The Power of Decentralized Confidential Computing in Web3
We often discuss the benefits of decentralization in blockchain technology, which include robustness, censorship resistance, and democratization of applications. However, one critical issue hinders the widespread adoption of decentralized applications: data confidentiality. Traditional blockchains are fully transparent, making user data instantly public and unsuitable for institutional players. So, how can we protect sensitive raw data while still reaping the benefits of decentralization?
Introducing Decentralized Confidential Computing (DeCC)
Decentralized confidential computing, or DeCC, is the solution to the problem of data confidentiality in Web3. It allows for the protection of data during processing, ensuring compliance and corporate use cases.
The Role of Confidential Computing in Web2
Confidential computing has been a critical offering in the Web2 world for years. Companies like Microsoft, Google, IBM, NVIDIA, and others already offer powerful confidential computing solutions. However, this technology is now being understood and adopted in the Web3 world as builders realize its potential.
What Sets DeCC Apart
Itโs important to distinguish confidential computing blockchains from projects focused solely on transactional privacy, such as Monero or ZCash. DeCC provides protected computing that enables arbitrary computations on data without revealing it to the world.
Use Cases Enabled by DeCC
- Confidential trading strategies for DeFi
- AI model training on confidential data
- AI models with confidential parameters
- Sealed-bid auctions for DeFi, DeSci, and NFT worlds
- NFTs with protected data, enabling true ownership of content on Web3
- Confidential on-chain voting (e.g., for DAOs)
- A decentralized on-chain identity that doesnโt reveal data to everyone
- Multiple gaming use cases
Furthermore, confidential computing enables opt-in compliance by allowing users to control access to their data.
The Technologies Behind DeCC
Several leading technologies enable the implementation of DeCC on blockchains:
- Zero-Knowledge Proofs (ZKP)
- Multi-Party Computation (MPC)
- Fully-Homomorphic Encryption (FHE)
- Hardware-based Trusted Execution Environments (TEE)
Projects utilizing these technologies include Oasis, Phala, Marlin, Fairblock, Partisia, Aztek, Aleo, Penumbra, Manta Network, Fhenix, and Inco. Each technology has its own benefits and advantages, and the combination of multiple technologies can yield the best results.
The Future of DeCC in Web3
DeCC is the missing piece of the Web3 stack that will enable powerful decentralized applications and drive wider adoption. It enriches existing use cases and paves the way for new ones. As modularity becomes increasingly important in blockchains, DeCC fits perfectly as a Confidential Execution Layer alongside Execution, Consensus, Data Availability, and Settlement.
In the future, performing confidential computations and protecting data stored on-chain will become standard practice in Web3. This will fulfill the promise of decentralized networks and unlock the full potential of blockchains for individuals and institutions everywhere.
About the Author
Alexander Zaidelson is the CEO of Secret Labs, specializing in scaling technologies for privacy across Web3. He previously served as Chief Business and Data Officer of Israel-based decentralized exchange VirtuSwap, where he remains a strategic advisor. The views expressed here are his own and do not necessarily represent those of Decrypt.
Hot Take: Decentralized Confidential Computing Unlocks the Power of Web3
Decentralized confidential computing, or DeCC, is the key to unlocking the full potential of Web3. By protecting data confidentiality while leveraging the benefits of decentralization, DeCC enables powerful applications and drives wider adoption. It is a critical building block of the decentralized web, alongside other innovations like DeFi, DePin, DeSo, DeSci, and Gamefi. The future of Web3 lies in performing confidential computations and safeguarding data on-chain. When this becomes standard practice, we will have achieved the true promise of decentralized networks.
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