Blockchain technology is regarded as the next step in a global technological advancement, with countless use cases that are promising to revolutionize some industries, and significantly improve others. While the potential is still there, and multiple large companies have developed an interest in the new technology, many are still not willing to approach it.
There are multiple reasons why this is the case, such as the high expenses that would accompany a switch of their systems to the blockchain, regulatory uncertainty, but also the lack of knowledge about it, which can be solved with time and research.
However, there is another crucial reason why companies avoid blockchain, and that is the lack of privacy.
Blockchain Privacy is not on an Enterprise-Required Level
Blockchain, by design, works thanks to full nodes that validate transactions and create new blocks. However, to be able to conclude whether a transaction is valid or not, they need to have full access to all blockchain data, which results in such information is publicly available. In other words, while blockchain can be pseudonymous, it can't reach full anonymity, at least in case of Bitcoin and other older cryptocurrencies.
While blockchain does not automatically connect the transaction data to a certain individual, it does leave a trail that researchers can follow and combine with other pieces of data in order to deduce who made the transaction. This is a problem for individual users, but it is also a large issue for companies that need to keep their investments, payments, and similar data a secret from the competition.
Meanwhile, nearly anyone who has a certain level of understanding of how the blockchain and crypto transactions work can follow this trail, including competitors, the government, hackers, scammers, and numerous other entities.
One solution to the issue is to use privacy coins, such as Monero or Zcash. However, while this may be an acceptable solution to individual cryptocurrency users, it is not what companies are looking for. They need something different, and multiple projects are currently trying to achieve it right now.
The tech giant IBM is currently creating a way to offer confidential transactions on its own enterprise solution known as Hyperledger Fabric. Their goal is to prevent individuals and organizations from accessing information that is not meant for them to see. This data would be classified, and transaction participants themselves will be anonymous to the outside viewer.
Amazon Web Service is another example, as it entered a collaboration with Kaleido in order to find better ways of using distributed ledger technology. This has led to the introduction of Ethereum templates and Hyperledger, which will allow the company's customers to move faster without having to worry about managing the blockchain.
Another project, MIT's MedRec, currently works with the Beth Israel Deaconnes Medical Center, which is a platform that creates authentication logs for medical record access. That way, the authentication log remains private, as medical researchers are the ones responsible for “the mining” process. MedRec also likes to think of itself as a network, instead of a service.
They believe that the technology which is currently used for storing health records was not designed to be used by multiple institutions and that it cannot handle the complex network that it needs to be established in order to improve healthcare. Patients tend to move between different health providers, and their medical data ends up being scattered across multiple organizations. As such, data can often be incomplete, lost, or outdated. Blockchain technology provides not only a method to keep all of the data in a single place, but it also allows the patient to keep their privacy and choose who can access their data, as well as which parts of the data can be viewed.
4) Zagg & DigitalBits
Then, there is a project called Zagg Protocol, which is open-source, and it focuses on providing blockchain-using firms with a method to achieve privacy. According to Zagg, state channels are two-way channels which connect one user with another, and as such, they do not offer complete privacy, which can be achieved via the blockchain.
For a while, it was believed that Zagg would collaborate with Stellar on building its project. However, the plans were changed, and the project chose DigitalBits as its new partner. DigitalBits provides better privacy features, while it is still supported by the largest wallet in Stellar's ecosystem — Lobstr.
Zagg also uses zk-SNARKS to ensure that validation will remain private and secure. At the same time, double-spending is prevented. To put it simply, the protocol works in a way that it allows one party to confirm to the other party that the information waiting for validation is true, without having to reveal what this information actually is. The protocol does not disclose information about the sender or receiver, and so details such as the amount that is being sent, or the address itself remain hidden.
There is also a project called Polkadot, which is trying to find a solution to interoperability between different blockchains. If they succeed, all of the different blockchains currently in use could be linked into a single, massive network which would be able to share any and all information instantly through smart contracts and dApps. After the data is gathered and processed, it would be passed to a relay chain, which would lead it to the next chain.
MESG is another project that is trying to achieve blockchain interoperability, but it also wants to connect the blockchain to other types of technology. This could make it possible for developers to monetize open-source code in the future, and bring numerous other benefits as well. Meanwhile, blockchain technology finds it hard to reach adoption as the user experience leaves much to be desired. However, if blockchain could be connected to the already existing technologies, which users are already comfortable with, the adoption of blockchain would receive a massive boost.
Finally, there is Lambda, which is a storage network based on the blockchain technology. Lambda is currently trying to develop two new features that would make blockchain more useful and attractive to large corporations. The first one is PDP (Provable Data Possession), and the second one is POR (Proofs of Retrievability). Both of these features can bring better solutions for storing and accounting for large volumes of information which companies tend to exchange or store.