Like every other technology even blockchain is not without potential for improvement. It’s interesting to note that a variety of new solution-oriented blockchain-related protocols are currently being designed to address the shortcomings in the current technology. For example, Polkadot resolves the issue of interoperability between blockchains. Chainlink allows the exchange of data between off-chain data and on-chain APIs and data servers. Hathor enhances scalability and lowers the transaction costs.
In addition, every new blockchain protocol has particular strengths that enhance the efficacy of the blockchain technology and makes it more flexible for use in real life.
This article we’ll look at a different blockchain-based protocol, called Phala Network. It functions as a cloud computing system that can provide the security of blockchain smart contracts that are used in DeFi and dApps. Phala is attempting to address concerns of trust within the cloud computing.
Why is confidentiality so important when it comes to smart contracting?
Blockchain is unique because it is a distributed ledger that keeps track of transactions in a safe and transparent manner. Every transaction is publicly accessible. Therefore, anyone can confirm it, however, nobody can alter the information. The openness of Blockchain is a groundbreaking feature that enhances security and user control.
However, some businesses may also possess sensitive or private information that they do not want to expose for all to see. For instance, stock traders are keen to make their information public, but they aren’t keen on revealing their order history or positions. In addition, due to the privacy concerns, data privacy related DApps on Ethereum are not in compliance in accordance with General Data Protection Regulation. This means that they could be blocked by the European Union.
Certain blockchains are not appropriate for handling confidential data. Bitcoin and Ethereum are not suitable for this purpose. The inability to handle sensitive data or sensitive information for business restricts the use of the Blockchain since it can cause trust problems.
There are a variety of approaches to address the issue of confidentiality and privacy in Blockchain However, the solutions are only applicable to crypto currencies and do not apply to smart contract.
What is the Phala Network?
Phala Network is a new method that aims to provide the security of smart contracts making use of the specially designed hardware Trusted Execution Environment (TEE). It is designed to protect privacy in smart contracts that meet four goals:
- Guard the privacy of managed apps.
- Provide computing power on level with existing cloud services.
- Keep the security and reliability of Blockchain. All computing operations performed on Phala are secure.
- Cross-chain interoperability is possible without sacrificing security.
In our insight on interoperability in blockchain that cross-chain communication is essential for any blockchain-based smart contract or dApp; otherwise, its use in the real world is extremely restricted. The confidential contracts that are powered by Phala are interoperable and can be used to interact with other contracts that are confidential.
Phala Blockchain is built upon Substrate which is interoperable to the Polkadot ecosystem. (Read further regarding Polkadot interoperability) Additionally, Phala is a Parachain of Polkadot which means that by Phala can be an interoperable blockchain. But, Phala takes Interoperability a step further by facilitating the transfer of assets to another blockchain while maintaining confidentiality.
What are the main benefits that come with Phala Network?
- Phala is protected from attack at the system level since sensitive data will be processed and processed by TEE which is an isolated processor
- Only authorized key-protected actions are permitted on the network.
- All off-chain and on-chain communications are encrypted from end-to-end.
- Off-chain code and execution can be verified on-chain.
- As a substrate-based Parachain of Polkadot, Phala is designed to allow interoperability and cross-chain communications.
- Because it is interoperable Phala is able to offer computing power to other blockchain applications.
Read More: https://www.leewayhertz.com/what-is-phala/
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