Understanding the blockchain privacy track competition pattern: PlatON, Oasis Labs and Ethereum

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The competition for the privacy track is still in progress. At present, PlatON, Oasis Labs and Ethereum are the hopeful winners.

Original title: “Privacy battle, who can fight the blockchain privacy track?” 》
Written by: Carrie, Ivy, working at Chain Hill Capital

Industry Status

As a trust solution in the digital age, blockchain technology has a certain contradiction between its decentralized transparency and the privacy required by reality. The publicly verifiable data on the chain means that data such as transactions are traceable and cannot be tampered with. When we interact in the real world and the virtual world, it is inevitable that we can trace the transaction and other information to the real Traces of identity information.

All data stored on the chain is publicly verifiable, which is a fatal problem for blockchain and smart contracts. The lack of privacy protection is unacceptable in the real world, because not only individuals want to protect the privacy of their property information and other private information, any business or organization also wants to keep their sensitive and valuable data confidential. In addition, privacy regulations such as GDPR (European Union General Data Protection Regulation) and CCPA (California Consumer Privacy Act) also indicate that the protection of personal data will become stricter. Therefore, if privacy issues cannot be resolved, cryptocurrency and blockchain cannot achieve mass adoption.

In view of the privacy problem of blockchain, the industry currently proposes the following different solutions:

Privacy encryption currency

To realize the privacy of cryptocurrency, it is necessary to keep the sender, receiver, transaction amount, and transaction IP confidential, so that this information is only visible to the participants (or third parties designated by the participants). In response to this problem, an anonymous currency branch was derived. The feature of this branch is that it is only used as a currency and does not support smart contract functions. Currently, projects in this field are relatively rich and mature, and many top projects have been launched as early as 2014. As of November 23, 2020, the current total market value of the anonymous currency sector is RMB 25.4 billion.

Data source: non-small, as of November 23, 2020

Bitcoin’s privacy infrastructure

In fact, Bitcoin was originally designed to achieve anonymity, but Bitcoin uses an asymmetric encryption algorithm, which has relatively weak privacy and anonymity, and user transactions can still be viewed by all nodes. And as the algorithm improves, UTXO can be traced to the initiator and recipient of the transaction. As a result, the privacy infrastructure based on Bitcoin also proposed some improved algorithms in the early days.

CoinJoin

The principle of the scheme is relatively simple, that is, multiple transactions of different users are merged into one transaction to cover up the ownership of UTXO. Others cannot determine from this obfuscated transaction that the address is owned by one person, nor can they determine the flow of currency. And users can perform Coinjoin operations multiple times to further hide transaction information.

The Coinjoin solution does not need to change the Bitcoin protocol and is relatively easy to implement. The disadvantage of Coinjoin is that the intermediate server can grasp the input and output addresses of all users, which has the risk of exposing privacy to a third party. At the same time, if the intermediate server is attacked, the user’s information will be easily leaked. In addition, among the participants in the coin mixing, at least one party knows who is involved in the coin mixing, or can access the mapping between addresses.

At present, there are mainly 3 privacy wallets using hybrid server tumbler: Wasabi, Samourai and Joinmarket. Users who use coinjoin need to register on the server, and the service aggregator requests multiple users to participate in the coin mixing step. Mainstream service providers such as BTCPay Server also use coinjoin-based privacy technology P2EP. Unlike conventional Bitcoin transfers where only the sender initiates the transfer from the wallet, P2EP transfer packages the sender and receiver’s input together, and the receiver also Will send extra bitcoins to themselves. Compared with simple coinjoin, the privacy performance is improved.

TumbleBit

TumbleBit is a decentralized currency mixing service. It uses a decentralized tumbler to create offline payment channels between participants. The user sends coins to the intermediate tumbler, and obtains the same amount of other bitcoins through these channels. TumbleBit’s level of confidentiality is better than coinjoin, because the interaction between individuals and tumbler is independent of each other, will not be affected by other malicious parties, and the anonymity is not limited. But to mix coins on tumbleBit, you must advance funds for the mixed coins.

