What are secret contracts?

Smart contracts based platforms have been taking the cryptosphere by storm. Ethereum has kicked off a wave of imitators and innovators alike, with NEO, EOS, Tron, Cardano, Zilliqa and many more looking to add their own twists to the formula. However, there is a notable lack of privacy features among these platforms, making us wonder if they will and could they even be implemented.

As it stands, smart contracts aren’t exactly private. Anyone can use a blockchain explorer and access all the information that has been stored in a specific smart contract. This can be problematic since smart contracts, in their current form, cannot store any sensitive information without a risk of said information getting exposed. As things stand, sensitive data is stored off-chain and public data is stored on the chain. For some people this isn’t much of a problem; others however either value their privacy more than others or have sensitive data that they don’t want to get exposed.

This is why a project aptly called Enigma decided to launch so-called secret contracts. Enigma is a startup that was initially focused on the hedge funds sector but has since rebranded itself as a protocol for these “secret contracts”. These contracts are modified smart contracts that allow for transaction origin obfuscation and for encrypted contract computation.

“Blockchains without privacy are useless. Smart contracts without privacy are useless. If these technologies cannot work without privacy, then new privacy technologies are the truly useful innovations,” says the Enigma development team about their focus on privacy. Their idea and technology are still rather new and experimental, and they even point this out in their official material.

“We acknowledge that development of these types of innovative technologies is non-linear and an ongoing, iterative process. We’re not simply forking an existing platform – we’re building something completely new and essential, something that will take (and has taken) many people and many days and nights to build.”

Secret contracts will let developers have the entire computation process encrypted, thus hiding important data from the public. This finally enables dApp developers to include sensitive data in their smart contracts, without moving off-chain to centralized (and less secure) servers and systems. The centralization issues that sensitive blockchains (medicine, finance, ID) have are mitigated and dApps become peer-to-peer, without third parties that can expose data in between.

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Enigma offers an interesting approach to smart contracts that no other project has attempted before. A lot of work is ahead of them for sure; they predict they’ll have a fully working blockchain by 2020. They provide a full roadmap that gives a clearer insight into steps they will take on the road to making their vision come true. It remains to be seen if secret contracts are a viable technological solution and if more projects will look into developing them.

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner.

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