In an era dominated by artificial intelligence, the need for onchain privacy is paramount. Eran Barak, CEO of Shielded Technologies (developer behind the Midnight privacy chain), emphasizes that blockchain privacy tools like zero-knowledge (ZK) proofs are crucial for protecting online user data. He argues that centralized servers are becoming attractive targets for AI-assisted hackers seeking valuable data, including private keys, financial metadata, medical records, and government documents.
The Rising Threat of AI-Driven Cyberattacks
The centralization of user data in corporate service providers and centralized servers creates a significant risk. Hackers find a substantial return on investment (ROI) in targeting these honeypots, which house millions of records. Barak highlights that ZK-proofs provide a solution by enabling verification of onchain data without revealing it, thus enhancing cybersecurity:
“Blockchain is going to improve cybersecurity around the world, because, for a hacker to get to actual data, they need to hack individual wallets, but their ROI would be one record instead of millions — not worth it. They are going to go elsewhere.”
Privacy solutions have gained traction among Web3 developers due to the necessity of shielding metadata from AI algorithms. As large institutions consider adopting blockchain, privacy tools are becoming a prerequisite for protecting sensitive business data.
Zero-Knowledge Proofs: A Key to Onchain Privacy
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Zero-knowledge proofs (ZKPs) are a cryptographic method that allows one party (the prover) to prove to another party (the verifier) that a statement is true without revealing any information beyond the validity of the statement itself. In the context of blockchain, ZKPs can be used to verify transactions or data without disclosing the underlying details, ensuring privacy and confidentiality.
ZKPs are a type of zero-knowledge protocol where the prover demonstrates knowledge of a secret without revealing the secret itself. This is achieved through a series of interactions between the prover and the verifier, where the prover provides evidence that the statement is true, without disclosing the actual information.
There are several types of ZKPs, including:
- ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge): These are succinct, meaning they require only a small amount of data to be transmitted, and non-interactive, meaning the proof can be verified without requiring interaction between the prover and the verifier.
- ZK-STARKs (Zero-Knowledge Scalable Transparent Argument of Knowledge): These are scalable, meaning they can handle large amounts of data efficiently, and transparent, meaning they don’t require a trusted setup.
Cardano’s Hoskinson Announces Midnight Token Airdrop
At Consensus 2025, Cardano co-founder Charles Hoskinson revealed an upcoming Midnight token airdrop for holders of AVAX, XRP, BTC, BAT, and other cryptocurrencies. Midnight is a partner chain of the Cardano network, focusing on privacy and data protection.
Hoskinson stated that the multichain airdrop aims to unite the industry through cooperative tokenomics and promote collaboration. “We have a chance to come together again, and I think in this divisive era, the industry absolutely needs that.”
Midnight’s Approach to Web3 Privacy
Barak added that Midnight would invite interested users across the Web3 ecosystem to mine the Midnight token after the initial multichain airdrop, further fostering community engagement and decentralized participation.
Why Onchain Privacy Matters
- Data Security: Protects sensitive information from unauthorized access and potential breaches.
- Compliance: Helps institutions meet regulatory requirements for data privacy.
- Competitive Advantage: Allows businesses to operate onchain without exposing confidential data to competitors.
- User Empowerment: Gives users control over their data and how it is shared.
In conclusion, the growing sophistication of AI and the increasing volume of data being processed onchain necessitate robust privacy solutions. Zero-knowledge proofs and privacy-focused blockchain networks like Midnight are critical in ensuring a secure, compliant, and user-centric Web3 ecosystem.
