Ethereum has introduced intelligent contracts worldwide and has stimulated an explosion from Cambrian innovation, including Defi, NFTS, Daos and a universe of Dapps. On July 30, the network will reach its 10th anniversary.
The last decade of the ecosystem has focused on the prouvance of Ethereum’s features and capacities as well as improving efficiency thanks to upgrades such as fusion, which has marked the transition from proof of work to proof of assistance. The next era requires a pivot to correspond to the more mature ecosystem he now supports – the one who includes not only web3 natives, but financial institutions, governments, companies and people who do not know what “agriculture” is, but who may want to obtain a loan for their homes with a cryptographic collateral.
In the midst of an increasing involvement of the government and the institution, the hope that the crypto will help to create a “free and open society”, an ideal originally expressed in the manifesto of a cypherpunk, is sometimes lost. For Ethereum to be good on this original promise, privacy must be a basic principle of its future.
Confidentiality is identity
A certain degree of privacy is essential for financial security and freedom. You would not want to reveal your net value at the cashier each time you buy a latte or a slice of pizza, but it is essentially how the crypto has worked in the last decade – with the radical transparency of the immutable registers recording each transaction publicly.
Not only does this level of transparency put individuals at risk of phishing and other attacks, but this also hinders the involvement of institutions that do not want to give their competitors an advantage by revealing their activity. Although it is possible to keep the pseudonymat by never interacting with a centralized platform, this is not practical for the interactions that affect the real world.
People and businesses must be able to interact with governments and banks via accounts related to identification, and the key to allow these types of interactions – without endangering personal information for flight and improper use – is programmable confidentiality.
The solution is the technology fueled by ZKP
The solution is already there: Zero Knowledge Proof (ZKP) – Figural intelligent contracts give users the control of information to share and with whom. With programmable confidentiality activated by ZKPS integrated into Ethereum at a fundamental level, a world of applications is not only feasible but practical.
Products and services must comply with the regulatory requirements of each jurisdiction in which they operate. This includes the collection of customer information in accordance with KYC directives, the counter-financing-terrorism (CFT) and AML laws. Typical KYC processes involve the sharing of a form of identification, as a passport or a driving license, as well as personal identification information (PII) such as name, date of birth and address.
If it is captured by bad players, this type of information can be used to target people in phishing scams and other types of attacks (see recent violation of Coinbase data). Rather than forcing people to reveal their PII and to make themselves and to make themselves vulnerable to attacks and thefts, the solutions fueled by ZKP allow people to prove that they do not work from sanctioned countries and to prove the admissibility to participate, all without giving the platform their data and contributing to potential honey pots.
The possibilities activated by ZKPS also go far beyond compliance. The Airdrops are currently suffering from Sybil attacks where IA bots have beaten real human participants to give certain participants a disproportionate advantage. The same problem applies to decentralized governance. Decision making in a DAO cannot be really fair and free, unless it can be proven that the good number of votes goes to the good number of people – not bots. The ZKPS offer a solution with “proof of humanity” via tools of data from data such as Zkpassport, Zkemail and Zktls.
Digital payments must provide the same privacy as species. Payments in dollars, euros and other sovereign currencies via stabbed are another important factor to allow the mass adoption of DEFI applications, but that will never take off in mass without guarantee of confidentiality. The same goes for decentralized mortgages, loans and essentially any type of legal contract, which require all IDs to execute.
There are many other applications made possible with privacy as a basic tenant of the Ethereum ecosystem. These include the authenticity of criticisms of products or restaurants, allowing a secure digital vote, decentralized entire services, monitoring of carbon compensation, builder status on the GitHub in an anonymous manner and a checking of employment skills – all carried out in a secure and pre -predicted manner which does not imply the sharing of sensitive PIIs.
Create a culture that requires privacy
Although technology exists to implement ZKP solutions today, challenges will have to be overcome before confidentiality is globally reflected as a fundamental value throughout the Ethereum ecosystem. The technical challenges of implementing the technology fueled by ZKP include the greatest expenditure of ZKP transactions. The construction of ZKP applications is also more complicated, posing a learning curve for manufacturers. These are all solved problems.
Other challenges are cultural: the creation of universal membership of the spectrum of participants in the value of privacy and the coordination of the implementation of solutions through the technological battery, from the protocol to the portfolio. There is also the obstacle to erroneous perception of private life associations with illegal activity.
The change in technology is ultimately easier than the change of minds, but the central ethic of the crypto is, after all, a philosophical technology – a technology that underpins the belief in the freedom and the private life of individuals and entities. If in 10 years, we look back on another decade of Ethereum and can celebrate its role by allowing greater financial freedom, an emphasis on privacy will be the key.
