Bitcoin Masterclass with Craig Wright, Day 2 Session 3: Privacy Isn’t As Easy As You Think

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“Who thinks privacy is easy?”

That’s the opening question from Bitcoin inventor Dr. Craig S. Wright during the third session of Bitcoin Masterclass Day 2 in London. This session examines the existing privacy infrastructure based on centralized digital notary certificates and how they could achieve much better security under a structure like Bitcoin.

All of the Day 2 sessions can be viewed here, and the full two-day Bitcoin Masterclass sessions are on CoinGeek’s YouTube channel. Future Bitcoin Masterclass events are planned for other cities.

Several audience members seem to believe that privacy is easy, although Dr. Wright gives examples of issues that might arise in specific cases. As discussed in previous sessions, there are issues of who may have access to what information (about themselves or others), for what purpose, when, and how much other data is revealed by accessing these information. An example is getting a simple true/false answer to questions such as “Is this person old enough to be here?” or “Is this person an employee of Company X?” without revealing the actual date of birth or employment history.

Why Bitcoin is Better Than Certificate Authorities

“X.509 sucks,” he says, referring to the standard SSL/TLS X.509 digital certificates commonly used on the Internet today to “secure” many websites. These certificates are issued by trusted Certificate Authorities (CAs) who, in theory, follow strict rules on granting the issued certificates. There are several types, including client authentication and code signing.

The problem with this model, as Dr. Wright has mentioned many times in the past, is that the transmitter can be compromised. This compromises all certificates issued by the CA, which can lead to hundreds or thousands of owners, resulting in a significant proliferation of security breaches before action is taken. He mentions again the case of DigiNotar, the infamous Dutch certification authority founded in 1998 which went bankrupt a few weeks after being compromised in 2011. The compromise affected well-known names like Yahoo!, Mozilla, The Tor Project and WordPress.

Bitcoin, blockchain structure, and data tokenization allow for much more granular control over access to information than legacy systems. Their processes also enable faster reporting of breaches and attempted attacks, alerting administrators to these events immediately and allowing them to act quickly. Blockchain records also keep complete and auditable logs of all events.

Can information be deleted from a blockchain?

“Who can tell me what section 7 of the whitepaper (Bitcoin) is about?” asks Dr. Wright. For the record, it’s the section on “disk space reclamation” which, as he reminds everyone, also relates to the issue of “merkle tree pruning” and whether records on a blockchain can be “deleted” to comply with data deletion laws such as those in the EU. General Data Protection Regulation (GDPR).

If we transfer something from a BitcoinUTXO and move it to a new value, miners can stop producing blocks containing that information.

What kind of information might be flagged for pruning in our identity hierarchy? Other people’s information, on the one hand, and your own data if it is outdated, embarrassing or unnecessary.

So can we create something like X.509 that is better than X.509 and without some of its problems? How would it handle things like certificate revocation?

With bitcoin and blockchain, we can put structures in place to create provable ownership of data, primary identity keys and multiple “subkeys”, multi-sig access to data, even pseudonymous investments that remain legally compliant (as long as the relevant authorities are aware of the true identity behind the pseudonym, no one else needs to know).

We could structure the identity of a “pseudo person” (as today’s corporations are considered by law) with complete on-chain records of its (real) shareholders/option holders and office bearers and their levels of control. What information should we put and where should it go? Dr. Wright asks the audience.

With Bitcoin, data and legal structures can be transparent and open, while confidential and private information remains private or accessible only to appropriate parties. There is food for thought both at the technical/coding level and at the political level. If you are interested in this topic and want to learn more, the Bitcoin Masterclass series is a great place to start.

Watch: The Blockchain Masterclass with Craig Wright: Confidentiality, Intimacy, Anonymity, Party to Party

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New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about the Bitcoinas originally envisioned by Satoshi Nakamoto and blockchain.

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