How Arcium is securing the decentralized web

Your financial transactions, medical records, and personal information should be completely secure, even as they flow through the internet.

Recently, data privacy has become a growing concern. As the reliance on cloud-based services and decentralized applications increases, your personal information is more vulnerable than before.

Traditional encryption methods simply aren’t enough — they protect data at rest and in transit, but leave it exposed during processing, the very moment when it’s most at risk

In web3 you can collaborate with others on groundbreaking projects without ever exposing your private data. This is the promise of confidential computing, and Arcium is at the forefront of making it a reality.

In this article, I’ll explore the future of data privacy, and how it’s being built on the foundation of Arcium’s confidential computing network.

The current state of data privacy and security in Web3

Web3 focuses on privacy-enhancing technologies and decentralized architectures, aiming to give users more control over their data. Unlike Web2, where centralized entities often control and monetize user information, Web3 prioritizes user ownership of data and digital assets.

User data is distributed across a network of nodes, reducing the risk of centralized data breaches. Individuals have direct control over their information through blockchain technology and smart contracts.

web 3.0 benefits

The blockchain creates immutable records of transactions, making unauthorised alterations difficult. Advanced cryptography is employed to protect user data and transactions. Also, users can operate under pseudonyms or with greater anonymity compared to Web2 platforms.

However, Web3 also presents new privacy challenges. Users are responsible for securing their private keys, which can be daunting and risky if not properly managed. The information recorded on public blockchains is typically permanent and visible, potentially compromising privacy. The technical nature of Web3 technologies can be challenging for average users to navigate securely.

Regardless of these challenges, Web3 is still seen as a potential solution to many of the privacy and security issues prevalent in Web2. It aims to create a more secure, equitable system of privacy and individual data ownership. As the technology evolves, there is a growing focus on developing user-friendly solutions to address these challenges and make Web3’s privacy benefits more accessible to a broader audience.

Understanding confidential computing

There’s a popular saying, “Data is king”. However, with great power comes great responsibility, especially when it comes to protecting sensitive information. Traditional encryption methods excel at securing data at rest (stored on a device) and in transit (travelling across networks). Sadly, a critical gap exists — protecting data in use, when it’s being processed and analyzed. This is where confidential computing steps in.

confidential computing

Confidential computing is a technology that safeguards data during computations. It creates a secure shelter within a computer’s hardware called a Trusted Execution Environment (TEE).

A TEE is like a locked vault within the processor. Data entering the TEE is encrypted, and only authorized code can operate on it. The results come out decrypted, but the original data itself remains hidden within the vault, invisible to anyone, including the cloud provider or operating system.

This approach fundamentally differs from traditional encryption methods.

Why confidential computing matters now more than ever

The world is growing with different technological advancements, and the amount of data we generate is exploding. This surge in data, coupled with the increasing sophistication of cyber threats, necessitates a more robust approach to data security.

As more organizations move to cloud computing environments, the need for robust data privacy and security measures has become critical.

Confidential computing offers several benefits that are increasingly important.

• Enhanced security: Protects data in use. Confidential computing reduces the attack surface and mitigates data breaches and unauthorized access risks.
• Regulatory compliance: Helps organizations meet strict data privacy regulations by ensuring that sensitive data is protected throughout its lifecycle.
• Trust in cloud services: Assures businesses that their data is secure even when processed on third-party infrastructure, encouraging the adoption of cloud services for sensitive workloads.
• Collaboration and innovation: Enables secure data sharing and collaboration across organizational boundaries without compromising privacy, enabling innovation in healthcare, finance, and artificial intelligence.

Introducing Arcium

Arcium is a pioneering parallelized confidential computing network designed to bring confidentiality to every on-chain application in the Web3 ecosystem.

The network’s mission is to become the global computing infrastructure for the decentralized internet, providing developers and applications with a trustless, verifiable, and efficient framework to run encrypted computations.

By enabling secure data collaboration across industries like blockchain, healthcare, and artificial intelligence, Arcium seeks to address the growing need for privacy-preserving technologies in the digital age.

