How Web3 is revolutionizing AI-powered cloud computing
Data Security Is Broken, Blockchain Is the Key, Says David Atterman
Centralized data networks, those owned and/or operated by a single entity, have been structurally broken for years. Why? Single points of failure. If a single entity (or even a few) has access to a database, there is only one “point” that can be hacked to gain full access. This is a serious problem for networks that hold sensitive data such as customer information, government files, and financial records, and those that control infrastructure such as power grids.
Billions of digital records were stolen in 2024 alone, causing an estimated $10 trillion in damage! Notable breaches include nearly all of AT&T’s customer information and call logs, half of America’s personal health information, 700 million end-user records from companies using Snowflake, 10 billion unique passwords stored on RockYou24, and the Social Security records of 300 million Americans.
Source: Statista, 2024
This problem is not limited to the private sector, but governments and critical national infrastructure also rely on centralized networks. Recent high-profile breaches include the theft of 22 million Americans’ records from the U.S. Office of Personnel Management, sensitive government communications from multiple U.S. federal agencies, the personal biometric data of 1.1 billion Indian citizens, and the ongoing Chinese infiltration of several U.S. internet service providers.
Despite hundreds of billions of dollars spent annually on cybersecurity, data breaches are becoming larger and more frequent. It has become clear that piecemeal products cannot fix network vulnerabilities—the entire infrastructure must be redesigned.
Source: market.us, 2024
AI magnifies the problem
Recent advances in generative AI have made it easier to automate everyday tasks and boost work productivity. But the most useful and valuable AI applications require context—that is, access to sensitive information about a user’s health, financial, and personal information. Because these AI models also require massive computing power, they largely cannot run on consumer devices (desktops, mobile phones), and must instead access public cloud networks, such as AWS, to process more complex inference requests. Given the serious limitations inherent in centralized networks described earlier, the inability to securely connect sensitive user data to cloud AI has become a significant barrier to adoption.
Apple also referenced this when announcing Apple Intelligence earlier this year, noting the need to be able to enlist the help of larger, more complex models in the cloud and how the traditional cloud model is no longer viable.
They cite three specific reasons:
Privacy and security verification: Service provider claims, such as not logging user data, often lack transparency and enforcement. Service updates or infrastructure troubleshooting may inadvertently log sensitive data.
Runtime lacks transparency: Providers rarely disclose software details, and users cannot verify whether the service is working without modification or detecting changes, even using open source tools.
Single point of failure: Administrators need high-level access for maintenance, putting them at risk of unintended data exposure or misuse by attackers targeting these privileged interfaces.
Fortunately, Web3 cloud platforms provide the perfect solution.
Blockchain Organized Confidential Cloud (BOCC)
BOCC networks are similar to AWS — except they are built entirely on confidential hardware and controlled by smart contracts. Although still in its early stages, this infrastructure has been in development for years and is finally starting to accommodate Web3 projects and Web2 enterprise clients. The best example of this architecture is Super Protocol , an off-chain, enterprise-grade cloud platform that is entirely managed by on-chain smart contracts and built on Trustless Execution Environments (TEEs). These are secure hardware enclaves that keep code and data verifiably confidential.
The implications of this technology address all of Apple's concerns we mentioned earlier:
Verifying Privacy and Security: Through public smart contracts that govern the network, users can verify whether user data has been transferred and used as promised.
Workload and software transparency: The network also verifies the work done within the secret TEEs, cryptographically proving that the correct hardware, data, and software were used, and that the output has not been tampered with. This information is also sent on-chain so that it can be audited by everyone.
Single point of failure: Network resources (data, software, hardware) can only be accessed with the owner's private key. Thus, even if a single user is compromised, only that user's resources are at risk.
While cloud AI represents a huge opportunity for Web3 to disrupt, BOCCs can be applied to any type of centralized data network (power grid, digital voting infrastructure, military IT, etc.), providing superior, verifiable privacy and security, without sacrificing performance or latency. Our digital infrastructure has never been more vulnerable, but blockchain can fix it.
Note: The opinions expressed in this column are those of the author and do not necessarily reflect the views of CoinDesk, Inc. or its owners and affiliates.
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