Research Summary: User perceived privacy in Blockchain

TLDR

  • Interest in Blockchain technology and its applications has increased tremendously; however, this is accompanied by serious privacy threats.
  • This paper studies users’ privacy perceptions of UTXO-based blockchains such as Bitcoin.
  • It elaborates – based on interviews and questionnaires – on a mental model employing privacy-preserving techniques when doing blockchain transactions.
  • It evaluates users’ awareness of blockchain privacy issues and examines their preferences towards existing privacy-enhancing solutions, i.e., add-on techniques to Bitcoin versus built-in techniques in privacy coins.

Core Research Question

  • RQ1: To what extent are users aware of privacy issues and privacy-enhancing technologies?
    • Do they trust third-party privacy-preserving services?
    • To achieve better anonymity, do users prefer using add-on privacy techniques on top of current blockchain implementations (e.g., Bitcoin), or built-in features of privacy blockchains (e.g., Monero)?
  • RQ2: Are users willing to use privacy-preserving techniques despite the higher fees and longer transaction time?
  • RQ3: Which privacy features interest users the most (e.g., hiding the source, hiding destination, hiding the amount)?

Citation

Ghesmati, S., Fdhila, W., & Weippl, E. (2022). User-Perceived Privacy in Blockchain. Cryptology ePrint Archive. https://eprint.iacr.org/2022/287.pdf

Background

  • De-anonymization in Bitcoin: All transactions on the blockchain are publicly available, anyone can apply specific heuristics in combination with auxiliary information (e.g., address tags) to cluster and identify users and their transactions. Thus, it becomes possible to link Bitcoin addresses to real identities.
  • Privacy-enhancing Techniques in Bitcoin: Add-on techniques on top of Bitcoin were proposed to enhance privacy. They can be categorized into four categories including centralized mixers, CoinJoin based, Atomic Swap, and Threshold signatures.
    Privacy Coins: provide built-in privacy.
    • Monero: is a UTXO-based cryptocurrency that was developed to provide anonymity. It applies stealth addresses, ring signatures, and RingCT. Stealth addresses create a one-time address for each transaction. Ring signatures allow obfuscation of a sender by creating a group of inputs for hiding the actual sender.
    • Zcash: is a Bitcoin fork that employs a type of zero-knowledge proof named ZK-SNARKS.

Summary

  • We introduce the main concepts related to Bitcoin, privacy, and deanonymization attacks.
  • We provide the result of our extensive research on privacy techniques.
  • We investigate existing privacy wallets and top privacy coins.
  • We describe our quantitative and qualitative studies.
  • We present the results and discussion

Method

  • Recruitment: Participants were recruited via social media, universities, and companies focusing on Blockchain technology.
  • Interview Procedure: Before the interview, participants were briefly informed about the context of the research and signed a consent form. Each interview lasted about 30 minutes. We conducted semi-structured interviews both in-person and via online meetings.
  • Coding: Grounded Theory was used for coding. The researchers coded the data and grouped statements related to the same concept.
  • Sampling: We selected participants according to their reported level of knowledge and their usage of cryptocurrencies, ranging from expert to novice users. We interviewed 14 participants, 12 users (age: max. = 45, min. = 26) and 2 non-users (age: max. = 45, min. = 35). 7 out of the 12 users and 1 out of the 2 non-users were working in IT-related fields.

Results

  • Privacy Awareness:

    • Some participants in the qualitative part did not know the difference between custodial wallets such as exchanges and non-custodial wallets.
    • Some participants assumed that blockchain is safe from a privacy perspective as it uses addresses rather than real identities
    • Users were willing to apply mitigation tools to enhance privacy in case of awareness.
    • Awareness of address reuse and auxiliary information obtained from exchanges and services have increased among our participants. Most respondents were not aware of common input ownership, the most prominent heuristic in de-anonymization techniques
    • Some participants had heard of Zcash and Monero, but were not aware they were privacy coins.
    • Some of the participants assumed privacy persevering tools or privacy coins were used by criminals for tax evasion and refrained from applying privacy-enhancing measures or tools.
  • Privacy Preferences:

    • While more than half of the participants preferred to use privacy coins rather than add-on techniques, most of those who chose to use add-on techniques on top of Bitcoin; expected future built-in privacy improvements to Bitcoin. Although this does not seem realistic in the near future, it is implemented by wallets or layer two solutions.
    • Users are willing to accept longer transaction times to achieve better privacy, but half of them dismissed the idea of paying extra fees.
    • Users who were aware of the distinguishability of CoinJoin transactions with the same output amount were not willing to use it. Instead, they favored alternative techniques that preserve indistinguishability, where the transactions cannot be flagged by monitoring tools.
  • Privacy Wallets:

    • Although the development of bitcoin privacy wallets started around 2015, privacy wallets still struggle to attract users. These wallets are complex and require a minimum understanding of privacy concepts and techniques.
    • On the one hand, current Bitcoin privacy wallets implemented CoinJoin with the same output amount suffer from distinguishability in the blockchain; on the other hand, the newly implemented indistinguishable techniques such as PayJoin or Wabisabi in Wasabi wallet 2 may be banned by governments, rendering them unusable for their respective wallet developers and users.
    • Users prefer to use wallets that support different coins; thus, we can not expect users to install different wallets for different coins, let alone install additional wallets for their privacy, as well as having to spend time learning the wallet functions.

Discussion and Key Takeaways

  • Problems:
    • Participants have little knowledge about privacy-enhancing techniques. Most of them were not informed about how these tools work, even if they had heard about the techniques or privacy coins’ names. They did not know what kind of privacy is provided by those techniques. or they assumed those techniques are too technical for ordinary users who only buy and sell cryptocurrencies for trading or investment purposes.
    • There were also negative understandings of privacy tools (such as using them for criminal activities or tax evasion)
  • Solutions:
    • The problems and consequences of the public availability of the data on the blockchain need to be educated through integration with wallets by providing meaningful notification and privacy features or through documentation and social media.
    • We suggest the concept of public and private privacy, the former referring to information that is available through the blockchain to the whole world, and in the latter, the information that is available to governments, exchanges, or wallets.

Applicability

With a better understanding of users’ mental models, developers will be able to build more user-friendly privacy techniques or coins.

6 Likes

I found this paper quite enlightening and insightful. A lot of privacy attacks occur as a result of the exploitation of the loopholes in blockchain technology and a lot of users are not aware of those loopholes.

It is interesting that the use of addresses instead of real identities does not provide privacy as much as users may believe. For instance, transaction traceability - wherein some tools may link addresses and transaction data using transaction graphs and publicly available ledgers - increases the prospects of a third party’s ability to infer a user’s real identity which seriously threatens the users’ privacy.

In addition, the use of third-party scripts by some applications and on browsers poses serious threats to sensitive information as posited by the researchers in the Research Summary - What is in Your Wallet? Privacy and Security Issues in Web 3.0 paper and not many users are aware of this.

Also, I wouldn’t fault the participants for making such assumptions since quite a lot of the news around privacy-preserving tools and privacy coins are rife with instances of their illegal uses. Some governments, e.g. Australia, Japan, and South Korea have also banned the use of privacy coins. I commented on privacy coins here. The use of privacy coins could improve compliance with data protection laws if properly enforced.

I agree with this statement and also think that developers should aim to incorporate privacy into their design from the beginning. Research has found that certain mechanisms work to solve specific problems and not most problems, therefore should be a cross-pollination of privacy-preserving mechanisms into the design of blockchain technologies to ensure that the privacy of users is not violated.

However, for users who have little to no knowledge about privacy-enhancing techniques and are not interested in technicalities, how would you suggest that they be educated about enhancing their privacy, and on whose shoulders should the responsibility for public education fall?

6 Likes

Hey @19charles54, GM. Remember our discussion on the writer’s cohort break out room recently, where I tried explaining privacy, anonymity, and pseudonymity.

This paper will be helpful in bringing you up to speed as regards that.