Coinshuffle

Coinshuffle is an improved coin mixing solution with coinjoin ideas. The picketing mechanism is introduced, and malicious nodes can be found every time the coin mixing fails, and users can avoid malicious nodes for the next round of operations. Coinhuffle does not require additional mixing costs and can pick up low hands, but the disadvantage is that it cannot customize the mixing amount and is less efficient.

In general, all hybrid solutions are compatible with the Bitcoin system and can protect Bitcoin transaction addresses. However, all hybrid schemes have overhead problems, and the system needs to consume more computer resources and communication resources to achieve mixing.

Privacy smart contract

For the privacy of smart contracts, it is necessary to encrypt input and output data and network status to make it concealed from all parties except the user (including the node executing the smart contract). Through privacy smart contracts, sensitive data and applications can safely run in an open public chain environment, which is required for most practical use cases. Regarding the privacy issues of smart contracts, one type is based on public chain infrastructure, which solves the privacy problem of public chains; the other type focuses on privacy computing and develops basic public chains for the purpose of vertical segmentation.

Public chain privacy scheme

The underlying architecture supports the basic public chain of privacy smart contracts (or privacy dapp).

Such projects include Horizen and Particl, which were launched in 2017, and Zcoin, which appeared in 2018. The overall market value of this segment is approximately RMB 900 million. Compared with pure anonymous coins, projects that incorporate the concept of privacy smart contracts have received several orders of magnitude less attention. On the one hand, this may be different from the maturity of development. On the other hand, it may indicate that this project positioning has not been recognized by the market.

In addition, there are projects like AOS and Origo, which are not anonymous coins themselves. Origo is a distributed privacy application platform that can support both privacy transfers and privacy smart contracts. Its investment institutions include a series of well-known institutions such as Polychain Capital, Consensus Labs, and NGC, as well as Zade Capital, which has also invested in Zcoin. However, the project is not favored by the market. Compared with IEO, the price has fallen by -89.86%, and the highest increase during the period is less than 100%.

The AOS project is more suspicious. Judging from the limited disclosure of information, it is a private public chain that supports users to independently issue private assets, and can use zero-knowledge proof programming and convenient development of private DAPP. Although the market value of the project shown on the non-small account is 110 million yuan, there are only two small-scale platforms on the online exchange, so the market value is very suspicious, and the project discloses very little information.

Understand the competitive landscape of the blockchain privacy track: PlatON, Oasis Labs and EthereumData source: non-small, coingecko as of November 23, 2020, for the sake of comparison, the vertical axis here is the same as the pure anonymous currency project

Self-upgrading of existing public chains.

Ethereum has always been exploring scalability and privacy issues. A solution that the current team values ​​very much is the ZK Rollup technology based on zero-knowledge proof. Its engineering implementation such as ZK Sync looks promising. In terms of capacity expansion, ZK Sync can bring thousands of transactions per second (TPS) throughput, high audit resistance, and ultra-low latency to Ethereum. In terms of privacy, Ethereum will establish a programming framework and virtual machine environment specifically designed for smart contracts based on zero-knowledge proofs, which can greatly reduce the technical threshold for developers to develop private smart contracts.

Privacy tools and protocols for existing public chains.

This type of project does not have an independent main network and focuses on serving other public chains. For example, the privacy smart contract platform Phala Network of Polkadot will become a parallel chain of Polkadot in the future, providing privacy computing, confidential smart contracts, defi and data services for any blockchain through cross-chain protocols. The agreement now supports functions such as transaction transfer in a private environment and one-click release of private assets. With the support of Polkadot, it can become a confidential smart contract network with composability and interoperability.

