Privacy - Privacy trade-off: when defending our privacy hurts our privacy

EthCC[8] · 1 Jul 2025 · 15:48

Costanza Gallo examines cases where adopting privacy tools can expose people to new risks. The presentation discusses tradeoffs when encrypted communications attract attention from groups opposing privacy.

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From EthCC[8], hosted by Ethereum France.

Transcript

[Music] Hello. Um, hi everyone. So now we're going to see privacy privacy tradeoff. So when defending our privacy is actually hurting our privacy. Um, before we start a little bit about me. Um, I studied low anthropology society and I spent years basically analyzing how governance systems evolve and how technology evolves with governance systems and that deeply influences how I think about crypto uh decentralization, privacy and society. I've been in the

space since 2018 in a way or in another. So I spent years working with crypto projects, helping with privacy, advocating for privacy, building, advising, um, advocating. And I used to think that privacy was always good. But then something happened. Uh, North Korean hacked me. That was in December. And they completely drained my wallet and I lost everything. Um, and what happened? So they laundered all my money. um half of them through a centralized exchange, a very regulated but shady centralized exchange and half of them through a cryptonative tooling.

Um, and I contact the chain. I was like, well, at least I'm going to be able to recover part of the money. So I send them the police report, I send them the screenshot, all the transactions, all the analysis that um CL 911 did for me. They keep on saying no. Why? Oh, because we are defending our users privacy. So we can't uh we can't help you. Um so on the one hand I lost 50% of my money through a cryptonative tooling and 50% of my money through a regulated cryp exchange and that moment works something in me because the very technology privacy that I spent years advocating

for um going to all the conferences and speaking to people was actually using against me and that's when I faced the dark side of privacy when privacy was not my defense but privacy was something used against me was a tool being used against me and that made me ask some painful questions. So what are the unseen unspoken cost of privacy and what happens when defending privacy actually hurts our privacy.

So the goal of this talk is to first analyze it and see that privacy is not always good. Um and then to build a framework to hopefully build better products, better projects that help us and that cannot be used against us. So we've been conditioned to think that the grammar for privacy is offense defense. But that is not and we've been also conditioned to think that privacy is individual.

Privacy is always good no matter what. And the enemy of privacy is surveillance. That's the theory. But what's the practice? So first of all, privacy is relational, is layered, is situational and sometimes most of the times is also contradictory. So you should not adopt a grammar of war because that will fail to capture all the complexities and nuances. Then privacy is good but not indiscriminately good. Um when we defend absolute privacy then we compromise on local privacy and vice versa.

Then the enemy of privacy is not always surveillance. Sometimes the enemy of privacy is privacy itself. So privacy privacy tradeoff means that protecting one aspect of privacy can cost us some privacy in another way. So we need to imagine privacy uh like a blanket. If you pull it on one side then it is short on the other side. It is not infinite. And we're going to see a couple of examples like in my case my crypto got stolen and then uh Max an exchange got used to lender the money um and they protected the thief's privacy hurting my privacy in exchange but

that's very easy because you know like there is a clear victim there is a culprit and there is someone using privacy to cover for the activities that are making a big part of the revenue. But there are other cases. So something harder. What if using privacy tooling is actually dangerous and can cost your life? A few years ago I was talking with a friend who live in a country without freedom with extreme surveillance during a war and he was part of the opposition. So that was a very little and very dangerous combination. He was literally risking his life. So it was taken for granted that his phone was

being monitored. That's something that you need to accept. You need to like know if you're living in some countries. So we're speaking about secure messaging platforms. WhatsApp, Instagram, Facebook, all the Meta Packet was obviously um not an option because Meta was helping the government shut down the protest. Um, iMes also didn't offer enough security guarantees. Um, Telegram, well, Telegram is has back doors from both the US and Russia. So, again, not an option. So, what about signal? What about status? What about all the privacy preserving protocols?

The problem is that in his circle, in his friends, no one ever used signal or status. No one ever downloaded them. So by downloading those tools, it was putting a target in his back because in that world, in that situation, downloading one of those apps makes you a target. He screams to the government, I have something to hide. Come get me. So the act of choosing privacy for him was actually making him less safe, not safer.

So if you live in a place without freedom and with extreme surveillance and you have a privacy app on your phone, then the Allen bell goes immediately on why do you need it? What are you hiding? Are you working with the enemy? Are you threat? Are you a terrorist? And then that's very similar to what happened with tornado cashache. Um, law enforcement ban users from using tornado cache, not because they had proof that they did something illegal, but uh because if you're needing privacy, then you are automatically criminal.

