Privacy TechnologyAnalysis and Mechanisms

David Chaum

Privacy is fundamentallyimportant!!!

• Is essential for democracy– Needed for participation without fear of retribution

• Is a fundamental human right

OUTLINE

• Analysis – Policy– Economic

• Solution Mechanisms– Legal– Technological

• “Privacy Technology”

Policy Analysis

The actors and macro considerations

Hierarchy of IT Needs of Humans

• Self-Worth—relation to: artificial intelligence, etc.

• Privacy—identity, credential & role protection

• Interaction—communication, exploration, commerce

• Security—uptime, robustness, no hacking

• Processing—storage, interface, crunching

Maslow’s Hierarchy of Needs

Policy Issues

Economic Analysis

These days,

everybody’s an economist!

Monetizing privacy

• Various schemes proposed (even 20+ years ago)

1. Consumers pay for privacy protection services

2. Consumers are paid for use of their privacy-related data

3. A brokerage of privacy related data

Imbalance in desire for privacy/data

• Individuals discount present value of privacy protection in transactions– Explains anomalous behavior of consumers when

confronted with cost or inconvenience– Practices and potential dangers unknown

• Organizations value personal data– Overestimate future potential of data– Discount exposure to organization– An organization not too concerned about dangers posed

to consumers that it is not accountable for

Imbalance in size/power of entities

• Organizations have lots of leverage

• Their are few sources of mass products and services

• Consumers don’t have much choice for many products or services

• High relative cost of change of practices for consumers

Legal mechanisms

Powerful but don’t work well directly

Legal mechanisms—evolution

1. Originally based on codifying legitimate expectation of privacy

2. People should be able to review and amend data

3. No erosion of privacy due to technology

4. Best privacy protection practical

Legal mechanisms—capabilities

• Accountability after the fact is ineffective– Hardly able to address

• Covert/clandestine abuse

• Abuse of public or leaked data

• Corporate shield

• Undoing damage done to people

• Can cause creation and use of infrastructure

Technological Mechanisms

The directly-effective mechanism

Locus of privacy-related control—The critical architectural choice

infomediary

Organization x

Locus of control—Three choices:

1. At organizations• Weak benefit/effect for consumers• Clandestine abuse, leaks, reversibility…• Mollify/diffuse the issue – prevent effective solutions

2. At an intermediary• Create infrastructure with single point of failure • Full cost but little true benefit• Dangerous concentration

3. At the individual• Privacy technology – the only good solution

Old paradigm—assumptions/model proven false!• Believed to be a zero-sum game,

privacy v. security

• ID believed needed for security against abuse by individuals

• ID believed only way to organize data

Old Paradigm

J. Doe3834343

J. Doe3834343

J. Doe3834343

J. Doe3834343

J. Doe3834343

raw data raw data

New paradigm

• Individuals provide organizations with minimum sufficient information and proof of its correctness

Privacy Technology

Win-Win break of the believed tradeoff

New Paradigm

Feasibility of a comprehensive solution set has been proven

• Payments—eCash payments deployed by major banks on 4 continents

• Communication—Mix nets, onion routing, etc. have been widely deployed

• Credentials—mechanisms implemented on cards and by IBM

Benefits to organizations (micro)

• Reduced exposure/liability• Better data

– Cleaner because less deception and garbage– More willingness to provide data because of

protections

• All organizations get the data; level playing field

• Better public image (?) – probably wrong!

Not easy to get there from here

• Requires lots of users (hard to be anonymous alone!)

• Difficult to get the system “primed”

• Consumers don’t want to pay costs

• Organizations tend to resist change

Really an “infrastructure issue”

• Pseudonymity / Anonymity only “in numbers” (as mentioned)

• Communication infrastructure can nullify protections

• Way to share data pseudonymously is infrastructure

CONCLUSION

A “Privacy Technology” infrastructure is the way to go and would be hugely beneficial

Kinds of Privacy for Payments

Governmentpayments, e.g.

transfer-order systems

pre-paidphone cards bank notes

& coins

eCash™

stored-valuecards

credit cards onthe Internet

No privacy False privacy

Consumer-controlled

privacy

Organization-controlled privacy

privacy / consumer-control

tech

no

log

y /

tim

e

Protectiononly frommerchant

Advertiseconsumer

privacy

Buy/reload card withoutidentification

Consumer Payments Market Space

high value

irregularpayments

scheduledpayments

$10low value

Electronic Cash

• You can buy a digital “bearer” instrument from a bank with funds in your account

• You can pay by giving the instrument to the payee, who deposits to an account

zoom in on eCash blinding

Privacy and Control over Payments

• Nobody can learn without your cooperation who you pay, how much you pay, or when

• You can always prove who received any payment, for how much, and when

• Payments can only be made by you and they cannot be stopped by others

Credential Mechanisms

• You deal with each organization under a distinct “digital pseudonym”—a public key whose corresponding private key only you know

• You obtain a “credential” as a digital signature formed on one of your digital pseudonyms

• You answer the queries you choose to by proving you have sufficient credentials

Wallet with Observer

• A tamper-resistant chip, issued by a trusted authority, is carried by the individual

• But the chip can only talk to the outside world through the person’s PC/PDA

• The two devices perform a multiparty computation and thus speak to the outside world with a common voice

How untraceable-sending works

message 1

message 2

message 3

message 4

The “mix” sever decrypts and re-orders inputs

Mix network

Prevents tracing messages back

message 2?

Cascade of three Mixes

Server 1 Server 2 Server 3

PK1 PK2PK3

Encryption of messagePK1 PK2

PK3

message

Ciphertext = EPK1[EPK2[EPK3[message]]]

Processing the messages

Server 1 Server 2 Server 3

m1

m2

m3

m2

m3

m1

decrypt

and

permute

m2

m1

m3

decrypt

and

permute

decrypt

and

permute

m2

m3

m1

Tracing prevented by any mix

Server 1 Server 2 Server 3

m3?

IAOThe Information Awareness Office (IAO) develops and

demonstrates information technologies and systems to counter asymmetric threats by achieving total information awareness useful for preemption, national security warning and national security decision-making. John Poindexter, national security adviser to former President Reagan, is the director of the new agency. He was a controversial figure both for his role in the Iran-contra scandals and for his efforts to assert military influence over commercial computer security technologies. NSDD 145 & Data Mining.