Key features:

1. Multiparty Computation eXecution Environments (MXEs): These form the backbone of Arcium, combining Multi-Party Computation (MPC), Homomorphic Encryption, and Zero-Knowledge Proofs to enable encrypted computations.
2. Highly configurable architecture: Users can customize MXEs to their specific needs, including trust assumptions and hardware investment. The network consists of multiple nodes working together. These nodes, called Arx nodes, are specifically designed to perform MPC on encrypted data.
3. Chain-agnostic design: Arcium provides confidential computing power without requiring changes to underlying blockchains, making it versatile across different ecosystems.
4. Parallel execution: Computations are executed in parallel, ensuring mainstream-ready throughput.
5. Developer-friendly: Arcium works with popular tooling to minimize the learning curve for developers.
6. Distributed architecture: The network consists of multiple nodes capable of executing MPC tasks, ensuring robust data security and preventing single points of failure. Nodes within the network form clusters to handle specific tasks. These clusters operate under strict protocols to ensure secure and efficient computations.

Developers can also use the Software Development Kit (SDK) to create custom MXE instances for specific requirements, such as advanced DeFi computations, statistical analyses, and more.

Recently, Arcium raised a $5.5 million strategic funding round led by Greenfield Capital, signalling strong support for its vision. The network is currently progressing towards its mainnet launch, with plans for a private incentivized testnet followed by a public testnet.

A deep dive into Arcium’s Architecture

Arcium tackles the challenge of data privacy in Web3 by introducing a novel architecture that uses a combination of cutting-edge cryptographic techniques.

Arcium MXEs

Let’s say you have a secure bag. This bag, called an MXE in Arcium’s architecture, is a Trusted Execution Environment (TEE) specifically designed for multi-party computation (MPC).

Here’s the key concept: multiple parties can contribute their data to the MXE without revealing the actual data itself. The MXE performs the computations on the encrypted data and delivers the encrypted results. Only by combining their decryption keys can the parties unlock the final outcome. This ensures data privacy while enabling collaborative computations.

A combination of MPC, Homomorphic Encryption, and Zero-Knowledge Proofs powers Arcium. The network doesn’t rely solely on MPC. It strategically combines three powerful cryptographic tools which offer a robust and flexible security framework for Web3 applications:

• Multi-Party Computation (MPC): As explained earlier, MPC allows computations on encrypted data without revealing the data itself. Arcium uses MXEs to facilitate secure MPC.
• Homomorphic Encryption: While not the primary focus due to its complexity, Arcium can use homomorphic encryption for specific use cases where calculations need to be performed directly on encrypted data within the MXE.
• Zero-Knowledge Proofs: This technique allows one party to prove to another party that they possess certain information without revealing the information itself. In Arcium’s context, zero-knowledge proofs can be used to demonstrate the correctness of computations performed within the MXE without revealing the underlying data.

Arcium’s architecture goes beyond just security. It prioritizes scalability by working alongside parallelization. Imagine multiple MXEs working on different parts of a complex computation simultaneously. This parallel processing significantly boosts the throughput of the system, allowing Arcium to handle large datasets and complex computations efficiently.\

Arcium node network

Web3 is a diverse landscape with multiple blockchains. Arcium understands this and is designed to be chain-agnostic. It doesn’t rely on any specific blockchain protocol, making it compatible with various Web3 ecosystems. This flexibility allows developers to enjoy Arcium’s secure computation capabilities across different blockchain networks.

In essence, Arcium’s architecture provides a secure, scalable, and interoperable foundation for confidential computing in Web3. By combining cutting-edge cryptography with innovative design choices, Arcium paves the way for a future where data privacy and usability coexist within the decentralized world.

Key verticals of Arcium

Arcium’s secure computation capabilities hold immense potential to transform several key verticals within the Web3 ecosystem. Let’s explore how Arcium can transform these sectors.

1. Decentralized Finance

The decentralized finance (DeFi) space, promises a future of open and accessible financial services. However, ensuring data privacy while maintaining regulatory compliance can be a challenge.

Traditional DeFi transactions are often publicly viewable on the blockchain, revealing transaction details like loan amounts and collateral. Arcium can conceal sensitive financial data during loan applications, creditworthiness checks, and other financial calculations. This protects user privacy without compromising the transparency of DeFi protocols.

Regulatory compliance is important for the mainstream adoption of DeFi. Arcium can facilitate the creation of compliant DeFi protocols by enabling regulators to access specific encrypted data for auditing purposes while user privacy remains protected for non-essential details. Protocols can use zero-knowledge proofs to demonstrate compliance with regulations without revealing sensitive user information.