3 Likes

A significant number of blockchain users are very concerned about maintaining their privacy. This is because blockchain was developed based on the principle that information should be made accessible to all and everyone, rather than just a select few.

Those individuals who want to prevent their information from being seen by other people may find this to be problematic.

Users can securely exchange data with one another via the usage of blockchain, eliminating the worry that the data may be compromised or stolen.

When using this technology, all transactions are encrypted, making it impossible for anybody other than the person or organization that was responsible for sending it out in the first place to read it.

In the world of blockchain, user perception is crucial. It is important to understand that the success of a blockchain project depends on how well it can be embraced by the public.

How Blockchain Data is Immutable & How That Affects User Privacy

A person’s level of privacy may be defined by the amount of information they are willing to share with other people.

On the other hand, security refers to the amount of work that an individual is willing to put out to preserve their privacy and keep their personal information secure from being accessed or disclosed by third parties who are not permitted to do so.

Your ability to choose the amount of information that may be shared with other people is an essential component of your privacy.

Privacy may be safeguarded, protected, and preserved by the measures you take to ensure your protection. The terms “privacy” and “security” are not interchangeable.

Information saved on the blockchain cannot be altered after it has been recorded. Data is stored securely in encrypted chunks that are linked together.

Information storage technology may be used to save any kind of data, including sensitive data like medical and identity files.

User Perceptions of Data Protection

figure1

Many people worry about violations of their privacy and express a preference for anonymity. There are, however, several additional methods available for staying anonymous. It is suggested that a pseudonym be used if complete anonymity is desired.

This means you may use any name you choose other than your real one if you like. For those who value privacy, this might be useful.

Data protection is an important part of the financial services industry. Within this industry, data protection is seen as a way to protect consumers and their data.

This will be seen as a way of ensuring that people are not exploited by the companies they are trusting with their data.

What is the State of User Privacy Issues with Centralized vs. Decentralized Ledgers?

Centralized ledgers are the most dominant and well-known type of ledger. They are centralized in one entity or organization, which is usually a bank.

The data is stored on a server, and there is no need for a third party to validate transactions. This is how we currently operate with our money, credit cards, or any other form of currency in the world today.

Decentralized ledgers are decentralized systems that are not administered by a central authority. They employ encryption and distributed networks to exchange information amongst all parties engaged in a transaction without requiring an intermediary to validate it.

These sorts of ledgers have existed for a while, but they have never taken off until later when Bitcoin and blockchain technology became more popular than ever.

The main difference between these two types of ledgers is that centralized ledgers are controlled by a single entity while decentralized ones rely on cryptography and distributed networks to provide security.

In conclusion, privacy is an important and sensitive issue for many users. While privacy concerns are widespread, different people have different perceptions about how much of their personal information should be shared with the public.

For example, some people may be okay with having their name and location available to everyone on a social media platform while other individuals may not want anything more than their name and age revealed.

What’s important is that organizations understand how user-perceived privacy impacts their business model and what it means for them to operate in this space whether in web3-powered technology or others.

9 Likes

My thoughts on RQ1: A society’s level of privacy is determined by the digital privacy services they use. The more they use, the more they are aware of privacy issues. A study showed that people who use privacy-enhancing technologies have a higher awareness of privacy issues than those who do not. They are more likely to know about the risks of online privacy and the need for privacy-enhancing tools. They are also more likely to trust third-party privacy-preserving services.

Privacy is a fundamental right of all living beings and should be respected. There are many pitfalls of the digital era that have eroded our privacy. Governments and corporations use our data to target us with ads and manipulate our behavior. Data breaches occur regularly and cause consumers to become increasingly scared of using online services.

In fact, the average consumer will only use a service for a few months before abandoning it due to paranoia. Consumers are aware of the privacy issues they face. In order to avoid the pitfalls of the digital era, consumers may use privacy-enhancing technologies such as VPNs to avoid being targeted by ads and governments. However, there is distrust among consumers about third-party privacy-preserving services.

