Disclosure: The opinions and opinions expressed here belong only to the author and do not show Crypto.news’s opinions or opinions.
In the summer of 2016, Ethereum’s most prominent decentralized autonomous tissue flaws have led to the stolen Ethereum (ETH) of over $ 50 million. Dao hack. This episode showed a definitive moment of blockchain security, and the industry was supported by smart contract audits, formal verification, and eventually safer programming frameworks. It was a crisis -led innovation, pure and simple, but played an important role in promoting blockchain technology on a long road.
Today, the industry is at another important transformation. However, this crisis is not rooted in panic caused by a unique and isolated case, but instead, many people continue due to insidious vulnerabilities that are soaked in the entire crypto ecosystem. You may not even recognize the results you are. give.
I am talking about transaction privacy.
Daily robbery
Every day, billions of dollars of cryptocurrency transactions pass through the public member pool. This is waiting for the room where the transaction is sitting before being processed. In these transparent pools, sophisticated bots scan highly profitable opportunities and extract value through front running and sandwich attacks.
This is not rare. Thousands of these attacks occur every day, and sophisticated actors steal billions of dollars from ordinary users through automated exploitation. This is an organizational theft, simple, simple, and a strong fixing player systematically extracts value from ordinary people. This extraction, known as a malicious MEV (maximum extracted value), has grown from the theoretical concerns on the billions of dollar issues that impair the basic fairness of the blockchain system.
How we reached at that point show the evolving task that the industry had to work on. Bitcoin’s proof has solved the fundamental problem of achieving consensus with an unreliable network. Etherum’s smart contract has enabled programmable transactions, but has introduced a new attack vector. The proof of the proof has improved energy efficiency while raising questions about the value of the validator.
Each progress brought new tasks and eventually brought a solution. However, the privacy of transactions represents completely different types of issues.
Betrayal by design
Unlike the previous security issues that can be dealt with through protocol patches or more robust coding practices, the privacy challenge is derived from the unique transparency of public blockchain, a basic design option. Such transparency was often said to be a function to guarantee accountability, resulting in basic vulnerabilities.
If all the transactions in pending are displayed in all participants, the bot is the fastest and the strongest connection can be advantageous to the asymmetry of this information. It is as if a privileged trader can see all other people’s orders on a stock exchange and jump side by side before they are executed.
The early recognition of this problem presented a different path, albeit two clearly. It prevents theft through systematic changes, or gives priority to personal interests by exploitation. The main players not only chose the latter as expected, built a sophisticated infrastructure, promoted practices, but also accelerated.
This design defect not only impairs the market efficiency, but has betrayed the central promise of the blockchain of creating a fair and accessible financial system for all participants.
The response from the industry has been inadequate, changing the trust from the protocol to the intermediary in a privacy attempt to impair the basic principles of the decentralization of blockchain and the uniform access.
Running a blockchain on some concentrated servers will solve scalability, but will defeat the diversification purpose. Creating a private transaction channel is a concentrated solution that only privatizes the problem, not solving it. They shift the trust from the protocol to the intermediary. This retreats from the central promise of the unreliable operation of the blockchain.
Stadium level
The actual solution lies in the advanced encryption, especially the excitement encryption system. Unlike conventional encryption, where a single key holds full power, the excitement encryption distributes this responsibility to multiple independent stakeholders.
By encryption of memory transactions through the encryption of the threshold, you can create a system that cannot be unilaterally accessed by a single participant before execution. Or financial resources.
It may sound complicated, but the mechanism is actually simple and elegant. When a user sends a transaction, it is encrypted by the public key jointly generated by the network keychain. These encrypted transactions sitting in the member pool have immunity around the front because their content remains hidden. Only after the position of the transaction in the block is determined, the key chain will release the decryption key shares so that the transaction can be processed.
Before clarifying the details of the transaction, consider it as a digital safe that multiple independent keychains need to cooperate. The migration to the encrypted members, as the security has changed the consensus while maintaining security, should represent the next main technical milestone in the blockchain. In both transitions, you need to reconsider the basic assumptions while saving blockchain technology while saving valuable important properties.
Recovery of trust
But this is just the beginning. The industry is already investigating more advanced solutions. The shy value promises to directly enable the calculation of the encrypted data of the completely classified encryption (shiki value -fhe) and the distinct of immovable (IO), and calculate the blockchain. We promise to potentially change the whole paradigm. Imagine a smart contract that can handle confidential data without decryption of the application that is hidden in all internal details. These are ideas that can have a significant impact on maintaining privacy.
These developments represent a small component on a much larger road to a more private future. Privacy is not considered an add -on function, but is a basic feature of blockchain systems.
But clarify the meaning of privacy in this context. Privacy is not hidden or unclear, but with the ability to determine the information to be shared, share, and who are with whom. Privacy is about the protection of thieves and bad actors who use transparency for their own benefits.
Think a little about it. Do you want any company to operate a trading strategy or business that can be seen in real time for competitors? Of course it is different. It is essential to get this right. This right is indispensable to recover the basic fairness of systematically destroying specific high -frequency transactions in order flow and Ethereum malicious MEV.
As a community, we are now standing at the crossroads. One path can maintain the status quo and continue to check systematic theft. The other is implemented a proven encrypted solution that can restore fairness and privacy to blockchain systems.
Mathematics and encryption to solve this exist today. The problem is whether the vision of starting to use them and whether our technology is willing to guarantee that our industry will reflect the principles and value of our industry.
