In this episode of Adventures in Blockchain the panel discusses privacy in the blockchain. Privacy is a hot topic right now in the blockchain world and is an issue that a lot of people are trying to solve. This is a problem in both public and private blockchains.
Bruno starts by addressing the misconception that private blockchains mean that your data is private. He explains that that private means that you are taking control of the infrastructure and maintenance of the blockchain. Privacy is possible in public and private blockchains. Bruno corrects these misconceptions by describing the blockchain as a large database and just like in any other database you need to be careful in securing your data.
The main problem in the blockchain is that anyone on the network can see what you are doing. Bruno explains how zero-knowledge proofs can help. Zk-SNARK’s or Zero-Knowledge Succinct Non-Interactive Argument of Knowledge help you know when you have a valid transaction without actually having to run it. The panel talks about what this means for privacy.
The panel takes a step back to define public and private blockchains. Public blockchains, such as Ethereum and Bitcoin are run and maintained by the public. Public blockchains are not ideal for business who need to keep certain data secure. Private blockchains work better for business because a large corporation can run and maintain its own blockchain. They use permissions to control who in their corporation can see what in their blockchain, while the public has no access to their blockchain.
The panel gives advice on how to know if a blockchain is the best solution for your needs. They warn that even those blockchain is new and shiny is not everything should be put on a blockchain. Start by deciding if you need a blockchain and then what you want from your blockchain.
The pros and cons of blockchain implementation are considered. The centralized element of private blockchains makes them less secure while public blockchains are very secure. Private blockchains don’t have the same monetary incentive for maintenance. Privacy and throughput of public blockchains are cons that are seeing some improvement.
The issue of sending digital currency privately is getting close to being solved. Roman Storm built a dapp, tornado cash, that allows a roundabout way to achieve that anonymity in achieving private cryptocurrency transactions. It allows cryptocurrency to be placed in a mixer, a type of smart contract, along with other users that when pulled back out is no longer traceable back to the user.
The panel gets a little sidetracked off of privacy for a minute as they discuss experimenting with new use cases for blockchain. They discuss the Dubai smart city project. The implications the blockchains may have in the voting systems or medical records. With blockchain still being young, there are a lot of unexplored avenues that could benefit from the blockchain.
Gregory considers the adoption rate of the blockchain and cryptocurrency’s effect on the world. People are using cryptocurrency to send funds internationally. The financial world is working hard to keep up by lowering wire transfer rates. The panel wonders what killer app needs to be made to drive adoption forward. Gregory talks about decentralized finance apps that get users competitive interest rate on cryptocurrency, better privacy, and faster transfer speed. Bruno considers how regulations that prevent testing are slowing progress in blockchain experimentation.
Bruno Duarte Brito
Charles Max Wood