For example, the internet is a world that is constantly changing. It is a world that we are all constantly exploring. With the introduction and advancement of new technologies, new laws, and new trends, the internet is a place that is constantly evolving. Privacy has always been an issue for internet users and it will continue to be an issue. There are a number of privacy-preserving services and technologies that are exclusive to the internet and new ones are being introduced all the time. What is the extent to which internet users are aware of privacy issues and privacy-enhancing technologies? Do they trust third-party privacy-preserving services? The extent to which internet users are aware of privacy issues and privacy-enhancing technologies are complex.

Privacy-enhancing technologies and privacy-preserving services are important for today’s internet users. The main issue is that even with these services, many people are still not aware of privacy issues and how to protect themselves. The reality is that many people don’t understand the risks associated with their use of the internet. With a lack of knowledge, many people are putting themselves in vulnerable positions. privacy-enhancing technologies and privacy-preserving services can help people better safeguard their data and how to protect themselves in a digital world.

My thoughts on RQ1-A: Data privacy scandals have shown that people are wondering if they should trust Third Party Privacy Preserving Services. Companies such as Facebook and Google are in the business of monetizing their customers’ personal information.

These companies will leverage any opportunity to make money. However, the data privacy scandal has shown that these companies are not in the business of protecting your personal information. Do they trust third-party privacy-preserving services? The recent Facebook data privacy scandal has shown that people are wondering if they should trust Third Party Privacy Preserving Services. Companies such as Facebook and Google are in the business of monetizing their customers’ personal information. These companies will leverage any opportunity to make money.

However, the data in A study published in the Journal of the ACM showed that only 27% of people trust third-party privacy-preserving services, and less than one in three people want to disclose their personal information to third-party privacy-preserving services.

Third-Party Privacy-Preserving Services Third-party privacy-preserving services are a way for you to protect your privacy while giving your information to companies or organizations. You are giving up your privacy to allow the company to collect your data, but they are unable to decrypt, see, or use your data because they are using a third-party service to encrypt and decrypt the data. This is a way to make sure your information is only used for the reason it was given to the company.

A key point to consider with this is that you can ask for the information back at any time and the company cannot decrypt the data. Privacy is a major concern for many people, especially when it comes to the internet. There are a lot of companies out there that offer to keep your information private and secure, but is it even possible to trust them? The answer is no.

Do they trust third-party privacy-preserving services? Privacy is a major concern for many people, especially when it comes to the internet. There are a lot of companies out there that offer to keep your information private and secure, but is it even possible to trust them? The answer is no.

My thoughts on RQ1-B: Bitcoin users can achieve better anonymity by using a few of the add-on privacy techniques available on top of Bitcoin. This is a really interesting idea, and it brings up the question of whether users would prefer using these add-on techniques on top of current blockchain implementations, or built-in features of privacy blockchains. Users prefer using add-on privacy techniques on top of current blockchain implementations, or built-in features of privacy blockchains

Bitcoin, is a public ledger that makes transactions public and traceable. While that may be fine for transactions in which all parties are anonymous, transactions involving people who want to keep their transactions private are vulnerable to public scrutiny. In response, many Bitcoin users are using add-on privacy techniques instead of building privacy into the ledger itself.

I believe this is a difficult question, as both of these options have their pros and cons. One major pro to using add-on privacy techniques is that they can be easily disabled and replaced with other privacy techniques. This allows users to experiment with different add-ons to find the best one for them. Add-ons seem to be more flexible than built-in privacy features, as they can be customized to the user’s needs. Built-in privacy features can also be incorporated.

There are many reasons to want to remain anonymous online and around the world. Governments and corporations can use your identity to track you, or even punish you. They can use your image for their own purposes and profit. Even if you’re not doing anything wrong, you may still want to remain anonymous because you don’t want to be exploited. There are a number of ways to achieve better anonymity online, but one way is to use add-on privacy techniques on top of current blockchain implementations, such as Bitcoin. Another is to use built-in features of privacy blockchains, such as Monero.

