One of blockchain’s greatest challenges that’s yet to be solved is the lack of confidentiality and privacy of data. It’s a challenge that needs to be addressed though, because until a solution is found then blockchain will always be out of the question for enterprises that put a premium on data privacy above all of the benefits the technology provides.
The good news is that the last couple of years have seen a number of projects emerge that aim to tackle the blockchain privacy problem once and for all. They’re aiming to make it possible for a bank or some other private firm to implement and operate their own blockchains while retaining control not only of the transactions added to it, but more importantly, what’s in those transactions.
Let’s take a look at some of the most promising blockchain data privacy projects looking to make inroads this year:
One of the best efforts is Manta Network, which is aiming to tackle one of the biggest problems with web3 blockchain infrastructure – the fact that anyone can access the records stored upon it.
Manta guarantees privacy through the use of a technology known as “Zk-SNARK”, which is a cryptographic method that allows one party to prove it has specific information without revealing that data. Manta claims that this method enables complete end-to-end anonymity with high transaction throughput and cross-chain interoperability.
Manta uses Zk-NARK as the basis of its decentralized privacy payment and privacy token exchange protocols and is also working on a decentralized privacy lending and synthetic asset protocol.
Manta Network co-founder Kenny Li told Hackernoon in a recent interview that the basic logic is to mint “private tokens” with stablecoins and other base tokens at a minting value ratio of 1:1, with the exchange protocol used to support traders who wish to exchange those privacy tokens.
The Manta Network protocol uses zk-SNARK to swap Polkadot and parachain tokens with their corresponding private tokens. It also enables people to pay with privacy tokens and redeem base coins from private tokens. The decentralized anonymous exchange protocol, known as Manta Swap, uses zk-SNARK and an Automated Market Maker to allow users to trade private tokens anonymously. The protocol’s price formation method is consistent with that of the mainstream AMM.
Li explained that Manta’s goal is not to build its own privacy token, but instead to privatize every other cryptocurrency, for example Polkadot, Bitcoin and others.
“By using Manta Network, any token can become a privacy token – that’s the goal,” Li said. “By creating this as a layer-one network, we are able to also manage the costs of the network, which will ultimately mean more inclusion into privacy activities, transforming privacy from a luxury into the vision of the fundamental human right that we strive to achieve.”
Employing a more novel approach to the problem of data privacy on the blockchain, ParallelChain has hit upon the idea of interoperable public and private blockchains to enable wide interaction while keeping enterprise data secure.
ParallelChain’s secret sauce is its Proof-of-Immutability algorithm for validating transactions, wherein any node is free to write its own data, which can only be identified by a hash value that’s stored on that node’s hash vault.
This way, the data written by the node remains untouched until such time as it’s relevant to a transaction involving another node. At that time, the data must be verified to ensure it has not been tampered with. ParallelChain says its unique method helps to guarantee data privacy compared to other blockchains and can be useful in various industries, ranging from fintech and smart transportation to airports, factories or hospitals.
ParallelChain believes its Proof-of-Immutability has big appeal for enterprises because it will allow them to deploy and operate confidential blockchains that prevent other users from seeing any transaction data. Yet at the same time, it remains possible to validate any single transaction on the blockchain, without seeing that information.
ParallelChain’s decentralized, anonymous approach to data security also helps to solve a number of problems that other blockchains struggle with. It comes with custom-made applications such as PreventativeChain that help to protect against insider threats by monitoring employees’ behavior to pre-empt data leakage. Meanwhile, its eKYC-Chain app improves facial recognition with its anti-spoofing technology that can distinguish between a real face and a photograph.
A final interesting use case is accountability. ApprovalChain is an application that documents every activity in a project, immutably, making sure each task has been signed off as complete only once all parties involved are in agreement.
For those companies looking to strike a better balance between privacy and transparency, a project known as Findora promises to be an interesting solution.
Findora’s blockchain relies on what’s known as ZK-Rollup technology, or zero-knowledge proof, that allows network participants to verify the ledger is valid without knowing the content of its transactions.
Here’s a simple explanation of how it works: John wants to persuade Susan that he knows the correct password to open a keypad door. He doesn’t reveal the password, but he does unlock the door using the keypad lock. It’s a compelling argument that John does indeed know what the password is, without him needing to tell anyone the exact combination of numbers. John has therefore convinced Susan his information is correct without revealing any part of it.