There are also many privacy tools around Ethereum. For example, the privacy protocol project Aztec adopts the ZK-ZK rollup scheme to achieve hundreds of private transactions per second on the Ethereum main network, while reducing the cost of each private transaction. The Aztec protocol uses a “zero-knowledge note” system to track hidden assets. These bills (including the owner of the bill) are publicly available on the Ethereum network, but unless you are the owner of the bill, there is no way to know the amount in each bill; Ethereum’s second-layer privacy technology Zkopru combines Zk SNARK and Optimistic rollup Technology to support low-cost private transfers and atomic swaps in the second-tier network; “Nightfall” released by the blockchain team of Ernst & Young, one of the four major accounting firms, uses zero-knowledge proof that it can be used on the Ethereum blockchain Enable anonymous transactions on.

After iteration, Nightfall can be widely applied to game items and collectibles; through the open source mixer Hopper, mobile devices can conduct private transactions on the Ethereum blockchain, and users can access private accounts without revealing any public account addresses. When depositing or withdrawing ETH, it also uses zero-knowledge proofs to verify the recipient of private transfers; Quorum enables private contracts and private transactions to be built based on Ethereum, which respectively allow specifying which nodes in the network can access the contract and can execute , Other nodes cannot see the code or data of the contract, nor can they query or execute, and make the transaction visible only to authorized participants.

Privacy computing public chain

The underlying architecture supports the basic public chain of privacy smart contracts (or privacy dapp), but its native tokens are not anonymous coins.

Representative projects are projects with privacy encryption technology as the core starting point, which are generally referred to as private computing public chains, such as Enigma, ARPA, PlatON, and Oasis Labs. On the one hand, as an independent public chain, they can directly develop privacy-compatible smart contracts on the main chain; on the other hand, they can be used as a layer-2 network (Layer-2) solution for other public chains to provide any public chain Privacy computing power. In addition, the vision of these projects is to integrate with the big data and AI industries, and the prospects are very broad.

The tokens of the Oasis Labs and PlatON projects have not yet been listed on the secondary market, so it is temporarily impossible to make a market value comparison. However, these two projects have received a lot of capital attention in the primary market as representative high-quality projects in foreign and domestic markets. Oasis Labs has raised a total of US$45 million through private equity so far. Investment institutions include 36 investment institutions such as Polychain, a16z, and Binance Labs, which are well-known in the industry. PlatON has raised a total of more than 50 million US dollars in two rounds. The latest round of financing was led by Alpine Capital and Hash Global Capital, with the participation of Singapore OUE Group, Asia’s leading insurance asset management institution and other family offices. Both of these projects are still relatively early, the main network has not been officially launched, and the tokens have not yet been launched on the exchange, but their team is strong, and they focus on the technical development of the project. They have been widely praised by the community and received high praise. It is believed that both of them are likely to become the projects with the greatest development potential in this field in the future.

At present, the overall market value of this segment is 330 million yuan. The main reason is that the development of privacy computing type projects is relatively early, and the main projects that have received market attention have not yet entered the secondary market.

Understand the competitive landscape of the blockchain privacy track: PlatON, Oasis Labs and EthereumData source: non-small account, coingecko, as of November 23, 2020, for the sake of comparison, the vertical axis here is the same as the pure anonymous currency project

Market pain points

Blockchain technology has a wide range of application scenarios. In addition to cryptocurrency and payment transfer, it can also empower business scenarios in all walks of life. However, the reasons why it cannot be adopted on a large scale currently are: insufficient scalability, high cost, poor user experience, and lack of privacy protection.

Alex Gluchowski, a researcher of blockchain expansion solutions, pointed out the pain points in solving privacy issues.

Due to the following factors, it is extremely difficult to implement privacy protection on public blockchains:

  1. Privacy protection must be enabled by default as a complete protocol feature. To quote Vitalik Buterin: “Only a global anonymous collection is truly reliable and safe.”
  2. In order to enable privacy protection by default, the computational cost will increase significantly, but for privacy transactions to be practical, the cost must be very low.
  3. Privacy models must support programmability, because real-world use cases require more than just transfers: these privacy models also require account recovery, multi-signatures, payment limits, and so on.

