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The virus killer: How blockchain contributes to the fight against COVID-19
On Jan. 30, the South China Morning Post reported that one of the largest Asian pharmaceutical companies, Zuellig, had launched a blockchain-based system to track the quality of COVID-19 vaccines. Called “eZTracker,” it allows any user to “instantly verify the provenance and authenticity” of vaccines by scanning the QR code on the package. Somewhat surprisingly, throughout the pandemic, there have not been many reports of blockchain-based products adopted by big pharma or global healthcare organizations to bolster the anti-COVID effort. Here is a rundown of the major cases of such adoption, along with possible reasons for the limited interest in blockchain among healthcare officials.
South Korea: Blockchain vaccine passports
In April 2021, the South Korean government became the first to introduce blockchain-based vaccine passports amid the COVID-19 crisis. Putting proof of vaccination on a distributed ledger ensures the authenticity of the document as many people around the world tend to counterfeit such “Green Passes,” which sometimes can secure access to restaurants, public spaces and travel.
The app, which goes by the name COOV, was developed by London-based Blockchain Labs and is available on the App Store and Google Play Store. It generates a QR-code for each user and ensures that all personal data is stored on the user’s device, exchanging it with the app host through blockchain only.
Brazil: The National Health Data Network
The blockchain-based National Health Data Network is not being built specifically to fight the coronavirus — it constitutes a vital part of the ambitious plan to digitize Brazil’s entire healthcare system. Yet, the system has been used to respond to coronavirus-related challenges since late 2020.
The main use of the Brazilian network, like that in South Korea, is vaccination tracking. The system registers every jab immediately, creating a database that allows for a “continuity of care in the public and private sectors.” The national healthcare digitization project is expected to be completed by 2023.
Mexico: COVID-19 test certificates
In October 2021, private healthcare provider MDS Mexico launched a rapid COVID-19 testing service, backed by blockchain. The digital platform allows patients to get their test results in real-time via a QR code and to safely store their vaccination history. Once again, the company cited the fight against counterfeit vaccinations as the key mission of the platform:
To avoid the falsification of negative results, we began to certify the SARS-CoV-2 detection tests with blockchain technology and cryptographic signature, which protects the information in a unique, immutable and unalterable QR Code that can be verified worldwide.
The private initiative followed the earlier announcement of Mexico’s National Chamber of Commerce that it plans to digitize vaccine passports with the use of blockchain technology.
Other ideas
These examples represent only a small fraction of all blockchain-related projects that are being developed to combat public health threats. Distributed ledgers can help to manage supply chains, ensure the quality of drugs, hold medical records, process insurance claims and increase the efficiency of systems performing a range of other tasks.
Besides safe data management and vaccine tracking, healthcare researchers see opportunities to use blockchains in an even greater variety of areas. A group of American medical scholars proposes a blockchain-based movement pass that relies on smart contracts and tokens to facilitate social distancing. A Scottish research group came up with a project of a blockchain platform, synchronized with the Internet of Things (IoT), that can trace contacts without compromising user identities.
Promoting cross-border compatibility
Enabling cross-border data sharing that could preserve patients’ privacy is a humongous task. To solve it, two scientists from the National Institute of Technology Raipur (India) designed a consortium blockchain to identify and validate COVID-19-related reports through the comparison of the perceptual hash of each report with existing on-chain perceptual hashes.
Reporting COVID-related data to healthcare authorities can get problematic in a pandemic. Jim Nasr, CEO of Acoer — the company that launched the first decentralized COVID-19 tracker back in 2020 — shared his U.S. experience with Cointelegraph:
Every state has its own requirements and mechanism for collection of state-level COVID data. In turn, the states have mandatory infectious disease reporting obligations to federal government entities that largely fund them. The quality and timeliness of data reporting is at best inconsistent, inefficient and publicly non-transparent.
