The Future of Financial Privacy and Blockchain

June 22, 2021 inThoughtby Findora

By Lemon Lin – Marketing Lead, Asia

Findora is an open public blockchain created for financial privacy, so the topic we are discussing today is privacy. This year can be said to be a golden year for the privacy subsector of computing and blockchain in particular – as the experts agree that data protection will grow in prominence within the field of computing and blockchain, in 2021 and beyond.

Back on February 10th earlier this year, Barry Silbert, founder of Grayscale and founder of DCG, tweeted, “2021 will be the year of privacy protection, decentralization, and resistance to censorship.”. On January 13th 2020, Gartner published a report on ‘the Future of Privacy’ in which the author Bart Willemsen, analyst, predicted that “privacy-first” would become an industry-standard label applied to technology products reflecting a cultural shift in consumer and institutional demands.

The rise of privacy as a priority focus for blockchain networks and cryptocurrencies is a natural evolution which resolves the relative lack of privacy or tracing-prevention features on first and second generation blockchain networks, like Bitcoin and Ethereum. The market leadership of these blockchains has since been challenged by an increasing trend of blockchains with privacy in-built as a default “for-granted” feature at a fundamental design level.

A Brief History of Privacy Blockchain

Privacy is a topic that has been in the spotlight within the crypto space for a long time with the first blockchain protocol to address privacy issues appearing back in December 2012, the CryptoNote protocol, which primarily utilizes privacy address and ring signature technology. In 2013, what followed was the emergence of Coinjoin technology which was created to enhance the privacy of BTC, based on the “hybrid coin” technology.

Cryptocurrencies such as Zcash and Monero use cryptography to protect the anonymity of pass-through transfers. However, the limitation of these systems is that transactions only prove the validity of simple transfers of native cryptocurrencies, but not more nuanced statements and auditability is lost. Therefore anonymous blockchains also do not provide the compliance requirements needed to deploy financial applications.

Anonymous blockchains like Monero have not been able to integrate well with finance because they have not been able to solve the relationship between privacy and auditability. Transparency and open participation are the cornerstones of blockchain-based finance. 

This is a far cry from the Findora vision of privacy – as the teams are creating a network protocol and toolkit for developers to create platforms which are fully auditable and compliant with regulatory standards. The intention is for the governors of decentralized data structures to cooperate with authorities and third party regulators when necessary – rather than to draw their ire.

How Findora Solves The Privacy-Transparency Dilemma

Findora is built from the ground up and supported by a strong team to solve this privacy and auditing problem without compromising on its privacy-preserving promises, using state-of-the-art cryptography and distributed large-scale systems engineering techniques to enable the creation of decentralized financial services that operate transparently. The goal is to make Findora available to anyone in the world, whether an individual, an SMB or an industry giant.

A self-sovereign, privacy solution for financial applications and more, the Findora protocol is highly-scalable with low operational costs which features an advanced toolset for issuing and trading confidential assets which can be transacted between private self-custodial account holders. More features are currently being developed for future release such as programmable smart contracts and the ability to create dapps.

Privacy on Findora is guaranteed due to zero-knowledge proofs, which are stored on the Findora blockchain instead of the actual data pertaining to the transaction itself – these are cryptographically verifiable proofs which contain a reference to the relevant data (which is stored off-chain on private client servers). This means that one party may prove to another that a piece of data is true without the need to reveal the information or have it stored on a public blockchain.

The contributing teams of Findora have extensive collaboration with the world’s leading cryptography experts and our comprehensive cryptography library includes implementation of the latest zero-knowledge proofs such as Plonk, Bulletproofs and Supersonic. Dr. Whitfield Diffie, 2015 Turing Award winner, provides direct Findora Advanced Institute consulting services.

Discreet Labs and The Findora Foundation will help to build the first Findora ecosystem projects along with third-party developer teams around the world, as well as the building of a developer community that empowers individuals and institutions to create an unlimited number of decentralized financial applications.

The teams behind Findora strongly believe that a large percentage of total global transactions will be moved to the blockchain. We are already working with partners to help small and medium-sized businesses migrate to a cloud-hosted blockchain-based transaction system. Such systems are configured as subnets of the Findora public blockchain, and the more we are adopted, the more market momentum and support for our Findora master chain and pass-through utilities will increase.