This niche cryptographic technique can transform privacy in web3 – TechCrunch

Privacy is a core issue in crypto. Once you know that a crypto wallet address corresponds to a specific person, you can track all the transactions that the person has made through their wallet on any public blockchain, including Bitcoin and Ethereum.

Some cryptographers believe that the solution to crypto’s privacy issues lies in zero-knowledge evidence (ZKPs), a technique that enables a transaction to be verified on a blockchain without sharing the underlying data. Although zero-knowledge evidence can actually improve the privacy and scalability of some of the most popular blockchains, they are far from the only cryptographic method that can accelerate the progress of web3.

Ravital Solomon, co-founder and CEO of Sunscreen, believes that fully homororph encryption (FHE) is even more promising in its potential to strengthen the privacy of web3. The technology enables individuals to perform calculations on encrypted data without having to decrypt them, Solomon explained. One of the obvious uses that comes to mind is for financial institutions, which can use FHE to break down transaction data to detect potential fraud while maintaining more privacy for customers than is currently the norm.

“Zero-knowledge evidence is very exciting in terms of what they can offer for web three. There are all these exciting applications for games and identity, but zero-knowledge evidence is not necessarily the best for crypto or privacy. I think of it as if you are going to eat. Right now, zero-knowledge evidence is presented as “this is the only tool you need to eat your entire meal,” while I do not think that is necessarily true. zero knowledge, “said Solomon, who took his master’s degree from the University of Oxford in mathematics and theoretical informatics.

Sunscreen founder and CEO Ravital Solomon Photo credit: Sunscreen

Part of the challenge with zero-knowledge evidence is that it can be costly to use them. Solomon explained that many projects built with ZKPs expect users to have computing power far beyond what the average consumer would have at home to perform as intended. Therefore, she decided to work with Sunscreen, a start-up that aims to increase the development of FHE technology.

“Instead of the user needing these crazy computers that are potentially even servers – forget about laptops – completely homomorphic encryption is much easier [than ZKPs] for the user. “So you can still get privacy for different types of transactions and calculations, but you can get it at a reasonable price, even on a laptop,” Solomon said.

Solomon co-founded Sunscreen last year with threshold encryption veteran MacLane Wilkison of Y Combinator-backed NuCypher, which is where Solomon worked when she first got the idea to work on bringing FHE technology to market. Wilkison, now Sunscreen’s consultant, encouraged Solomon to start a company around her idea.

Today, Sunscreen’s three full-time employees (including Solomon) have developed a compiler to make it easier for engineers to build FHE programs. The company also announced the launch of a scholarship program that will allocate up to $ 500K ($ 50 to $ 75K per project) to fund proposals from developers, academics and researchers using FHE, Solomon said.

To fund these initiatives, Sunscreen just raised $ 4.65 million in a seed round led by Polychain Capital with participation from Northzone, Coinbase Ventures, dao5 and Naval Ravikant. Some of Solomon’s former NuCypher colleagues also participated in the round as angel investors, including Entropy founder Tux Pacific. The increase will supplement a $ 570,000 sunscreen previously collected, Solomon said.

If FHE is so promising, I asked Solomon, why is it not already more popular in web3, which seems to fit naturally for its features?

Solomon explained that it is very difficult to write FHE programs because the space is still so incipient, for one thing – which is part of why Sunscreen builds developer tools to simplify processes around it.

For the technology to be useful in the privacy area, Solomon believes a new layer-one blockchain is necessary, something she plans to work with Sunscreen in the long term which she says will have a bridge to Ethereum. With a new chain, technologists can build integrations between that chain and other protocols like FileCoin to hide the underlying data from users and can leverage both ZKPs and FHE together at a lower cost, Solomon explained.

FHE is a subgroup of lattice cryptography, an area that Salomon said is still considered a niche even in the field of cryptography.

“My suspicion is that completely homomorphic encryption has recently become effective enough to make sense for use cases over the last three to four years,” Solomon said. “While maybe you and I think zero-knowledge evidence is niche, lattice cryptography [is even more so]. There is only a very small group of people who even, I would say, have the expertise to sit and combine these different areas to solve problems. In web three, I think the space is growing, but it is definitely five years behind zero-knowledge evidence. “