Imagine there’s a door with a keypad lock next to it, and Bob is trying to persuade Alice that he has the correct password for the keypad lock. By unlocking the door with the keypad lock, Bob has given Alice a compelling argument of him knowing the password, without directly revealing what it is. In other words, Bob has convinced Alice that his statement about knowing the password is true, without revealing any additional knowledge about the statement.
Findora works the same way, using ZKPs to prove the transactions on its blockchain without revealing any of the actual data. By doing so, it makes it possible to run all kinds of services on its blockchain that deal with sensitive data, including banking applications, investment funds, lending marketplaces and more.
Findora says the advantage for financial services is they’re able to take advantage of blockchain’s built-in transparency while simultaneously remaining compliant and safeguarding user’s data.
Elastos isn’t really a privacy-preserving blockchain at all. Rather, it’s instead building an entire ecosystem that aims to isolate decentralized applications from the Internet completely to ensure the integrity of user’s data.
The blockchain is in fact just one of four components that make up Elastos’s smart web infrastructure. The Elastos Blockchain can be thought of as an identification layer, which provides a unique ID for each person, computer, smartphone and application that accesses its smart web.
The Elastos Runtime serves as an operating system, capable of running on any device, that remains disconnected from the Internet at all times. This is where DeFi apps and data on Elastos is hosted. The Elastos Carrier protocol meanwhile serves as an intermediary that connects to the web on behalf of applications and users, making it possible for those apps to communicate with others.
The final component is the Elastos Software Development Kit, which gives developers a way to access Elastos Carrier and users’ identities.
WIth Elastos then, decentralized applications don’t run on the web itself. They run entirely on Elastos – separate from the internet – ensuring users control their own data and eliminating the risks of that data being stolen by malware or other kinds of web attacks.
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dYdX Founder Advises Crypto Industry to Abandon US Customers, Deeming Market Effort Unrewarding
The founder of the decentralized exchange, dYdX, asserts that individuals involved in cryptocurrency development should direct their efforts toward international markets beyond the United States for the upcoming five to ten years.
Antonio Juliano conveys to his audience of 49,400 on the social media platform X that the prevailing regulatory uncertainty within the United States does not merit the associated challenges or concessions.
Juliano contends that it would be more prudent for cryptocurrency developers to establish their products in alternative countries and subsequently re-enter the United States from a position of strength.
“Cryptocurrency developers would be well-advised to temporarily discontinue catering to the US market and instead seek re-entry in a span of 5-10 years. The complications and compromises involved do not warrant the endeavor. Moreover, a substantial portion of the market exists overseas. It is recommended to innovate in those regions, ascertain product-market fit, and then return with greater bargaining power…
The paramount objective shared among all stakeholders is to secure a significantly more potent product-market fit for cryptocurrency. The pursuit of a robust product-market fit does not necessitate flawless distribution. A multitude of substantial overseas markets present avenues for experimentation.”
Juliano articulates that advocating for more amiable cryptocurrency regulations demands time, although the process could be expedited if developers manage to introduce products that elicit consumer demand.
“However, this perspective does not undermine the importance of efforts to influence US cryptocurrency policy. On the contrary, such endeavors are absolutely vital. Given the protracted timeframe required (in anticipation of re-entry), and considering that much of the world takes cues from the United States, it becomes evident that our progress in shaping policies hinges upon achieving global-scale product usage.”
The dYdX founder proceeds to emphasize that, with time, American citizens will come to realize that cryptocurrency is inherently aligned with US values and principles.
“The tenets of cryptocurrency closely align with American values. What concept could be more quintessentially American and reflective of capitalist ideals than a financial system conceived for the people, driven by the people, and answerable to the people? This, indeed, constitutes the very essence of our endeavor.”
Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn
Bloomberg Intelligence’s senior macro strategist, Mike McGlone, is conveying a pessimistic outlook for Bitcoin (BTC) in the immediate future.
During a recent interview on Kitco News, McGlone underscored that Bitcoin is currently displaying bearish signals even amidst the ascent of other high-risk assets.
“In the event of a downturn, adhering to a rule prevalent in bear markets, resources across the board could witness a reduction in value, and Bitcoin will not be an exception.
A crucial observation is the necessity for Bitcoin to exhibit divergent strength at a certain juncture, akin to the behavior of treasury bonds and gold in a deflationary economic environment. Regrettably, this pattern has not materialized.
