30s Summary

Companies’ reluctance to use Web3 technologies stems from the transparency of blockchain, making them vulnerable to scams and market risks. Avidan Abitbol from the Data Ownership Protocol (DOP) suggests using zero-knowledge technology for selective data disclosure. Privacy is critical not just for financial dealings but also for sensitive areas like healthcare. Oracle service Chainlink introduced private transactions for companies to address this issue. It further unveiled the Blockchain Privacy Manager and the CCIP Private Transactions encryption tool. Australia and New Zealand Banking Group was among the early users of Chainlink’s privacy features.

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Some companies are wary of using Web3 technologies because blockchain is so public and out there for everyone to see. Avidan Abitbol from the Data Ownership Protocol (DOP) privacy solution reckons that selective disclosure using zero-knowledge technology can get around this issue.

Abitbol explained that the open nature of blockchains can pose a risk for companies. It can make them a target for theft and scams, and can put them at a disadvantage when doing business. The straightforward nature of blockchains can also create market risks because traders can make a move to boost or knock down a particular asset based on the transactions of big companies.

Blockchain’s lack of privacy is a well-known issue. In September 2024, Paul Brody from the IT consulting and services firm EY, said that privacy is a must to protect the workings of these companies. Brody raised that the blockchain privacy problem doesn’t just affect corporate finance, but also impacts fields like health care, where privacy of a patient’s medical records is critical.

In October 2024, oracle service Chainlink launched private transactions for companies. Among the privacy features it rolled out included the Blockchain Privacy Manager and the CCIP Private Transactions encryption tool. Australia and New Zealand Banking Group (ANZ Bank) was one of the first to experiment with Chainlink’s privacy features for settling tokenized asset transactions.

Furthermore, the clear nature of blockchain can contribute to issues with maximal extractable value (MEV) – this is when miners or validators arrange transactions within a block to get the highest economic benefits. These guys use the transparent data on public blockchain networks to make money from investors and traders. But, this problem could be lessened with privacy-enhancing solutions that hide data.