Risk of Blockchain Privacy Leakage

At present, users are increasingly concerned about privacy protection, and many well-known companies have been reported to have leaked a large amount of user privacy data, including Yahoo, Uber, Paypal, American credit agency Equifax, and the British National Health Service (NHS). and so on. The relevant leaked data involves tens of millions to hundreds of millions of users. Facebook also lost tens of billions of dollars in market value in two days because of its largest privacy breach in March 2018, and may face a sky-high fine of up to four times its market value.

We are glad to see that some teams are now paying attention to the decentralized network's privacy protection. Notable projects include Zcash, Monero, and Dash.

From the perspective of the latest technological development, using the latest cryptographic algorithms to ensure privacy functions, such as a non-interactive zero-knowledge proof mechanism (NIZK), is one of the most promising improvements. However, introducing an encryption mechanism requires significant changes to the underlying protocol and consumes more computing resources, which affects the efficiency of blockchain applications. Therefore, the introduced privacy protection mechanism must fully consider the performance, efficiency, and cost of nodes in computing and storage.