Increased Awareness Of Personal Information Protection

According to McKinsey's survey, 71% of respondents indicated that if a company were to disclose sensitive information without permission, they would cease doing business with that company. Technology companies have introduced "End-to-End Encryption" (E2EE) solutions. End-to-end encryption encrypts data during transmission, allowing only the users participating in the communication system to read the messages. Even the service provider cannot obtain the encryption keys required to decrypt the information.

"End-to-end encryption is an important tool for protecting certain types of data transmission, but it is only a partial solution and does not work for protecting metadata, such as who sends data to whom, when, where, and with what frequency," noted Dr. Sebastian Bürgel, the founder of HOPR. Many believe that E2EE is still not enough, as it still faces the risks of man-in-the-middle attacks and backdoor procedures. For example, WhatsApp's end-to-end encryption experienced a "backdoor incident," a vulnerability that could have jeopardized the privacy of millions of messages.

In the era of the data economy, data itself holds value, leading to frequent cyber attacks on major companies like Apple, Amazon, and Facebook, which control a significant portion of data on the internet. The Cambridge Analytica scandal in 2018 exposed the data of millions of Facebook users. Internet giants control and store user-generated data through search queries, send it to data centers, mine and analyze it, and then sell it to businesses. Social media websites like Facebook have also established data centers worldwide to maintain and utilize the data.

As a result, users are becoming increasingly concerned about the types of data these companies are sharing and the objects they are sharing it with. Currently, privacy breaches have become an urgent issue on the internet. With the information technology revolution moving toward the era of web3, the development of privacy protection and regulatory solutions is crucial for the flourishing of Web3 technology in the United States. In formulating these methods, CoNET can provide a powerful tool to prevent cybercriminals and hostile state actors from using blockchain technology for illegal purposes while still protecting users' privacy regarding personal information, data, and financial activities.

The development of privacy protocol solutions using CoNET can incorporate deposit filtering, withdrawal filtering, and selective de-anonymization based on the operating and economic models of specific protocols or platforms, as well as regulatory compliance obligations. This helps meet these obligations and better protect the ecosystem from illegal use, preventing harm to national security. The diversity of activities in the blockchain space may require developers and founders to consider multiple approaches, including the privacy solutions proposed in this white paper, to address the risks of illegal financial activities and privacy breaches.