Four Projects Seek to Solve Ethereum's Privacy Paradox

"From a blockchain perspective we always say privacy but it's more like data security," said Can Kisagun, co-founder of Enigma, a startup building privacy-enhancing technology for the ethereum network.

According to Kisagun, countless ethereum projects, such as those dealing with voting, location data, social media and identity, will likely be restricted by the radical transparency of the blockchain.

Jutta Steiner, the CEO of Parity Technologies, ethereum's second-largest software provider, echoed that, stating that without a privacy layer ethereum will not achieve its goal of becoming a decentralized world computer.

While Steiner said using the software on Parity's permissioned clients is a perfect fit, in the future, Parity hopes to release the tech to run on the ethereum mainnet as well.

The verification of that computation is fed back to the ethereum blockchain, so there is some kind of immutable, transparent record of the transaction.

While Enigma plans on taking its technology to other smart contract platforms in the future, the team is currently focused on solving ethereum privacy problems first.

Built at a 36-hour ethereum hackathon in Argentina last month, Kimono is a privacy project that seeks to combine encryption with game theory.

"Time locking is a pretty useful primitive for decentralized networks because as more and more more people move onto ethereum there will be more use for privacy and anonymity."

Finally, while still in the proposal phase, a code change called EIP 1024 designed by developer Tope Alabi seeks to introduce a simple encrypt-decrypt function on the ethereum blockchain.

Explaining the proposal, Alabi told CoinDesk, "EIP 1024 allows you to generate an encryption key pair using your ethereum private key. This new encryption key pair can then be used to securely send data to any other ethereum address."