The Privacy Paradox: Balancing Transparency and Security in Blockchain - TOKEN2049 Dubai 2024

so my name is pran Sharma and I'm the head of Business Development for exolo exolo is a new age exchange which is targeted for genz specifically but of course you guys are all invited to trade as well so the topic is security why security really matters especially to us in the web 3 space it's really important to realize how this entire Journey began why all of us are all collected here today it's because Satoshi released the Bitcoin white paper during the 2008 financial crisis the reason for why the markets crashed why so many people lost all their money all their hardhard funds all gone in one second was because of a clear lack of transparency and security so which is why when we are now trying to build an entirely new ecosystem it's important for us to keep that same dream alive so security is vital for many different reasons as well security is vital because the bull run that we're currently facing relies on security and transparency the entire Bull Run that we're seeing right now is basically based on institutions institutional money is finally coming into crypto be it Bitcoin ETFs some countries have now released uh Hong Kong recently released ethereum ETFs yesterday or the day before and more and more institutions are trying to come into this space the more passive money that flows into this entire ecosystem the more we'll all have the space to grow so security as a whole is essential now just quickly uh I'm sure all of you know everything about this the four main pillars of blockchain immutability consensus transparency and robustness so the application of all four of these pillars was written down in the white paper and it's present in almost every single thing that we do today we're all collected here in Dubai and even in Dubai I'm sure most of you guys took a flight here and the automatic signin Gates they work using blockchain Tech I think this is something which most people don't talk about that blockchain has become entrenched in our lives and that's when technology really wins when we don't even know that we're using blockchain Tech another example of the same four pillars is the fact that ethereum switched completely from proof of work to proof of stake and the reason for that was the simple fact that sustainability was a big factor and so was privacy and security the switch from proof of work to proof of stake led to a 99.95% reduction in all the energy used in the ethereum blockchain so stuff like this is extremely crucial and now coming to the dark parts we have had we've been plagued by multiple hacks multiple scams all throughout the crypto ecosystem from Mount gox all the way back to FTX as recent as 2 three years ago and while people view them extremely negatively and think of them as the end of the world what I truly believe in is that hacks like these will happen and are good for the entire ecosystem a show of hands please how many of us knew about proof of work before FTX collapsed one person in the audience maybe a couple more but most of us did not know what proof of reserves were and now almost every exchange does implement the same how did this all come about it came about because a big crash happened people lost their money people realized that there is something that we can truly do about this we can solve this issue and make sure it does not happen again and that's when the users us we made the Sexes Implement changes and make changes for the betterment of the entire ecosystem and the same thing not just for centralized exchanges centralized exchanges basically act as almost every person's first gateway into the entire world of crypto the first time I heard about crypto was the same some friend lost $100 and another friend made a couple of couple of thousand and I thought I could the same it's only later on when you learn more about this entire thing that you realize that no this is is an entire ecosystem it's an entire new world that we could build dexes were born in this fashion too decentralized exchanges exchanges where there is no middleman there is nobody in the middle and yet it's not like just because there is no Central party there is no one place that you can just hack and steal all the funds it's not like they've been safe either dexes themselves have been plagued by so many faults in smart audit Contracting if there's a problem in the programming there is somebody out there smart enough to take advantage of all of it and scams have happened so it's been it's been both sexes and dexes so this is a list of all the money that has been lost all throughout the years I'm sure you guys know about most of them from 3 AC to Voyager to wall to Celsius all of them happened within the span of a year and it really completely shook the crypto Market now let's move on to some measures of security that we can take in order to ensure that both sexes and dexes are completely protected one of them is MPC MPC stands for multi-party computing in extremely simple words one task is not done by one computer or one individual instead it is broken down into multiple different packets so there are different nodes different layers working to solve one simple problem this technology can also be used by digital wallets but they barely are most wallets most exchanges do not use MPC technology what happens with M MPC technology as a whole especially with regards to digital wallets is the fact that it improves both your privacy and your transparency because it's not one central place that everything is being stored in s so uh SOC is a certification which is given by the Society of Chartered product accountants so these are S so1 and S SO2 are certifications or grades that they give to different kinds of protocols and Technologies it's all about data privacy it's all about security and how safe your personal data is being kept so s SO2 and all of this is being used extensively by web 2 companies but web 3 for some reason is falling way behind especially knowing the fact that we do have institutions that now want to come into the picture we should have more of these accreditations by web two people or by organizations because that will help funnel money into our EOS system and build so much trust multi-dimensional security systems so there have been so many advances in programming they occur every single day as part of the entire web3 ecosystem we realize the changes and improvements happening all the all the time it's an absolute constant but yet when you look at most Exchange changes most centralized all displate exchanges they just have one single layer we have Advanced Technologies like digital signature wallets digital signature algorithms and yet they are not really being used so this is something which could be implemented these are all based on cryptography and it could be an absolute game Cher so coming to Dows now uh Dows really came into the public Frey around the 2020 Market crash when Co shut the entire Market down with crypto boomed so Dows were the next big thing they were the Holy Grail a place where we could finally be Democratic a place where the people all of us would be equal we would all have the power and we would vote individually it sounds absolutely amazing and it is and as of right now there are over5 billion of assets which are held by Dows so they are not controlled by one single party it's all a collective think okay so some of these problems plaguing both sexes and dexes can be merged by actually combining their weaknesses and their strong points the the good thing about centralized exchanges is that 90% of people use them because they are one central place you can just give them custody of your assets and you can easily trade they have high liquidity and it's very easy to get in and out the Bas spreads everything is controlled there is Central jurisdiction if anything happens it at Le there's somebody to sue whereas the problem with decent flies exchanges is a complete lack of liquidity most decent flies exchanges when we even try and exit a trade if you have like $500 by exiting because of slippage you'll be you'll you'll end up with like maybe 300 250 or even worse circumstances but this problem could be solved by merging these two by what exolo is calling a hybrid decks in a hybrid decks you can combine The Best of Both Worlds and merge them together so you will have a centralized exchange with good liquidity who is backed who is audited who is funded properly and at the same time you can use your metamask wallets your trust wallets or whatever wallet you have to directly trade in and out of the exchange without actually giving custody of your funds to The Exchange so this is the type of leaps and innovations that we would like the entire ecosystem as a whole to take yeah the roles of dows and securities so we've discussed a bit about the positives of dows but there are still inherent problems with the same one of them very clearly being that the founder or the group of Founders inevitably hold way too much control and sway over the entire audience once they make a statement they make a speech all of the VES flow towards them so then how exactly is it decentralized there are extremely Simple Solutions which can be solved by using operations which by having operational procedures within the algorithm themselves by doing so we'll actually be able to create perfect formless Democratic Dows so these were some of the ways we could harmonize and sort of combine all of the same we start this off with proof of reserves and while that has been implemented we should push a step further we should demand more we should ask every single exchange to have the Merkel tree as well the Merkel tree is a brand new technology what it actually does is provides the Perfect Blend of security and privacy using the Merkel tree one person can individually look at not just the fact that his money is there which is provided by proof of reserves but the Merkel tree ensures that each and every single person will know that the funds are at the exact same place without knowing about the transactions of somebody else of course if I invest in one particular fund I don't want you or anybody else to know what I did with the money yesterday so this is where Merkle tree and Technologies like these really come in so that's been my time thank you guys so much uh one thing if I could request you all to take away the ecosystem will change if we change if we demand change not just one person not just two people be developers users people actively building all of us we should be adamant we should demand changes and I'm sure we'll get there that's been my time thank you