The problems that remain
Currently, the vast majority of COVID-19-related projects still live only on paper. As the most acute phase of the pandemic is arguably over, healthcare innovators seem to be less inclined to focus specifically on the coronavirus. Meanwhile, the number of medical blockchain startups remains on the rise in a variety of more general areas, such as patient consent, clinical trial recruitment, IoT device management, clinical goods supply, finished goods traceability and many others.
Nevertheless, the larger problem of the relationship between blockchain innovation and healthcare officials persists. As Nasr notes, many traditional public health institutions are not ready to embrace blockchain-powered innovation:
In my experience, many of their KOLs (Key Opinion Leaders) are under-informed about DLTs and largely [concerned] about the noise in the space (e.g. scamming, cryptocurrency volatility, dealing with keys & wallets, etc).
It is not solely the lack of information that affects adoption. At the end of the day, both public and private healthcare sectors could lack the incentives to innovate in the direction of transparency. Nasr believes that some current problematic aspects of the healthcare industry — “particularly siloed data and opacity of pricing and process” — maintain its profitability and support a thick layer of intermediaries who all benefit along the way. The missing component here is patient pushback that could arise from a better understanding of their rights of data transparency and privacy.
Layer 1 Project Aleo Raises $200M
Key Takeaways
- Aleo has closed a $200 million funding round led by SoftBank Vision Fund 2 and Kora Management.
- The team aims to build a scalable and privacy-centered blockchain using zero-knowledge proofs.
- Once live as a mainnet, Aleo will reward validator nodes with its native token, Aleo Credits.
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Aleo has raised $200 million in a series B funding round to build a new Layer 1 blockchain focused on scalability and user privacy.
Aleo Pulls In VC Backing
Aleo, a Layer 1 blockchain focused on scalability and privacy, has closed a $200 million funding round. The team announced in a tweet that it hoped to “build the next-generation of private apps powered by zero-knowledge proofs.”
The funding round was led by SoftBank Vision Fund 2 and Kora Management. Also participating were such notable VCs as Tiger Global, Andreessen Horowitz (a16z), Samsung Next, Slow Ventures, and Sea Capital.
Aleo was created by Howard Wu, who based it on his original research on novel cryptographic primitive called ZeXe.
The Layer 1 blockchain will employ a security model in which decentralized applications are hosted on-chain but most computations take place off-chain. To do this, Aleo will rely on of zero-knowledge proofs. Notably, such proofs are currently being used by existing blockchain scalability solutions on Ethereum, including Polygon Miden, StarkWare, zkSync, and Loopring.
The Aleo testnet is currently live with a mainnet launch planned soon. Once that goes live, blockchain will reward validator nodes with its native token, Aleo Credits. The token will be used to pay for computational resources in the Aleo blockchain ecosystem.
Aleo has also released Aleo Studio, a development environment like GitHub that will be used exclusively for zero-knowledge proofs. The team has also developed a new programming language named Leo. Both of these resources are geared toward simplifying the experience of deploying applications on the network.
As of today, Aleo has raised a total of $228 million. It closed a Series A round of $28 million led by a16z in April 2021.
Disclosure: At the time of writing, the author of this piece owns ETH.
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Privacy-focused applications platform Aleo raises $200M
Zero-knowledge applications platform Aleo has raised $200 million in a solid investment round, pushing the company forward and supporting its goals to develop products and services that encourage and assist developers in building applications on top of its decentralized network.
The Series B investment round was led by Kora Management LP and SoftBank Vision Fund 2, which invest in fintech projects within emerging digital economies. Samsung Ventures also participated in the raise along with Tiger Global, Sea Capital, Slow Ventures and Andreessen Horowitz (a16z).
Aleo is building a network that integrates zero-knowledge proofs, a cryptography technique that lets the platform become scalable, private and interoperable.
Aaron Wong, an investor at SoftBank Investment Advisers says that Aleo is creating a foundation that ensures that Web3 is scalable, safe and secure. Wong added that this will enhance financial transactions and gaming applications as well.
