DappCon 2023: Circles Entropy: Weaving Privacy Into Trust Networks - Circles Entropy

Transcript

thank you good morning um wow this is such a contrast it's so sunny outside I feel like I'm the darkest room um in this building but yeah uh thanks for uh coming out this morning to listen to us um I am uh this is my first day at the conference I wasn't here yesterday but really looking forward to yeah it looks like a great schedule um uh my name is KB I work with as Daniel mentioned the circles project um and uh more recently working on a project called circles entropy I'll tell you a little bit about it but let's start with for folks who don't know what circles is a little bit of context about circles um I work with circles but I'm also a part of a developers Collective called bits

possessed uh and actually um I um yeah we small software developers Collective primarily working on like um trying to work on sustainable technology projects uh uh um with like around like um more Equitable Tech and I work with a small group of folks who usually aren't Berlin but some of us are here today and uh I'll tell you a bit more about what the involvement with circles is in a second but maybe I'll just wave at uh the vid possest gang here who are here who've been working on circles for the last couple of years too um so circles um circles is an alternative Community uh currency system it aims to provide um enable communities to provide each other

with basic income without involvement from the states because a lot of States uh don't do basic income as they should um circles was um founded in 2020 um it was launched in October of 20120 as uh a set of smart contracts deployed on the nosis Chain but also a web- based wallet U which runs on circles. garden and that's the bit that's been developed and maintained along with original smart contracts has been developed and maintained by the bits possessed developer Collective uh the project has been supported in Berlin uh for the last couple of years by the circles coop Coop uh and there's some members from the circles Co-op here I believe they are um who have successfully run a community

pilot um in Berlin where there's about 30 businesses over 30 businesses in Berlin who accept circles um and there's uh this number I'm not sure I was told is not right this probably higher than this but about 700 active members using circles on a day-to-day basis to buy things like um fresh groceries ve veggies um um um preserves coffee paying for some alternative medicine and health care and um um yeah say that again dcon tickets yeah you could yeah actually a bunch of I didn't have to pay for my ticket this

time because I'm speaking but I know a bunch of my uh my friends who actually bought their tickets using circles uh to come to this conference so yeah uh that's uh that's possible that's awesome um so yeah and um um and uh so that's been going on for a couple of years and hopefully uh keeps going on for a bit uh um but uh so that circles and that's awesome but there's a few things that we noticed that we could make better here because as as it goes with a lot of blockchain uh projects um all of this stuff that happens on circles is actually written on chain circles Works in um so I said it's deployed on the nosis

Chain as a um as a smart contract so we we call it the circles Hub contract it does two things one is enables people to it well actually three things it uh it sets up a token contract every time someone signs up with a circles Hub it starts minting what your basic income um um we currently issue circles as one Circle per hour uh which means you get about 720 circles a month um and and then you can spend those C circles you can send those to other people and pay businesses who are selling you uh the goods and services I mentioned earlier but the way this works is that it relies on um on a on a web of trust based system so circles to sign up with circles you need three people who

are already using circles to trust you once that happens you have a circles account and then you can use your use a circles tokens that are Minted as your Ubi to pay people who actually trust trust you or trust your token uh and we do something called transitive trust which means uh I have a friend called David David has a friend called Jackie um Jackie trusts David David trusts me I don't know Jackie directly but I have just bought some veggies from Jackie and I want to pay them uh but Jackie doesn't because ja jacket doesn't trust me directly but they do trust David they will accept David's circles but not mine

but in this this case what Circle what what the circle system allows you to do is allows me to say pay 50 circles to David for the wedgies that I bought from jacket and David then Pays His 50 circles to jack a uh uh on my behalf and that's what we call transitive trust and most circles transactions work like this via the web of trust where you it uses the degrees of separation within your trust Network to determine who trusts who and moves circles around this way but for this to happen we write the whole web of Trust on chain currently which means that all transactions within an a community can actually be looked up by any by a third party Observer on chain publicly which which basically lets them determine who is connected to

who in a specific Community or if certain communities are connected to other communities elsewhere right um this is a privacy risk especially if um um if you're working with communities at risk uh in places where the states not so cool about somebody just running a basic income project um in places where you may be connected with someone somewhere um within your because of your Degrees of Separation with somebody who who somehow happens to be in a place where there's like blanket crypto bands the third one on this slide is the bit that it's kind of like it's more immediate and concerns me um with like with what I see how how we use circles

here where so you can actually access alternative medicine certain kinds of healthare in Berlin using circles but I wouldn't want that information to be public if I'm paying a therapist or if I'm paying someone to I don't know fix a problem with my back I really don't want the world to know that I am paying for healthare um um um by like looking up what kind of transactions I'm engaging in on chain or it could apply to a lot of other things that I I'm I I generally maybe I don't want people to know what I'm eating or how much coffee I'm drinking um but these are things that you cannot hide today because um well if I'm pay paying with circles and making a transaction in a community you can kind of track where where my circles went to and what I what kind of goods and

