Today we are going to talk about encryption technology to protect privacy, which is also the most important part of our entire blockchain technology: encryption!!
This video is about the basic knowledge that must be learned in the cryptocurrency circle. It is very dry. I will try to make it easier to understand~
01 Overview of Encryption Technology
Speaking of encryption technology, old friends in our channel will definitely blurt out ZKP, zero-knowledge proof.
The most famous technology at present is ZKP technology.
There were a few famous ones before, but they are almost all forgotten now. For example, Monero, launched in 2014, is a BTC copycat coin with a privacy protection function. However, like Bitcoin, it is not programmable, does not support smart contracts, and can only protect the privacy of Monero users.
Monero was once glorious, but now its popularity has faded. However, a lean camel is still bigger than a horse, and its market value is still 3 billion US dollars.
It has withstood the test of more than ten years of history, but there is no expectation of rising prices.
There is also Tornado Cash, which was launched in August 2019 and claims to enable users to "send Ethereum 100% anonymously". Later, the technology was upgraded to support a variety of currencies. However, this project has become a tool for money laundering because it protects user privacy too much.
In May this year, Alexey Pertsev, the developer of Tornado Cash, was also arrested by the United States for money laundering and sentenced to 64 months in prison. Co-founder Roman Storm will also be tried in September. However, Tornado Cash has remained the largest cryptocurrency mixer since it was sanctioned. Hackers and protocol attackers are still using this tool to launder money.
Today, the technologies that are still emerging in the field of privacy protection are zkp and FHZ.
Zkp means (Zero Knowledge Proof), we are very familiar with it. The zksync and Aleo that have been criticized this year are the leading projects of zero knowledge proof. Both projects raised more than 200 million US dollars two years ago.
Now zksync is an L2 based on Ethereum. Although it was listed on Binance in June, its FDV is only more than 3 billion, and more than 80% of the tokens have not been unlocked. In addition, it has openly engaged in insider trading, which has offended all community users. Any price is possible in the future.
Aleo is based on ZK's Layer 1. This project has sold a lot of mining machines, but the main network has not been launched yet.
Looking at the appearance of these two perfect couple, even Da Piaoliang is worried about them.
02The New Holy Grail of Cryptography
So what is FHE?
The full name is Fully Homomorphic Encryption.
We may not be familiar with it, but some technology giants are touting it: for example, in May this year, Vitalik Buterin also republished his article to popularize the technical principles.
Kyle Samani, founder of Multicoin, announced that zero-knowledge proof (ZKP) is a thing of the past, and the future belongs to fully homomorphic encryption (FHE)
So our ZK this year has just begun and itâs about to end?
Letâs first talk about the significance of protecting privacy:
The blockchain we are familiar with is essentially a large public database. And this database is decentralized, so that the data cannot be tampered with by a single party.
But if it is put on the blockchain, then everyone will know the data. If Zhang San transferred 1 million to Li Siâs wife, and the whole village helped him keep accounts, wouldnât that be a joke?
This is how to do?
Both Fully Homomorphic Encryption (FHE) and Zero-Knowledge Proof (ZKP) can solve this problem in different ways:
If Zhang San gives Li Si's wife a look, no one in the village will know what's going on between them, and only Zhang San and Li Si's wife will know that the transfer is successful. This is ZK.
If Li Si's wife expresses her feelings, Zhang San will know to transfer money. This is fully homomorphic encryption, and he will also know that he needs to transfer 1 million.
FHE is mainly used for computing and processing without exposing the content of data.
ZKP is mainly used to prove the authenticity of a condition or information without revealing actual data information.
03 FHE Ecosystem Opportunities
Fully homomorphic computing technology is so awesome, what star projects are worth paying attention to?
The well-known research institution Messari (the one that proposed the concept of depin) gave a framework diagram:
Divide fully homomorphic encryption into three areas:
Tools and middleware
Fully homomorphic encryption public chain
Technology Application
The leaders in these three fields have also emerged:
3.1 Tools and Middleware
First of all, when it comes to tools and middleware, the undisputed giant is ZAMA.
The ZAMA project is an open source homomorphic encryption tool built for developers. Currently, most fully homomorphic encryption projects are using the tools they provide.
In March of this year, ZAMA also received US$73 million in financing led by Multicoin and Protocol Labs, thus crushing other tool projects in terms of financial strength and taking the lead.
3.2 FHE public chain
In the public chain field, Fhenix is ââthe first public chain driven by fully homomorphic encryption. Last month, it received $1,500 in investment led by HackVC, bringing the total fundraising scale to $22 million.
3.3 FHE Applications
At the application layer, the leader of FHE should be Privasea.
After Privasea completed a US$5 million seed round with Binance in March, it completed a strategic round of financing in April, with the amount of financing expected to exceed US$10 million.
Currently, Privasea is the fastest in the application of fully homomorphic encryption. Donât think that this technology is far away. They have already launched the application imhuman, and the first application scenario is real-person verification.
For fully homomorphic encryption technology, for example, the data of our cryptocurrency users does not need to upload their identity information to any exchange to prove their identity.
Think about it, all our exchanges now require KYC to allow users to verify their identities.
However, the requirements for user identity data vary around the world, and some countries even require that the data be stored in the country.
Even if zk technology is used, the encrypted user data must be sent out of the warehouse for verification after encryption.
If an exchange uses Privasea's data, encryption and verification can be completed within the database. The exchange does not need to store customer information and is not responsible for keeping the information confidential.
With this thought, do you understand why exchanges such as Binance/OKX/Gate are competing to invest in Privasea?
But identity recognition is only one of Privasea's application scenarios. This project is mainly to provide distributed computing resources for various fully homomorphic encryption AI models and accelerate the implementation of FHE in other scenarios.
04Earning opportunities layout
Having said so much, where are the money-making opportunities in this track?
ZAMA, the leading project in the tool field, has an unclear coin issuance plan at present. However, the FHE tools provided by this project are all charged, and it is possible that they will make money from charging in the future.
In the public chain field, Fhenix and Inco are still in the testnet stage, and the mainnet is expected to be released at the end of this year or early next year. Friends who have free time can go and take part in the airdrop.
The project with the fastest progress may be Privasea. In the first half of the year, two versions of the test network, V1 and V2, were released successively. It is expected that the main network will be released in Q3 and TGE will be completed.
In addition, the Priavsea project currently has nodes for sale, including WorkHeart and StarFuel NFT nodes. For more information, please visit the official website~
It is said that the waves behind the Yangtze River push the waves in front of them, and the waves in front of them die on the beach.
ZK zero-knowledge proof has only been popular for two years and is about to become a bygone trend.
Of course, ZK technology will not disappear, but will coexist with fully homomorphic encryption technology. However, with the development of large-scale AI model applications, the industry's holy grail may belong to fully homomorphic encryption.
But who can guarantee that no new technology will emerge in a few years to replace fully homomorphic encryption?
Therefore, in our crypto industry, only projects that conduct TGE as early as possible before the boom and allow our investors to benefit from the industry's growth are good and conscientious projects.
Bye~
