One of the fundamental principles of blockchain protocols has been ensuring user privacy, even in systems that are publicly verifiable and relatively transparent.
This has become increasingly critical as personal privacy rights appear to be diminishing, highlighted by the European Union’s recent initiative for a chat control law enabling mass monitoring of private communications and encrypted messages.
The latest episode of The Clear Crypto Podcast explores the significance of privacy-preserving protocols in a discussion with Yannik Schrade, co-founder and CEO of Arcium.
Schrade elaborates on the privacy revolution: encrypted computing, zero-knowledge proofs, and multiparty magic that empower blockchains to manage sensitive information like medical records and financial data without leaks or the need for trusted intermediaries.
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Privacy 2.0
Schrade indicates that the industry is progressively transitioning toward an era he labels “Privacy 2.0,” in which blockchains operate on an encrypted shared state.
“That means everyone can encrypt their data, whether it’s transaction data, medical records, or anything else. We can compute collectively over this encrypted data. We can create encrypted order books for private trading. We can establish private lending markets to maintain confidentiality when using all those DeFi applications,” Schrade explained.
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The Arcium CEO stated that the potential for encrypted shared states would represent a significant breakthrough not only for the cryptocurrency ecosystem but for society at large.
“Data can now traverse through encrypted channels globally. That is the future we are heading toward, and it truly represents the forefront of both privacy and computing.
Schrade further noted that the Web2 internet we currently use has been constrained by singular trusted entities. Cryptography and multiparty computation now enable individuals and AI to analyze and derive outputs from data without compromising or accessing the data itself.
Practical unlocks in healthcare
Schrade provided a tangible example of how encrypted computing could facilitate access to sensitive healthcare and medical information without jeopardizing patient privacy.
He referenced medical records from hospitals or data collected by a Whoop band, which monitors vital signs and other sensitive biometric data.
“Globally, that data presently resides in data silos. It cannot be shared and rightfully should not be shared due to its sensitive nature. There’s highly sensitive government data and financial information too,” Schrade mentioned.
Related: Crypto finance is scaling, but without real-time verification, it won’t last
Encrypted computing can interact with this data to derive shared insights without compromising the information.
“In traditional centralized computing systems, data inevitably gets exposed at some point. That’s inherently how those systems function, but we are moving toward a future where that is no longer the case.”
To listen to the full conversation on The Clear Crypto Podcast, check out the complete episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. Don’t forget to explore Cointelegraph’s full lineup of other shows!
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