It can be difficult to tell which anonymity techniques are working and which are not. It can also be difficult to know what the best anonymity technique to use is. Is it better to use different anonymity techniques on top of the current Bitcoin blockchain, or is it better to use Monero’s privacy features? There is no easy answer. This blog post will discuss the pros and cons of both approaches.

My thoughts on RQ2: We all know the importance of keeping our data and private information safe. However, when we share our information with a third party, we do not have control over how securely and responsibly they store it. The use of blockchain technology could potentially reduce the risk of data breaches by limiting the amount of data that is stored on third-party servers. This way, only the minimum amount of data needed to complete a transaction is shared and all of the data is encrypted and stored on the blockchain. This, in turn, ensures the security of the data, users willing to use privacy-preserving techniques despite the higher fees and longer transaction time

The demand for private transactions has been steadily increasing over the last few years. In a recent study by the Center for Democracy & Technology, about 50% of the respondents indicated that they would be willing to pay higher fees for privacy-preserving transactions. The same study also found that about 70% of respondents would be willing to wait for privacy-preserving transactions to be processed.

My thoughts on RQ3: Privacy features are an essential part of the Blockchain and cryptocurrency ecosystem. Setting up and configuring your privacy features can be complicated and confusing. This blog post will cover the best Bitcoin and cryptocurrency privacy features that you should be using to ensure the anonymity of your transactions. Which privacy features interest users the most? Privacy features are an essential part of the Blockchain and cryptocurrency ecosystem. Setting up and configuring your privacy features can be complicated and confusing. This blog post will cover the best Bitcoin and cryptocurrency privacy features that you should be using to ensure the anonymity of your transactions.

There are many features that can be used to protect privacy with cryptocurrency transactions. One set of features is the ability to hide the source of a transaction, the destination of a transaction, and the amount of the transaction. Which privacy features interest users the most? There are many features that can be used to protect privacy with cryptocurrency transactions. One set of features is the ability to hide the source of a transaction, the destination of a transaction, and the amount of the transaction.

The recent rise in cybercrime has resulted in a demand for improved privacy features in transactions. Research from the Ponemon Institute shows that users are interested in the following privacy features: - Hiding the source of funds - Hiding the destination of funds - Hiding the number of funds The recent rise in cybercrime has resulted in a demand for improved privacy features in transactions. Research from the Ponemon Institute shows that users are interested in the following privacy features: - Hiding the source of funds - Hiding the destination of funds - Hiding the number of funds

A recent survey by the Wall Street Journal reveals that, when asked which privacy features interest them the most, respondents chose: -Hiding their browsing history from Internet providers -Hiding their browsing history from governments -Hiding the amount they spend on credit cards The WSJ survey also revealed that, of the respondents who were interested in hiding their browsing history, the most commonly cited reasons were: -Protecting themselves from cybercriminals -Protecting themselves from “discriminatory ads” -Protecting themselves from “government surveillance” In light of these findings, it is no wonder that companies are investing in building out features that allow users to hide their browsing history.

6 Likes

User Perceived Privacy in Blockchain: A Personal View

People want privacy of transactions because they don’t want to be extorted, blackmailed, robbed, or even kidnapped. However, there could be other reasons.

Probably, you haven’t given blockchain privacy a deeper thought, or you haven’t yet seen reasons for blockchain privacy. If any of the two applies to you, don’t worry, this comment has you covered.

Here, I’ll answer the research questions (RQ) from the original paper. That’s, I’ll answer questions on how familiar I’m with privacy issues and technology, how willing I’m to use privacy techniques, and which privacy features interest me the most.

I hope that in answering these questions, you might get a better understanding of blockchain privacy if you don’t. My answers might give you reasons to buy the idea of blockchain privacy, who knows?

RQ 1: On Familiarity with Privacy Issues and Privacy Enhancing Technologies

There are two kinds of third-party services— centralized and decentralized third-party services. I’m not interested in centralized services for the reason that they defeat blockchains’ goal of decentralization and can easily be manipulated.

