The Enigma Crypto Protocol; Bigger Than Blockchain

advanticle (42)in #cryptocurrency • 6 years ago

Every single day I wake up excited about the possibilities and promises that blockchain technology brings to the world. The need for decentralization and breaking down of many of the deeply embedded legacy power structures throughout the world is one of the biggest tasks society is currently facing.

I firmly believe that cryptocurrencies and blockchains are a step in the right direction to finding the answers that are needed to the questions of what comes next.

Even though I’m certain that these technologies do provide emerging solutions to many problems we’re currently facing, we are still very early in the development of these technologies.

There are lots of limitations with the technology we have currently that must be addressed before we’re able to see the true possibilities of this technology shine through and impact the world in the way we know it can.

This is one of the central reasons I'm constantly writing and talking about the platform and infrastructure plays being the smartest investments in this space for the foreseeable future. Beyond what I have been communicating here, if you look around you'll see that many others are also calling 2018 The Year of the Platform.

You see, in order to build all these incredible dApps that we’re all waiting for, we need to first lay down a proper foundation that allows for them to be possible in the first place.

A lot of attention is being paid to many different dApps that are coming out and raising money through ICOs. Some of them are very ambitious, and even overtly ambitious for the current state of the blockchain.

The simple fact of the matter is that there are two major issues that need to be solved before many of these dApps will be able to be developed and functional in their peak form. Two of the biggest issues in the space right now include scalability and privacy.

It’s not a coincidence that these are two of the biggest buzzwords you’ll hear in the cryptocurrency space these days; they really are two of the most important issues that need addressing in order for progress in the space to be made.

Some of the Not-So-Small Problems

A lot of people assume when first getting into the crypto space that blockchain technology provides privacy by default. I mean hell, the news told you that Bitcoin was only for drug dealers wanting to use it for the “untraceable” and anonymous payment solution that it provided. Of course, the opposite is actually true.

Blockchains provide an open and permissionless ledger that anyone has the ability to access, view, and interact with. That’s right, you can see every transaction that has ever taken place on the blockchain. The blockchain is by no means anonymous, it is, in fact, pseudonymous, meaning that at this point in time there are no distinguishable identifiers that link any single person to any number of transactions.

Give it a few more years and the collection of data over time will soon uncover whose who with the right computing power. Thus, we have the argument and use case for privacy coins.

The fact that data is stored on most blockchains and is completely transparent has both positive and negative aspects to it. On the positive side, this allows for any user of the network to easily validate all transactions and creates a high level of trust in the system.

However, the downside is that the open nature of this system means that any applications that need to maintain strict privacy controls with the data they interact with can’t be run on any of the current blockchain solutions out there today.

The problem with scalability we’re experiencing is also largely due to the open and permissionless nature of the blockchain. One of the key goals of many public blockchains is to become continuously decentralized, and have as many network participants taking part in the network as possible. But in order for this to work, the highest possible level of security must be maintained as more participants enter the network.

What this means is that with most blockchains today, every single node has to process every single transaction that takes place on the network. What this results in is incredibly expensive and slow computation, and ultimately this leads to the situation we’re in today. Most applications can’t be run efficiently or in a cost-effective manner on blockchains.

Enter Enigma

Enigma, trading with the ticker ENG, aims to address these two huge issues with one of the most ambitious and important projects in the cryptocurrency space today. Now, pay close attention, because I believe that Enigma is without question the very definition of a great platform play, and what I believe provides an incredible opportunity to get into something huge early.

Now, this is a very technically advanced project led by a rockstar team of MIT computer scientists, but I’m going to break it down for you in a simple way so your brain doesn’t start melting as you read through all the crazy equations they’ve got in their white paper. Stick with me, because this is revolutionary stuff!

enigma-crypto-www.techmagy.com_-1.jpg

What Enigma is creating is a platform protocol that they believe will be able to power an ecosystem of truly decentralized, worldchanging applications. And after digging into how the technology works and the team behind it, I have to say I believe that they’re building something capable of doing just that.

The Enigma crypto platform provides a unique mix of using the blockchain, an offchain network of nodes that perform secure multiparty computations, and a new type of smart contract called 'secret contracts'. Combined, these are able to address the issues of privacy and scalability plaguing the industry today.

Secret Contracts

Let’s start with talking about secret contracts. Now we all know how awesome smart contracts are for many applications, but they also have a huge limitation. Smart contracts are public and all information held in the contract is passed to all the nodes on the network and is open for all to see. This means that many types of applications in industries such as healthcare, finance, lending, and many more are not able to use smart contracts currently because of the strict requirements around data protection.

Enigma’s secret contracts operate like standard smart contracts, except there is a built-in privacy layer that allows the contract to operate with private data. The secret contract has code that is partially executed on the public blockchain, while the remainder is executed on Enigma's decentralized offchain privacy computation network. The public blockchain stores auditable proofs of correct execution for the code executed on the offchain network of nodes.

Now when you store data within Enigma, the full data is never available on any one node. Instead, unintelligible bits and pieces of the data are held on each node and if you only had the data from one or even a couple of the nodes, you wouldn’t be able to figure out what the data means or where it’s from. Similar to the concept behind the Interplanetary File System, this novel concept is how the Enigma crypto platform maintains privacy and increases scalability.

Solving Scalability

You see, with this system, there’s no need for every node to process every transaction. In fact, most of the computations are produced offchain and each node only processes one specific part of the overall transaction. Anyone that wants to participate in the Enigma crypto network and run a node is welcome to.

