As an increasing number of corporations and governments worldwide continue to explore efficiencies gained by blockchain technology, we continue to gain a better understanding of how the technology can take data security and consumer privacy to the next level. With major companies like IBM, ING, and Ernst & Young all delving into scalable, private transactions on blockchain over the past year, these endeavors are seen as a gateway to mainstream adoption of the technology itself.
To learn more about advancements in privacy brought forth by blockchain technology, I sat down for an interview with Shigeki Kakutani, the CEO, and Founder of QURAS. QURAS is a next-generation blockchain protocol that enables anonymous, private transactions in public smart contracts, enabling ‘Privacy 2.0’.
- What advancements have you witnessed with privacy technologies in recent years?
The focus on privacy technology has increased over the last few years, and many hopes in the technology have been confirmed. For example, adoption of the privacy-focused MimbleWimble protocol by Grin and Beam, two blockchain companies, has brought us two privacy-by-default payments cryptocurrencies. Privacy advancements stemming from MimbleWimble include increased ability to perform confidential transactions on a blockchain, the ‘cut-through’ feature which allows for smaller block sizes, and CoinJoin, which is a trustless method for combining multiple Bitcoin payments from multiple spenders into a single transaction. All of these advancements aim to achieve both scalability and security. Today, privacy technology applications include their implementation in smart contracts, such as QURAS using both ring signatures and Zero-Knowledge Proofs for privacy protection. In addition, a new privacy concept of an Ethereum mixer has surfaced which makes it nearly impossible to trace your Ethereum address.
In order to enhance blockchain-related services, privacy protections must be considered from various points of view. Even with privacy protection, there are many things left to solve, and it is not easy to cover everything with one solution. For example, QURAS does not specialize in specific technologies and we regularly discuss internally whether integrating other technologies can be used to evolve the QURAS platform, such as MimbleWimble, the open-source software known as Tor, and distributed VPN.
- What are the challenges we face today in protecting customer and business data?
The challenge of protecting customer privacy is a balance between usability and information protection. The trade-off between security and privacy is in the background of the increasing convenience of internet technology, and we must find a way to balance the two.
Our society’s privacy continues to be exposed and exploited on a constant basis. It’s worth highlighting a few examples, including Facebook having been breached and compromising its users’ personal information, Google’s continued monitoring of our actions, and the open advertisement of our hobbies and preferences that suggest targeted online ads. It’s important to always keep in mind the trade-off between convenience and privacy.
At the end of last year, the QURAS platform announced the ability to store documents on the blockchain using multi-signature in highly confidential environments. Companies and governments are often required to securely store confidential information and they are now presented with another way to do so. However, the risk of hacking and data breaches is still vast for companies, governments, and digital asset exchanges alike, and the cybersecurity industry has to continuously monitor for new threats while coming up with new solutions.
- How can blockchain technology assist with privacy and data protection within existing consumer applications?
Blockchain can assist existing applications from many perspectives. The privacy of payments has been a focal point of the blockchain industry for quite some time, but I feel that there are many data protection challenges that need to be tackled with blockchain-enabled applications.
For example, in the medical field, there is a high need for data protection in order to protect the personal information of patients and medical service providers. For example, a medical service that shares information between multiple operators requires privacy protection for specific information when sharing medical information. Coordination between organizations and diversification between segments or regions is required. Blockchain technology can help with coordinated trust and privacy without the need for a centralized system, a single point of failure, housing and transferring the data.
In addition, blockchain technology can help within the gaming industry by ensuring the privacy of item transfer history, verifying the scarcity of in-game collectibles, and giving gamers full control of their virtual assets to use and sell as they wish.
However, with the world steadily becoming a flow of shared information with greater decentralization activity, you will always face the question of how to protect your privacy.
- What role do you expect privacy-focused blockchains to play in terms of adoption of 2020?
I believe that in 2020, the importance of privacy protection will increase as the social implementation of blockchain will become more advanced.
It will also be a year that blockchain becomes more regulated. The news that cryptocurrencies may be handled on the Korean stock exchange could not have been imagined in 2016. The world is progressing with such a sense of speed that the more people get involved in the blockchain industry, then the more evident it will become that human nature by default does not want to be monitored.
- With governments continuing to spotlight anonymous cryptocurrencies, what differentiates QURAS from everyone else in the field?
The delisting of anonymous cryptocurrencies on Japanese exchanges has strengthened the image that anonymous currencies are bad in Japan. However, it has been found that the Japanese Yen is also used in various places where it cannot be tracked. So a real question here is does the central bank, the Bank of Japan, print Japanese yen in such a way? Looking at the Japanese Yen monetary base, as of the end of last year the monetary base was 512 trillion Yen. Of this, about 110 trillion Yen was paper money and about 5 trillion Yen of hard currency, and we cannot identify the remaining 397 trillion Yen. The Yen is a traceable digital Japanese virtual currency itself, and it is the very nature of Japan’s current economic policies that this monetary base is increasing every year.
In example, a company can buy its stock with traceable digital Japanese Yen and then distribute potentially untraceable banknotes and money, but in fact, the Bank of Japan will not allow such usage. The Japanese Yen is not bad. The people who use it are bad.
The same goes for anonymous currencies. Few people are willing to announce that third parties will be able to see how much you own. Currently, the news is flowing that China is also pursuing a digital RMB project, and it is trying to implement traceable privacy protection technology, and yet it is known that many Chinese citizens have assets with third parties. There is a need to want privacy in your money matter, and at the same time, the Chinese government needs to track down issues of money laundering, so it may be developing a traceable anonymous digital RMB.
At QURAS, we’ve developed a traceable anonymous technology to solve various privacy issues. The QURAS platform gives users and enterprises options in choosing the suitable privacy level for any type of transaction while also being able to adhere to regulatory compliance. The uniqueness of the QURAS platform is not only in anonymous technology but also in smart contract transactions. From 20% to 40% of smart contract transaction fees on the QURAS platform are returned to the token issuer. On the project side, the aim is not only to sell tokens, but also to generate and monetize transactions with tokens, and to promote the long-term growth of any application that is built on our platform.
- With the main net launch of the QURAS blockchain this quarter, what are your other major initiatives this year?
We are focusing heavily on mass adoption initiatives. This includes enhancing and scaling the QURAS project through new service launches and value-add partnerships. First, to increase the number of projects that use the QURAS protocol, we are strengthening the relationship with digital asset exchanges so that tokens issued under the QURAS protocol can themselves be listed on exchanges smoothly. Next, we plan to partner with blockchain developer groups, which have a large number of engineers, to train and onboard more engineers who will develop applications on the QURAS protocol. More is being worked on that I cannot announce now, but will be announced on a continuous basis throughout 2020. This is a pivotal year for all of us at QURAS.