EY unveils and open sources Nightfall their solution for private transactions on the Ethereum main net
Like other privacy preserving technologies, Nightfall uses zero-knowledge proofs to enable private transactions. Unlike other solutions, Nightfall is designed to sit on top of public ledgers, in particular, the Ethereum main net. EY even created their own ERC721 compatible token for enterprises to use in conjunction with Nightfall. At the same event they announced Nightfall EY also demonstrated their additional capabilities and services built around zero-knowledge proofs, demoing audit tools to help enterprises maintain their books when using zero-knowledge transactions.
This is an unambiguous vote of confidence in three things: the Ethereum main net, open source, and zero-knowledge proofs.
First, Nightfall was built for the Ethereum main net
in contrast to existing solutions (Pantheon, Quorum, etc) for private transactions on a permissioned network. This is a clear bet that EY thinks public networks are the future, and anecdotally, EY employees were comparing public networks to the Internet and private networks to intranets/extranets at the Nightfall launch event. I tend to agree with them, and think we'll use public networks as interoperable settlement layers in the future.
Second, Nightfall was open sourced. Blockchain engineers and cryptographers that can build with zero-knowledge proofs are not cheap, and it's a big deal that EY decided to put all of that work out in the public domain. EY's global innovation leader for blockchain had this to say:
"We want to maximize adoption and community involvement, we want people to adopt it, and adapt it, and improve it. If we retain ownership, people may not invest that much time and energy in something they might not control,
EY wants this to be something the community adopts, builds on, and maintains, much like other public utilities (Bitcoin, Ethereum, 0x, MakerDAO, etc). That both makes their product better, and creates a network effect around it. To generate revenue they're betting on selling services down the road, like audit and compliance tool that work with Nightfall or similar zero-knowledge transactions.
Lastly, this sends a clear message that EY thinks zero-knowledge proofs will be an important part of the future. Avid readers of this newsletter probably already know I agree! Zero-knowledge proofs are not only a mind bending privacy preserving technology, but they are also a blockchain scaling solution.
Expect to see much more of zero-knowledge proofs inside and outside of the blockchain space in the coming years.Microsoft is shutting down its PHR HealthVault
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