“As the blockchain industry continues to evolve, it is proving its potential to support a digital ecosystem defined by accessibility, efficiency, and interoperability.
Daniel Jacobs, Founder at Kora Management LP says that the biggest challenges in the industry are privacy and scalability. According to Jacobs, Aleo “will have profound impacts on a large and growing number of applications in the blockchain space and beyond.”
Related: a16z-backed TrueFi launches DeFi lending market for asset managers
Jacobs explained that the project could protect user and application identity without giving up on performance that’s required to support many users. He also further noted that Aleo will become a catalyst that spurs the next generation of gaming, decentralized finance, and other use cases within the blockchain industry.
As Cointelegraph reported in April, Aleo secured $28 million in a private investment round to bring its platform for zero-knowledge applications to a wider audience. Venture capital firm a16z led the effort followed by investments from Coinbase Ventures, Galaxy Digital, and others.
BlockWallet: A Private & Non-Custodial Cryptocurrency Wallet
BlockWallet is a private, non-custodial Ethereum browser extension wallet that allows you to hide the amounts and the origins of cryptocurrency held by easily interacting with privacy smart contracts on Ethereum which is a decentralized, non-custodial, and frictionless manner.
The platform is an innovative solution that has met the increasing demand for privacy and anonymity. Its one-of-a-kind solution will create a new wallet address for you with the amount of crypto that you requested when you make a withdrawal.
This is achieved by using cryptographic proofs to ensure that the user cannot be linked with the original depositing address.
What Is BlockWallet?
With the boom of blockchain technology in finance, assets are no longer the picture of physical assets such as gold, art, wills, bonds, stock certificates, or cash which are carefully stored in a bank to secure.
Although you can keep all those assets away from thieves, it takes a lot of time to approach the market such as for sale or trade.
On the other hand, digital assets have opened a new era for more quick trade and easy hold in global economics.
As a result, many blockchain-based banking platforms with digital banking bringing traditional and blockchain banking services are increasingly born to meet the demands.
These services are more efficient and can facilitate real-time settlement, bringing down transaction costs, counterparty risk, and capital efficiency.
However, it can be denied that hackers’ attacks have got sophisticated as well, making banking platforms unable to stop improving their technology. Projects like BlockWallet continue to push innovation for asset management.
BlockWallet is able to ensure total crypto security and anonymity for you as well as is the most private, non-custodial cryptocurrency wallet.
Launched in 2020 by a group of tech consultants, software engineers, and developers who want to disrupt the most modern technology – blockchain, BlockWallet is a vision of the team to create the future of DeFi.
In addition to the smart contract functionality, the platform also integrates with Tor for a higher level of privacy. Functionality is going to be launched including DeFi web3 integrations as well as support for Metamask Snaps Plugins to allow for seamless connectivity and usage.
What is the BlockWallet Solution?
The cryptocurrency industry has challenged users’ perceptions towards the way financial operations are done.
While the values and beliefs in the immutability of blockchain technology are highly appreciated which is still the leading benefit sought after by people when participating in any DeFi activities, transparency is on the contrary.
Today, protecting one’s assets gets more attention than before. If given the option, users may choose to remain anonymous over revealing themselves and their wealth.
Unfortunately, users often must experience friction or deal with centralized entities when they want to keep less transparent and anonymous when participating in DeFi ventures with existing solutions.
Understanding these demands, BlockWallet is designed to offer real privacy for your cryptocurrency. Also, this means it allows you to reclaim your financial privacy on the blockchain.
The biggest problem that the platform has recognized is how everything can be tracked.
Did you know?
Anyone can access your dApps when you’ve connected your wallet. As such, people not only can know all your history transfers but also know how much crypto you have in your wallet.
To keep you safe from exposing yourself in each crypto transaction, BlockWallet develops a system that adds the ultimate protective layer to your crypto transactions along with other functions that other wallets offer in the market.