I’m, therefore, an advocate of decentralized third-party services for the mere reason that they are decentralized and not easily manipulated. Even after the US’ ban of Tornado Cash mixer, a decentralized third-party mixing service, the protocol is still running. Maybe, if it were a centralized service, it would have been shut down.

In addition, some blockchains can come with privacy added features, while others have privacy inbuilt as in Monero and Zcash.

Personally, investing in a blockchain’s native currency for the reason that it has an inbuilt privacy feature is not ideal for me. I prefer to invest in coins of native blockchains, whose use cases excite me, and which can add privacy, aka add-on, as a necessary feature.

Imagine if Bitcoin or Ethereum had an add-on privacy feature, users will most likely prefer them over in-built privacy blockchains, like Zcash or Monero, as they have more use cases, user base, fame, trust, market cap, etc.

RQ 2: On Using Privacy-Preserving Techniques Amidst their Challenges

Privacy-preserving techniques use special mechanisms such as cryptography to ensure privacy on a blockchain. Such techniques include ZK SNARKs, Ring Signatures, etc. This research summary by @Tolulope lists and explains the various privacy-preserving techniques on Bitcoin and other cryptocurrencies.

Techniques like Zero Knowledge Proofs are very popular for their success. I have researched a handful of these techniques and I can say that I’m comfortable with their modes of operation. They can be easily adapted to a blockchain and can be the basis for add-on features. Remember, I prefer the add-on privacy feature on blockchains in the first place.

RQ 3: On the Best Privacy Feature as a User

In choosing a privacy feature, a user has to choose what is most important to them. Intent matters a lot and one should always ask, why do I need privacy in the first place?

As outlined in the research summary, such privacy features are: hiding the source, hiding the destination, and hiding the amount. So, choosing any of these as the best feature would depend on what one wants to hide and for what reasons they want to do that.

Personally, at this time, I’m only interested in hiding the amount of my transactions. I don’t care if the recipient address on the sender’s address is known, but I don’t want the amounts on my transactions left in the open. This is mainly for security reasons.

Conclusion

Just like @Jmax stated in his recent comment, blockchain privacy depends on who is involved. What one considers as part of privacy might not be the same for others. This post tried to cover my view of privacy and hopefully help you discover or improve yours.

If you enjoyed reading this, you may directly reply to this post. Let’s keep the conversation going.

11 Likes

Thank you for this explicit comment.

For me, privacy is a personal thing.

I believe that’s why Blockchain Governance categorized Privacy as ethics as explained through by @Austin_jul in his Research Summary on Blockchain Governance.

Privacy is based on perception and it leaves everyone having a divergent view on what they consider private.

6 Likes

Yeah, this is very enlightening. It looks like a lot of people have been sold a bill of goods when it comes to the safety of the blockchain in terms of privacy.

5 Likes

Good job on your research. Your ability to clearly explain your paper was truly enlightening.

4 Likes

Thank you @simin, for your time and effort in this paper, based on my understanding of this research paper, I think this the paper tries to demonstrated the lack of users’ knowledge about blockchain privacy issues and even most users do not even know why privacy techniques are required or how they could mitigate de-anonymization. Based on these facts, I think that is why the author was able to find out that 18% of users were unaware of the risk of being de-anonymized on blockchain, and half of them knew about the risks and were concerned, I am sure that improving the users’ knowledge, the usability of implemented privacy techniques has a significant role in their practical adoption.

I think the paper did not investigate privacy wallets and users’ preferences on additional fees and delays related to add-on privacy techniques. I also noticed that the author complied with the GDPR by not asking any questions that may disclose personally identifiable information. In my opinion, I feel that it is necessary to know that several risk management strategies can be developed when considering blockchain technology:
Use permissioned blockchain to support governance models:
• Authorize selected number of approved participants.
• Technical measures to reduce the amount of personal data that participants process.
• Allocating data processing responsibly.
• Responding to individual requests.
• Deploying data processing agreement.
• View differences between public and private blockchain implementation.
I just have few questions; do you think that there are Limit personal data stored in the blockchain? Do you also feel that CoinJoin-based methods might require less exchanges, which would bring down the charges that ought to be paid to give protection or privacy?