services I bought so this is something that yeah you may not want to make public but anyway the the the point being that all transactions within uh uh a web of trust are public today and we want to try and fix that uh wa did I miss something sorry about that so that's what Circle entropy that's where the cires entropy project came in we've been thinking about this for the last couple of years um we wholly support the idea of being able to let communities have the autonomy in the

way they uh engage in uh Financial transactions within a community without the need of centralized Authority and C to an extent has allowed that has actually helped a lot of small businesses um kind of flourish because they can now um accept Community currency and engage with members of the community themselves but all of this is public as I mentioned on chain and I don't want to Target just circles here I don't want to Target my project this is a problem with a lot of blockchain projects where yeah in the name of transparency we actually do end up making a lot of uh uh uh uh uh private data kind of public right um and all things considered it's not so bad with

circles yes the public addresses that are engaging in transactions and trusting each other are on chain but there's very little data we collect anyway it's basically a username and a user Prof uh user profile picture that you can query using the public API that circles provides uh today but no no other personal personally identifiable information beyond that uh but that sometimes can be enough to kind of like know who is who and uh what's happening in network um to do to fix that we started thinking about how we could maybe make circles more privacy preserving and that's where the entropy project comes in uh we put together a small team of U cryptographers to kind of like help us think about well how can

we offer more privacy guarantees U use in circles how can we provide users um user account anonymity so they don't have to make uh their user information public to anyone except people they Trust how can we make sure that their balances are uh private um how can we make sure that all transactions are shielded uh these are things that are not new these are things that have been uh have been um um other projects have been doing for a while shielded transactions and private balances and user account anonymity but we want to do this in a way where we still want to be able to do uh apply this to the web of trust uh that circles relies on uh for transitive trust and transfers and uh we also want

to try to provide Network level anonymity for all transactions while we are at it so this is where we uh well most of the work that we've we've had to do so far is around figuring out how can we do this kind of uh transitive trust path finding that circles currently does uh where we need the web of the web of trust data to be public currently so we can see who's connected to who and um that's the problem we start uh uh uh uh we started to work on solving so we ended up with um after a bunch of research we ended up with um uh having to make some decisions around what what we're going to base this on we chose to go with uh building circles on uh

circles entropy on top of uh a set of protocols developed by uh anoma which allow us to do uh fully shielded multiparty State transitions um and um and in the context of circles allowing us to use the max flow algorithm that circles uses uh to do transitive trust but without uh having to reveal um user information uh users having to reveal any personal information in uh in the process um and uh that led us to defining uh the technical architecture that circles entropy um um uh is using with

where we have um so anoma is an intent Centric uh um uh platform that allows us allows the user to make their intents known which are partial State transitions that then solver uh solvers um can pick up and well do matchmaking to basically uh um um turn that into um um uh complete State transitions which are like to form Atomic trans uh transactions and then you can settle this as zero knowledge proes somewhere in our case a blockchain um and we do all this and to and so we

we need people to run like uh well uh we provide resources to run what we call Sol uh the solver Network by running solver nodes and to reward these solver nodes we intend to use a utility token that will then um incentivize people running these solver nodes um in our case we want to use a token that we are we we will issue uh called Enzo but but but but it but a solver can choose what they accept and they can be incentivized the way they wish to as long as well there there's some sort of an agreement in the network about like what um um um yeah what's viable um so that's the technical overview where there is an there well a

user uh uh defines partial State transitions as intents solvers pick it up try to match them with other intents that would fulfill um uh this transaction and once that happens it can be verifi it can be published as a a proof and verified on chain and solvers uh and gossip nodes can be incentivized um with a um yeah with a utility token um of course this can be used Beyond circles um we want to use this to do um well um um we'll do web web of trust based uh transactions um um for for payments

within circles but but if you can actually Elevate the web of trust to provide uh there's many users for like there's many things that rely on web many many things that actually Rel on web web of trust models right so if you can actually Elevate this to provide the kind kind of privacy guarantees that we wish to uh have with circles you could apply this to well um more autonomous um mesh credit networks you could do community credit clearing without the need of a central Authority um where communities make um well well um um um publish intents um anonymously and then those are matched with others to kind of like

do debt clearing in a in a in in the context of a community without the need of a bank um you could apply this to social media you it it I think it it can can really um um U help solve problems around uh around around like um by providing uh spam protection measures in a privacy preserving social distributed social media context you can also apply this to secure private messaging and there's a many there's many things basically it comes down to the web of trust is a strong model uh which is used widely to build various kinds of applications on top of U but and this I could see this working in any of those contexts um but with privacy guarantees that a lot of the time doesn't come with

web of trust based models because well you need the web of trust uh available for you to um um yeah um um compute connections and and um enable transactions right so uh that's what we yeah that's so those are the problems we're trying to solve with circles and hopefully apply that to some other um um other applications um the current state of affairs with circles entropy is that we started working on this project with a small team of cryptographers earlier this year uh we went through a pretty intense research phase between I'd say March and about um about now U we published um our technical

