What are encrypted blockchains and why are they important?
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In order for data to be truly worth something we have to know the data is accurately reflecting sentiment, wants, needs, etc. As advertisers, businesses, or suppliers or demand we want to know that the customer data or client data or user data is real data. The problem is when it is a public blockchain (like Steem, like EOS, like Ethereum), we cannot ever know the true value of the data on the blockchain. In my previous post I mentioned that Steem has a potential gold mine of data but this is only the case if we assume the data being structured on the Steem blockchain actually reflects something in the real world. It is possible that it doesn't.

Encrypted blockchains will unlock unlimited utility and produce a true data currency. What is a data currency? Data currency is to think of data as the actual underlying value behind blockchain technology. Those of us who understand security analysis and fundamental analytics of stocks know that when looking at companies we look for what value that company creates for the ecosystem and the real world wealth that company has. The difficulty in determining the fair price and value of the Steem token, Bitcoin, Ethereum and the other cryptos is that it's been very difficult to find that underlying value.

Some who don't understand the breakthrough that blockchain technology represents have even said that the blockchain has no value or that crypto is like fiat. These people actually have a point when the blockchain is fully transparent. A transparent database really has limited value because the only data which will be placed on it are for lack of a better word "advertisements". In other words when we post our blogs we are posting what we want everyone else to see which in a sense is  not necessarily what we really believe, feel, want, think, and this makes any algorithms which monitor these blogs for sentiment less than reliable.

The same problems we have with Twitter and Facebook we also have with Steem. Fake accounts can be used to produce fake sentiment to fool the algorithms (and the decisions of people and organizations who rely on them). Voting doesn't work because that too can be coerced when all the votes are public. When wallet amounts are public then we cannot actually know the true Gini coefficient because people are going to do everything they can to divide their wealth across many accounts. 

Once again a transparent blockchain has limited utility. This limited utility is solved by simply encrypting the data stored on the blockchain. To take it even further an encrypted blockchain is a blockchain like what we see here with Steem with the addition of privacy. Privacy to be defined as the individual has control over what they share and who/what has access rights to what they chose to share. For example if I'm an individual interacting with an encrypted blockchain then perhaps I want the algorithms to access my data because the bots are willing to pay me in the token of value for the data useful to their computation. Because the data itself can be collected anonymously and because the data remains encrypted even when being computed by the algorithms the data can be shared in a way which is of minimal risk to me and which also maximizes the utility value of the crypto ecosystem.

In general I would want to share as much data as possible with the algorithms because I want my needs met. My needs are better met if I can communicate my needs most accurately. This private communication between me and the algorithms is only possible if there are private smart contracts and encrypted blockchains. 

The Enigma Project, iExec and OasisLabs
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The three main projects which will be implementing privacy in the correct way (in my humble opinion) are listed above. Enigma relies on a novel secure multiparty computation protocol for version 2 (the most privacy version of their secret contracts). The standard method which the cryptographer community has arrived at is called the [Trusted Execution Environment](https://en.wikipedia.org/wiki/Trusted_execution_environment) or TEE for short. TEE is currently an Intel technology based around [Intel SGX](https://en.wikipedia.org/wiki/Software_Guard_Extensions). Some of you may have heard that Intel has partnered with Enigma and with iExec specifically on the hardware component which will enable encrypted blockchains to be developed.

The good news
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The good news is that Enigma, iExec and Oasis Labs are developing technologies which are blockchain independent. This means it will be possible for a Steemit developer to create an SMT and produce a privacy layer on top of Steem. In fact I argue this would be a rather trivial project which one or two developers could take on because it likely going to be made easy to do by the Enigma (and possibly iExec) teams to write private smart contracts. The question is would it be something people want?

The how to do it question or more specifically how would a private smart contract connect with Steem? Well it's simple. A bot could be introduced to Steem and users of Steem could simply interact with that bot by issuing commands. At least this is how things could work in theory assuming SMTs are operational and the Steemit community decides not to block these sorts of bots that connect private to public.

The risks and challenges
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Of course with any new technology there are going to be risks and challenges. The main risk of privacy preserving technology is that there are always going to be people willing to abuse it. For example private ICOs will be possible where no one will be able to know who participated in them but then these will be unregulatable by the SEC. This will likely generate bad press, increase suspicion around the space, and of course there will be controversy. There are also challenges because implementing it right requires a lot of moving parts. To implement it right means to factor in the risk of abuse, but also to factor in the potential big rewards. 

On one hand having encrypted blockchains will make voting possible and in a useful way. It will make it possible for you the individual to own your data and exercise your digital sovereignty if you choose. It will allow you the individual to monetize your data in ways you never thought was possible. There are potential markets worth trillions which could emerge from having encrypted blockchains but it is also possible that abusers of the technology could take it over. At the end of the day the technology (encrypted blockchains) is going to exist because TEE/SGX exists to enable it and so the question remains do we want the benefits or do we just want to have the risks?

The benefits include algorithms which can be improved on indefinitely and which can be trusted to compute data of any sensitivity level. This would allow people to put 100% of themselves into their digital persona rather than to simply put a "public" self into a "public" persona. This 100%ness could make the algorithms a lot more useful, more accurate, and this could allow the ecosystem (and AI) to evolve in better more pro social ways, On the other hand there will always be people who don't trust the hardware (Intel) or the software (Windows/Linux,Enigma,iExec, etc). The whole point isn't that trustless technology is possible because it isn't but it is that we can minimize the amount of third parties we have to trust to get our needs met. 

References
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1. https://medium.com/iex-ec/intel-and-iexec-collaboration-privacy-preserving-offchain-computing-198bd6799c36
2.  https://blog.enigma.co/enigma-intel-for-immediate-release-ccb363280c73
3. https://www.coindesk.com/a16z-leads-45-million-raise-for-blockchain-startup-oasis-labs/
4. https://www.oasislabs.com/
5. https://enigma.co/