In the context of rising nationalist trends, we need to reinforce tools for trust and collaboration – according to the cofounders of the Israeli startup QED-it. During the World Economic Forum annual event, held last week of January in Davos, the question of cooperation is crucial for governments and enterprises. At Davos, QED-it presented new collaboration systems and use-cases based on Zero-Knowledge Proof cryptography, which let companies and countries preserve sovereignty over private data while collaborating with their ecosystem.
American ”wall shutdown“, French “yellow vests”, Brexit: in this context of national withdrawals, this new edition of the World Economic Forum was crucial. This reminds us strongly that in our globalized society, there is no prosperity without cooperation.
At the core of Davos historical purpose, “cooperation” could be perceived as a stock notion or pet theme. However it’s a powerful goal, as the contemporary intellectual Yuval Noah Harari recently noted: “Globalization has emphasized values and interests shared by all human beings, and encouraged as never, free movement of ideas, goods, money and persons. This has made the world more peaceful and prosperous, bringing hundreds of people out of misery”.
So two opposite trends coexist : while we all admit the benefits of cooperation, a nationalist drive to win at the expense of others seems to proliferate.
The dilemma can be stated this way: shall we share parts of our individual sovereignty to be stronger together, taking the risk of weakening our singularity? Or should we do the opposite: decide to protect and fight for our sovereignty in an attempt to prevent us from being brought down by someone else’s bad decisions?
This dilemma is actually at the heart of many crucial topics that impact all modern societies, whether it’s the environmental crisis, nuclear threats or the Brexit. In all these cases, the world has walked back on its international treaties and cooperation. Even tax avoidance can be added to the list as, according to OXFAM’s latest report, the wealthiest now pay less taxes in proportion than the poorest in many countries across the world.
We can take the example of the GAFA taxation at EU level. Cooperating on taxes would allow EU states to recover large tax funds. The first step would be to reach a transparency on how much tax is collected, on a European level. However such transparency threatens the sovereignty of member countries, such a project would oblige them to share confidential fiscal data.
In the corporate world, we found the same tension between sovereignty and collaboration, around the data privacy dilemma: keeping private data to yourself vs sharing data with your ecosystem for the benefit of all. Companies wish to extract value from private data, even at the price of GDPR compliance. Collaboration among players in the same ecosystem could bring value, for example in terms of fraud prevention and risk management, but still requires to keep private data private.
When looking at transaction platforms, the dilemma is even accrued. All the players would like to cooperate to minimize fraud and risk, but they are today reluctant to expose all their activities to one central player, who can exploit this privileged access to information.
Today, the “trust protocols” technology exists to solve this dilemma. We introduce a very promising one here in Davos: the “Zero-Knowledge Proofs” protocol. Its wide variety of applied use-cases could positively change the way we do business in the world.
Predictive maintenance for fighter aircrafts based on classified defense data, streamlining clearing and settlement of financial assets while ensuring full privacy and regulation, insurance fraud prevention… There are countless use-cases in which “Zero-Knowledge Proofs” protocols solve the privacy dilemma, allowing different stakeholders to cooperate in a risk free and mutually beneficial manner, while fully preserving their individual strategic interests.
In the case of the EU GAFA taxation, this solution enables european states to recover tax funds without sharing any of their fiscal data nor infringing with their fiscal sovereignty. More specifically, this technology allows EU to apply one aggregated taxation rate to all international firms, while maintaining total confidentiality for each and every national fiscal data.
The 2019 edition of WEF addressed one key challenge: develop innovative ways to collaborate while respecting sovereignty, for the benefits of all.
Ruben Arnold, Jonathan Rouach