The dilemma of security and privacy

The design of blockchains such as Bitcoin and Ethereum chose security and decentralization, which sacrificed scalability to a certain extent, making it difficult for blockchains to support heavy and complex calculations. Similarly, this design also brings security and privacy dilemmas. The open and verifiable data on the chain ensures the security of each transaction on the one hand, and on the other hand brings great troubles to the privacy protection of users. In fact, global anonymity can be achieved by encrypting data, and the encrypted data can be verified by permitted parties without complete transparency. For example, privacy technologies such as zero-knowledge proof and secure multi-party computing use cryptographic methods to encrypt data, and only the licensor who holds the private key can verify it correctly.

The scalability problem

The most intuitive experience that the sacrificed scalability brings to users is that the transaction waits for confirmation for a long time and the transaction fee is high. On Ethereum, gas fees have increased sharply due to state congestion, and the waiting time for transaction confirmation has increased. For the cumbersome calculation steps required for privacy calculations, the high handling fees will only discourage users. Therefore, some private computing projects have chosen to build their own native public chains or cross-chains that seek high-performance scalability.

Composability and interoperability

In addition to anonymity, privacy requires various blocks that support anonymity to cooperate with each other on the chain to maintain privacy in terms of interoperability such as multi-signature, account retrieval, and smart contracts. In addition, most of the current blockchain technology systems are limited to the performance and trust issues between nodes, and the further development of the blockchain requires not only performance improvement, but also the ability to combine and combine on different chains. Interoperability. Smart contracts on different chains can call each other and be parallel, and achieve sufficient data exchange and collaborative calculations to solve more complex problems in various applications.

Privacy solution

Based on the above-mentioned pain points, different projects have chosen different technical solutions. So far, there have been many proposed privacy and anonymity protection technologies, and they are constantly evolving and improving.

At first, CryptoNote, a protocol for the privacy of digital certificates, was proposed, which used hidden addresses and ring signatures to protect the anonymity of the addresses of both parties in the transaction. In 2013, a “coin mixing” technology was proposed for the privacy of Bitcoin. The currency mixing technology only increased the difficulty of tracking, and it can still be traced. In order to improve the shortcomings of the need for third-party participation and insufficient anonymity for currency mixing, anonymous coins represented by Zcash and Monero emerged subsequently. They used anonymity technologies such as zero-knowledge proof and ring signatures to protect the privacy of native coins. At the same time, two-tier solutions for side chains and channels have also been proposed.

These solutions are focused on anonymity at the transaction level and cannot be extended to Turing-complete smart contracts. Therefore, since 2018, projects on privacy computing have been launched. Privacy is not only based on user transaction privacy, but should also be extended to smart contracts to protect any confidential data in smart contracts from being leaked, and to achieve smart contract interaction. For example, Arpa uses cryptography-based secure multi-party computing (MPC), Enigma and Oasis use hardware-based secure executable environments (TEE), and Ethereum uses zk rollup to solve the problems of expansion and privacy.

The following table shows the application status and advantages and disadvantages of each privacy and anonymity technology:

Understand the competitive landscape of the blockchain privacy track: PlatON, Oasis Labs and Ethereum

Comparison of mainstream privacy technology details

The first three solutions in the above table are more based on transaction anonymity, and it is difficult to achieve good security and 100% anonymity. In terms of privacy computing, cryptographic-based technologies include fully homomorphic encryption (FHE), multi-party secure computing (MPC), and zero-knowledge proof; hardware-based solutions mainly include trusted execution environment (TEE) and other technologies.

The security and credibility of the multi-party secure computing MPC is based on cryptography, and the security is verifiable. Its landing is mainly concentrated in small scenarios, and it processes sensitive data with specific algorithms and high security requirements. However, its computational flexibility is limited. As the number of participants increases, the computational efficiency will further slow down, and there is a problem of communication burden in practical applications. The current multi-party secure computing can reach a single operation in milliseconds. However, in the big data scenario, a data application or model training involves tens of thousands of data samples, and the computational efficiency and communication burden are the bottlenecks hindering the development of MPC. Moreover, for application scenarios that need to perform complex computing tasks, MPC is currently difficult to handle, and it will take several years to optimize.

