8 Blockchain Projects Enlist Early to Test Secret Enigma Contracts

Can you keep a secret?

For many blockchain projects – whose underlying architecture is a public ledger of transactions – that can be a challenging ask. But Enigma, a project incubated at MIT Media Lab that raised $45 million in an ICO last year, is hoping to make that possible by developing privacy-enabled smart contracts it calls "secret contracts."

And in a sign of the broad applicability of that idea, as revealed exclusively to CoinDesk, eight diverse blockchain projects will be incorporating Enigma's protocol into their services when the contracts launch later this year.

These "launch partners," said Enigma co-founder and CEO Guy Zyskind, are already building on the current version of the technology, called "Discovery," within the testnet, so when the protocol actually goes live, they'll be processing user's data without revealing it to any outside party.

Blockchains have always had a complicated relationship with privacy. Despite bitcoin's early adoption by Silk Road drug pushers, the cryptocurrency has proven to be far from anonymous.

And in recent years, smart contract platforms such as ethereum have struggled to reconcile the public nature of on-chain data with users' privacy demands – especially when it comes to sensitive use cases.

Enigma's protocol is notable in that it works on top of existing blockchains. Sure enough, several of the launch partners – Colendi, Datawallet, Ocean Protocol, ReBloc and Datacoup – are built (or are building) on ethereum.

The protocol ensures user data "stays completely encrypted from the point of view of the network parties that are executing these secret contracts," said Zyskind, while remaining "tamper proof" like a normal smart contract.

He added:

"If you're thinking about true blockchain adoption, you've got to have both. No one is going to build applications where sensitive information is just live on the blockchain for everyone in the world to see."

Stop oversharing

We live in a world of oversharing – from what people ate for lunch to what they think about their boss to how much they drank last night.

And while that has proven problematic for some, it's generally seen as the prerogative of the poster.

But some data needs to stay private. For instance, Colendi – one of Enigma's launch partners – is building an ethereum-based application for both decentralized credit scoring and microlending.

Bulent Tekmen, the project's co-founder, said Colendi "requires sensitive information from borrowers," such as bills, bank statements and national identification numbers. Not only does Enigma's protocol allow such data to be run through Colendi's algorithms in an encrypted form, it also avoids creating an Equifax-like honeypot for hackers to go after, he suggested.

This idea that some data is too sensitive to put on a public blockchain is the same reason Ocean Protocol plans to use the Engima protocol.

While Ocean Protocol is creating "a decentralized ecosystem aimed at unlocking data for AI consumption,"said co-founder Don Gossen, some datasets cannot be bought and sold unencrypted. Ocean's white paper lists medical data as an example.

As such, Enigma "makes logical sense" for Ocean's marketplace, Gossen said.

Another data marketplace launch partner is Datawallet, which aims to let users monetize data from applications, such as social media, by selling them to advertisers, for example. The application's goal is "complete user empowerment and data ownership," CEO Serafin Lion Engel told CoinDesk.

In Datawallet's case, Engel said, the protocol will provide Sybil protection, that is, prevent bad actors from spinning up multiple digital identities to swamp the platform. While plugging in existing social media accounts is a good way to provide such protection, Enigma's Zyskind added, some "people don't want to connect their Facebook account and give you their data."

Enigma also announced partnerships with Portal Network, which turns wallet and smart contract addresses on multiple blockchains into human-readable IDs; Eximchain, a supply chain solution based on Quorum; ReBloc, an ethereum-based real estate data marketplace; 2key, a second-layer network that aims to disrupt social networks; and Datacoup, a platform for monetizing personal data, which is transitioning to ethereum.

More to come

Enigma has not announced an exact date for launching the Discovery network live, but Zyskind said that the deadline is the end of 2018. When the protocol is live, computers or "nodes" on the network will be incentivized to perform secret contract operations with the native ENG tokens Enigma sold in its ICO.

For those familiar with the Enigma white paper, which caused a minor sensation when it was published in 2015, Discovery represents an intermediate step to the fully fledged Enigma protocol.

The network described in the white paper would run computations on encrypted data using a process known as secure multiparty computation (SPMC), in which encrypted information is split up into separate pieces for different nodes to work on separately – while still encrypted.

It's then reassembled into a final, encrypted result.

In other words, the smart contracts perform operations on the data without ever having – or getting – to decrypt it, so this approach is considered especially secure.

What's more, even if all the nodes were able to break the encryption, they would all have to collude to reconstruct the original, sensitive data. A single honest node could prevent the data from leaking.

While that's the end goal, though, that technology won't be ready for the initial launch.

The mainnet launch of Discovery will bring secret contracts to ethereum, but they'll be housed in what are called trusted execution environments (TEEs), rather than functioning through SMPC.

Zyskind said TEEs still provide excellent security, however, because "any input data that needs to go inside the computation, inside the execution, is being encrypted on the outside with a key that only exists inside the enclave."

As for SMPC, Zyskind said:

"Expect it in 2019."

Enigma machine image via Shutterstock