I have had the habit of being skeptical after conducting sufficient research on crypto infrastructure. The business is replete with grandiose statements. Each new protocol vows to improve scalability, revolutionize finance, create a new form of governance, or develop the principles of the next digital economy. However, on closer examination, most of these systems are merely variations of already existing ideas, with new stories being retold.
And that is why when I stumble upon a project which purports to have something inherently correct, I feel no excitement first. It is enquiring and questioning. I will attempt to take a step back and pose a simple question of whether the problem they are attempting to solve is real.
I believe it is in the instance of blockchain transparency.
Radical openness was made the foundation of public blockchains. All transactions are not only transparent but their history of wallet interaction can also be tracked, but all activity is recorded in a shared registry. It is transparency with which the decentralized systems were ever available, in the first place. Any person will be able to check conformity to the rules by himself or herself.
However, the further into the future I read about the applications of blockchain in the real world, the more I find a tension lurking within that design.
In the real world, most systems are not able to work in a transparent manner.
Banking institutions are unable to publicly lay bare internal flow of transaction. Healthcare systems cannot post the patient data on a world registry. Companies are not allowed to disclose supply chain accords or trade secrets to any individual that may inspect the chain.
The same characteristic that renders blockchains credible transparency can render them irrelevant.
It is this inconsistency that made me begin to pay a closer attention to Midnight Network. It was not a glittering statement, or a marketing story that I found interesting. This was the question that the project appears to be asking: how can decentralized systems be used to authenticate information without compelling people to tell it all?
That could be an imperceptible change, but I believe there is a more advanced concept of architecture in it.
Midnight questions the possibilities of cryptography to enable the verification without exposure, instead of assuming that all data has to be public in order to verify truth.
The most important technology of this solution is Zero-Knowledge Proofs. I was responsible to the concept of this idea when I was a student learning privacy research in cryptography and the idea is remarkably simple.
Zero-knowledge proof is a kind of a demonstration where the person can demonstrate that something is true but does not provide the information that demonstrates it.
That initially sounds almost a contradiction. But consider a situation where I have to demonstrate that I satisfy a particular condition say, that I have enough money or that a deal is made in accordance with regulatory provisions. Rather than making the entire dataset accessible given that assertion, the system does create a cryptographic confirmation that the demand has been met.
The blockchain confirms the evidence, and not the raw data.
This is in theory the possibility of a decentralized network validating transactions, contracts, or compliance conditions without revealing the sensitive information.
That is the structural direction which Midnight seems to be setting out towards.
The network is not a pure ledger, but it resembles more of a verification layer. The chain ensures adherence to rules and also privacy of underlying data by participants.
When I consider the areas where the such system would be relevant, I think of several areas.
An apparent example is the healthcare. Patient data, credentials, and research results should be verified at any time in medical systems without subjecting patient privacy. It would not be possible to publish all this to some publicly accessible blockchain. However, it could be of immense importance to verify the integrity of data without disclosing the data.
This is the same with institutional finance. Regulated financial systems and banks need to demonstrate the ability to ensure that the rules are complied with and that the data of the customers is secured. Privacy checks might be able to enable blockchain infrastructure to run within those settings.
Such systems may also be needed by artificial intelligence systems even in the future. Since AI models rely on big data, data provenance or computational integrity checking without revealing proprietary data may become more significant.
Nevertheless, I attempt not to be carried away by the appeal to the concept.
Any cryptography that is pretty on paper eventually raises real world issues.
As an example, computational complexity can be added to zero-knowledge proofs. The creation and validation of proofs use resources and efficient scaling of those systems is an ongoing research problem.
The other unknown is the developer adoption. The most innovative infrastructure cannot perform even when developers have trouble developing it. It is tooling, documentation and ecosystem support that can make or break whether or not a network can be useful.
Then there is itself the trust model. Even a privacy preserving system uses validators and nodes to verify proofs and ensure consensus. The network should make sure that the verification is secure even in the cases when the underlying data is obscured.
These working specifics tend to define the transition of an architecture into reality infrastructure.
Midnight is also economic with its native currency, NIGHT, that facilitates the coordination of the participants who keep the network running. Similar to the majority of blockchain tokens, it is probably an incentivization system among the validators and processing of transactions. However, the design of tokens will not ensure success by itself. Even the well-established token systems would be hypocritical without meaningful use.
After all, it remains to be seen whether Midnight is going to end up as a popular infrastructure layer. Most of the technically promising protocols fail to gain the momentum in representation of the ecosystem.
I do believe however that the issue it is investigating is factual.
In the event that the blockchain technology will see its extension beyond the transparent financial ledgers to some wider digital infrastructure, it will have to, sooner or later, work with sensitive information in a responsible manner. Without exposure verification can be rendered a feature that is required instead of something on the niche.
This is why I see Midnight in my research notes.
It is not because I believe that it will be successful but because the question it is posing seems significant.
@MidnightNetwork #night $NIGHT
