Why privacy tech is actually collaborative tech in disguise

You get a thesis. You get a thesis. Everyone get's a thes(es).

I’ve only gone and done another “thesis”. This one is with @Lunar Ventures, it has fewer buzzwords than Convergence but it’s just as important. Download/read the full paper [[here]].

I’ve been shilling this paper all over the socials this week. So if you’ve already read it, then get off this site now and go be more productive with you time. Before you leave though, do sign up to my Woof…

Thesis: Privacy-enhancing technologies will secure data during processing leading to new confidential data collaboration opportunities creating a new market: collaborative computing.

It breaks down a little something like this:

  1. Imagine for simplicity 4 steps when communicating online - 1/ data on device > 2/ move data from device to server > 3/ process the data in some way > 4/ send the result somewhere else. For 1 we can encrypt data, for 2 and 4 we have Transport Layer Security. So what about 3?

  2. Today data is not encrypted during processing this is a much bigger problem that people realise.

  3. Privacy enhancing technologies (PETs) are techniques to try and secure data processing. They include things like multi-party computation, homomorphic encryption, zero-knowledge proofs, verifiable computing, differential privacy, federated learning, and trusted execution environments.

  4. Great so we secure processing and we can move data around the Internet and process it anyway without data breaches. @Zama, our portfolio company are looking to solve this with HTTP(Z). That’s big for sure. But everyone already knows that’s the future, how is that a thesis Lawrence?

  5. Good pushback, the actual insight is this: once we have secure/private/secret computing, we have the environment for widespread data sharing and collaborative computing. That leap from PETs as security tools to PETs as data collaboration tools IS the thesis.

  6. Specifically what it means is people, companies and machines will begin to open up and pool data for collective processing to all benefit from the shared output.

  7. Over time, PETs become like invisibility cloaks for data so it kinda doesn’t matter which person or company offers a processing or machine learning service because you don’t have to trust them or worry about where they are located. The cryptography solves the trust problem.

  8. The thesis, if correct, predicts that this once developers and users get comfortable with this new reality, they will be far more open to sharing, selling or renting their data on data markets. Data will become a highly liquid asset with real-time pricing (The overlap with the Convergence Thesis is the likelihood that blockchains are the technology to provide the transaction and automation rails for these data marketplaces. Hello @Ocean Protocol, spoiler alert I’m an advisor and investor).

  9. With price will come economic efficiency and more efficient allocation of valuable data, and necessary state intervention so public goods and some equitability in outcomes (public good funding as explored at @RadicalxChange is also a part of this, spoiler alert, I help with the Fellowship program over there)

Cool story. But what does it mean for ME? I hear you, my egotistical friends.

Well check this:

Founders: You’re not selling privacy

  1. Few people care about privacy in the enterprise. Internalise that. Build a business, not a public good.

  2. Don’t sell technology, sell solutions. Be clear which problems are getting solved: data liability; using personal data; outsourcing risk; collective processing; or data acquisition. And be sure to answer why this is the right balance of security, cost and performance to solve the problem.

  3. Focus on the pain today. Grow from there. This is generally obvious in start-up-land, but oftentimes start-ups in this field try to solve a problem that doesn’t exist yet. Founders need to reduce risk for their customers first; then solve issues of collective processing and data acquisition. As you expand your footprint in your customers’ organisation, target the growing collaborative computing opportunity.

Investors: PETs are creating borderless computing infrastructure

  1. PETs are a data management tool first, and a privacy tool second. Dismissing PETs because privacy isn't a large enough consumer market or GDPR compliance isn't investable is missing the opportunity.

  2. The terms privacy-enhancing technology is misleading. Partnership-enhancing technologies and collaborative computing are better frames for investors, and should be attractive to any investor covering Cloud, b2b SaaS, enterprise, big data, or AI.

  3. PETs are enabling data markets. A good way of viewing PETs is as a data market driver and for investors with investments in enterprise software, a portfolio value multiplier. Enabling businesses to generate value from internal data will unlock big revenue opportunities. But enabling businesses and markets to collaborate and compute on shared data is the next era in the data economy.

Policymakers: PETs support digital free trade

  1. Policymakers must untangle different market failures. Problems of monopoly power require different solutions than issues resulting from individual reasoning failures from trading privacy for information goods. Natural monopolies and reasoning failures will have different policy instruments.

  2. Be aware PETs offer a viable market solution to the privacy problem. Before using regulatory tools, supporting the development and commercialisation of PETs can have powerful positive externalities and drive innovation.

  3. Consider PETs in the broader context of data policy and digital markets. PETs support markets and economic growth, while privacy regulation (and legal ruling like Schrems II) protects individual rights at the cost of growth. Individual rights and economic growth do not need to be at odds. PETs can square the circle: protecting individual rights while supporting trade and growth. If Government’s want to support free trade, then PET-enabled digital free trade is a crucial policy area to support.

That’s some serious value you’ve just got from my content no? Be a doll and help me be Internet famous by hitting all the buttons below. People like you have already done it.


P.S. This looks cool - https://hypercontext.com and read this https://zwischenzugs.com/2021/07/12/if-you-want-to-transform-it-start-with-finance/