A fundamental principle of blockchain protocols is the provision of user privacy, even when the chains are publicly verifiable and relatively transparent.
This focus is becoming more significant as personal privacy rights appear to be diminishing, highlighted by the EU’s recent initiative for a chat control law allowing mass scanning of private communications and encrypted messages.
The latest episode of The Clear Crypto Podcast explores the significance of privacy-focused protocols in a discussion with Yannik Schrade, co-founder and CEO of Arcium.
Schrade discusses the privacy revolution: encrypted computing, zero-knowledge proofs, and multiparty magic, enabling blockchains to manage sensitive data like medical records and finance without leaks or trusted intermediaries.
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Privacy 2.0
Schrade believes the industry is slowly progressing towards what he terms “Privacy 2.0,” where blockchains operate on an encrypted shared state.
“This means everyone can encrypt their data, whether it’s transaction data, medical records, or anything else. We can perform computations on all this encrypted data collectively. We can create encrypted order books for private trading. We can establish private lending markets ensuring privacy in all DeFi applications,” Schrade explained.
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The Arcium CEO stated that the ability to have encrypted shared states would not only be a significant breakthrough for the cryptocurrency ecosystem but for society at large.
“Data can now flow through encrypted channels worldwide. That’s the future we are heading towards, representing the frontier of both privacy and computing.”
Schrade mentioned that the existing Web2 internet has been constrained by single trusted entities. Cryptography and multiparty computation now enable both individuals and AI to process and extract insights from data without compromising or directly accessing it.
Practical unlocks in healthcare
Schrade provided an example demonstrating how encrypted computing could unlock sensitive healthcare data while maintaining patient confidentiality.
He referred to medical records at hospitals and data from devices like the Whoop band, which monitors vital signs and other sensitive biometric details.
“Globally, that data currently resides in silos. It cannot and should not be shared, as it is highly sensitive. This includes sensitive government and financial data,” Schrade noted.
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Encrypted computing can connect with this data to gain shared insights without breaching confidentiality.
“In traditional centralized computing systems, you always risk exposing the data at some stage. That’s how those systems function, but we are moving towards a future where that is no longer necessary.”
To catch the full dialogue on The Clear Crypto Podcast, listen to the entire episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And make sure to explore Cointelegraph’s full lineup of additional shows!
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