Opinion by: Eran Barak, CEO at midnight
It has been almost 16 years since the blockchain emerged from esoteric fringes to enter the global discourse, which has recently been proven by the ongoing backbone from the incumbents of Wall Street. Despite this amazing ascending climb, the poor fact is that this technology has not yet realized the true business potential. A major challenge is going on: Excessive sensitive data remains unintentional in public.
The issue crux is that companies should keep business data confidential, and people are trying to care for their personal information as much as possible. When data is placed on a public blockchain, however, it is irreversible and endless exposed.
Although a business takes every possible caution to hide data, errors made by others or system weaknesses may expose sensitive onchain or metadata data, including participants’ identities. It can lead to privacy violations, compliance violations or both, which disrupts the thinking of blockchain trust and emphasizes the importance of stable steps to protect sensitive data.
On the other side of that coin, the hiding activity on a blockchain can open the door launch door, motivating the government’s negative responses. The opportunities that happened this led to a false impression that governments opposed the web3 privacy, a criterion business fundamentally needed for them to adopt technology.
From any angle we look at this, maintaining privacy onchain is a real and complex issue for the web3. Until we solve it, businesses do not and should not expect to cross the sadness.
The belief that governments oppose privacy in blockchain is wrong
Web3 entrepreneurs have grown in fear that the development of decentralized applications and businesses that provide anonymously financially can come to them with regulatory problems. Just look at the samaurai wallet, which Co-founders were charged with money launderingo Tornado Cash, whose developer is punished by 64 months in prison For similar reasons.
These answers have led to a consensus that governments oppose privacy in full when it comes to blockchain.
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This cannot be more from the truth. Governments do not contradict privacy but are ordered in industries. Data protection laws, such as general data protection regulation or the Health Insurance Portability and Accountability Act, are in place to ensure businesses protect our customer data from misuse and security threats.
This real issue shows high -profile cases that web3 steps to protect data have created opportunities for misuse, enabling the facilitia of criminal activities that evidently increases serious concerns on the name of governments. Blockchain data protection capabilities should not undermine established cross-jurisdictional laws that protect the global community from terrorism, human trafficking, fraud and other criminal criminal offenses.
It asks a question: What does privacy look like, right,?
Selecting disclosure
When it comes to using a blockchain, protecting sensitive data is usually achieved by either mainchain data, or data onchain data. The latter is not a strong privacy provided by the rapid advancement of computing quantity in the cracker of the pen.
The advent of zero-knowledge (ZK) technology, a complex cryptographic procedure, enables users to ensure sensitive data remains offchain by sharing testimonies about the validity of the data instead. In the web3, ZK appeared as a way of renewing to enhance privacy as it allowed unreliable parties to prove that a transaction occurred without sharing any information about the transaction.
Decentralized applications can exercise selective disclosure by selecting between placing data onchain (full disclosure), putting it on the onchain with a disclosure (disclosure by looking at the keys) or using ZK to publish only testimony of data (offers utility without any disclosure). Selective data disclosure will only solve half the puzzle. It is not designed to account for metadata.
The next privacy frontier
MetadataThe information surrounding our data, is an accidental element of blockchain exposure of sensitive information; It can be used to make information, which creates an added layer of weakness even when the data itself is hidden.
For example, through the transaction metadata, investment and trading techniques can be deducted in addition to other behavior patterns. For businesses, its implications can damage their growth and ability to stay early with competitors. They cannot afford to have trade secrets and approaches, or even the identities of other parties they are fighting for, make it public.
The need to protect metadata and eliminate the ability to make information is most important to security and can be met with a private token. Such a ability can, however, easily abuse for money losses.
If using a private token is not the solution, and using a public token does not provide ample level of confidentiality, then the way to resolve this challenge is to rethink the web3 approach to protecting the metadata altogether. We need to combine the advantages of both techniques, which effectively creates a Dual-asset system where a public and a private token is used. Each possession works independently, meaning specific restrictions can be placed to avoid prohibited activities such as losses while maintaining all the benefits.
A strong plot
The dual-asset system enables confidentiality without the disorders that prevent the metadata usually carrying out, making it possible to comply and implement a business policy. By incorporating this tokenomics structure with selective disclosure, compliance with privacy and regulation may integrate the blockchain, which will have effects on adoption and change.
Opinion by: Eran Barak, CEO at midnight.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
