July 20, 2018
Two new startups named Enigma and Oasis Labs are finally exploiting Blockchain’s unexplored capabilities in creating better cloud computing platforms, which are performant and offer better data privacy to the users.
Blockchain, a decentralized technology that manages cryptographic records through secured methods of consensus, has been widely talked about for its capabilities in creating more secure connected environments and overall cybersecurity. However, the blemishes created by bad actors and spammers in one of blockchain’s most famous applications, cryptocurrency, have stifled the investments in this area. In fact, if we were to believe CBN insights, ICO’s have been raised to five times that of their cumulative investments in Blockchain. Therefore, it is no wonder that the funding streams for blockchain are stopping as the trust from cryptocurrency starts to deteriorate.
It is therefore encouraging when startups like Oasis Labs get VC firms from Silicon Valley to fund it with $45 million. Furthermore, Oasis is not the first startup that has recently got lucky in the market. Last month, another startup, Enigma, which uses the same technologies and protocols to create confidentiality-based scalable and more efficient smart contracts, won a contract with Intel. Now the startup will be trying to boost the company’s data privacy efforts by incorporating Intel’s SGX extensions or Intel’s Software Guard Extensions. The spokesperson from the startup has told CoinDesk, “Privacy is currently the biggest barrier to smart contract adoption. Blockchains are good at correctness, but bad at privacy by design. Smart contracts and decentralized applications will need to be able to use private and sensitive data to see global adoption.”
Both the startups will be using patented Trusted Execution Environments, or TEEs, to achieve their goals. In brief, TEEs can be described as a secure space on a device’s processor, separate from the operating system which is used for storing protected data. The technology, then, can be used to separate the execution of the smart contracts from the consensus mechanisms of blockchain.
Dr. Dawn Song, a founder of Oasis Labs, MacArthur awarded security researcher, and professor at UC Berkeley, has also explained how the technology based on the above-mentioned mechanism will optimize the processing of the smart contracts. In a research paper, where she has named the technology as ‘Ekiden’, she explains the inefficiency of Blockchain that is due to the consensus method. She writes, “Existing smart contract systems replicate data and computation on all nodes in the system. Each node can thus individually verify correct execution of the contract. Full replication on all nodes provides a high level of fault tolerance and availability.” This mechanism, however, severely limits the scalability of the smart contract infrastructure. She further clarifies, “Even when you have 100,000 nodes, the capacity of the network is still the same as one node, brutally limiting the performance of the system”.
Ekiden deals with such situations by optimizing the use of blockchain without degrading the security. How it works is that TEE will allow the processing of the contracts to happen in a separate piece of hardware in Ekiden called the ‘Secure Enclave’. This Secure Enclave will then generate a cryptographic proof of the entry, which is what will be sent to the blockchain instead of the complete contracts. Regarding this neat work, Song says “enables these different layers to scale independently”, making it more efficient and secure.
Song says that cloud-computing solutions based on such systems are more applicable for the healthcare industry, where it is crucial for the institutes to protect the identity of the patients whilst also helping the R&D for better medical procedures. She is, in fact, talking with organizations in the sector that are hoping to make use of the system as soon as it launches. The system is predicted to be official by next year, and a variety of industries including finance and eCommerce, are already making plans to use it.