Privacy-Centric DApps Face Crisis After Australia Proposes Anti-Privacy Bill

A proposed bill in the Australia parliament is stifling the citizens’ right to privacy. The bill calls for a software “backdoor” to encrypted data for government authorities to access on demand. If passed, decentralized applications–which pride on their privacy features–stand to bear the brunt.

As blockchain technology and cryptocurrencies gain prominence, a major issue most governments voice is of the lack of control and opacity of financials. But, at the cost of privacy, regulations can be twisted to supplement the technology’s rise.

Long-term implications of a major economy passing an anti-privacy legislation could set the tone for other economies, such as India, U.K., and the U.S., to follow. Citizen surveillance has to be a significant feature of all developed countries across the globe, and as distributed systems compete against that aspect, a flurry of regulatory changes are inevitable.

The so-called Assistance and Access’ bill proposes three features for the Australian government to exercise:

1. Granting a voluntary request for assisting a company with information about a product or customer.
2. Demanding mandatory assistance from a company for getting personal information.
3. Build a “backdoor feature” into technology applications that compromise user encryption for surveillance purposes.

If passed, Australian citizens could lose their online privacy. But for blockchain enthusiasts, investors, proponents, and developers, the move can spell significant damage for the technology’s most prized feature: Privacy.

Most decentralized applications (dApps) rely on blockchain technology or other derivatives–such as DAG–for their functioning. Attempting to create a dApp without the blockchain is comparable to accessing a website without connection to the internet.

Since their introduction, dApps have provided a strong narrative for propelling user privacy while interacting with a global network of people–as aspect not wholly-possible in current mechanisms. For the everyday person, a dApp will be the primary method of interacting with the blockchain, which is said to lead the “Fourth Industrial Revolution” and surpass the internet in terms of usage.

However, if the Australian bill comes to pass, the very existence of decentralized apps—and the principles for which they stand for may be jeopardized.

Based on the proposed bill, it remains unclear how dApps would be accommodated keeping their USP in mind. Australia has been experimenting with blockchain technology in recent times–partnering with other economies to conduct cross-ocean shipping and even issuing billion-dollar bonds–making it clear the government understands the technology and its myriad benefits in depth.

As of today, the global market has approximately 1,945 active dApps with 12,900 daily users, as per data collated by tracking website State of dApps. But with the law’s introduction, several questions come to mind: Would all application participants violate the law by using a privacy-focussed dApp? Are dApps unlawful? Can dApps be legalized with only if a centralized body if governing the system and exercising majority consensus?

Meanwhile, some of the world’s largest tech companies have come together for submitting a four-page notice to the Australian Attorney General in opposition to the proposed bill.

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