Unlike centralized banking entities, blockchains do not suffer from any business or political-related risks, nor do they rely on trust between the sender and recipient of funds.
Blockchains are holy grails
- Blockchains are a vendor-neutral platform, and they can facilitate interactions between businesses and individuals who share little to no familiarity.
- Blockchains are also completely transparent, all transfers can be checked on the public record for accuracy.
Unfortunately, the transparency that blockchains provide is not always beneficial.
Privacy has become an issue.
- There are several mechanisms in place to combat this problem.
- The authentication measures used to increase privacy help reduce the visibility of sensitive information.
- Cryptographically secure obfuscation
- Indistinguishability obfuscation
- Secure multi-party computations (SMPC)
- Zero-knowledge proofs
- Low-tech approaches
- State channels
- Ring Signatures
- Linkable ring signatures
These privacy-preserving technologies are useful for simple data storage, such as medical records. However, on a larger scale these technologies can become computationally impractical, so to maintain efficiency these technologies only alter small parts of the blockchain. Due to this blockchain can never be completely private.