This week we have a fantastic deep dive into onchain use cases for FHE with Jason Delabays, Blockchain Ecosystem Lead at Zama. Jason has been working at the forefront of the FHE x Blockchain space since its inception so he had a lot to add to this conversation.
From tokenizing Real-World Assets (RWAs) to revolutionizing identity solutions, FHE holds the key to unlocking unprecedented levels of data privacy and security. Join us as we uncover the myriad possibilities and challenges of integrating FHE with Blockchain, and envision a future where privacy is not just an option but a fundamental right.
To watch the video click here, for a detailed breakdown of the discussion and its highlights continue reading!
Introduction? 3 seconds →
Jason is the Ecosystem Lead at Zama working at the intersection of FHE and Blockchain.
Originally a fan of Rand Hindi, the CEO of Zama, Jason eventually joined when Zama launched their blockchain product that abstracts FHE into Solidity (TFHE-rs).
RWAs 1 minute 40 seconds →
Tokenization of RWAs: most RWAs cannot be brought onchain without masking at least some of their data. This is because the smallest data leak can lose sensitive data or competitive advantages and right now all blockchain data is public by default.
A good example is VCs where the data is very private. No firm will tokenize their equity positions if it means leaking that data, in detail, to the world.
Private Networks vs. Public Blockchains with Private State 3 minutes 10 seconds →
Many large enterprises discovered blockchain 5-7 years ago and began building their own private blockchains, but in doing this they lost the inherent benefits of blockchains (decentralization and permissionlessness), and these private networks became, to put it simply, “bad databases.”
Now they can have the best of both worlds: public blockchains that can selectively mask data.
Many enterprises are already exploring the FHE x Blockchain space.
Identity 5 minutes 40 seconds →
Using FHE for identity solutions is a massive unlock because of how composable and programmable it is.
For instance you can put personal information onchain: age, nationality, credit score, keeping all of it secure with FHE. Then you can have others selectively operate on top of your encrypted personal data. A creditor could check your score, asking if is it higher than 700, or a onchain gambling company could ask your age, asking if you are over 18.
KYC and KYB (know your customer/business) would be great to have completely onchain and this is very feasible with FHE.
ZK identity-based solutions have been tried, but there are significant tradeoffs needed to make it work. FHE is highly composable and permissionless and a perfect fit for this vertical.
ZK vs FHE 7 minutes 5 seconds →
ZK is a scaling technology, inherently un-useful for multi-party use cases.
With ZK schemes, one entity, the prover, must see all the data to prove the data is what it is supposed to be. If you applied ZK to solutions that are great with FHE, you would find that the prover compromises the security of the data.
Authentication and FHE-ML 8 minutes 40 seconds →
Jason believes that AI is new enough to blockchain that confidentiality is not a problem yet. He believes that technologies traditionally scale before they become secure, a thesis proven true by the blockchain industry, the internet, and most specifically Venmo who shared sending amounts publicly for a long while before hiding them.
There are also speed and computational load challenges with FHE-ML, as FHE is very complex on a compute level.
Inference models are a huge opportunity for FHE as you can have an encrypted input to models, and the computation would take place in FHE. The benefit here is that you maintain the sanctity of the query data when processing is happening.
Healthcare 11 minutes 13 seconds →
Health data, compared to all other types of data, is the most inherently sensitive. This means that the ability to not only store it but also process it confidentially is a huge value add.
Because this data is so sensitive, it has been siloed in such a way as to make it very unusable. Once it is encrypted using FHE, the ability to share this data in a highly programmable way, will enable it to be used in ways that would not be safe today.
The combination of being able to encrypt data and then keep it encrypted during processing, sending, and at rest is a huge opportunity. This is the principle that Zama wants to apply to the whole internet.
Data Marketplaces 12 minutes 40 seconds →
With FHE x Blockchain one could build a highly programmable data marketplace that allows users to sell their data, data aggregators to bundle it, and data users to permissionlessly buy data, all encrypted. If data is the new oil, then decentralized, FHE-enabled data marketplaces are the pipelines that make “leaks” impossible.
This data can be anything, advertising data is a large market, and financial data is big too.
Roadblocks for FHE x Blockchain 13 minutes 15 seconds →
Hardware acceleration will enable use cases with higher needed throughput.
Key management systems need to improve to make the encrypt/decrypt/re-encrypt process more robust.
UX and tooling must be worked on to make implementing FHE as simple and easy to understand as possible. This has already been solved in part through the TFHE-rs library that runs FHE through a Solidity frontend.
Bridges are also a large focus as there is a real need for economic security with such new technology as FHE x Blockchain. Inco has done a good job trailblazing here with their recent announcement of $4.7 billion in re-staked ETH committed by Ethos, and a previous announcement with Eigenlayer that will enable them to outsource ETH security to Inco.
Bridges 15 minutes 20 seconds →
In the future, once signing transactions is enabled with FHE, the possibilities of FHE bridges will become reality.
TOTP 16 minutes 20 seconds →
In the future one could also build a fully onchain, one-time-password application that could be used to increase wallet security.
Gambling and Gaming 18 minutes 31 seconds →
Blockchain is a space that loves gambling, making it one of the tightest PMFs for FHE.
With confidential states enabled on public blockchains, many new games are enabled: poker, wordle, slots, hangman, and more. We may even see completely new games created.
Check out this arcade for some examples.
Jason’s Vision of FHE x Blockchain 23 minutes 35 seconds →
Jason hopes that using FHE to encrypt data and then operating on that data becomes commonplace on public blockchains. Simply put, that FHE becomes the encryption layer of the onchain space.
Jason hopes that “FHE becomes boring” and he thinks that “people should not care about privacy.” Not because it doesn’t matter, but because it should be part of the infrastructure.
As we navigate the complexities of data privacy in an increasingly digital world, the fusion of FHE and Blockchain emerges as a game-changer. With Zama leading the charge in pioneering FHE-Blockchain solutions, we stand on the brink of a new era where data privacy is not just a dream but a reality. Together, let us embark on this journey toward a more secure and transparent future, where privacy is not compromised but preserved.
Join the conversation about FHE x Blockchain today here.
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