Fully homomorphic encryption is still based on the theoretical stage and is relatively backward in terms of credibility, flexibility, and efficiency. In actual use, the efficiency is too low, and the construction method and implementation technology are complicated, and it is not yet suitable for large-scale commercial applications. The existing FHE scheme mainly uses homomorphic decryption technology to reduce the problem of ciphertext expansion, which can indeed overcome the problem of computational boundary theoretically, but it is very complicated from the perspective of implementation. In addition, security and applicability issues must also be considered. At present, most homomorphic encryption algorithms cannot effectively resist attacks of adaptive ciphertext selection, and the highest security level can only achieve resistance to selected plaintext attacks.

The trusted execution environment TEE has actually been applied on a large scale, such as fingerprint unlocking and biometric identification on mobile phones. TEE is based on trusted hardware facilities. It relies on the trusted environment of hardware and centralized hardware vendors for security. They need to make trusted assumptions about the hardware and may face side channel attacks (SCA. Password attack method to obtain secret information in the device). Its advantage lies in higher flexibility, friendliness to general calculations, and faster speed. The technology construction is relatively mature. Compared with other privacy computing solutions, the comprehensive strength of TEE is closest to the practical scenario.

Zero-knowledge proof is the most credible and can achieve complete anonymity, but some protocols also require credibility settings and rely on the generation of special random numbers. Flexible data calculation interaction and cross-validation can be realized, but it is still difficult to achieve. At present, the efficiency of generating a proof is about 7 seconds, and a large amount of computing power is required to increase the calculation rate.

The following table is a detailed comparison of 4 privacy encryption technologies:

Understand the competitive landscape of the blockchain privacy track: PlatON, Oasis Labs and Ethereum

The different technologies in the above table have their own advantages and disadvantages. What needs to be pointed out is that privacy solutions should be based on requirements. It is not simply a matter of judging which technology is more advantageous or similar. It can only be said which technology is more suitable to solve the problem in the above-mentioned scenarios. Therefore, these schemes are not contradictory in themselves. In some scenarios, the combined use can achieve better results.

market prediction

The dilemma of anonymous coins

The privacy project in the early stage focused on the privacy currency scene. Monero is the well-deserved leader in this field, and it is the first choice for privacy transaction users. For example, privacy anonymous coins such as Monero and Zcoin can achieve functions that are more difficult to trace than Bitcoin, but their privacy use cases are limited. Most of their use cases are focused on things like illegal transactions, and the transaction base requires liquidity and acceptance, and many people are required to use it. This is valid for Bitcoin, because Bitcoin is more liquid.

Indeed, in the application scenarios of hacking incidents, illegal transactions, blackmail and other gray areas, the use of Bitcoin still far exceeds Monero. Therefore, anonymous coins may never be able to surpass or replace Bitcoin, and as Bitcoin’s own privacy improves, anonymous coins may lose more market share. Therefore, for anonymous coins, only the top projects have room for survival, such as Monroe, which is the most practical and well-known, and Zcash and Dash, which are more technically powerful. The competitive landscape of privacy currencies has basically taken shape. It is difficult for the privacy coins at the end to break through the situation, either they die out, or they can only find another way out.

For example, Beam recently launched a new feature for the issuance of stablecoins with private transaction attributes. Exploring defi’s diversification strategy is the way Beam must survive, but the chances may still be slim. In addition, regulatory risks also impose great constraints on the market space of anonymous coins. According to Chainalysis, a well-known blockchain analysis organization, the interest and demand for blockchain investigation technology in law enforcement agencies and government agencies around the world is growing.