It’s a non-custodial Ethereum browser extension wallet focusing on privacy. In other words, users hide amounts and origins of funds by interacting with privacy smart contracts.
Each transaction is made to a newly generated wallet address and uses cryptographic proofs to break links between the user and the original deposit address.
Therefore, it can be seen that this browser extension breaks links between users and funds, adding an extra and necessary privacy layer to all activities.
The more the adoption of blockchain users is common, the more the problem with privacy is increased. With BlockWallet, you have rights to your privacy which shouldn’t be “opt-in”, but something you could occasionally “opt-out”.
Why BlockWallet?
As mentioned before, BlockWallet’s built-in privacy is currently a one-of-a-kind solution that the market hasn’t seen in the past.
It is also an advantage over existing competitors in the cryptocurrency industry like Tornado.Cash which also uses smart contracts, or Metamask, is a private but not anonymous wallet.
The wallet focuses on anyone who wants to store their crypto non-custodial and in a private way. While the recent hacker attacks are showing the frightening trend as you don’t know who will attack, the non-custodial wallet brings value to you with the untouchable privacy benefit.
How to Use BlockWallet?
BlockWallet is designed with a simple user interface. You can easily download the wallet from the Google Chrome store and install the extension in their browser.
Then, they can interact with any DApp and store their crypto which is like with any non-custodial wallet.
BlockWallet’s privacy pools use smart contracts to group the userbase’s funds together. Funds are deposited into a smart contract which can be later withdrawn to a new address. Also, zkSnark technology proves that users deposit their funds into the contract.
Every time you withdraw your funds, BlockWallet creates a new wallet address for you that contains the amount of cryptocurrency you requested. Transfers are implemented within the pool to ensure that they always are anonymous and untraceable.
BlockWallet will charge a 0.25% withdrawal fee for all transactions taken through the BlockWallet privacy pool. Other features without requesting privacy are going to be free.
BlockWallet Token
The native token of BlockWallet is $BLANK. Not only providing liquidity for the development of the wallet but the token also powering in its marketing activities.
The $BLANK token is mainly used to obtain additional benefits in the wallet and to monetize its value.
In addition, there are various ways for BLANK token holders to get the benefit when using, including fee reduction, token burn, rewards, exclusive features, “Access-First” functionality, and many more.
To date, the total supply is 125,000,000 tokens.
How to Buy the BlockWallet Token?
Although BLANK has been listed on a number of crypto exchanges, BLANK is an altcoin that requires you to transfer your coins to an exchange where BLANK can be traded. It cannot be directly purchased with fiats like other major cryptocurrencies.
To buy BLANK, you must first buy Bitcoin, ETH, or USDT from any exchange then use it to buy BLANK.
When the KYC process is finished, you will be asked to add a payment method. Depending on the crypto exchanges, you can use a credit/debit card or a bank transfer to make payment and buy one of the major cryptocurrencies such as Bitcoin, ETH, or USDT.
Then, transfer your cryptos to an exchange that BLANK can be traded.
Once finished you will need to make a BTC/ETH/USDT deposit to the exchange to purchase BLANK from the exchange.
Buy $Blank from:
BlockWallet is Here to Help!
Cryptocurrency banking platforms or cryptocurrency vaults have become popular and make a new future for asset management. Not only is crypto held in a vault where it can be kept safe but it is also used to generate yield over time.
BlockWallet has opened better privacy in the wealth management space. As more and more people turn to managing their wealth via cryptocurrency, it can be seen that achieving privacy becomes all the more important.
To learn more about BlockWallet – please click here!
Important Note: There have been reports of scammers approaching companies via Telegram, LinkedIn and Other Social platforms purporting to represent Blockonomi and offer advertising offers. We will never approach anyone directly. Please always make contact with us via our contact page here.
