An Enigma Indeed - the Enigma / Catalyst ICO

Before we actually dive headlong into the subject, it is probably worth pointing out two basic details. Enigma is a platform designed to solve a very specific problem - further details are provided below. Catalyst, on the other hand, is the first example of a product or service - a Blockchain-based quant-type trading platform, as it happens - to leverage the Enigma platform. Now that this should be clear, let's get started...

Enigma Indeed

An examination of any ICO begins with a reading of the white-paper. And we knew in advance, of course, that the Enigma and Catalyst white-papers - which are presented jointly on the Enigma platform - would likely make for interesting reading not least because of the MIT-heavy composition of the team behind the project.

What we discovered, as per our stereotypical expectation, was not so much a layman's proposition on the solutions that the project proposes (which any ICO white-paper should aim to be) but rather an ethereal, mathematical treatise on the justification of that same solution. So, that seemed to raise a minor flag - a white-paper that gives a descriptive (as opposed to a mathematical) outline of the project which then references an external source for the mathematical justification would have been more appropriate, we felt. So that wasn't a great start.

However, presenting your project within a body of mathematical language may not necessarily be a bad thing, we told ourselves. At the very least, it carries the advantage that the team behind the project can get to demonstrate how clever they are. That can be a positive in itself. The disadvantage, of course, is that one now worries that the team may not have a healthy grasp on the business aspect and how lesser mortals might perceive the project.

Layman's Perspective

I'll try to summarise here, as best I can, my understanding of the Enigma / Catalyst project from my reading of the papers. If you happen to have read the paper yourself, and want to point out any corrections or improvements, I am - naturally - all ears.

Enigma itself is designed as a generic platform which solves a specific problem relating to privacy. As we all know, when it comes to data there are unaccountable central authorities such as Facebook, Amazon and Google who bring problems to the table. Not least of these is their monopoly on private data as well as a corresponding ability to exercise discretionary control over that same data. At the other extreme, the Blockchain offers complete transparency which itself is not always a wanted thing.

On the back of this, the question becomes - is there a way we can engineer a happy medium? Say, for example, a scenario where we have ten people in a room and they each earn a salary. Imagine now that each of those ten people would like to know where they rank in relation to the other people in the room without anyone having to reveal their salary to anyone else.

Well, there are tricks that can be performed whereby each of these individuals releases his or her salary in encrypted, anonymous form to the cloud. All of these anonymously-provided salaries can then be assembled by the Enigma engine which performs the necessary calculation before it then releases the requested data - once all salaries have been submitted.

The end result is that we now have ten people sitting in a room who are in a position to know how their salary ranks in comparison to the others sitting in that same room, and we can achieve all this without anyone being able to discern anyone else's salary or ranking.

"Hang on," you say. "Couldn't this all simply be performed on the Blockchain?"

Yes, but the value brought by Enigma to the equation is that it serves as an off-platform validation service - it independently validates each of the salary figures submitted by those ten people sitting in that room to ensure that contributors are not telling porkies, so to speak. And it does so in such as way to ensure that outside observers can verify that the figure submitted by any given individual was valid without those same outside observers getting any kind of access to the salary figure itself.

The implications, then, are enormous. This means - and this is just one simple example - that we can now erect much more robust voting systems that preserve general transparency and individual privacy at a tiny fraction of the current cost that it takes to stage even a simple election.

Catalyst

So we have some insight to the general idea behind Enigma. In summary, it is a platform that offers a transparency / anonymity balance that can be leveraged by anyone who needs to solve the kind of problem outlined above. The first project on the cards to leverage the Enigma platform will be Catalyst. The Catalyst white-paper is much more digestible, and essentially presents itself as a platform for developers in the quantitative investments / algorithmic trading space who want to operate within open markets in an anonymous manner. The advantage for these traders - for the best among them in any case - is that they can expose to the world in a verifiable manner their abilities to outperform the market in a manner which preserves the anonymity of their strategies.

Faux-pas

At this stage, we started to think, then, that this concept has enormous potential. But, naturally, we were still left with a few questions because, as we've already remarked, the Enigma white-paper is not something that average mortals like ourselves can expect to read without scratching our heads.

So we went off in quest of some clarification from the Enigma / Catalyst team so that we could get a better handle on what underpins the long-term value of the associated token. The only problem was that they never got back to us. And that was our first experience in the ICO-space of being completely blanked. Naturally, we didn't particularly appreciate that.

To be fair, our attempts at communication occurred around the same period in which the Enigma team were dealing with the fallout of a $500 000 USD hacking scam. But the hacking itself was something of a red flag with indications of a lack of due diligence.

So, unable to discuss anything with the team - and we don't invest in anything unless we can do so - and given the other issues outlined above, we decided that we were not going to pursue this one. None of this is to say that Enigma is not a viable idea and will not be a lucrative coin. It's just that we don't feel inclined to invest here.