In June 2019, FATF (Financial Action Task Force) issued a cryptocurrency regulation bill requiring exchanges to collect and transmit customer information during transactions. This information includes the name, account number and address information of the transaction initiator, and the name and account information of the recipient. This is equivalent to hitting the fate of anonymous coins. Once the G20 adopts the same new FATF regulations in its member states, the exchanges of most mainstream countries may delist anonymous coins. Recently, the company signed a controversial contract with the government agency IRS to help the IRS agency track Monero. The CEO of Chainalysis believes that the future of anonymous coins such as Monero is limited.

In terms of supervision, anonymous privacy coins have encountered the biggest obstacle, and privacy protection needs to find another way out.

Ethereum continues to grow

In the public chain infrastructure, the privacy of Ethereum adopts zero-knowledge proof technology, which can not only bring dozens of times the performance improvement of existing Ethereum, but also solve the overall privacy problem for Ethereum. At present, there are many privacy infrastructure projects on Ethereum. For example, the AZTEC protocol uses zero-knowledge proof, which is very efficient in terms of scalability and anonymity. The landing of Aztec can bring a private decentralized exchange to Ethereum. Ability to trade different Aztec assets in complete confidentiality; private weighted voting, in financial applications such as community autonomy, to protect the privacy of voters; an anonymous identity sharing scheme, which can prove identity without revealing identity. The expansion of these applications plays a very important role for smart contract interaction on Ethereum, and true anonymity may become a reality. The scalability and privacy issues of Ethereum are gradually being resolved, and with the powerful application ecology that has been formed so far, other public chain projects will be difficult to match.

The development of vertical segmentation

In addition to the continuous development and improvement of the public chain itself, privacy computing also has a place in segmented fields. In 2018, a number of projects focusing on privacy computing have emerged: arpa, oasis labs, PlatON, phala network, etc. They use cryptography or rely on trusted hardware to provide privacy protection for the blockchain. The use cases of these projects are no longer limited to the privacy protection of data on the chain. Their emergence fills the gap in the privacy of data in the computing link, creating more use cases for the real world. At present, the commercial value of privacy computing is prominent in the global data market. There are many vertical segments in the data market, such as data transactions, AI, big data, cloud computing, etc.

In the current data transaction encryption market, most projects chant the slogan of breaking data islands, but this is actually a false proposition. The premise of data trading is that the data has a clear division of ownership and usage rights, and the user’s information can be controlled by itself. If the data source and use are not clearly directed or permitted, the data can be reprinted and reproduced at will, resulting in data redundancy or random forgery. Therefore, when building a data market with good positive incentives, it is first necessary to build a trustworthy privacy protection mechanism to standardize data collection, clarify ownership, make information private, and make transactions transparent. In this way, data can become a user’s asset rather than an accessory, and data islands can be truly resolved.

The AI ​​industry is one of the industries that have the most exposure to data in existing commercial applications. However, the entire AI market has encountered a big bottleneck: the data is relatively scattered. In order to improve the accuracy of the entire model, it is necessary to obtain as much data as possible; The issue of privacy makes it increasingly difficult to obtain user data. The problems caused by this “contradiction” have become prominent in the AI ​​industry. Privacy computing can alleviate the “contradictions” in the current AI market to a large extent, so there will also be larger emerging markets.

At present, the general business model of the Internet industry is to use lower cost to collect costs, and then use big data analysis to create and realize data. For example, if you click on a product on social media, a certain treasure or a certain number will promote the product on the homepage. Undoubtedly, the user’s data is “passively” stripped of ownership at the beginning of using the product. This data is stored on a third-party platform and continues to create profits for the platform, but users are exposed to the risk of information leakage. Blockchain privacy calculations can be well cut into it. Privacy calculations can first encrypt the user’s original data and then perform big data calculations. At the same time, it provides economic incentives to users who provide data. Data demanders can purchase and construct data. A data market with positive circulation and incentives.

