Below is a guest post Matthew Neemergco-founder of Aleph Zero.
During the Renaissance at the Grand Hall of Palazzo Medy in Florence, the legendary banker was doing the trouble with a complex dance of transparency and secrets. Their ledgers meticulously tracked all florins, but access to these records was kept as carefully as the money in the safe. This delicate balance of accountability and confidentiality was more than just a good business. It was essential for survival on the complex web of Renaissance politics and commerce.
Five centuries later, as blockchain is innovating both finance and business, it appears there is a risk of forgetting its basic lessons. The idea that every transaction should look forever in a public ledger is not merely naive, it is devastating to business adoption.
Companies take privacy for granted
Consider modern manufacturers to negotiate with suppliers. Traditional banks have verified and recorded transactions, but details remain confidential. Only those involved and their financial institutions are known. Now, imagine these same negotiations happening on a public blockchain where all payments, all contractual terms and all business relationships look like competitors, customers and market manipulators. This is equivalent to forcing a company to disclose all paid and accounts receivables in rail time, with transaction amounts and counterparty identity.
Transparency should mean ensuring that a transaction follows agreed rules and not exposes all business decisions to public scrutiny. Just as Netscape introduced SSL in the 1990s, e-commerce became feasible by protecting online transactions, blockchain networks require a robust privacy mechanism to achieve mainstream business adoption. Masu.
2020 McKinsey SurveyHealthcare and Financial Services achieved the highest score of trust from consumers. Both industries are two of the major blockchain adopters. Without a secure, confidential infrastructure, these sectors risk eroding the trust they have spent decades. Physician prescriptions, patient care plans, or corporate financial restructuring cannot be broadcast worldwide on public ledgers, regardless of how secure the verification mechanism is.
Today’s interests are even higher. The need for confidentiality becomes more serious as businesses consider moving more operations in a chain from supply chain management to intellectual property licensing. Pharmaceutical companies developing groundbreaking drugs do not risk exposing research investments through transparent blockchain transactions. Retail chains should not broadcast inventory management strategies to their competitors through visible smart contracts.
A permanent, easy-to-read public ledger
Furthermore, the persistent nature of blockchain records amplifies privacy concerns. Historical transaction data is ultimately difficult to access in traditional systems. However, in public blockchains, all transactions remain visible forever. Create an indelible record that may reveal business strategies, pricing patterns, and relationship networks to future competitors or enemies.
The solution is not to abandon the promise of blockchain technology to improve verification and automation. Instead, privacy needs to be embedded in these systems from scratch. Zero-knowledge encryption provides a pathway, allowing transactions to be validated without revealing their content. This technology allows businesses to take advantage of blockchain benefits while maintaining inherent confidentiality.
Some blockchain purists may protest that this approach contradicts the establishment principle of technology transparency. But they misunderstand history. Bitcoin innovation wasn’t about making every transaction public. It was to solve the double spending problem without requiring trust in the central authorities. Privacy-providing technologies can maintain this unreliable verification while protecting sensitive business information. The two are not mutually exclusive.
The fusion of trust and confidentiality
From ancient temples to modern Swiss banks, the history of privacy of banks shows that confidentiality is not against trust. That’s essential. The religious role of the temple gave them a reputation of integrity and discretion. Similarly, Medicine By broadcasting clients’ finances to everything in Florence, they survived and did not thrive for centuries. They have succeeded in innovating their dual immigration bookkeeping system to keep client information accurate and private and ensure trust through discretion.
As we build the future of business with blockchain networks, we must learn from this history. Next-generation blockchain protocols need to incorporate privacy as a fundamental feature, rather than an afterthought. Zero knowledge proof, confidential smart contracts, and private transaction pools are not just technical innovations, but building blocks that are essential for real business adoption.
Interests extend beyond individual privacy concerns to the architecture of future financial systems. Without a robust privacy solution, public blockchain risks pushing businesses into private, authorized networks. This is a trend we’ve seen already. jpmorgan’s Kinexys Platform and Hyperledger-based networks show how large companies choose a more controlled environment than public infrastructure, the networks Walmart and Maersk use for supply chain management. These private networks cater to immediate business needs, but they fragment the blockchain ecosystem and limit the network effects that make public chains extremely powerful.
Just as early Internet age corporate intranets ultimately gave way to the public web when security measures matured, public blockchains offer privacy to avoid being sidelined by business-specific solutions It requires technology to do so.
Thankfully, this is a limited trend as large companies such as Ubisoft, BlackRock and Warner Music Group continue to use public blockchain for their business use cases. However, this progress could be reversed unless the chain builds confidentiality into its core infrastructure.
Renaissance bankers understood that privacy was not about hiding bad deeds. It was to create the trust and security needed for commerce to flourish. As values ​​move more and more on-chain, we can remember their wisdom.
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