Part I: What Is A Smart Contract?

November 16, 2022

A smart contract is a self-executing digital contract stored on the blockchain. Code in the contract ensures it is executed automatically when predetermined terms and conditions are met. As a result, these smart contracts increase efficiency and render transactions traceable, transparent, and irreversible.

Use cases for smart contracts include digital identity management, insurance claims, medical care, supply-chain management, financial services, real estate transactions, online payments, and government voting. 

But blockchain-based smart contracts run on public ledgers and do not support privacy because all records are logged openly. This allows anyone to peer into your dealings and create potentially uncomfortable or dangerous data exposure. More problematic still is that connecting even the most random-appearing addresses to the owner’s real identity is possible. For customers and businesses alike, this creates a serious concern. 

How can smart contracts integrate privacy?

Adding privacy to smart contracts isn’t easy and has only recently become a priority. But there are solutions on the way. Leading proposals include Enigma (ENG), which uses Multiparty Computation (MPC) to calculate smart contract data without anyone being able to view the entire transaction. MPC involves two or more different people undertaking two or more different sides of an equation so that no one actor knows the full story. Related to this is the ability of Enigma to store encrypted data on the blockchain.

Solutions like this may be pivotal in the future of the internet of the future, since they balance the openness of blockchain with some basic privacy guarantees. As a company, we are continuously exploring the needs of businesses and individuals, and how privacy as discretion may be the pathway forward in order to achieve a utilitarian world.

From the ShareRing Blog

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