Onchain privacy in the age of AI

Onchain privacy is increasingly seen as a necessity in the age of artificial intelligence (AI) to protect sensitive and valuable user data from AI-assisted hackers and malicious actors.

Eran Barak, CEO of Shielded Technologies (developer of the Midnight privacy chain), highlighted that centralized servers and corporate service providers will become prime targets for AI-driven attacks aiming to steal private keys, financial metadata, medical records, and government documents. The high return on investment for hackers targeting centralized data repositories incentivizes these attacks.

Barak emphasized that blockchain privacy tools like zero-knowledge (ZK) proofs, which allow verification of onchain data without revealing the data itself, are key to solving this problem. By decentralizing data storage on blockchains, hackers would need to individually target wallets, drastically reducing their ROI and making large-scale data theft less attractive.

The need for privacy is further underscored by the fact that blockchain metadata can reveal detailed personal or organizational information, enabling AI to model and forecast sensitive aspects about individuals or entities. For example, onchain medical records without privacy could expose health conditions through visit frequency patterns. Metadata from employees within an organization could also compromise the entire organization's security by providing forensic clues to attackers.

Businesses especially require privacy solutions to protect sensitive operational data such as pricing strategies and contracts. Without privacy, companies risk competitive attacks and even disruptions in global capital markets. Experts argue that decentralizing information systems via blockchain and applying privacy protections is essential to counter AI-driven privacy threats.

More broadly, privacy onchain is not just about hiding data but about preserving human dignity, autonomy, and security in a world where data is increasingly commodified and vulnerable to exploitation. Privacy enables individuals and organizations to operate without constant surveillance or data misuse, which is critical as AI capabilities grow.

So, onchain privacy is becoming a fundamental necessity in the AI era to safeguard user data, maintain security, and enable trust in blockchain and Web3 applications. Technologies like zero-knowledge proofs and decentralized privacy-preserving architectures are vital tools to achieve this protection.

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