
implement solutions to these problems, and educate users and projects
about the fundamental role of privacy in the technology we build and
use.

Dusk Network is one of the three founding members along with HOPR and
BlockWallet. We noticed a lack of understanding with regard to the need
for privacy within the Web3 ecosystem. More education is needed, not
only for consumers and end-users but, even more importantly, for
policymakers.

On behalf of Dusk, Head of Business Development Ryan King, privacy
ambassador at heart, was invited to give a speech sharing his thoughts
on the importance of privacy. Everybody with a bank account (so,
everyone!) could identify with the examples Ryan shared.

Because we think it is relevant for everyone, we happily share the
speech by Ryan with you here:

Dusk Network and the Dawn of ’Private Transparency

Dusk Network is a Layer-1 blockchain company, operating mostly in
Europe. We are building a platform for privacy-preserving, legally
compliant smart contracts and security tokens. Effectively what we aim
to achieve is to allow finance firms, such as central securities
depositories, multilateral trading facilities, and others to be able to
tokenize their offerings and be able to take advantage of the benefits
of Decentralized Ledger Technology - specifically the speeding up of
payment and settlement (which is currently a 48 hours process in most
jurisdictions), reduction of costs due to the automation of processes,
and providing them with the ability to operate their trading operations
24/7. We are a the cutting edge of zero-knowledge proofs which will be
used to obfuscate anything except the most critical data, and are
working with financial entities to build compliance criteria into the
products themselves through the use of things like white lists, so that
both privacy and compliance are baked in at the base layer, meaning
anything built on top will follow those same standards.

I’d like to share a little about why privacy is so important to Dusk
Network as a company and I can explain this through two major points.

Firstly, one of the slogans, one of the action phases of the Leading
Privacy Alliance is: ‘privacy is not about hiding, it’s about freedom’.
That’s a fantastic way of putting it, and it is also very inspirational.
In the case of what we’re building at Dusk Network, let’s take it off at
a slight tangent and say, ‘our privacy is not about hiding, it’s about
restoring the same level of privacy that already exists in the space.’
This is a conversation that I find myself having regularly with people,
regardless of where they stand on blockchain and crypto. I don’t need to
stand here and persuade a room full of DevCon attendees of the benefits
of blockchain - if anyone here isn’t sure yet, then you’re probably in
the wrong job. Interestingly, many of the firms that we consult with are
also convinced, or in the process of being convinced of the benefits
too. As part of my role for Dusk, I spend a lot of time reading European
and British regulations, especially around DLT and crypto, and if you
read the preambles and supporting documents, it is clear that
governments too are also convinced of this. So why isn’t the industry
moving faster?

Well, one of the issues we have, as you all know, is the public nature
of DLT. If you were to get hold of my bank account number, well - that
wouldn’t be good, for lots of reasons - but one thing that you wouldn’t
be able to do is use that to get a list of all the good, bad, and
naughty things that I’ve spent money on. Yet, in the DeFi space getting
ahold of my wallet address allows exactly that. While many of us in the
space may be comfortable with ‘public as default’ - those regular folks
out there on the street are horrified by the idea. And ultimately these
people are our customers’ customers, so this is super no bueno. And this
brings me back to my point: investing heavily in privacy features such
as zero-knowledge proofs is not making things more opaque, or more
hidden but rather simply restoring the default level of privacy that
people in the market expect.

Secondly, as a company offering products to the finance sector, we are
operating in a highly regulated space. Regardless of what we feel about
these regulations, whether they are just and fair, whether they should
exist at all, it is a reality that they do and we not only have to be
aware of them, but to work within them. So how does this affect privacy?

Well, as mentioned, these iInstitutions live in a highly regulated world
where a single misstep could see the loss of a license or the shutting
down of their business. They have rules imposed upon them by governments
that require them to check personal information such as nationality,
age, and financial status. Anyone dealing in financial assets has to
make sure, for example, that they are not selling to North Koreans, to
teenagers, or to people without the means to deal in such assets.
Unfortunately this can very quickly lead to what we can call ‘mission
creep’ - i.e gathering more personal data than is necessary. It’s easy
to be a skeptic and assume that, like in the case of Facebook or Google,
this is cunning and intentional. But sometimes in the case of the
financial space, it is a consequence of the system that we already have.

For example, in a lot of current systems, proving a negative necessarily
requires proving a countering positive. As mentioned before: many
financial assets cannot be sold to people of certain nationalities like
North Korea, Iran, or Syria. However, in order for an individual to
prove that they are NOT from one of these countries, they must prove
that they are from some other country. I must show that I am American,
or Dutch, or Colombian in order to prove that I am not North Korean,
Iranian, or Syrian. The system itself has no real way to distinguish
these two things, but they are different. Proving a negative should not,
in my opinion, necessitate proving some other positive, because that is
handing over far too much information. We are somewhat programmed to
accept this, as a society, as we already do this in the analog world -
when I was 18, I had to show a driver’s license in order to prove what
age I was to get into a club. But what the law actually required me to
show was that I was NOT 17 years, 364 days and under. However, proving
that negative isn’t possible with our current system of identification.
And so therefore, as I go to prove that I am NOT underage, I
accidentally reveal my actual age, my birthday, not to mention my name,
address, and what kind of vehicles I am licensed to drive. I don’t want
some random security guard to know that. And neither should a person
purchasing financial assets need to prove where they are from in order
to prove where they are not from.

So, needless to say, for these reasons privacy is a deeply important
issue to Dusk Network and our core business. Luckily, we are also
blessed to have a staff of individuals, myself included, who are
passionate about privacy in general and who keep this flame burning in
everything that we do and every decision that we make.

Dusk Network is currently in TestNet and is working with several
financial entities to create pilots and test products that will help to
persuade them of the use case, whilst simultaneously helping us to
identify the features that we need to keep and those which we can drop.
We are building the base layer of a new financial system, one in which
entities can gather and users can provide just enough data to be
compliant and no more. But we can’t do this alone. We currently operate
Helios - a grants program which provides funding for parties interested
in building tooling for and dApps on top of Dusk Network, so that we can
together provide an entire privacy-preserving, compliant financial
system to our partners, our users, and the world. As part of the LPA, we
hope to meet many of these potential partners, and if not, we are also
happy to be a part of the conversation, and to drive companies in the
Web3 space to include privacy, not as a feature, but as a default. And
in a space such as finance, where we are talking about people’s savings
and wealth, people’s assets and debts, and people’s very livelihood,
what could be more fundamental than that?