Blockchains provided disintermediation to the world, causing a revolution in all sectors, including cryptos, smart cities, healthcare, IoT, e-administration, e-transport system, to name a few.
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The technology allows processing and verification of digital transactions using the ledger without intermediaries while enabling provenance and public verifiability of the data. While a rising tide lifts all boats, the opposite can also be true.
Blockchain solutions have their own unpleasant attributes, for example, compliance with legal regulations, scalability, security threats, or privacy issues. These concerns undermine user anonymity and confidentiality in their transactions on the blockchain and raise privacy concerns among the general public and businesses.
Since all blockchain transactions are traceable and linkable, the world needs privacy-preserving proposals to make the best of this emerging technology.
Enter multiparity computational (MPC) technology
The privacy infringements of blockchain can be tackled by utilizing a neutral infrastructure that ensures users are put in charge of their private data while also making data accessible. Nothing better than MPC technology can solve for confidentiality.
Short for Multiparity Computational technology, MPC is a subfield of cryptography that aims to create a method for parties to compute transactions together over the given inputs while keeping the data of those inputs private.
It works on the standardized cryptographic signature algorithm (ECDSA) and can be used across multiple blockchains, making MPC-based solutions protocol agnostic. Furthermore, MPC has been the topic of academic research since the early 80s. Even today, solutions built on this tech are being reviewed by relevant authorities.
MPC and blockchain technology
While MPC solves for privacy, blockchains protect the data from security breaches. Integrating these two ensures that users’ data is secure and confidential, thereby achieving the best of both worlds.
This combination is not only an effective solution to deal with the monumental issue of data security but is also a viable way to safeguard consumer data. Especially in the cryptocurrency world, a large number of participants means more risk to the data, including sensitive information like credit card numbers, addresses, KYC data, etc.
Consumers that understand the concept of blockchain and that the tech cannot protect their privacy will be less likely to use any blockchain-based project like an e-commerce provider or a social media platform. Putting blockchain and MPC together is the only way to address these privacy concerns.
Growing interest of institutions in privacy-preserving solutions
Pairing MPC technology with blockchain offers endless opportunities to businesses for creating a more inclusive financial system. PayPal, which recently got into the crypto space, is very well aware of the benefits of privacy-focused blockchain-based solutions.
To support its foray into cryptocurrencies while extending confidentiality, the retail giant has partnered with Curv, a platform that offers a security framework for blockchains and digital assets using MPC technology. ZenGo, another MPC-based solution that provides a keyless cryptocurrency wallet, recently raised $20 million in funding from renowned investors.
The institutional interest is bound to build because they know and understand that people are wary of their privacy, and regulators are keener on ensuring users’ privacy should be a priority among a business.
Moreover, the recent attack on Ledger’s database caused a fury of confidentiality concerns among crypto users. MPC-based blockchain solutions represent a perfect combination of privacy and security. Besides, since blockchain’s data is kept confidential, there is nothing for lawmakers to pry on.
Platforms building privacy-preserving and scalable blockchain-based solutions
While privacy-focused solutions aim to increase the widespread adoption of cryptocurrencies, the onus lies firmly in the hands of regular users to realize the risk they are taking by ignoring the privacy and confidentiality of their data. Blockchains are secure but they are open and accessible.
Platon is a privacy-preserving AI network based on the fundamental properties of the blockchain. The network uses MPC, verifiable computation, ZK proof, and other cryptographic algorithms to build an open-source infrastructure for blockchain applications, AI, data providers, and developers with computing needs.
It presents an innovative way to maintain privacy of data without requiring an intermediary for collaborative computing. A network is as strong as its partners. Recently, Platon has entered into a strategic relationship with ChainX and PolkaWorld to grow its ecosystem.
ARPA incorporates MPC to allow any two parties to transact with each other on a blockchain without having to share any personal data. It creates ways for different entities to analyze data and extract data synergies while protecting the privacy of the involved parties.
The authenticity of the computed result is verifiable on the platform via information-theoretic Message Authentication Code. Though this privacy-preserving computation network houses various awards and feats, it recently integrated with Amazon Web Service (AWS) marketplace to allow users to process their customized application in a secure computation method.
Furthermore, ARPA also submitted a draft of privacy-preserving computation standards for AI to IEEE in collaboration with the Alibaba-led group.
Secret Network is a layer 1 blockchain protocol focused on privacy and capable of offering smart contracts. These contracts are encoded with RUST and compiled with WASM to ensure their privacy. Even Secret network nodes cannot see transactions as they are carried out within Trusted Execution Environments (TEEs), in which encrypted data is collected.