Um, so you're automatically a criminal, a terrorist, a threat. So those are two examples of privacy being a danger to the very same people that it should protect. And there is many more examples. The list could go on and on and on. So what I would like to do here is to propose a framework to evaluate whether something has an hidden privacy cost. So we have a friends Bob and alius like always and we need to understand if the project they want to use project ABC um has um negative impact on the privacy.

So the first element to consider is the consequences of the app. Uh there is intended unintended consequences. By design the project is intended to reduce their privacy and then there is unintended consequences. The design is not to reduce the privacy. However, if it's not implemented correctly, if something goes wrong uh or to other circumstances, there is a risk to their privacy. So, what we saw before with a signal or tornado cache example and then there is the role that Alice and Bob have to take um in one case they

have to hop in. So they take an active role or they're just like um they have a passive role. It is being used to them without them actively choosing it. So as you can see here we have a matrix. Um we have a design where Alice uh decides to use a projects. However, there are unintended consequences that can affect her. Um and then we have um a case where there are unintended consequences uh but Alice doesn't obtain sort of a data leaks and something that unfortunately is very well outside of our control. And then there is um Alice

has a passive role. However, there are intended consequences against our privacy and we're going to focus on those two here. um that that's the one where we can have the most action. So intended consequences and passive role like in the case of the sh exchange that stole my crypto or other projects that are preaching privacy but are actually a surveillance and censorship mechanism.

So here what we need to do is to take a a reality check like we need to be very humble and understand that those projects are actually using privacy as an excuse. Privacy is a marketing tool is a branding if nothing else. So what do we do here? The way here to protect Alice and Bob and to protect everyone is to stop using those tools even if it's convenient for you. even if it's something that you want to use because it's very easy because you know like oh you like that exchange um they would have no power if people stop using them we are the one giving them power so

stop using them is the only way to actually protect the community and to avoid those mistakes mistakes then consequences and active role this is like the case of tornado cash and signal And this is extremely dangerous because it's very often overlooked until too late. And here the consequence of using privacy tooling. It's not the privacy itself. It's how it's being perceived by external actors. Because erase the questions, why do you need privacy? Are you a terrorist?

So here the way out is honestly becoming so big that they can shut it down. Becoming so big and so widely adopted and privacy has to become so normalized and not exceptionalized. So for example, if everyone in my friend's circle was using signal to you know like talk with their mom and buy milk then that will create a safety net for my friend to use the privacy messaging app. So if you have a projects here um working um in Sier then please please do invest in business development marketing road whatever you want to do

but you need to become big you need to become big enough that your app is normalized is normal is not exception you you need to get as many users as possible to normalize your tool and remove suspicions for everyone else and protect the people that need it the system. So like I said before um I would like to approach the privacy privacy tradeoff and changing the grammar from grammar of worth to a grammar of care because in both cases the community the amount of users that a project has or doesn't have are the protection for everyone else.

So in this context the saying either we all have privacy or no one has privacy has a meaning and it means something because we are all interconnected. Privacy is not individual is relational like we saw before and we all need one another to provide sufficient coverage for privacy not to be suspicious and not to be a tool to be used against us. So with that thank you. Those are my contacts. if you want to stay in contact. Thank you very much. Do you have any question?

Wonderful. No question. Okay. Thank you very much. Oh, one question. How about we name some names? What would be an example of from the first side of you know a project that's claiming to support privacy but isn't right. You you said that there are certain apps there's certain projects that are using privacy as a marketing message. Yeah. Do you want to talk about those or I don't want to make anime.

It's a sideline conversation. Well, um I mean I can talk about the How about one example? The one example is the egg chain that got my money. Uh it is Max. Um and yes, so they are protecting the privacy of their users including the privacy of the thief that stole my money even though I send them police reports. So they're saying that they are protecting privacy but actually what's happening is that many of those exchanges are actually making a big business in the front because of course like many money are going through them

in this way. This is the one example I can talk about um very easily because it happened to me. But there are other protocols where for example um you are excluded if you are from a certain geography or if a government wants to exclude you and those projects sometimes are branding themselves a privacy protocols. Thank you. Thank you very much. Any other question? No. Okay. Thank you. Thanks.

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