While the modern internet connects us like never before, one thing younger generations have never really experienced is true privacy. Even older generations have forgotten what life was like before our every thought and action was tracked.
Web3 envisions an open, trustless, permissionless internet where users can interact peer-to-peer without giving up ownership control, privacy, or reliance on intermediaries.
On the basis of this vision, blockchain is one of the most important tools. They remove the need for trusted third parties and facilitate the establishment of direct relationships between users and service providers, recording the rules of engagement on an immutable ledger, and even storing direct interactions between them. Blockchain also fundamentally restructures the structure and balance of power in data ownership.
With blockchain, individuals can now interact directly with each other in an end-to-end encrypted manner, bypassing centralized websites and costly intermediaries. People can buy assets such as real estate or artwork, access public resources, and participate in high-level decision-making. Furthermore, with a decentralized platform, the control and management of these processes is much simpler, and third parties cannot obtain the data unless the participants agree.
In theory it is.
The reality of blockchain privacy
In reality, blockchains today are "anonymous" and users are identified by a string of alphanumeric characters known as a public key. However, the association between transactional activity and metadata often undermines anonymity. This renders one of blockchain's main advantages useless and potentially exposes sensitive information to all participants in the network.
We may not know who Satoshi Nakamoto is, but we can trace transactions associated with their addresses. Blockchain forensics firms including CipherTrace and Elliptic often use digital ledgers to trace financial activity on blockchains.
Recently, in the world of growing blockchain-based marketplaces, a seemingly unrelated phenomenon has arisen where transactions that are visible to miners become "front-running transactions."
At first blush, this doesn't have much to do with privacy, but when miners are able to read plaintext transactions submitted on-chain and insert their own transactions before users, this type of attack happens and miners get the best transactions that make the rest of us less valuable. Maximum Extractable Value (MEV) is the value that miners can extract from the system through front-running transactions — the value that users would have otherwise received.
Since January 2020, miners have extracted hundreds of millions of dollars in value from Ethereum users. Clearly, this is a real problem that the industry needs to address.
This begs the question: where is the blockchain layer that provides true privacy?
As things stand, privacy is not given the priority it needs or deserves. Instead, the blockchain community has opted for other priorities—in particular, addressing the scalability, speed, and cost challenges that hinder blockchain mass adoption.
Web3 privacy solutions already exist
Of course, this wasn't just a deliberate oversight. There is an acceptable technical reason why today's web applications cannot perform on existing blockchain architectures. Since all participants are currently forced to re-execute all transactions to verify the state of their ledger, each service on the blockchain effectively time-shares a single, finite global computing resource.
Another reason privacy is not a priority is that it is difficult to secure. Historically, privacy tools have been slow and inefficient, and making them more scalable is hard work. But just because privacy is hard to achieve, doesn't mean it shouldn't be a priority.
The first step makes privacy simpler for users. Achieving privacy in the world of encryption shouldn't require clumsy workarounds, questionable tools, or sophisticated cryptography expertise. Blockchain networks, including smart contract platforms, should support optional privacy and be as easy to operate as clicking a button.
Blockchain technology is ready to answer these calls, taking security measures to guarantee maximum privacy.
Zero-knowledge proofs (ZKP) and secure multi-party computation (sMPC) are two technologies that could revolutionize the way we perceive privacy on the internet and help us regain control of the personas we create online.
Both solutions will make the internet a place where our sensitive data can only be published with our consent. However, both solutions have their own drawbacks.
Small problems in blockchain privacy
While ZKPs allow basic transfers, they do not allow multi-user interaction. While sMPC supports multiple users, it can be very slow by itself. The obvious answer is to bring these two technologies together to remove the flaws and create a fast, secure, highly private framework from which to start Web3 projects.
Perhaps the right way to look at online privacy today is that we will eventually end congestion. Destination - a better form of privacy, controlled by the user - has never been in doubt, but there is other work to be done.
Congestion is caused by a focus on addressing scalability, speed, and cost, while understandably little effort and investment has been devoted to addressing privacy issues. But that is in the past.
Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.
Huang Bo