FIRO Coin and Its Lelantus Spark Privacy Protocol
Last year, in August 2021, Firo – a privacy cryptocurrency protocol, formerly known as Zcoin, unveiled the details of its new privacy protocol.
Called Lelantus Spark, it’s the protocol’s next major update that intends to greatly improve the privacy, as well as the overall flexibility of its transactions. With this in mind, let’s dive a bit deeper into it.
What is Lelantus Spark?
Spark represents the logical extension of the team’s work on Lelantus v1/v2, and it also retains many important features which include but are not limited to:
- High anonymity sets
- Straightforward construction
- Efficient support for batch verification
- No trusted setup
- It also relies on well-established cryptographic assumptions
Furthermore, the protocol introduces new privacy-preserving capabilities, including:
- Efficient multi-sig operations
- Incoming and full view keys,
- Spark addresses
- Modular design
Firo’s team continues to explore new avenues to expand the protocol’s functionality, such as enhanced addressing, as well as the ability to show proof of payment to various merchants.
Speaking on the matter, Reuben Yap, Project Steward of Firo, said:
“There are only a handful of cryptocurrency privacy protocols in meaningful use today, each with different trade-offs. […] Firo has always been at the forefront of privacy tech development and we believe Lelantus Spark represents a holistic balance of high anonymity, simplicity, and flexibility while remaining true to the spirit of trustlessness in cryptocurrencies.”
Lelantus Spark’s key ideas have also been used in Monero’s upcoming privacy framework Seraphis in an effort to scale its ring sizes.
It’s worth noting that Monero has had its fair share of challenges through the years. Firo’s implementation of Spark focuses on much higher anonymity sets and utilizes sliding windows between large sets, avoiding many of the issues of decoy selection present in ring-based privacy. Firo’s core team has published a detailed article comparing Spark with other privacy protocols.
Breaking Down the Features
Spark Addresses
The Lelantus Spark protocol brings forward a non-interactive addressing system that’s designed to increase the privacy of the recipient of the transaction. The funds kept in these Spark addresses are also kept hidden, disallowing anyone from knowing the user’s exact holdings.
Previously, publicly-shared addresses could be searched on a block explorer directly, and anyone could check when said addresses received a payment. Even with the amounts being hidden, the payment information itself was leaked. With Spark addresses, users are allowed to share their addresses without them being searchable on the blockchain.
Multi-Signature
Multi-sig operations will enable multiple mutually non-trusting parties to generate, receive, and also authorize, in a cooperative manner, transactions associated with an address that supports the multi-sig.
The Spark protocol is designed to support efficient signing and multi-sig operations as it uses the modified Chaum-Pedersen discrete logarithm proof.
Modular Design
The modular design introduced by Spark follows well-known cryptographic building blocks such as the Pedersen commitments, zero-knowledge one-of-many proofs, range proofs, as well as discrete logarithm equality proofs that are designed to allow straightforward security analysis without needing any trusted setup processes.
View Keys
This feature comes with a few practical applications for organizations, charities, and individuals, that include:
- Benefactors are able to view balances and transaction values
- Offloaded scan services are allowed on online and mobile wallets
- The balances can be determined for both auditing and accounting purposes
In summary, the Lelantus Spark protocol is different than some of the most popular ones used at the moment. For instance, the Ring-CT-based protocol that’s used in Monero (XMR) limits the sender anonymity because of the space and time scaling of the underlying signature scheme. Triptych, on the other hand, has a very cumbersome and complex multi-sig process, while zkSNARKs requires complex math and a trusted setup.
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America COMPETES Act passes House without ‘disastrous’ provision on crypto
A piece of legislation aimed at addressing supply chain issues to keep the U.S. economy and businesses competitive has passed the House of Representatives — without a provision many in the crypto space had criticized for giving the Treasury Secretary authority to shut down exchanges.
