Blockchains are two very conflicting aspects, yet fundamental. While transparency allows for trust and security, it can also leak sensitive data and is hard to implement in all sectors, like healthcare, business, and finance. Eran Barak, CEO of Midnight—a privacy sidechain for Cardano—reiterates that privacy isn’t a luxury but a necessity in the crypto space.
The Privacy Challenge in Blockchain.
Its transparency means that every transaction is recorded publicly but can reveal some critical metadata. This could be of interest to many threat actors, big data collectors, and AI-driven analytics as ways of tracking and profiling individuals and organisations. For example, storing medical records on-chain without adequate privacy measures could expose an individual’s health status to others by transaction frequency and interchange with healthcare providers.
Businesses involved in transactions on public blockchains potentially expose sensitive information related to pricing strategies, movements in supply chains, and other financial dealings. This exposes potential dangers toward market manipulation, data breach, or disadvantageous competitiveness.
AI and the increasing demand for privacy.
Privacy becomes a significant concern as artificial intelligence continues to advance rapidly. With AI, one can analyse the data in a blockchain and even predict user behaviours with a great deal of accuracy. According to David Holtzman, AI-based systems might use public blockchain data without adequate privacy measures, causing security risks on personal and organisational levels.
Balancing Privacy and Transparency
The main problem is the trade-off between being transparent and remaining private. According to Paul Brody of EY and Avidan Abitbol of the Data Ownership Protocol (DOP), “there is an urgent need for privacy-focused solutions that will spur businesses to invest in blockchain.” With zero-knowledge proofs and encrypted transactions, blockchain networks may be able to provide security and still retain decentralised trust.
Conclusion
Privacy in blockchain is a must for businesses, individuals, and organisations to stay safe in the digital world. As blockchain technology improves, adding privacy features will be even more important to help more people use it, keep data safe, and protect users from new AI-related threats.
