Take, for example, Amina, a single mother raising her kids in a small, remote community. She’s hoping to tap into the new microloan program to expand her small business. She worries about exposing her identity and financial situation in a system she doesn’t entirely trust. Her story isn't unique. Millions of women like her are missing out on the benefits of decentralized finance (DeFi). Their legitimate privacy concerns and their unfamiliarity with the process prevent them from engaging. Technology’s crypto revolution is a powerful force, but it should not be allowed to throw the most vulnerable under the bus. Is this the future we want?

Privacy is a Human Right

We’ve all heard about how blockchain is going to be revolutionary, the transparency, the immutability. What about privacy? In the pre-fintech world, expectation of privacy goes (at least to some level). After all, our bank statements aren’t exactly televised for the public to see. In most DeFi applications today, every single transaction you make is recorded on a public ledger! This chilling effect holds back broader adoption, especially from those most at risk to harassment or even violence from exposure.

This isn't just about hiding nefarious activities. It’s about upholding Amina’s right to financial independence, keeping her safe from future discrimination or predation. Largely, it’s about giving people who live in repressive governments the ability to safely seek financial services without the risk of penalty or prosecution. In this digital age, the expectation and right to privacy is more than just a luxury, it’s a foundational pillar of a free and equitable society.

Decentralized Confidential Computing (DeCC), sometimes referred to as “Privacy 2.0,” is a technology with the promise to unlock that potential. Consider it a private black box for your information. This nascent technology enables computation to be performed on encrypted data. This way, your sensitive information remains secret, even when it’s being processed on a blockchain. No longer showing your entire hand just to make a run on Home! These changes can fundamentally make DeFi less of a playground for the tech-savvy. It has the potential to be a transformational weapon for social good.

From Hype to Hope for Everyone

DeCC isn't a single magic bullet. It’s not a silver bullet, but rather a medley of technologies, each with their own distinct pros and cons. Zero-Knowledge Proofs (ZKPs), Multi-Party Computation (MPC), Fully Homomorphic Encryption (FHE), and Trusted Execution Environments (TEEs) are daunting technical topics. Fear not, intrepid friends! Together, let’s untangle this alphabet soup.

Don't be intimidated! The important thing is realizing that these technologies are just more specialized, powerful tools in a carpenter’s toolbox. ZKPs allow you to prove that something is true without giving away any additional information. Multiparty Computation (MPC) enables several parties to work together on a computation without needing to exchange their private input data. FHE makes it possible to conduct all sorts of computations directly on encrypted data. TEEs offer a protected environment inside a processor to isolate code and data that’s been prepared.

The great beauty of DeCC is in its composability, and so it can extend beyond itself. These technologies are not mutually exclusive and can be integrated to create hybrid solutions that deliver the benefits of both. For instance, as mentioned previously, MPC can be combined with TEEs to improve trust and security. One way to bolster scalability and privacy protections even further is by combining ZKPs with FHE. This flexibility is incredibly important for being able to adapt to the wide range of needs that various applications have. It’s not about this one miracle solution which they use to dredge up around the beltway, but rather having a toolbox of solutions.

Data Collaborative Computing (DeCC), a secure computation environment, enables collaborative data processing without disclosing sensitive underlying inputs. Further, it address the potential “data in use” vulnerability quite remarkably. Preventing decryption while in use means that data is protected against insider and external threats alike, and is a major step forward.

Projects such as Fhenix (FHE), COTI (Garbled Circuits), Arcium (MPC), iExec (TEE), and Aleph Zero (ZKP) are at the forefront. Now, they are developing the infrastructure to build a more private and inclusive DeFi ecosystem. Anyone Protocol and SilentSwap are pioneers too under Decentralized Privacy Networks.

After something so historic and unprecedented, how do we make sure that DeCC really brings radical benefits for all, not just the privileged few?

Ethical Responsibility and Access

This means:

  • Building user-friendly interfaces: Technical complexity is a major barrier to entry for many. We need to create intuitive interfaces that abstract away the complexities of DeCC, making it easy for anyone to use.
  • Providing educational resources: We need to educate people about the benefits of DeCC and how it can protect their privacy. This includes creating educational materials in multiple languages and tailoring them to different cultural contexts.
  • Supporting open-source development: Open-source DeCC solutions are more likely to be transparent, auditable, and accessible to everyone. We need to support open-source projects and encourage collaboration within the community.
  • Addressing potential misuse: Like any powerful technology, DeCC can be misused. We need to be proactive in addressing the ethical considerations and developing safeguards to prevent malicious actors from exploiting DeCC for illicit purposes.
  • Actively seeking input from marginalized communities: Amina's voice, and the voices of others like her, must be heard. We need to actively engage with marginalized communities to understand their needs and ensure that DeCC solutions are designed to meet those needs.

The potential for financial inclusion is immense. Now, picture a world where refugees no longer have to worry about receiving remittances in ways that expose them to exploitation. Imagine smallholder farmers being able to access microloans but not leak their personally identifiable information to predatory lenders, and people in authoritarian countries evading economic censorship to enter the global marketplace. This is the promise of DeCC.

The legacy systems encrypt data at rest and in transit but must decrypt it during processing (“data in use”). DeCC’s goal is to maintain the data in an encrypted form, including during the computation.

Venture capital investment in DeCC is now nearing $1 billion. This momentum signals a shift. Investment alone isn't enough. We must make certain that this massive investment is used to build out projects that put social impact and financial inclusion first and foremost.

It's time to move beyond the hype and embrace the true potential of DeFi – a future where everyone has access to financial freedom and privacy. Let’s ensure DeCC is a bridge, not a barrier, to a more equitable and inclusive world. Are you with me?

Call to Action:

  • Support DeCC projects that prioritize financial inclusion.
  • Educate yourself and others about the benefits of DeCC.
  • Advocate for policies that promote responsible development and deployment of DeCC.
  • Share Amina's story and other stories of individuals who are excluded from the traditional financial system.
  • Let's build a future where privacy is not a privilege, but a fundamental right for all.