Lesson 4: Data Sovereignty

Captions as YouTube publishes them, usually machine-generated, so names such as Daml and Canton can be misheard.

1. 0:00

   The most common definition of data sovereignty you might find on the internet refers to data that is subject to laws of different nations from where it is collected. Data sovereignty with Daml and Canton supports this requirement and many other business scenarios.

2. 0:17

   When we talk about data sovereignty with regard to multi-party applications, we’re focused on your business and the ability to govern "your data" and what is shared with other parties in an application. A very real challenge for the adoption of distributed ledger technology and contract-based applications is that early implementations, like those built around Bitcoin and Ethereum, have limited privacy features.

3. 0:45

   There’s anonymity, but all transactions are visible to those on the network. This, among other reasons, has often been cited as a barrier for governments and regulated industries to adopt these first generation networks. For a multi-party application to really be viable for businesses, like those in banking and finance, there needs to be granular privacy controls.

4. 1:12

   Meaning only those that should have access to the data can access or even receive the data. Something unique to Daml and Canton is the way privacy is built into the technology, treating it as a primary consideration for all features and providing data sovereignty.

5. 1:30

   Let's look at how Daml provides for privacy. There are two fundamental ways Daml and Canton allow for privacy. The first is that organizations control where data is located. And, second, organizations control which parties are provided data as part of the multi-party application.

6. 1:51

   As a distributed system, Canton allows you to run and store your data wherever you like. You’re not required to use someone else’s system like what you have in common Software as a Service models. You’re free to host your data on premise or on a cloud service provider of your choosing.

7. 2:11

   And moving data between those spaces doesn’t affect your ability to connect with other applications. So, you have complete control over the privacy and security location of your data. Now let’s look at how Daml contracts allow for data sovereignty and privacy.

8. 2:30

   There are several components to a Daml application running on a Canton network. But for the topic of data sovereignty we’re going to focus on contracts, choices, participant nodes and sync or “synchronization” domains. Contracts are the output of a Daml application with templates for those contracts written in the Daml language.

9. 2:53

   These contracts can represent tokenized assets, records, or any number of valuable transactions. Each contract can have choices. Choices allow us to define actions on the contracts like selling, transferring, updating, creating, and archiving contracts.

10. 3:12

    The contracts are stored and the choices are run on a participant node. Participant nodes are the local part of the network for your business. You might have several participant nodes, but generally a party in a multi-party application will have their own participant node that they maintain and manage as part of the broader multi-party application.

11. 3:36

    This is how a business can ensure the physical location and custody of their data. Connecting it all together is the sync domain. This is what coordinates and runs the Canton protocol that ensures data is appropriately provided to each participant node according to the rules outlined in the contracts and choices.

12. 3:58

    A collection of participant nodes, connected to sync domains, can then connect to each other over the global Canton network or even with another private sync domain. Although there are several "components" in this network of domains, nodes, contracts and choices, it is with contracts and choices that privacy is established.

13. 4:20

    The contract dictates what data the parties can see in a contract and the choices on that contract. As a general rule, data in a contract must be purposely disclosed to parties. So, a Daml application running on the Canton Network requires explicit disclosure of data at each level.

14. 4:41

    For example, if I have a choice where I’m taking an action of selling an asset between two parties, I would specify which two parties can see that selling action. Every other party on the participant node and wider synchronization domain would not be able to see this action happening.

15. 5:00

    It’s important to note that this doesn't try to rely on pseudo-anonymity to provide pseudo-privacy, which is how many public blockchains work. Only the necessary data for a transaction is sent physically to the participants hosting the parties involved in the transaction.

16. 5:19

    Other participant nodes do not receive any data connected to that transaction at all. Parties without explicit permission to see the data do not know that the transaction is happening. This granular disclosure of data and transactions happening on the distributed ledger is called data projection.

17. 5:39

    The data is only projected to the parties that have been specified to see it. The Canton protocol that manages all the data for the network ensures and manages where the data can be seen and where it’s stored. Even though there are several participant nodes, if only two of them should have access to the data, the data will only be provided to the appropriate nodes through the synchronization domain.

18. 6:06

    This level of privacy designed in the Daml ledger model and the Canton Protocol allows for very powerful and secure data projection and data location that gives your business data sovereignty. So, let’s review. Daml applications are made up of contracts and choices.

19. 6:26

    These contracts are created on participant nodes that you and other parties in the application manage. The participant nodes are connected through synchronization domains, which ensure the correct data projection and thereby the location where data is sent through the Canton protocol.

20. 6:44

    Data projection and node location allow for data sovereignty for everyone in the network.