findings and our goals as a black paper um in June um you can can read that on the circle entropy website there'll be a link in a second on the next slide um we're currently working on applying the algorithm the max flow algorithm that that the that that circles currently uses to do this kind of pathf finding and transitive trust and transactions uh using tiger which is the which is the framework that uh that uh that is a part uh that is a part of the set of protocols that anoma provides and we want to p publish a proof of concept of how uh this intens Centric solving U with the solver Network would work

towards the end of this year um our our our end goal is to make circles more privacy preserving with uh uh with uh the uh uh with circle being uh uh using the entropy protocol sometime next year ideally by summer autumn next year and that's uh yeah that's that's that's where we're at and if You' like to learn more we have published the black paper on entropy. circles. Coop you we also have a booth downstairs as a circles stable where you can uh if you have circles pen circles to buy some uh uh buy some of the things that I mentioned earlier there's uh uh there's some beautiful things that you can uh spend

your circles on while you're here at Decon uh but also importantly if you want to learn about circles entropy or circles Ubi in general um um there's uh one of one of the uh cryptographers working on circles entropy Davey who's here will will be there will be at the booth uh today there's also other circles developers who will be at the booth now and then so come talk to us about circles uh we're also in the process of uh doing some fundraising to continue to work on circles and circles entropy so if you'd like to know more about how you could uh engage with us uh um around that come talk to us um have a look at the website and read the black papers entropy. circles.

Coop yeah and that's me thank you very [Applause] much so if I understand correctly if you want to pay someone who you don't trust you need to I can't really hear you very well if you want to pay someone who you don't trust you need to ask your uh someone who you trust to pay on behalf of you correct um and and so actually if that's the case uh that means your friend knows what you pay for and which means but actually uh related to the Privacy issue is that if you trust your friend it doesn't really

mean that you want your friend know everything you buy correct so uh yeah I just have this uh uh question on how to uh solve this problem yeah so um the so the question is yeah currently the way circles works is with transitive trust yes so if if um you trust me but I'm trying to pay say them and they trust you you would know that I paid them say 10 circles because it's actually you who paid them 10 circles and I paid you 10 uh yeah so your yeah your your point is uh valid here that yeah currently you could basically go oh you would know as my as the person who

trusts me to enable this transaction that what I paid for and who I paid uh and probably what I paid for right and this is yeah one of the things that we want to kind of like um solve with entropy by not routing transactions the way it currently but basically determining that there is the the the you can by determining that there is the the the the path that exists between us without actually having to Route the transaction through you so I should be able to send somebody uh circles directly as long as we can prove to to a everybody involved here that yes that that transitive trust path exists so in this case it wouldn't be that I would have to you would only accept my circles and they would accept your circles ideally they would accept

circles directly from me but but your role would be to validate that there is a trust path that exists here thank you very much I have two questions question one is where does the value of Ubi come from sorry say that again please where does the value of the Ubi come from and the second question is so what I learned is that you understand that privacy is a number one blocker for you to reach adoption or scale and I wonder what are apart from privacy the number one blockers for you to reach the next level of growth um so the first question where

does the value for this Ubi come from um so simply put the value for the UI within the current context of circles comes from the community so your your your tokens are actually your personal tokens which only have value if someone else trusts trusts those tokens and accepts them uh in the um but of course that's like yeah that's a very simple explanation to a more complex uh question that you're asking in the context of Berlin uh the circles Co-op has been able to do um um a bunch of fundraising in the past to run a subsidized pilot where uh where where where we we've be we've subsidize

businesses who are accepting circles to a certain extent um and uh and also uh well using that to try um that to kind of like Leverage trying to create a community and try to build more um um um more Loops more circular Loops within businesses so businesses can trade uh using circles with each other that they accepting from the community but yeah it's been a subsidized pilot and I think there's a few more examples I can think of where there's like subsidized Pilots of circles right now um um um yeah but there are other models that you can use instead of like well trying to do large number large amounts of fundraising to like f like subsidize businesses um so there for example um

there is a um there's a project called um um ethic Hub in uh in Mexico who do this where they actually uh um support a lot of like Farmers especially like small small business coffee Farmers um and and anyone can invest in them by actually buying buying tokens that could provide Li that that in return provide liquidity for these businesses but then these tokens Can Be staked and then there's like pretty attractive staking rewards for people who actually are investing in these tokens so that's one model that I can think of but but with circles there is a there is a we actually have a group currency layer on top of the Ubi layer now where uh communities can actually

pull um their circles tokens and via the via the current web of trust and the transitive uh transitive trustpath mint um um a specific group token which could be for a specific community and that token could be used to bring in liquidity in various ways um so yeah there are many models there is no yeah so there so the value really again comes down to how the community decides to kind of create value for it but there are other there are like definitely um um economic technical models that you can apply on top of the web of trust based Ubi uh uh U uh system that we have currently to bring in value I don't remember what the second question was it was about scale and privacy can you but we are also out of time maybe we can

chat a tight yeah so thank you very much cop um if there are remaining questions then just join them on their Booth uh next I'm proud to introduce you Shonda Brown uh she will also talk about circus but this time about the implementation of circuit in Indonesia Bali welcome shaa