After attaining its peak towards the conclusion of Q1, reaching approximately $31,000, driven by optimism and the influence of exchange-traded funds (ETFs), Bitcoin subsequently retraced to $25,000 or approximately $26,000. Presently, it is manifesting divergent weakness in contrast to the concurrent upsurge in the stock market.”
According to McGlone’s analysis, the ongoing “economic reset” implies a continuation of Bitcoin’s recent downward trend, although he anticipates that the premier cryptocurrency will ultimately attain a six-figure valuation.
“While I believe that Bitcoin will eventually achieve a valuation of $100,000, the onset of a global economic reset, as I anticipate, characterized by a standard deflationary recession leading to a decline in the housing and stock markets, analogous to the conditions of 2008—though arguably exacerbated due to the ongoing removal of liquidity from the system—Bitcoin’s role as an influential precursor comes to the forefront.
This underscores my point that Bitcoin has recently been taking on the role of a harbinger of trends. Its value ascended briefly to around $31,000, only to subsequently trend downwards. From my perspective, it serves as a leading indicator for a majority of high-risk assets.”
As of the time of writing, Bitcoin is trading at $26,079.
Lead Developer Announces Imminent Public Reopening of Shibarium
Shiba Inu’s (SHIB) Latest Layer-2 Scaling Solution Nears Public Relaunch Following Recent Technical Challenges
Shytoshi Kusama, the enigmatic lead developer behind the SHIB project, has shared in a recent blog post that significant progress has been made in addressing the technical setbacks that temporarily halted the operation of Shibarium, SHIB’s new layer-2 scaling solution. The initial release of Shibarium encountered network issues that prompted its temporary closure. However, Kusama assured the community that diligent testing and parameter adjustments have led to notable improvements.
Kusama elaborated, stating, “After extensive testing and parameter refinements aimed at achieving a ‘ready’ status, Shibarium has undergone enhancements and optimization. While still undergoing testing, it is now successfully producing blocks.” Additionally, to prevent a recurrence of the past network overload, Kusama revealed the implementation of a new monitoring system and supplementary fail-safe measures. These include rate limiting at the RPC (remote procedure call) level and an automated server reset mechanism in the event of another surge in traffic.
With these advancements in place, the team is on the verge of reopening Shibarium to the public. As part of this progression, more network validators will be integrated into the ecosystem on August 23rd. Kusama emphasized the significance of this step, remarking, “Tomorrow, additional validators will become operational, expanding the options available for staking BONE. This will allow for a distribution of rewards earned through their roles within our community. As testing concludes, we will once again prepare for public utilization.”
Shibarium’s previous technical difficulties were attributed to an overwhelming influx of users and transactions during its initial launch. As of the current writing, SHIB is trading at $0.00000798, marking a 0.4% increase over the past 24 hours.
Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration
FTX’s co-founder, Sam Bankman-Fried, is currently seeking a temporary release from incarceration. The purpose behind this endeavor is to engage in collaborative strategizing with his legal representatives within the confines of the federal courthouse situated in Manhattan.
In a formal letter dispatched to US District Judge Lewis Kaplan on a Friday, Bankman-Fried’s legal team expounded that their client’s capacity to effectively scrutinize the extensive legal documents pertaining to his case has been significantly curtailed during his time spent incarcerated at the Metropolitan Detention Center (MDC) in Brooklyn.
Christian Everdell, the attorney representing Bankman-Fried, divulged that the government recently disseminated a voluminous three-quarters of a million pages of Slack communications. These were originally due several months prior. Expressing the urgency of the situation, Everdell articulated, “Only last week did the government furnish an aggregate of approximately seven hundred and fifty thousand pages of Slack communications that were originally stipulated for release months ago. Given the current timeline, it is a futile endeavor for Mr. Bankman-Fried to endeavor to review these materials.”
He underlined the pivotal necessity for Bankman-Fried to collaborate meticulously with his legal team, emphasizing his dire need to avail himself of an internet-enabled laptop within the courthouse premises. Such a resource would undoubtedly expedite the process of comprehensive document review, an imperative undertaking in light of his impending fraud trial scheduled for the forthcoming October.
In riposte to Bankman-Fried’s plea for reprieve, the prosecuting body voiced apprehensions regarding his adherence to the prerequisites concerning his planned defense strategy. Notably, they underscored that Bankman-Fried is yet to furnish the complete gamut of essential information regarding the counsel upon which he predicated his actions.
