The Ethics of Encryption: Balancing Privacy, Security, and Regulation

Jan 28, 2025

Encryption is the foundation of digital security. However, ethical challenges come into play when balancing the needs for privacy, security, and regulatory compliance. Technologies like PrivID provide a solution that can navigate these challenges.

The Encryption Triad: Privacy, Security, and Regulation

Privacy
Individuals have a right to privacy, the question becomes how do you provide strong encryption that will be used and that minimises unnecessary data exposure.
- PrivID’s Solution: PrivID can verify information (e.g., identity or financial status) without revealing underlying details, thanks to a portion of its technology.
Security
Protecting sensitive data from breaches and unauthorised access is a fundamental ethical obligation.
- PrivID’s Solution: With another portion of its technology PrivID can protect the data from theft or misuse.
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Regulation
Governments and regulators needs mechanisms to access data for public safety, fraud prevention, and compliance.
- PrivID’s Solution: PrivID enables secure audit trails and limited disclosures that meet regulatory needs without undermining encryption integrity.

Case Studies: Encryption Across Sectors

1. Healthcare: Protecting Patient Data

Healthcare providers need to protect patient information while enabling secure data sharing for treatment and research.

Challenge: Balancing privacy with operational needs and regulatory compliance (e.g., GDPR).
PrivID’s Implementation:
- Data Security: FHE encrypts patient records, allowing analysis without exposing sensitive details.
- Compliance Assurance: ZKP verifies that only authorised personnel access specific data, supporting audit and privacy requirements.
Result: Patients’ privacy is preserved, healthcare providers remain compliant, and sensitive data is used securely for research and analytics.

2. Banking: Securing Financial Transactions

The financial sector has always been a big target for cybercriminals because of the nature of the data and transactions, especially in a “Harvest now. Decrypt later” scenario. PrivID’s technology can take that last parts time frame to years, making the data almost obsolete. Encryption is critical for protecting customers data and complying with regulations like GDPR and PSD2 (Payment Services Directive 2).

Challenge: Ensuring secure transactions while minimising data exposure and preventing fraud.
PrivID’s Implementation:
- Transaction Security: PrivID’s FHE encrypts transaction data, ensuring that customer account details and transaction amounts remain secure even during processing.
- Fraud Prevention: ZKP verifies transaction authenticity without revealing sensitive customer information.
- Cross-Border Compliance: PrivID supports encrypted data sharing across jurisdictions, adhering to global regulatory standards.
Result: Customers enjoy secure, seamless transactions, while banks maintain compliance and protect against fraud and breaches.

Example Use Case: A bank using PrivID ensures that high-value transactions are securely encrypted and verified in real-time, mitigating risks of interception or manipulation.

3. Government: Protecting Classified Information

Governments handle data critical to national security, including citizen records, defense plans, and diplomatic communications. Securing this information while ensuring operational transparency and regulatory compliance needs strong encryption.

Challenge: Balancing data confidentiality with the need for secure inter-agency and international collaboration.
PrivID’s Implementation:
- Classified Data Security: FHE encrypts defense and intelligence data, ensuring it remains inaccessible even during analysis.
- Authentication and Access Control: ZKP verifies user identities without exposing information, restricting access to classified materials.
- Secure Collaboration: PrivID enables encrypted communication and data sharing between government agencies and allied nations.
Result: Sensitive government data is protected from unauthorised access while enabling secure collaboration and compliance with data protection regulations like GDPR and NIS2.

Example Use Case: A government agency collaborates securely with NATO using PrivID, making sure that intelligence shared between allies stays encrypted and accessible only to authorised personnel.

The Future of Encryption

Encryption is not about choosing between privacy, security, or regulation—it’s about harmonising all three. PrivID’s technologies ensure that data stays secure and privacy is maintained, while allowing organisations to meet regulatory demands.

PrivID provides a model for encryption that addresses the needs of industries and governments.