2. DePIN

Decentralized Physical Infrastructure Networks (DePINs) are important in securing sensitive data and enhancing trust in distributed systems. One key use case is the development of a privacy-focused decentralized wireless network.

DePINs use advanced cryptographic techniques, such as Multiparty Computation (MPC) and Homomorphic Encryption, to ensure the confidentiality of data processed within the network. By keeping data encrypted throughout its lifecycle, even during computations, DePINs minimize the risk of data breaches and unauthorized access.

Through the use of blockchain technology and cryptographic proofs, DePINs can offer a tamper-resistant record of all network activities and computations. This level of transparency and accountability is important for building trust among users, regulators, and other stakeholders.

3. Healthcare and medical research

Healthcare providers, researchers, and institutions can use the Arcium Network to securely collaborate on sensitive patient data. By encrypting the data and processing it within Arcium’s MXEs, the confidentiality of patient information is maintained throughout the collaboration process.

This allows for the pooling of encrypted data from multiple sources, enabling joint analysis and research without exposing the underlying personal details. Arcium’s confidential computing capabilities ensure that the data remains secure and inaccessible to unauthorized parties, even to the researchers themselves.

4. Artificial intelligence

Arcium facilitates the secure pooling of encrypted data from multiple sources. Arcium’s MXEs enable collaborative AI model training without exposing the underlying datasets.

This approach broadens the scope and diversity of data available for AI development, as organizations and researchers can contribute their encrypted data to the training process. Arcium’s encryption and secure processing capabilities ensure that the privacy of each data contributor is preserved, addressing a critical challenge in the AI ecosystem.

Beyond collaborative model training, Arcium’s confidential computing technology also enables the development of machine learning applications that preserve data privacy. By keeping the data encrypted throughout the entire lifecycle, including during the training and inference phases, Arcium ensures that sensitive information is never exposed, even to the model developers or operators.

5. Decentralized Identity (DID)

In a traditional decentralized identity system, users hold their own digital identities and selectively share verified claims with service providers. However, this process often requires users to reveal more personal information than necessary, compromising their privacy.

Arcium can address this challenge by allowing users to encrypt their identity data and verification claims before sharing them with service providers. Through Arcium’s MXEs, the service providers can verify the claims without ever accessing the underlying personal information.

This approach ensures that users maintain full control over their data and can selectively disclose only the necessary information, while the service providers can still reliably authenticate the user’s identity without compromising privacy.

Real-world use cases

Arcium’s ability to perform secure computations on encrypted data unlocks a new era of privacy-preserving innovation across various sectors. Here’s a detailed use case showcasing Arcium’s transformative impact:

1. Decentralized Finance (DeFi): Secure loan approvals with encrypted credit data

Scenario: Chioma, a freelancer with an inconsistent income stream, needs a loan on a DeFi platform. However, she’s hesitant to share her complete financial history publicly due to privacy concerns.

Arcium in action:

Chioma encrypts her bank statements and tax documents using user-friendly tools provided by the DeFi platform or a third-party service.

The DeFi platform leverages Arcium’s MXEs to perform calculations on Chioma’s encrypted data. This generates a credit score without ever decrypting the information.

The platform receives the encrypted credit score and assesses Chioma’s eligibility for a loan based on pre-defined criteria. Chioma can choose to share additional details directly with lenders if needed.

Benefits:

• Chioma retains control over her financial data while her creditworthiness is evaluated securely.
• DeFi platforms benefit from reduced risk of data breaches and fraudulent activities.

Potential tools and applications:

• Secure credit scoring platforms for DeFi lending protocols.
• Decentralized credit reporting bureaus built on Arcium’s infrastructure.
• Privacy-focused loan origination and underwriting tools.

2. Decentralized Identity (DID): Selective disclosure for age verification in dApps

Scenario: David wants to access an age-gated dApp (decentralized application) for online gaming but doesn’t want to reveal his birthdate on the blockchain.

Arcium in action:

David obtains an age verification credential from a trusted issuer (e.g., a government agency) that confirms he is above the legal age limit. This credential is issued on a decentralized identity (DID) solution.

The dApp uses Arcium’s zero-knowledge proof capabilities. David proves he possesses the age verification credential within the MXE without revealing the actual birthdate or any other data within the credential. The dApp verifies the encrypted proof using Arcium and grants David access if it’s valid.

