U.S. Loses $600bil to IP Theft — Blockchain Answers
According to the Theft of Intellectual Property Commission, IP theft costs U.S. companies $600 billion a year. A survey, completed by Deloitte, found that 35% of executives believed that IP was the primary motive for cyberattacks in the past year, second to only financial data. Organizations often find themselves victims to IP theft to find their products being reproduced in foreign countries or have their IP used as collateral in expensive battles of extortion. Cyberattacks on IP will not slow down, especially in the face of Machine Automation. IP not only includes the data used to make sound business decisions but also the algorithms used to control machines for industrial processing. These tools, used automation, will take the place of low-skill labor in the short term and it’s ripe for the taking. Business executives and governments are seeing this as an ability to compete with low labor costs that foreign nations can provide. Malicious cyber hackers are seeing this as a new stream of income. To show just how much of an impact automation could have on the economy, McKinsey and Company conducted a study on this future business practice:
“We conducted a study of manufacturing work in 46 countries in both the developed and developing worlds, covering about 80 percent of the global workforce. Our data and analysis show that as of 2015, 478 billion of the 749 billion working hours (64 percent) spent on manufacturing-related activities globally were automatable with currently demonstrated technology. These 478 billion working hours represent the labor equivalent of 236 million out of 372 million full-time employees — $2.7 trillion out of $5.1 trillion of labor — that could be eliminated or repurposed, assuming that demonstrated technologies are adapted for use in individual cases and then adopted.”
When most people think automation, they think of robots taking over the assembly workers’ role on the production line. While manufacturing is a major industry that is ripe for disruption, every industry can be made more efficient by automation:
The figure, $600billion a year in IP theft costs, is a fraction of what it could be once automation becomes a foundation of any efficient business. How then do companies protect themselves? How can anyone guarantee their IP is safe when manufacturing or providing their services abroad or even within the confines of their nation’s borders? Luckily for the pioneers of machine automation, blockchain has you covered. Massachusetts Institute of Technology (MIT) graduate, and founder of Enigma, Guy Zsykind has been working on this issue since 2015. Mr. Zyskind and MIT’s Dr. Alex “Sandy” Pentland (Forbes Globally Ranked 6th Best Data Scientist) have worked together to build a blockchain protocol that allows consumers to run computational analysis on encrypted data. Enigma offers the first glimpse at a future where companies can lease their data to others without fear of theft.
Is it possible to use the encrypted data without seeing it? Yes! Enigma is working on two ways to do this, these are called Trusted Execution Environments (TEEs) and Secure Multi-Party Computing (sMPC):
TEE: Provides a fully isolated environment called an enclave that prevents other applications, the operating system, and the host owner from tampering with or even learning the state of an application running in the enclave.
sMPC: According to Enigma’s whitepaper, all data “is split between different nodes, and they compute functions together without leaking information to other nodes. Specifically, no single party ever has access to data in its entirety; instead, every party has a meaningless (i.e., seemingly random) piece of it.” More technical aspects of sMPC and TEE can be referenced in my previous article or taking a look at their whitepaper.
The Enigma network provides a permissionless peer-to-peer network that allows executing code (secret contracts) with strong correctness and privacy guarantees. Another way to view the network is as a smart-contract platform (e.g., similar to Ethereum) that enables the development of decentralized applications (dApps), but with the key difference that the data itself is concealed from the nodes that execute computations. This enables dApp developers to include sensitive data in their smart contracts, without moving off-chain to centralized (and less secure) systems. All other smart contract platforms are considered public and cannot be used by business and organizations that want their information secured from ever present eyes of IP and Private data thieves. Enigma is the first and only blockchain that protects those smart contracts.
The users of automation could create products and provide services from that source code without ever having seen it. For example, if Boeing wanted to cut down the costs of logistics, tariffs, and materials, Boeing could lease the sensitive source code that is used to guide machine automation for the creation of the Boeing 747 aircraft and have a manufacturer in China create and assemble the aircraft without fear of IP theft. Of course, if they have the physical product, they could reverse engineer to find how it’s created. But, the economic disincentive exists as it’s extremely costly, time consuming, and still doesn’t guarantee you the ability to recreate it. Examples like this could allow for increased economic globalization while preserving the reward of developing proprietary technology. Economic prosperity is not the only benefit of Enigma’s protocol. It could also ease tensions surrounding the officially unofficial “U.S.-China Trade War,” as IP theft looms large in the economic battle.
Ultimately, you can’t steal what you can’t see.
Nevertheless, cyber-security companies provide tools to keep your open data safe and they’re valued in the hundreds of billions. Facebook, Google, Amazon, and many more deal with private data and trillions worth of digital proprietary data. They need to protect it. They need some of that data decentralized so they don’t turn into another Equifax or get involved in a public relations nightmare like Facebook. If you’re following the money and looking to the future, potentially another investment opportunity could be investing into technologies that obfuscate the data entirely.
Imagine how secure an organization’s’ information would be if it couldn’t be seen, yet still be used. Sharing secrets without revealing the secret itself has been considered the Holy Grail of data science. Fortunately for companies and organizations, Enigma is set to release their TEE and sMPC mainnets in Q3 of 2018 and Q1 of 2019 respectively. Future iterations of Enigma will not only consist of their own blockchain but their ability to be a protocol on pre-existing blockchains. Simply put, Enigma makes valuable data usable both on the blockchain and throughout the rest of the cyber world while still preserving it’s privacy.
Sources: Enigma White Paper, Enigma Developers Forum, McKinsey&Company
If you’re interested in the Enigma Project, consider resources:
Telegram: t.me/EnigmaProject
Reddit: reddit.com/r/EnigmaProject
Twitter: twitter.com/enigmampc