In a 222-210 vote on Friday, the House of Representatives passed the America COMPETES Act mostly along party lines. The provision originally proposed by Connecticut Representative Jim Himes would seemingly have allowed the Treasury Secretary to have fewer limits on surveilling financial institutions with suspected transactions connected to money laundering and not open the matter to include public feedback. However, lawmakers modified the wording earlier this week to safeguard restrictions currently under by the Bank Secrecy Act.
I’m happy to report @jahimes has listened to our voices and looks like the notice and comment protections in the COMPETES Act related to special measures will be retained! This is in a “manager’s amendment” that will be considered later this week. pic.twitter.com/6mAtLD0tF9
— Jerry Brito (@jerrybrito) January 31, 2022
Prior to Himes essentially reversing part of his provision, non-profit crypto policy advocate group Coin Center criticized the legislation for potentially giving “unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.” North Carolina Representative Ted Budd also proposed modifying the provision, calling it a “massive mistake”:
A new provision in the COMPETES Act would allow the Treasury Department to unilaterally prohibit certain financial transactions *without* public input.
I’ve submitted an amendment to fix this massive mistake. #crypto #blockchain https://t.co/S8Gi0AIz4l
— Congressman Ted Budd (@RepTedBudd) January 27, 2022
“The Treasury Department should not have unilateral authority to make sweeping economic decisions without providing full due process of rulemaking,” said Budd in a Jan. 27 statement. “This draconian provision would not help America compete with China, it would employ China’s heavy-handed playbook to snuff out financial innovation in our own country.”
Related: White House reportedly preparing executive order on crypto
The bill will likely move to the Senate next, where it may be subject to different amendments from other U.S. lawmakers. Once both chambers approve an identical bill, President Joe Biden will be able to sign it into law.
Litecoin (LTC) Announces Completion of Privacy Upgrade Following Years of Development
The developer of the Litecoin (LTC) cryptocurrency, Litecoin Foundation, is announcing a privacy and security-enhancing update.
Litecoin Foundation says that the Mimblewimble Extension Block (MWEB) upgrade is now a Release Candidate after undergoing development, testing, reviewing and auditing for years.
The MWEB upgrade will be bundled with the Taproot upgrade and released as part of Litecoin Core 0.21.2. Taproot is an update to enhance the privacy and efficiency of the network.
According to the Litecoin creator and the managing director of the Litecoin Foundation, Charlie Lee, the upgrade will go live as soon as the activation threshold is hit.
“Note that although MWEB is released, it won’t be ready to use immediately. We are using Bitcoin Improvement Proposal 8 with 75% activation threshold and one year time limit. So miners need to update to the new release and signal for activation.”
According to the Litecoin Foundation, the upgrade will solve a problem common to Litecoin and other blockchains where the “amounts sent between wallets are publicly displayed, allowing anyone to see how much is being sent, received and held; making the users’ ‘privacy’ impossible to protect.”
The privacy-enhancing MWEB upgrade will be optional for users, according to the Litecoin developer.
“Until now, cryptocurrency has been lacking these basic privacy measures offered by traditional banking systems – which, for the most part, afford individuals privacy concerning their finances – but that’s all changes with Litecoin’s MWEB upgrade.
Users may not require this level of ‘privacy’ for all Litecoin transactions, which is why using MWEB is optional, allowing users to ‘opt-in’ at their discretion, based on their needs.”
Mimblewimble consists of various technologies including coin-mixing and a technique for concealing the transaction amounts.
Extension Blocks provide optionality and can be viewed as an adjacent chain or a “parallel highway” that allows users to choose MWEB or the main Litecoin chain and vice versa.
Litecoin is trading at $11 at time of writing, up by 4% over the last 24 hours.
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Swiss Privacy Startup Nym Technologies Unveils Public Launch of Its Nym Token
February 2, 2022 – Neuchâtel, Switzerland
Crypto-powered privacy solution, Nym Technologies, has announced that its native token NYM is now live on the mainnet and is ready for its official public launch. This announcement follows the ongoing wave of product and feature releases by the Nym development team, including the world’s first open-source mixnet explorer and desktop wallet.
