How does blockchain support data privacy. Aleo privacy features.
Today, I am telling you about privacy challenges in the blockchain industry. I am discussing privacy issues, matters, and solutions. Moreover, I will tell you about Aleo — a promising startup in the industry. Stay tuned and have a good time reading! By the way, I really need your support — follow, applause, feedback. Thank you.
My Name is Val Savchuk and you are reading my blog. I write about blockchain industry startups and basics in simple words. I am from Ukraine.
Why privacy is an issue
If you know me well, I’m trying my best to describe everything in layperson terms. That is why I will start with an explanation of blockchain technology. Moreover, the technology itself is the main privacy issue.
Here you go some most commonly used definitions of blockchain:
“ Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” IBM
“.. blockchain is a shared and synchronised digital database that is maintained by a consensus algorithm and stored on multiple nodes (computers that store a local version of the database).” Blockchain and the General Data Protection Regulation. European Parliament
So, the thing you should keep in mind is that blockchain technology guarantees safety because the data is distributed through the network. And, yes, this is the main privacy issue — decentralization.
As the most simple example is a secret, everyone has access to. It is not a secret any more, isn’t it?
OK, you can say that the ones who need privacy just use centralized finance for the transactions and operations. On the one hand, blockchain has a lot of bonuses. I have already told you a lot about them in previous articles. For example, safety guarantees, mentioned above. On the other hand, legalization and regulation of blockchain is under question, because of privacy.
These all make privacy the main subject of discussion, when choosing blockchain.
In the article, I will tell you about one of the solutions to the issue and some more details on this topic.
Private and public keys
The base of privacy in blockchain technology are private and public keys. The public key is the key that is provided to second parties, so the transaction can be fulfilled. For example, wallet address. On the one hand, this kind of keys gives an opportunity to get information on the transactions it was used with and the number of tokens connected. On the other hand, it does not provide personal information and does not give an access to make any transactions from the wallet (for example) to other parties. To make all data private, it is recommended to use one key for one transaction.
The second type of keys is private. These keys are the most complex ones and are believed to be impossible to guess, even using computer and maths resources. Only these keys give access to private information and opportunity to use the assets they secure.
P2P Network
Another privacy base of blockchain technology is peer-to-peer transactions. This means that only two people or organizations know about the transaction and why it is fulfilled. There is no need for third parties to be involved.
So, when any transaction is being fulfilled, first it is validated by every node in the chain. The node is a kind of little blockchain server that stores blocks of data. The system ensures that nothing is wrong with the transaction, for example, there are funds required. After that, miners work to create a new block (Read my article on mining to know more: Is mining still worth it?). This block is added to the blockchain. The blocks in the chain are added in a strict position and can’t be changed or deleted.
From this point of view, privacy is also in some way guaranteed by the network itself. Anyway, it is not the privacy we expect.
Zero-knowledge proofs
“A Zero-knowledge proof is a cryptographic method by which one party (the prover) can prove to another party (the verifier) that a given statement is true, without conveying any information apart from the fact that the statement is indeed true. ” Wikipedia
The thing is that when using Zero-knowledge proofs no one should be trusted but the mathematics, that never lies. Anyway, if you think zero-knowledge to be an interesting topic, I can make another article to make it really clear for you on how it works. Just leave a comment below.
Aleo
All information above is just theory and bases. I promised you an example.
Today I want to remind you about Aleo, the tool that brings privacy on higher level! I have already told you about Aleo, but now I will emphasize on privacy. Anyway, check it out:
Yes, I become much better at writing ever since — that is all because of your support, than k you!
The main Aleo benefit is Zero-Knowledge programming. For this reason the team developed a new, simple but powerful language: Leo. “No cryptography needed” (Source).
What is the purpose? To bring zero-knowledge to everyone, to make blockchain world a safer place.
“Leo is a functional, statically-typed programming language built for writing private applications.” (Source)
Personally, I believe in Aleo, because of great investors and already enormous community support.
Furthermore, Aleo already gathered a lot of information about ZK for us, to study it easily:
Official sources:
Official website Discord Twitter
Conclusion
In the world of the internet, the world of digitalization of life, we gave up our privacy in one moment. Have you noticed that moment by yourself? I haven’t. Just now, I understand that a lot of information about my life is not private any more.
I noticed this while standing at home when all that COVID-19 stuff happened. The only things I needed to live was the computer, Internet, and money.
With Metaverse right on the corner, privacy in Web 3 and blockchain started wondering me. This is why I studied the question itself.
Right now I can conclude that with Aleo and other projects like that we will be secured and should not worry about privacy. What do you think?
Blockchain Technology: Data Privacy Issues and Potential Mitigation
Blockchain and the General Data Protection Regulation
What is blockchain technology. IBM
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