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EY and Polygon Ready Privacy-Focused Ethereum for Enterprise Release

Blockchain

www.coindesk.com 18 January 2023 13:11, UTC
  
Reading time: ~3 m

EY’s Nightfall, a five-years-in-the-making system allowing businesses to shield the content of transactions on the public Ethereum blockchain, has entered its final phase of production readiness for deployment using the Polygon network.

The latest updates to Nightfall have made its code fully decentralized, meaning it can run anywhere with no single entity being in charge thanks to the addition of industry standard X.509 identification certificates. These final updates herald the product going live in May of this year, said EY Global Blockchain Leader Paul Brody.

“It’s one thing to show that the math works, it’s another thing to have a security audited, tested out, hardened system,” Brody said in an interview. “We currently have a beta client for the supply chain work that is ongoing now, and we expect to show the first production ready product that uses this network layer at our Global Summit in May.”

The goal for EY and Nightfall, which teamed up with scaling specialist Polygon in September 2022, has always been to harness the power of the public Ethereum network for big business. In order to make Ethereum palatable from a data privacy standpoint, Nightfall uses a math-heavy secret sharing technology called zero-knowledge proofs that can hide the content of transactions appearing on the blockchain.

These days, zero-knowledge (ZK) tools have become a popular way to help scale up Ethereum by summarizing transactions using mathematical proofs and enabling data to be moved off chain – known as “roll-ups,” in blockchain parlance.

Nightfall takes advantage of certain efficiency trade-offs, creating a “zero-knowledge optimistic rollup.” It’s an approach that leverages ZK tech for its privacy benefits, while avoiding an overbearing computational load, achieved by allowing batches of transactions to process quickly and be checked afterwards.

This approach is a better fit for certain enterprise use cases, versus things like crypto trading or decentralized finance (DeFi), said EY’s Brody.

“The optimistic part allows us to have a very low cost for transactions,” he said. “Enterprises aren’t really doing trading. Most of the time, what they’re doing is moving 100,000 widgets in inventory and the transaction costs have to be driven as low as possible.”

As far as the use of identification certificates goes, Brody said it’s not the same as imposing know-your-customer (KYC) on an open system.

“We convened with a bunch of banks and other industrial companies last year and it turns out almost nobody can agree on KYC and what it should look like,” Brody said. “So we decided we can’t go that far. But we can make every company responsible for whom they transact with, and make it fundamentally unattractive for bad actors to use our ecosystem.”


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