4 Likes

Hi @simin I just found out that it is something good and interesting to comment on the privacy of blockchain and its transparency, this is because the most appealing aspect of blockchain technology is the degree of privacy it offers, but this can create some confusion regarding transparency. Blockchain networks periodically (i.e., every 10 minutes) self-audit the digital value ecosystems that coordinate transactions; one set of these transactions is called a block, and this process results in two properties: transparency and impossibility of corruption. In a blockchain, the identity of the user is hidden behind a strong cipher, making it particularly difficult to link public addresses to individual users. The question that arises in my head is, how can blockchain be regarded as truly transparent?

2 Likes

@Henry I can see the confusion, the point of the blockchain it is transparent because it is in a public ledger, the anonymity of the entity can be tracked through this ledger. so while the entity’s identity isn’t disclosed its trajectory is trackable so everything and everyone on the chain can see what they’re doing that is the point.

3 Likes

wow, thank you @Sword.of.Owmens for your quick response, i am satisfied by your answer. i got it now.

1 Like

Data protection and transparency within the blockchain world is a highly debatable discussion. In all spheres of human endeavor, data protection is vital. In Nigeria, Section 37 of the 1999 Constitution provides that: “The privacy of citizens, their homes, correspondence, telephone conversations, and telegraphic communications is hereby guaranteed and protected.” Other jurisdictions like the US equally have data privacy entrenched in its Constitution.

Inwardly looking, blockchain is characterized by its decentralization, autonomy, and immutability. Both data privacy and transparency can be achieved with the help of blockchain technology. For blockchains to protect their users’; anonymity, they must use the private and public key system. Now more than ever, in today’s information era, data is being hailed as the “New Gold” or “New Oil” of the economy. The kind of commodity one prefers as a store of value influences this view. Satoshi Nakamoto enabled everyone to verify transactions and other data by hard-coding transparency into blockchains. As a result of the decentralized nature of blockchains, this was doable.

In the blockchain arena, data services can be transparent and protective. Unfortunately, there is still an unending argument as regards how traditional secured currencies are compared to digital assets. A significant difference between blockchain technology and traditional systems architecture is that many traditional privacy protection methods do not apply to blockchain. Therefore, designing an effective supervision mechanism with privacy protection for user data in the blockchain is necessary. In terms of privacy protection, many information-hiding mechanisms have been proposed for transaction contents, including Monero and Zcash. Monero is mainly based on the Cryptonote protocol, which uses a one-time random address and ring signature to randomize the sender and other node information to realize the senders anonymity.

In Monero coin, the anonymity of the sender is determined by the size of the anonymous set. One of the essential characteristics of blockchain is known as data transparency, which refers to the identification of data and transaction data found in public blockchains may be seen by anyone. However, data is crucial for specific businesses or consumers to retain strong competitiveness. Sharing data may present some security difficulties, but it is important to keep in mind that these challenges are possible.

At this time, the most frequent ways to protect data privacy are zero-knowledge proof, homomorphic encryption, and commitment schemes. Ring signatures, mixing services, and non-interactive zero-knowledge proof are the most common options for protecting an individual’s identity privacy. To guarantee correct data management, data privacy regulations have been put in place to govern data collection, processing, and storage.

All in all, blockchains should continue to allow individuals maintain control over their data while also giving them a safe choice for storing it. Users may boost security by communicating restricted data by sharing their public keys since this does not involve revealing any personally identifiable information.

Finally, I believe blockchain software development firms are supporting businesses of all sizes in finding solutions to the challenges they have encountered over the years concerning their data storage. In the future, there will be further breakthroughs in blockchain technology, including pragmatic governance frameworks, improved interconnectivity, and adjacent technologies that, when combined, will give quicker, more dependable, and more accurate outcomes for effective company automation and growth.

References:
T. N. Dinh and M. T. Thai, “AI and Blockchain: A Disruptive Integration,” in Computer , vol. 51, no. 9, pp. 48-53, September 2018, doi: 10.1109/MC.2018.3620971.