However, the current privacy computing technology still has the bottleneck of high cost and low efficiency. In scenarios such as big data and AI, the sample size for training a model may be around 100,000, and the feature amount may require more computing resources. A large number of calculations result in low efficiency, and it may take several years for actual commercial implementation. carry out.

Comparison of privacy items

Understand the competitive landscape of the blockchain privacy track: PlatON, Oasis Labs and Ethereum

Summary

Privacy security technology has received great attention and development in the blockchain field, and many projects have chosen different directions and paths according to their own characteristics and technical capabilities. In theory, HE, NIZK and MPC can all achieve good privacy protection, but there is still a lot of room for optimization in terms of efficiency and cost. At the same time, the development of these technologies is also difficult. For example, Enigma, which originally planned to use secure multi-party computing, has listed MPC as its core technology in the white paper, but TEE technology has been widely used in practice so far. Although TEE is temporarily ahead in terms of efficiency, it compromises security and privacy.

In general, the development of privacy and security technology for each project is still in the stage of continuous R&D and engineering realization, and it needs continuous iteration and testing. There is still a long way and a lot of work to be done before the real landing. Combining the pain points of privacy issues mentioned above, we need to pay attention to the development of each project in the following aspects: 1) How to better connect privacy technology and underlying protocols, so that privacy protection becomes the default complete protocol feature; 2) Continuously Optimize efficiency and cost to achieve practicality; 3) Support programmability, be more friendly to developers, and promote a wider range of business scenarios.

The competition in the privacy track is still ongoing. Although it is still unknown which technical solutions and projects will eventually win, PlatON, Oasis Labs and Ethereum are the most promising.

In the end, the competition on the privacy track will still fall on general privacy. Among the three development directions and strategies mentioned above, the most promising ones are the private computing public chain with core encryption technology and the self-upgrading of the existing head public chain. The reasons are as follows:

  • Having core encryption technology, on the one hand means that the project uses the most cutting-edge encryption technology, but more importantly, the core team must have relevant technical strength. So far, PlatON and Oasis Labs meet this condition. Through private computing, these projects can meet the computing resource requirements of high-intensity computing and solve the problem of data sharing, thereby empowering the AI ​​and big data industry, making it a vertical public chain that deeply cultivates these two fields. Their strategy not only does not need to directly compete with existing public chains, but can also be used as a second-tier solution for other public chains, exporting private computing power to other public chains, which makes their competition more flexible and diversified.

  • The private computing public chain starts with the core encryption computing technology to explore more dedicated and general application scenarios, while Ethereum adopts another strategy. For a long time, Ethereum has adopted a gradual protocol upgrade route to solve key problems step by step. In the initial stage, it has accumulated first-mover advantages and ecological advantages based on security and smart contracts as its core competitiveness, and has become a well-deserved head basic public chain; in subsequent iterative upgrades, it will slowly solve scalability Questions and privacy issues. At present, Ethereum has found a breakthrough in scalability and privacy issues through ZK Rollup. If it succeeds in iterative upgrades, then for most public chains, a winner-takes-all situation will be inevitable.

  • Compared with the head public chain and the privacy computing public chain, the technical capabilities of the core team of other private smart contract public chains are slightly weaker, and the project planning is more at the conceptual stage; and even less in terms of developer and user ecology. With a competitive advantage, due to the strong network effect of the basic public chain, it is difficult for these tail projects to attract developers within and outside the mature public chain ecosystem, and it is extremely difficult to stand out.

  • As for other privacy tools and protocols, they are more like transitional solutions, which may have certain practicality and value at a certain stage, but will be replaced in the long run.

In summary, privacy is one of the important basic issues of the entire industry. The fastest project to achieve technological breakthroughs and provide complete solutions can gain a firm foothold in the entire infrastructure competition. Judging from the current competitive landscape, the most potential projects on this track are projects with core privacy technologies and projects with the strongest comprehensive competitiveness. The former is expected to become a decentralized cloud computing for computing-intensive industries, while the latter may become a decentralized global computer that supports a wider range of business scenarios.

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