The prosecutors proffered caution that unless Bankman-Fried promptly discloses the minutiae regarding the counsel he received and the provenance thereof, any attempt to interject such a defense during the trial should be summarily proscribed.
Although the prosecutors extended an offer to facilitate the transfer of documents onto hard drives for Bankman-Fried’s perusal within the MDC premises, a viable laptop-based solution was deemed unattainable. Initially, the notion of relocating Bankman-Fried to a more compact, upstate correctional facility where he could access an internet-enabled laptop was contemplated by the prosecutors. However, this proposal was met with resistance from prison officials.
Regarded for its starkly onerous conditions, the Metropolitan Detention Center has cultivated a notorious reputation among its inmate population.
Bankman-Fried’s Incarceration Stemming from Unsanctioned Internet Utilization
As documented, Judge Kaplan sanctioned the re-imprisonment of the beleaguered cryptocurrency luminary, citing alleged instances of witness tampering.
In that juncture, Judge Kaplan pronounced that a strong prima facie case existed indicating that the accused had endeavored to tamper with witnesses on no fewer than two separate occasions.
The decision was additionally influenced by Bankman-Fried’s unsanctioned use of the Internet while released on bail under the guardianship of his parents at their abode located in California.
Judge Kaplan discerned that Bankman-Fried had indulged in excessive communication with various individuals via electronic correspondence, even resorting to the utilization of a virtual private network.
Concurrently, the disgraced progenitor of FTX is simultaneously grappling with novel allegations brought forth by the Department of Justice (DOJ). These allegations encompass the misappropriation of customer deposits, including the purported embezzlement of said funds.
An indictment filed on the most recent Monday delineates that Bankman-Fried stands accused of diverting and embezzling customer deposits from the FTX platform. The illicitly obtained funds were purportedly channeled towards political campaign contributions, collectively amassing a substantial sum exceeding one hundred million dollars, in advance of the 2022 US midterm elections.
The indictment further posits that despite Bankman-Fried’s intimate knowledge of FTX’s fiscal insufficiencies, he continued to channel the purloined funds into personal investments, acquisitions, and political campaign contributions.
U.S. Securities and Exchange Commission Nearing Appeal in Ripple Lawsuit’s XRP Decision
The U.S. Securities and Exchange Commission (SEC) is taking significant steps towards pursuing an appeal in their recent legal battle against Ripple, indicating a potential shift in the course of the lawsuit.
James K. Filan, an experienced defense attorney specializing in crypto-related legal matters, has shed light on the latest developments. District Judge Analisa Torres has initiated a structured process for considering the SEC’s request to present an interlocutory appeal—a move that would allow the SEC to contest certain aspects of the ongoing case.
It’s important to note that this preliminary step does not guarantee the authorization of an interlocutory appeal; rather, it signifies that the SEC has been given the opportunity to formally request such an appeal.
Judge Torres has outlined the timeline for this process in her official order. The SEC is expected to file their motion for the appeal by August 18th. Subsequently, Ripple is given until September 1st to submit their opposition papers. If the SEC deems it necessary, they have until September 8th to file a reply.
The news of these developments had an immediate impact on the cryptocurrency market. Following the announcement of the judge’s order, the value of XRP experienced a sharp decline. The price, which had been trading at approximately $0.571, dropped to around $0.499 at the time of writing. This decrease of over 12% aligns with the broader trends observed across the cryptocurrency landscape.
The legal clash between the SEC and Ripple began when the regulatory agency filed a lawsuit against the San Francisco-based payments company in late 2020. The SEC alleged that Ripple had engaged in the sale of XRP without registering it as a security.
In a significant turn of events last month, Judge Torres issued a ruling that had mixed implications for both parties. She determined that Ripple’s automated programmatic sales of XRP, which occurred on the open market, could not be classified as securities offerings—a pivotal point of disagreement between the SEC and Ripple.
However, the judge did uphold a key aspect of the SEC’s argument. She agreed with the agency’s assertion that Ripple’s direct sales of XRP to institutional buyers indeed amounted to a securities offering, reinforcing the complexity of the case.
As the legal battle continues to unfold, the spotlight remains on the actions and responses of the SEC and Ripple, and how their ongoing dispute could shape the future regulatory landscape for cryptocurrencies and digital assets.