Per the Nym team, a total supply of one billion NYM tokens has been generated for the Nyx chain, the platform’s decentralized mainnet. The NYM token is the first Swiss blockchain token to be approved as a utility token by BX Swiss, the prospectus review body of the Swiss Financial Market Supervisory Authority (FINMA).
NYM token will be launching its public sale on CoinList. The registration deadline for the token sale is February 6, 2022 at 23:59 UTC, following which the NYM token will be available for purchase on February 9, 2022, in two different slots.
The NYM token is at the core of the Nym ecosystem. It will play the crucial role of powering the decentralized privacy mixnet by facilitating decentralization and incentivizing mix nodes to ensure end-to-end data privacy. When users pay for Nym’s services using the NYM token, a portion will be distributed to each mix node that operates the network.
Claudia Diaz, chief scientist at Nym, said,
“The mixnet reward-sharing scheme is designed to incentivize individual participants to take actions that are positive for the overall system. And not everyone needs to have technical expertise to take part in the infrastructure anybody who holds NYM tokens can delegate their token holdings to mix node runners and earn a share of their rewards. This increases the node’s reputation and its opportunities for participation in the service, creating a virtuous cycle with incentives to select the best nodes and provide good privacy service.”
Using its open-source mixnet technology, Nym provides developers with a secure tool for building applications that anonymize metadata both in network traffic and at the application level. In the mixnet, active nodes are organized across three layers, where they mix internet traffic and are rewarded with NYM tokens.
About Nym
Nym is an open-source, decentralized privacy-enhancing technology stack designed to prevent the surveillance and monitoring of users’ internet traffic. The architecture comprises a mixnet, providing general-purpose network layer privacy using the Cosmos-enabled Nyx blockchain for smart contracts and maintaining the reputation of the mix nodes on the mixnet.
Contact
Jaya Klara Brekke of Nym
This content is sponsored and should be regarded as promotional material. Opinions and statements expressed herein are those of the author and do not reflect the opinions of The Daily Hodl. The Daily Hodl is not a subsidiary of or owned by any ICOs, blockchain startups or companies that advertise on our platform. Investors should do their due diligence before making any high-risk investments in any ICOs, blockchain startups or cryptocurrencies. Please be advised that your investments are at your own risk, and any losses you may incur are your responsibility.
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Blockchain-based decentralized messengers: A privacy pipedream?
As people all over the globe have become increasingly aware of their privacy rights and how they are constantly being violated by various prominent social media platforms, the need for tangible, decentralized alternatives has continued to grow rapidly.
For perspective, in 2019, Facebook was ordered to pay a mind-boggling $5-billion fine by the United States Federal Trade Commission for improperly acquiring private data of up to 87 million of its users. Just a year later, the social media giant had to shell out another $550 million to settle a privacy lawsuit that suggested that the firm had illegally accrued customer data (including their biometric and personal details) without their explicit consent.
Such violations have helped spur the need for transparency-driven social media services, particularly decentralized messengers, that provide their users with a high degree of data security. In this regard, the new quantum-resistant, privacy-centric messaging app XX Messenger — developed by cryptographer David Chaum — recently made its way into the market. The app boasts a globally decentralized network of 350 nodes, with each operator earning the platform’s native XX Coin as an incentive for their efforts.
A quantum-resistant messenger would be able to resist most currently known methods of decryption, theoretically guarding against the possibility of a quantum computer used to crack into a user’s communications.
The incentives for blockchain-based messengers
Guy Goldenberg, CEO of MultiNFT — a metaverse-based social media network — told Cointelegraph that the need for decentralized messaging services is driven by two key accelerating factors: users looking for censorship-resistant applications, and a lack of trust in centralized providers when it comes to privacy and data protection. He said:
“Users are showing a rising concern when it comes to their freedom of speech and the ownership of their data rights lately, and with the help of decentralized chat apps, the solution seems to be right around the corner — platforms that are owned by the users and not by a small group of executives, where no single party can control opinions or censor participants.”
