Blockchain Privacy: Are Blockchain Privacy Firms Reliable?
Since the introduction of blockchain technology over a decade ago, the world has witnessed some form of a digital revolution. Blockchain technology has changed the globe in several ways. For example, the rise of cryptocurrencies has opened fresh opportunities. Crypto is a source of income for many. And with all revolutions come challenges. Today we talk about one. Privacy.
Most users using sites like Twitter, Facebook, Reddit, etc., complain about the misuse of their data. Unfortunately, data theft has been on the increase alongside other cybercrimes. Many believe blockchain will resolve these concerns with its enhanced features. This article will explore the current state of blockchain privacy and its projects, which are leading the way in blockchain privacy. But, first, let’s define a few concepts and dive right in.
What is Digital Privacy?
Digital privacy refers to the right and control of any internet or web user over their data. Furthermore, users can decide what they want to share and what they’d like to keep private. The concept of digital privacy came alongside the rise of the internet and the ability to share data. The more data is sent and dissipated, an interception will likely occur.
Data interception or breaches aren’t scarce in today’s digital world. Equifax, Facebook, etc experienced data breaches and password leaks in the last few years. Users who have multiple accounts would have suffered a hack in at least one of them.
In addition, to data theft and breaches by cybercriminals, most tech companies secretly track the activities of their users online. These tech companies monitor almost every action. Every ad, social media button, and website collects data on a person’s location, surfing habits, etc. These companies sell this data to ad firms with a clear picture of what to market to users. Most tech companies that request personal information ends up marketing it, leaving their users exposed. This breach of trust led people to be hopeful for blockchain privacy.
Blockchain and Privacy
Blockchain has a wide range of applications beyond efficient digital currency management. Furthermore, blockchain creates an immutable data ledger. This makes user fraud extremely difficult. As a result, blockchain helps confirm the legitimacy of almost anything it tracks and close the trust gap in any transaction.
Blockchain has the potential to eventually replace usernames and passwords by granting users encrypted digital identities. Additionally, users can utilize their digital identities for both their medical records and personal transactions. However, although blockchain offers security, there are concerns if it offers privacy. Some argue that blockchain’s transparency makes it easier to track transactions. But, others believe blockchain is the only shot we have at digital privacy.
Platforms that Offer Blockchain Privacy
Blockchain privacy has gained considerable attention in recent years. This is thanks to more offers and attempts to improve blockchain privacy. Here’s a list of layer 1 platforms that are making efforts to provide users with a secure and private digital experience:
Wanchain is a blockchain platform currently thriving within the blockchain world as it offers blockchain privacy to its users. This means that like other chains such as Monero or ZCash, Wanchain enables private transactions and cross-chain interoperability. Furthermore, Wanchain has both smart contracts features and uses ring signatures for privacy.
Rather than sending money to a public address, Wanchain sends money to an on-time account. Additionally, users can access one-time accounts with their private key. Wanchain transactions are one of the smartest. But the best part of this platform is its support for privacy through private transactions.
Firo is a decentralized platform that works towards keeping transactions anonymous. Formerly known as Zcoin, Firo uses zero-knowledge proofs to ensure the anonymity of each transaction. Firo allows users to burn coins and redeem them for newer ones. Furthermore, it keeps no record of such activities. The platform recently introduced its Lelantus Spark, which is a great step toward privacy. Lelantus Spark hides a sender’s address, recipient, and transferred amount. Finally, Firo is different from other privacy-focused coins. It tries to eliminate payment tracks rather than just obscuring them.
TornedoCash is an Ethereum-based decentralized technology for private transactions. Tornado Cash provides transaction privacy by severing the link between the source and destination addresses on the blockchain. Additionally, it uses a smart contract to take ETH deposits that can be withdrawn from a separate address. Also, it allows a relayer to withdraw to an address with a 0 ETH balance to maintain privacy.
Aztec is another platform advancing blockchain privacy. It provides its users with a cost-effective way to keep transactions private. In addition, users can mint their own privacy assets by using the same zero-knowledge proofs (ZKP) as zcash. Aztec also uses end-to-end encryption for secure transactions.
5. Secret Network
Built on Cosmos/Tendermint, Secret Network uses smart contracts to ensure user privacy. The Secret Network also uses Intel SGX to enable privacy, and so far, it hasn’t experienced any attacks or stains on its name. The platform enables its users to build apps that are both permissionless and privacy-preserving. Additionally, users have the exclusive right to decide with whom they want to share their sensitive details.
Monero is arguably the biggest layer 1 privacy platform. It features a proof-of-work mechanism and is largely used by people seeking privacy. Transactions on Monero are almost untraceable. The platform uses a series of enhanced privacy features to ensure a smooth and private transaction. Users use a one-time public key for each transaction. Furthermore, Monero keeps sensitive transaction details out of reach.
Is Blockchain Privacy Worth It?
The blockchain space is still in its early days. This means that many things have not taken shape. Nevertheless, new inventions and tools are emerging to tackle the present concerns in the industry. These privacy firms are far from perfect, but no one can ignore their impact. There is a need for blockchain privacy platforms. Third-party infringement is a major concern on the traditional internet. And it’s gradually spilling into the blockchain industry.
For example, Ethereum based transactions are easily tracked. Firms like Chainalysis, CipherTrace, and Elliptic have developed tracking tools to monitor transactions. Furthermore, these firms hand over these details to law enforcement agencies. The blockchain space is far from its dream of privacy, but privacy firms like Wanchain, Firo, Monero, etc., are making efforts to ensure privacy.
Without these firms, our chance at privacy is slim. So, although there are loopholes, blockchain privacy firms are highly important. The easiest way to think about blockchain privacy is that we’ve finally gotten through a major roadblock. But, there’s a lot to do to get to our dreamland.
It looks like the blockchain community has other priorities. Most platforms emphasize scalability and cost over privacy. However, we can all admit that privacy is quite difficult to ensure. Most privacy solutions have been slow and inefficient. Furthermore, scaling them up has proven problematic. But, blockchain users can address these concerns.
The Way Out
To further solve privacy concerns, blockchain privacy firms can make the process a lot easier. The average person finds most of the privacy solutions tiring. They often require tedious and extensive cryptography knowledge. Platforms should enable a single-click privacy mode for users. This means that users can access privacy mode with a simple click.
In addition, privacy platforms would need to further explore Zero-Knowledge Proofs (ZKP) and Secure Multi-Party Computing (sMPC). These technologies have the ability to change blockchain privacy. They’ll ensure that users have full control over their data. Both technologies have individuals pitfalls. But, combining them will produce a significant advantage.
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