Morrison F., (2020) The new ABC"s: Artificial Intelligence, Blockchain and how each
Complement the other. Morrison Foerster. Retrieved from The New ABC’s: Artificial Intelligence, Blockchain and How Each Complements the Other

3 Likes

I must commend this qualitative research. But here are the point I would like to make regarding blockchain privacy.

  1. I think privacy focused blockchains will be seen by regulators as a tool for money laundry. As such, their regulation would be intense compared to other blockchain projects.
  2. Does Privacy equates to security or it does not equate to security?
3 Likes

@simin good work on your summary

Given that blockchain ledgers are shared, how does blockchain address the issue of privacy?

Is it unavoidable for blockchain technology to erode privacy?

1 Like

Well-articulated, I could see how much effort you put into creating
This @Ulysses …this is a stellar work you put together.

1 Like

Well articulated @simin
Many smart contract participants are quite worried about safeguarding their privacy. it’s so, considering the idea behind blockchain is how data ought to be available to everybody and not just a small group of people.

However, this may be a problem for persons who don’t want other people to be able to read their information.
Blockchain technology allows users to securely communicate data with one another, removing any risk of data breach or theft. Any transactions made via that system remain classified, reducing the ability that anyone aside any individual or company who sent the information forth in the beginning to see it.
Customer impression is vital in the realm of smart contracts. It’s critical to realize that a smart contract project’s ability to win over the wider population will determine its existence.

Several individuals tend to opt for privacy and concern about digital surveillance. But there are still a lot of other ways to maintain your privacy. If total privacy is needed, it is advised that a codename be utilized.
This implies that, if you’d want, one can have a nickname besides just their formal title. This might be helpful for people who respect their confidentiality.
An essential component of the banking system is confidentiality. Confidentiality is viewed in this area as a means of safeguarding users’ information.
It will be recognized as a means of safeguarding individuals from being taken advantage of by the businesses they are delegating with one`s information.

1 Like

Discussion Summary

  • Interest in Blockchain technology and its applications has increased tremendously; however, this is accompanied by serious privacy threats.
  • This paper studies users’ privacy perceptions of UTXO-based blockchains such as Bitcoin.
  • It elaborates – based on interviews and questionnaires – on a mental model employing privacy-preserving techniques when doing blockchain transactions.
  • It evaluates users’ awareness of blockchain privacy issues and examines their preferences towards existing privacy-enhancing solutions, i.e., add-on techniques to Bitcoin versus built-in techniques in privacy coins.

Missing tags
privacy, blockchain, Bitcoin, and Coding.

Points of disagreement,

c. I believe the study overlooked privacy wallets and users’ preferences for higher prices and delays associated with add-on privacy approaches. I also noted that the author followed GDPR guidelines by not asking any questions that could reveal personally identifiable information.
View the full post-here:Research Summary: User perceived privacy in Blockchain - #11 by Henry

Unresolved questions.
1 . Given that blockchain ledgers are shared, how does blockchain address the issue of privacy?
2. Is it unavoidable for blockchain technology to erode privacy?
3. I think privacy-focused blockchains will be seen by regulators as a tool for money laundering. As such, their regulation would be intense compared to other blockchain projects.
4. Does Privacy equates to security or it does not equate to security?

Point of consensus.

  • Public availability of Data
    I believe that regulators will view privacy-focused blockchains as a weapon for money laundering. As a result, their regulation would be more stringent than that of other blockchain projects.

Offered solution.

  • To preserve privacy on a blockchain, privacy-preserving approaches employ unique features such as cryptography. ZK SNARKs, Ring Signatures, and other techniques fall into this category. @Tolulope’s research summary lists and explains the various privacy-preserving techniques used on Bitcoin and other cryptocurrencies.

  • If complete privacy is required, a codename should be used.
    This suggests that, if desired, one can have a nickname in addition to their professional title. This could be useful for folks who value their privacy.
    *Techniques like Zero Knowledge Proofs are very popular for their success.

Key resources.

2 Likes