An Internet Entrepreneur’s Perspective on Philosophy and Value

BY TOINE RODENBURG

Many of my professional peers in e-commerce are surprised to learn about my academic background, which involved advanced study in philosophy and theology

At universities across Europe, from the Moller Institute and the Katholieke Universiteit in Tilburg to the Universiteit van Amsterdam and the Institut Catholique de Paris, I focused on metaphysical questions that in retrospect seem wholly disconnected from the world of Internet entrepreneurship.

In those years I was more concerned about the revolutions inspired by Hegelian thought than the quiet revolution that was emerging from Steve Jobs’ Los Altos garage I would have been at a loss to explain the connection between my course of study and my future success in cyberspace

But along the way, I’ve witnessed the intersection of epistemology with new Internet technologies more than once Artificial intelligence is one realm Cryptocurrency is another

More than any ideology or philosophy, technology is transforming and transcending our world. I have written extensively on the risks and benefits of AI, and the existential implications of this self-evolving intelligence are already apparent to many. There is a philosophical aspect to cryptocurrency as well.

At first this surprised me. Like most, I initially believed this new form of currency was essentially a stream of binary code that existed across a plane of equations and calculations. Then I started learning about some of the foundational concepts associated with cryptocurrency, such as Zero Knowledge Proofs (ZKP) The very term seems to be a contradiction exactly the kind of puzzle that has always made philosophy so intriguing

ZKPs are a way to ensure both the security and privacy of cryptocurrency transactions, especially in the increasingly popular marketplace of Decentralized Finance (DeFi). Sophisticated users employ ZKPs to mask transactions and financial data without compromising network security. Users benefit from the ability to selectively disclose transactions, based on their own personal preferences, or keep them private.

It has been said that all philosophy is a footnote to Plato, and so it is fascinating that the best manual for understanding ZKPs turns out to be Plato’s Republic.

A commonly-cited scenario used to explain ZKPs echoes one of philosophy’s greatest metaphors: Plato’s cave As related in the ancient text, bound prisoners in a cave never directly observe real objects from outside their world, only the shadows the objects create on the cave’s walls The prisoners even make a game of guessing which shadow will appear next They never see nor understand true reality, only projections of reality.

This, in essence, is how ZKPs are able to prove the identity of users while still guaranteeing anonymity.

Crypto savants have their own cosplay version of the cave analogy: Within the Ali Baba cave, there is a magic door that can only be opened with the right secret word A character called Peggy knows the word, and another character named Victor wants to be able to confirm that she really does know the password The wrinkle is that he must devise a way to confirm the secret word without ever actually knowing it

Through a complex exchange of very limited information shadows of data Victor becomes convinced that Peggy knows the magic word, and Peggy keeps her secret. The door is unlocked, and the DeFi transaction can now be securely made.

The key to maximizing the benefits of ZKPs is to minimize the amount of communication needed between the transactional parties to prove identity. It’s essentially a guessing game accelerated to the speed of billions of calculations per second.

There are real keys to identity names, sums, and other very specific details but they can never be revealed in a ZKP transaction, only confirmed by narrowing the range of possibilities The more parameters that can be confirmed, the greater the level of confidence At the end of the process, the one thing that remains is zero knowledge: The real data remains unseen

The concept of ZKP is rich with paradox, providing both ambiguity and precision, proof and privacy. Internet enthusiasts consider this technology cutting-edge, but students of philosophy understand we’ve seen the concept before. After all, it was Plato’s teacher, Socrates, who declared nearly 2,500 years ago: “The only true wisdom is knowing you know nothing.”