Ethereum introduced intelligent contracts to the world and stimulated a Cambrian explosion of innovation, including defi, NFTS, damage and a DAPPS universe. On July 30, the network will reach its 10th anniversary.
The last decade of the ecosystem focused on testing Ethereum’s functionality and capabilities, as well as improving efficiency through updates such as merger, which marked the transition from the work test to the test test. The next was requires a dynamic to coincide with the most mature ecosystem that now supports, one that includes not only web3 natives, but also financial institutions, governments, corporations and people who do not know what “performance agriculture” is, but can obtain a loan for your home with cryptographic guarantee.
In the midst of the growing government and institutional participation, the hope that cryptography contributes to creating a “free and open society”, an ideal originally expressed in the manifesto of a cypherpunk, sometimes it is lost. For Ethereum to comply with that original promise, privacy must be a principle of its future.
Privacy is identity
A certain degree of privacy is essential for financial security and freedom. He will not want to reveal his net assets to the cashier every time he bought a coffee with milk or a portion of pizza, but so essentially it has been operating crypto during the last decade, with the radical transparency of the books of immutable books that record each transaction publicly.
This level of transparency not only puts people at risk of phishing and other attacks, but also hinders the participation of institutions that do not want to give an advantage to their competitors by revealing their activity. Although it is possible to retain pseudonym through never interacting with a centralized platform, this is not practical for interactions that touch the real world.
People and companies must be able to interact with governments and banks through accounts linked to ID, and the key to enabling this type of interactions, without endangering personal information to theft and misuse, is programmable privacy.
The solution is the technology driven by ZKP
The solution is already here: intelligent contracts with zero knowledge tests (ZKP) give users control what information to share and with whom. With programmable privacy enabled by ZKPS integrated in Ethereum at the fundamental level, a world of applications is not only feasible but practical.
The products and services must meet the regulatory requirements of each jurisdiction in which they operate. This includes collecting customer information according to KYC guidelines, counteracting terrorism financing (CFT) and AML laws. The typical KYC processes involve sharing some form of identification, such as a passport or driver’s license, together with personal identification information (PII) such as the name, date of birth and address.
If it is captured by bad actors, this type of information can be used to attack people in phishing scams and other types of attacks (see recent violation of coinbase data). Instead of demanding people to reveal their PII and make themselves already their data vulnerable to attack and theft, ZKP food solutions allow people to demonstrate that they are not operating outside the sanctioned countries and to demonstrate eligibility to participate, everything without giving the platform their data and contribute to potential honey powers.
The possibilities enabled by ZKPS also go beyond compliance. Airdrops currently suffer from Sybil attacks where the bots of AI beat true human participants to give certain participants a huge advantage. The same problem applies to decentralized governance. Decision making in a DAO cannot be really fair and free unless it can be demonstrated that the correct number of votes will be allocated to the correct number of people, not to the bots. ZKPS offers a solution with “humanity test” through data origin tools such as Zkpassport, Zkemail and Zktls.
Digital payments must provide the same privacy as cash. Payments in dollars, euros and other sovereign currencies through stablcoins are another important factor in allowing the massive adoption of defi applications, but this will never take off mass no guarantees of privacy. The same applies to decentralized mortgages, loans and essentially any type of legal contract, which require identifications to execute.
There are many other possible applications with privacy such as central tenant of the Ethereum ecosystem. These include demonstrating the authenticity of product or restaurant reviews, allowing safe digital vote, decentralized dependibility services, carbon compensation monitoring, builder test in GitHub anonymously and the verification of labor skills, all done in a safe and preservative way of privacy that does not imply the exchange of sensitive PII to centralized suppliers.
Creation of a culture that requires privacy
Although technology exists to implement ZKP solutions today, challenges must be overcome before privacy is integrally reflected as a central value throughout the Ethereum ecosystem. Technical challenges with the implementation of ZKP -promoted technology include the highest expense of ZKP transactions. The construction of ZKP -centered applications is also more complicated, which represents a learning curve for builders. All these are soluctionable problems.
Other challenges are cultural: create a universal acceptance of the spectrum of participants in the value of privacy and coordinate the implementation of solutions throughout the technological pile, from the protocol to the wallet. There is also the obstacle of wrong perception of privacy associations with illegal activity.
Changing technology is ultimately easier than changing minds, but the central spirit of cryptography is, after all, a philosophical, a technology that supports a belief in the freedom and privacy of people and entities. If in another 10 years, we remember another decade of Ethereum and we can celebrate its role in the authorization of greater financial freedom, an emphasis on privacy will be key.