To run a node, you must first stake some of your ENG tokens so that you can prove you’re not a bad actor. As a node, you will be assigned secrets tasks to process and validate in the network and you will be rewarded with ENG for processing these transactions. ENG tokens are currently an ERC20 complaint token, which is expected to switch to its own blockchain in 2020 and retain the ERC20 complaint framework to enable ease of programming within the Enigma Protocol.

As more nodes enter the network, it gets more powerful and more decentralized. If you are running a node and try to cheat the system or act dishonestly, you will lose the ENG that you originally staked. This helps keep the system honest and decentralized, while also bringing a new level of true privacy by default to blockchains, as no node in the system ever has access to all data.

Enigma’s solutions to the issues of scalability and privacy are truly unique in the industry, and they have amazing potential. This is a project that is likely a couple of years away from reaching its full potential, but it’s one we should all be rooting for in order to help create a truly private and decentralized system of apps.

If you want a deeper understanding of the technicalities of the protocol and how it all fits together, I would recommend diving into the white paper. Read it a couple of times to take it all in. But for now, let’s talk about just how awesome the team behind the Enigma crypto project is. Seriously, they’re impressive.

The Enigma Team

Before we get into the whose who of the team, I just want to say that I'm surprised that this is the first crypto to take on the name Enigma with the legacy that is the Enigma machine. Enigma was born at the Massechutis Insititute of Technology (MIT), one of the world’s top tech universities, when a team of researchers and developers there got very interested in cryptocurrency back in 2015.

The CEO and cofounder, Guy Zyskind, is a serial entrepreneur that had found much success in the business world before going to MIT to get his Masters. The Enigma crypto project was actually inspired by his Master’s Thesis 'The Efficient Secure Computation Enabled by Blockchain Technology', which broke down the system for scalability and privacy in blockchain based systems that eventually would become Enigma.

His foundations also include being a Research Assistant at MIT Media Lab, serving for a term as an Instructor at MIT, CTO of Athena Wisdom, Co-Founder and CTO of Tamkix, Co-Founder of CityOwls, a run of over 2 years as a Software Developer with SAP, and the Vice Editor in Chief, and Director of Reviews at HW Zone. Guy brings with him a breadth and depth of technical and leadership skills to the Enigma crypto project.

The Chief Product Officer and Co-Founder, Can Kisagun, was the CEO and Co-Founder at Eximchain, Product Manager Intern at DataXu, Founder and CEO at streetdust, and Business Analyst with McKinsey and Company appears to bring with him a wealth of knowledge and applicable skills.

Most noteworthy in my opinion is his time at McKinsey and Company with the foundation laid for the needs at Enigma. I see this as being pivotal to his position from a leadership perspective in that he clearly knows what needs to happen at the ground level in order for the Enigma crypto project to succeed.

Bringing together a team of Software Engineers that have a collective experience that most blockchain projects would be enviable of, the Enigma team is solid. Doing a deep dive into their GitHub you'll see that there is consistent progress being made by the team here, which is always a good sign, and one of the primary indicators I look towards.

The roll call for the Enigma crypto team just gets stronger and stronger from there with Advisors from MIT, Pantera Capital, Circle, and TwoSigma just for starters.

The Enigma Roadmap

This section updated 25th March 2018

This is where the rubber meets the road with Enigma, the foundations laid back in 2015 have seen the progression towards the 'Discovery' stage of 2018. This is set to be an exciting time for the Enigma team as they get their hands dirty with Secret Contracts on a level that they haven't before. This element of their roadmap upon fulfillment will see an end to end dApps being able to facilitate processes that they have never been able to before due to the sensitivity of data within smart contracts.

Image Source: Medium

Moving into 2019 with the 'Voyager' phase of their roadmap, the Enigma team anticipate that the deployment of their VM will enhance privacy even further. As a pivotal step towards chain independence, the Enigma Protocol will see a simplified consensus model which is expected to be a primary component of tackling the scalability issue head-on, thus ushering in the 'Valiant' phase.

Culminating in 2020 under the 'Defiant' phase, the Enigma crypto team will see the project operate completely independently of any other blockchain system. You would be forgiven for thinking that once we hit 2020 that everything has been achieved for the Enigma Team, far from it. The plans going forward from 2020 are all reliant upon the 2020 objectives being achieved. Once the Enigma Protocol os up and running with their training wheels off, real change will begin to be seen in this emerging space.

Where Do I Believe Enigma Is Heading and Why?

ENG recently traded at an all time high of $8.20 on January 11th and I believe it will be able to get back there when the blood in the streets stops flowing. This may be around the end of Q2 or midway through Q3 2018, and will see ENG grow by more than 400% on the current position. I believe that over the next year ENG has the potential to see between 5 and 10x gains.

If they are able to successfully complete their ambitious roadmap the project has the potential to see 100x gains. Providing true privacy and scalability in one project in this space could see the Enigma crypto project compete for dominance with the likes of ETH and EOS.

It's a little too early to say from a TA perspective with the shallow data on ENG, however, it looks like the $2.00USD level seems to mark a basis of support and resistance for ENG if you look past the parabolic activity of December 2017 to January 2018 as outliers in this timeframe. At the time of writing, ENG is holding steady in the top 100 at position 91 and trading at $1.74, which in the current market is a fair way down from where we were a few weeks ago.