Benefits:

• David maintains privacy by only disclosing what’s necessary for age verification.
• Seamless access to age-gated dApps without compromising privacy.

Potential tools and applications:

• Secure and privacy-preserving age verification protocols for dApps.
• Decentralized credential issuance and management platforms.
• Selective disclosure tools for DID solutions.

3. Healthcare: Secure collaboration for cancer research

Scenario: An association of research institutions wants to analyze massive amounts of encrypted patient data from various hospitals to identify new cancer treatment options.

Arcium in action:

Hospitals encrypt sensitive patient data (e.g., medical history, treatment responses) using Arcium’s tools before sharing it with the research consortium.

Researchers leverage Arcium’s MXEs to perform complex computations on the encrypted data to identify patterns and correlations relevant to cancer treatment.

The MXEs generate encrypted results that reveal valuable insights for cancer research without ever decrypting the patient data.

Benefits:

• Patient privacy is safeguarded throughout the research process, building trust in data sharing for medical advancements.
• Secure data analysis across institutions accelerates medical research and discovery.

Potential tools and applications:

• Secure data analysis platforms for collaborative medical research.
• Decentralized clinical trial management systems built on Arcium.
• Privacy-preserving tools for genomic data analysis in healthcare.

4. Supply chain management: Secure tracking and verification of pharmaceuticals

Scenario: A pharmaceutical company wants to track the movement of temperature-sensitive drugs throughout the supply chain to ensure their authenticity and quality.

Arcium in action:

Logistics providers encrypt data points like location, temperature, and sensor readings during drug transportation using Arcium’s tools.

Arcium’s MXEs perform computations on the encrypted data to verify the integrity of the supply chain and ensure proper storage conditions for the drugs. This can involve checking for unauthorized access or temperature fluctuations outside the safe range.

The pharmaceutical company receives real-time updates on the status of the shipment without compromising the confidentiality of the underlying data. This could include alerts if temperature readings fall outside the acceptable range, allowing for prompt corrective measures.

Benefits:

• Secure tracking throughout the supply chain prevents counterfeiting and ensures the quality of pharmaceuticals.
• Real-time data allows for better logistics planning and reduces the risk of spoilage.

Potential tools and applications:

• Secure track-and-trace platforms for the pharmaceutical industry.
• Decentralized marketplaces for verifying the authenticity of goods.
• Privacy-preserving sensor data analysis for supply chain monitoring.

The significance of confidential computing for Web3 and beyond

The rise of decentralized technologies in Web3 has brought data privacy and security to the forefront. Traditional encryption methods often leave data vulnerable during processing, exposing it to potential threats.

Confidential computing, as implemented by Arcium, addresses this gap by ensuring that data remains encrypted even during computation, minimizing the risk of data breaches and unauthorized access.

Moreover, the enhanced security and privacy guarantees offered by confidential computing can enable greater user trust in Web3 applications. As users become more aware of the importance of data privacy, the adoption of confidential computing-powered solutions can drive mainstream acceptance and adoption of decentralized technologies.

Building the future of secure computation

Arcium is on a mission to revolutionize data privacy by enabling secure computations on encrypted data. Sign up for the testnet and experience Arcium’s capabilities firsthand. By participating in the testnet, you’ll gain early access to the platform and contribute valuable feedback to the development process.

To further understand Arcium’s technical aspects, explore its comprehensive documentation. The Arcium docs provide detailed explanations of their network architecture.

The Arcium Discord server is a vibrant hub for the community. Connect with developers, enthusiasts, and the Arcium team directly. Engage in discussions, ask questions, and stay updated on the latest developments as Arcium progresses towards mainnet launch.

References

• The significance of privacy in web3 https://cointelegraph.com/learn/the-significance-of-privacy-in-web3
• Blockchain decentralized cloud computing https://www.rapidinnovation.io/post/blockchain-decentralized-cloud-computing-2024
• Arcium testnet invitation https://blog.arcium.com/arcium-private-testnet-invitation/
• Zero knowledge proof https://chain.link/education/zero-knowledge-proof-zkp
• Hoomorphic encryption https://www.keyfactor.com/blog/what-is-homomorphic-encryption/
• Approaches to privacy on chain https://blog.arcium.com/approaches-to-privacy-on-chain/
• Blockchain in healthcare https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10543232/