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Secret Network, which was spun out from Enigma following SEC action, allows decentralized apps to construct privacy-focused smart contracts for handling sensitive data.
Although blockchain technology provides a layer of openness and transparency that conventional centralized networks do not, some sensitive data should not be published publicly.
How many individuals want to utilize a network that, for example, shares their financial and identifying information with everyone?
That is the problem that Secret Network seeks to address. Secret Network provides the transparency benefits of blockchain with the security and privacy that consumers expect from web services by enabling programmable smart contracts that run on blockchain and compute within trusted execution environments, hiding the data from the nodes themselves.
Here’s a peek at how Secret Network works and what the project’s supporters aim to achieve.
Secret Network is a blockchain that was designed exclusively for data privacy. Secret Network provides programmable smart contracts that protect user data by enabling encrypted inputs, outputs, and smart contract states. If Monero and Zcash are the privacy-centric evolutions of Bitcoin, Secret Network’s smart contracts are the progression of Ethereum’s own smart contracts, expanding on that premise while permitting the safe transport of secret data.
Enigma, a business that invented the notion of a decentralized system for hidden smart contracts, gave birth to Secret Network. Enigma generated $45 million in an initial coin offering (ICO) in 2017, but faced action from the US Securities and Exchange Commission in 2020, forcing a settlement with the SEC.
Finally, the Enigma community opted to pursue that goal as an independent, decentralized project, which is how the present version of Secret Network came to be. Holders of Enigma’s Ethereum-based ENG token were able to exchange 1:1 for SCRT, the Secret Network’s native cryptocurrency used for governance and payment of fees, thanks to a swap. Enigma continues to be a vital role in the community, supporting the growth of the Secret Network.
How does Secret Network work?
Secret Network is a layer-1 blockchain built on top of the Cosmos/Tendermint architecture, with its own consensus and on-chain governance. It is based on a network of distributed nodes that conduct the computation of smart contracts created on Secret Network, but the nodes do so using a trusted execution environment (TEE)—similar to a black box—to keep prying eyes at bay.
It’s similar to how a smartphone CPU use a TEE to handle sensitive data such as fingerprints, except this time it’s a blockchain node. The network refers to its smart contracts as “secret contracts,” since they are intended to protect the anonymity of the data contained therein. The SCRT (“Secret”) coin must be staked by nodes to participate in the network, plus it is used to pay fees and transfer value.
What’s so special about Secret Network?
There is a lot to admire about blockchains in terms of immutability and transparency, but that kind of openness limits the type of data that many blockchains can securely handle—particularly top-secret material that people or corporations wouldn’t want viewed by just anybody.
Secret Network intends to fill that need by adding a layer of secrecy and security while retaining the benefits of blockchain technology—the best of both worlds, in theory. While it is not the only startup aiming to fill that hole, it is a notion that has the potential to shape the future of some decentralized apps (dapps), notably in the field of decentralized finance (DeFi).
What can you do with Secret Network?
Secret Network is intended to support decentralized apps that require a level of anonymity that is not available on many other blockchain networks. It can manage sensitive information that consumers and organizations would not otherwise be prepared to reveal by adopting a trusted execution environment and keeping private data away from both the public and node operators.
The network’s operators have proposed a wide range of possible use cases, including privacy-preserving credit scoring and lending dapps, machine learning capabilities that preserve privacy, and enhancing the ability to properly exchange and monetize data. Secret Network, in general, might be valuable to any dapp that handles sensitive data.
The future for SCRT
Secret Network is attempting to develop toward a future that welcomes interoperability with other blockchains, with the ENG-to-SCRT token swap finishing in January 2021, thus shutting the book on the previous Enigma project. A lack of cross-chain interoperability may restrict Secret Network’s attractiveness and, as a result, prohibit it from being as broad or beneficial as the community creators hope.
Secret Network is also making a significant push for decentralized banking with its Secret DeFi program, and will launch a SecretSwap decentralized exchange in February 2021. According to the Secret Network FAQ, “part of our vision has always been bringing privacy to every blockchain,” and it mentions Cosmos inter-blockchain communication and interoperability as another prospective endeavor on the pipeline.
Aside from that, Secret Network looks to be focused on recruiting additional developers to create their dapps on the blockchain, hence showcasing new use cases. It isn’t the only blockchain with privacy-focused smart contracts (Oasis Network is another), and there are other potential answers to the quandary of handling sensitive data on blockchain, such as safe multi-party computation. It remains to be seen if Secret Network’s solution will eventually outperform others now on the market or on the horizon.
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