Phala Network
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Phala Network

Phala & Decentralized Storage: A New Type of Mining for TEE Projects

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Phala has been in the public eye as a part of the Polkadot ecological privacy sector since its debut. However, Phala Network also pays great attention to the application of decentralized storage technology.

As early as on May 28 this year, Phala CEO Marvin Tong and Crust Network, the top project of Polkadot’s storage sector, discussed “Privacy Computing & Decentralized Storage-Polkadot Cross-chain Additive effect”. Both Phala and Crust are based on TEE to realize the privacy of networks and functions, and both mining nodes require the support of “SGX-abled device”. Phala network needs to combine decentralized storage technology to cache the data that needs to be processed, while Crust needs confidential technology to ensure that user data is stored without errors. In theory, Phala and Crust networks will complement each other in the Web3 world.

Why does Phala need miners?

The way the Phala network realizes its confidentiality — Trusted Execution Environment (TEE), a trusted execution environment, is very common in today’s society. The commands executed in the TEE cannot be tampered with by external software or operating systems, and only the results of data analysis are simply output. This technology has been widely used in fingerprint unlocking and face unlocking on mobile phones. After the mobile phone enters the face and fingerprint information, it is sent to the mobile phone TEE for verification, and then the mobile phone TEE compares the information. If the information is consistent, it outputs an “unlock” command, and the phone will be unlocked.

This requires a network that can connect multiple source data providers and send a “collect fingerprint information” request to everyone, asking for their consent and fingerprint gender information.

Different from traditional centralized analysis, a decentralized analysis will be completed and output directly on the equipment of the source data provider.

The Phala network will not receive fingerprint information from anyone, only feedback from thousands of TEEs: male, or female.

According to the classic “mining” logic of “providing your resources to get token rewards” in the PoW network, it can be said that in the Phala network, you can either be a data miner or a computing power provider. A person can rent out his data to gain income, or he can become the smallest unit of computing equipment and connect to the Phala Network to contribute to the entire computing power.

Every new miner is a node that can operate parallelly. As a result, Phala’s network performance will increase exponentially as the number of miners grows.

How does Phala apply decentralized storage technology?

In normal logic, once data is collected, it means the transfer of data sovereignty has been completed. In many UGC (User Generated Content) platforms such as WeXXX, Dou XXX, Red XXX, the user agreement will always mention the following rules:

The content you upload, publish or transmit on this site and related services (including but not limited to text, images, audio, video, live content and other forms of content, and the music, sound, lines, visual design, dialogue, etc. included in it), you grant the company and its affiliates, controlling company, and successor company a global, free, non-exclusive, sublicensable (through multiple levels) right (including but not limited to reproduction rights, translation rights, compilation rights, information network dissemination rights, adaptation rights and the rights to produce derivatives, performances, and displays, etc.). The use scope of the above rights includes but is not limited to current or other websites, applications, products, or terminal devices.

Platforms that rely on recommendation algorithms for heavy advertising operations, such as TikXXX, Today XXX, emphasize the followings in their user privacy policies:

Similar technologies such as cookies and device information identifications are commonly used technologies on the Internet. …We may use this type of technology to understand your preferences and usage habits, conduct data analysis to improve products and services, recommend information or features that users are interested in, and optimize your advertising choices.

This means that once we click “Agree”, both our information and the information generated by us will be collected, analyzed, shared, and transmitted to uses and third parties beyond our control. The only completely controllable method is to uninstall, but this means to leave this era — — the Internet era has forced users to “agree” or even get used to hand in the information and continue to do it.

Now we have a choice. The emergence of Phala decentralized data analysis platform W3A, which uses TEE network and decentralized storage network technology, has made the process of “collection” and “transfer” limited and controllable.

Different from the traditional paradigm, in Phala’s decentralized data analysis platform W3A, user data will not be controlled by Phala, but will be uploaded and stored in a decentralized storage network similar to IPFS. Every time others collect and use your data will first get your permission, and you will get rewards from it.

Specifically, the flow of data will be broken down into the following parts in W3A:

  • Collection: Collect data and store it in a decentralized storage service with end-to-end encryption throughout the process.
  • Custody: Users can manage, authorize, and delete data through confidential contracts.
  • Transaction: A trading market is provided, users can put data on it and earn profits.
  • Analysis: The demander only purchases the right to use the data. After the demand side realizes the purpose and analysis algorithm, W3A will execute the analysis according to the algorithm after obtaining the authorization of the source data, and finally only output the results.

Take the analysis of user-health data as an example. If the user’s private health information such as schedule, diet, habits, is agreed to be analyzed, it will be encrypted and uploaded to the distributed storage network, and then calculated through the W3A private computing network, and finally, output the result. The analyst will pay PHA as reimbursement for using network resources and source data, while users who provide source data will receive PHA as a reward for providing data, and TEE miners will receive PHA as a reward for providing computing power.

The management of private data must be trustless. As long as someone touches the plaintext data, there is a risk of leakage, so data management should not be left to a centralized organization. — — Phala W3A pitchdeck.

Phala and storage proof mining

Take the cooperation between Phala and Crust as an example: Both protocols are Polkadot parachains using TEE technology, and both project economic models have mining models. More importantly, the two projects are very complementary: Phala Network is responsible for data privacy calculations, and Crust is responsible for data storage of these “data feeds.”

Therefore, under the market demand for SGX CPU equipment, two protocols need to jointly create a “privacy technology” mining ecosystem. Miners with Intel SGX equipment can simultaneously mine Phala, Crust, or other storage projects tokens at the same time after connecting the hard disk.

Crust uses TEE for MPoW (Meaningful Proof of Work) mining to solve the problem of supervision and quantification. In Crust, TEE is like an honest supervisor that periodically check whether the node is working properly and whether there are any errors in storing user data. Through the GPoS consensus, Crust has achieved efficient node incentives.

As to Phala’s TEE mining mechanism, we call it “PoW-like”. The real PoW is to motivate the computing power. Longer online time and more computing power will result in more rewards, but it is easy to cause waste of electricity and computing power. Proof of Storage mining can use the redundant computing power, and Phala mining’s CPU and threads requirements can also help the nodes to better perform storage mining.

Phala Network plans to participate in the Filecoin Dev Grants project after completing Web3 Analytics. Filecoin’s development team Protocol Labs, after discovering the use case of Phala, said that using TEE for user data encryption is an interesting use case. They are very interested in the potential cooperation opportunities with the Polkadot ecosystem. With the potential of decentralized storage technology, Phala will achieve more efficient TEE resource utilization and network performance improvement.

About Phala

A Substrate-based confidential smart contract blockchain on which you can develop confidential-preserving and privacy-first blockchain apps. Member of Substrate Builders Program starting lineup. Recipient of Web3 Foundation Grant.

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