Scott Cunningham, an independent blockchain analyst and social media influencer, told Cointelegraph that the core proposition put forth by decentralized messaging platforms is that they provide users with end-to-end encrypted solutions that ensure consumer anonymity as well as a high degree of privacy. To strengthen his case, he shared a recent unpleasant experience with Facebook’s Messenger:
“I sent a note to myself [meant to be read later by me] only to find that Facebook is monitoring messages to myself and removed it due to a community violation. Once someone experiences firsthand that everything they say is being tracked and evaluated in real-time, they will feel more compelled to move.”
The drawbacks are quite real
While a decentralized messenger could theoretically preserve the privacy of the masses, blockchain technology in itself could be a barrier to adoption.
Ingo Rübe, founder of blockchain-based identity network Kilt Protocol, noted that decentralized messengers need real-time relay and storage capabilities, as it is quite unrealistic for receivers to be online whenever someone sends them a text. “A possible solution would be to use random single blockchain nodes as relays, but it might be unreliable,” he admitted.
Goldenberg said that the use of blockchain tech poses further problems when it comes to network upgrades. “Updates on blockchain systems are very rarely backwards compatible and can sometimes present issues that a product may not be able to survive,” Goldenberg added.
Yung Beef, content lead and community manager at Subsocial — a Polkadot-based platform for launching decentralized social networks — told Cointelegraph that one of the biggest barriers is transaction fees, adding:
“We’re already struggling enough with creating a social networking platform that has transaction fees, and with how much people message each other, I’m not sure that it would ever really be feasible.”
While he admitted that Subsocial is actively looking for ways through which to implement a private messaging module, the challenges are quite drastic, making the vision a bit of a pipedream. “We’re working on a way to lock SUB [the platform’s native crypto token] to get a certain number of free transactions a day, but that still doesn’t solve the problem of some people sending thousands of messages a day,” he added.
A similar sentiment was echoed by Rübe, who told Cointelegraph that a decentralized messaging service would be faced with multiple challenges from the get-go, starting with the fact that it would be costly to put messages on a blockchain. Even if they did make their way onto a network, they would not be very secure because it would be quite easy for anyone with access to the system to read them.
Alexander Klus, founder of Creaton — a decentralized content sharing platform — told Cointelegraph that a fully functional, viable blockchain messenger is a very hard problem to solve, pointing out that existing platforms such as Etherscan’s messaging service are quite centralized. Even Status, the official Ethereum messenger, contains some degree of centralization in order to scale better, he said, adding:
“Choosing a platform like Signal as a messaging platform would be best, as it has very good encryption. Also, permanence in terms of messaging isn’t a big deal or something most users don’t even want anyway.”
Another major problem is adoption since most decentralized products that currently exist within this realm simply can’t compete with the giants they are up against such as Telegram, WhatsApp and WeChat. Goldenberg stated:
“Users have a habitual way of doing things, and new platforms need a viral accelerator for adoption because they require massive migration, which is almost not possible. You see, for a chat application to be useful, you need all (or most of) your contacts to use it, and that takes time, marketing and willingness.”
Is there any middle ground to be found?
While popular privacy-oriented apps, including Signal and Telegram, claim to approach user privacy with a great deal of care, making use of end-to-end encryption or client-server encryption, the former is only as secure as its coding. In this regard, Chaum pointed out that messages from these platforms can still theoretically be compromised and decoded by a powerful computer if they have not been deleted permanently.
Therefore, moving forward, it will be interesting to see whether developers are able to come up with blockchain-powered messaging services that offer the same degree of functional and operational flexibility as their centralized counterparts while being able to tackle the issue of high transaction fees in a long-term and practical manner.