Dusk Network co-launches the Leading Privacy Alliance
By Sabine de Witte

Nov 03, 2022 - Amsterdam

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?

For more information about LPA, check out the website.

About Dusk Network
Dusk Network is the privacy blockchain for financial applications. A new standard for compliance, control, and collaboration. Our mission is to enable enterprises of any size to collaborate at scale, meet compliance requirements and ensure that personal and transaction data remains confidential.

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