Enigma is a privacy-focused blockchain meant to secure the foundation of tomorrow’s internet. It leverages multi-party computation (MPC) to encrypt and distribute data, creating a private environment for users. Data storage and transactions occur offchain, but a public digital ledger tracks and records metadata. Similar to TOR and Torrent distributed technologies, Enigma gains speed and efficiency as it scales.
The dual-layer blockchain and tokenized transactions (via the native ENG token) go a step further in building what the team calls “secret contracts.” If it attracts development through the mainnet launch and onboards enough secure nodes with proper bandwidth, it can build a sustainable business.
Business Use Case of Enigma
The MIT-bred team believes Enigma is the solution to modern privacy issues. Pew Research Center studies show internet use consistently rising, but approximately 50% of Americans distrust both the federal government and social media sites with data protection. And nothing Facebook did since CEO Mark Zuckerberg’s congressional hearings in 2018 calmed these fears.
Of course, none of this is new. Snapchat skyrocketed to mainstream usage in 2011 as younger generations avoid mistakes of their parents. Hackers, journalists, and activists have been preaching privacy for generations. The ideas of temporary social media, encrypted chat, VPNs, and other privacy tools are not passé, nor are they a niche meant only for advanced programmers.
Still – PWC surveys found only 10% of consumers feel they have complete control over their personal information. Regulation, consumer sentiment, and enterprise spending are all focused on privacy moving forward.
Because of its system architecture, Enigma supports privacy through interoperability with both legacy and blockchain networks. This means it can either replace or supplement existing solutions, and with over half the world’s population online, all solutions are welcome.
Notable Enigma Partnerships and Investors
Advisors on the Enigma platform include Nerdwallet Cofounder Jacob Gibson, Pantera Capital Partner Paul Veradittakit, MIT Media Lab Entrepreneurship Program Director Alex Pentland, and Sora Ventures Managing Partner Jason Fang.
Intel – Intel’s Software Guard Solutions (SGK) kit is used to create Enigma’s secret contract ecosystem. As one of the larger blockchain advocates in the traditional tech space, integration with Intel’s ecosystem could help Enigma maintain quantum computing resistance, and even support. Intel support also exposes the Enigma platform to the company’s 300,000+ partners in other industries like automotive, retail, logistics, and more.
Ocean – The Ocean Protocol is a decentralized AI ecosystem that organizes big data in a way consumable by machine-learning algorithms. Ocean Protocol’s data integrity initiatives align with Enigma’s promise of crosschain compatibility and data encryption. Enigma’s private voting mechanism is deployed in Ocean’s Token-Curated Registries (TCR).
Colendi – Colendi is focused on blockchain-based solutions to credit scoring, background checks, and global identity. Enigma’s secret contract technology is being implemented to prevent creating a honeypot scenario where Colendi’s database creates a single point of failure for identity thefts and data breaches.
The Enigma founding team has a strong pedigree at MIT and tech industry experience in both blockchain and legacy companies, like Intel, IBM, Ethereum Israel, and Snapchat.
Enigma is already on its second testnet, an early access for developers to prepare retail-ready projects by the launch of the Discovery mainnet. Proximity to MIT gives the team access to a rotating roster of academic and development resources.
The Enigma protocol can be used to create privacy coins (CLOAK), develop secure dApps, and more. Third-party projects in development on Engima’s protocol include Ocean, Datawallet, Colendi, 2key, Eximchain, Datacoup, ReBloc, and Portal Network. This increases the project’s feature set and chances for adoption, as each team will be working to promote their respective projects.
Enigma’s secret contract protocol earned it praise from Aion, which supports secret contracts on its network. Ethereum support is also stable.
Enigma already has Catalyst trading platform, which has pro-level trading tools across major crypto exchanges like Binance, Bitfinex, Bittrex, and Poloniex. KyberNetwork also supports the suite. Onboarding users to this live environment and encouraging large trades will be an important revenue stream.
From a development perspective, everything is built. The team is now at the mercy of third-party developers, which may not be as strong as the internal team. It’s also not fully clear if the team is targeting B2B or B2C markets, although it’s mostly leaning B2B so far.
Lack of a flagship product makes adoption a long-term marathon. There’s no exclusive consumer-facing Enigma app for people to get excited about, except Catalyst, a trading platform with tens of thousands of users (small for an app). Monetizing these dApps is key to generating revenue.
Major legacy tech enterprises like Amazon, Google, and Facebook have privacy initiatives moving forward, and they’re likely to use proprietary solutions. So far Enigma’s blockchain technology has not been implemented into a major legacy company. It’s competing with them until it is.
Fun Fact – The term “Enigma” is derived from communication encryption machines popularly used by the Nazis during World War II. It’s somewhat ironic similar tools are now being deployed against fascist governments.
Upcoming Enigma Catalysts
Discovery – The launch of the Discovery mainnet platform will be integral to Enigma’s success. It was initially scheduled for Q3 2018 and is now approximately a year behind. A successful launch requires a strong dApp library, enterprise support, and onboarded users. The team has so far made progress in all of these fronts, leading to positive expectations for the launch on Ethereum’s mainnet.
Defiant – Scheduled for 2020, Defiant is the final stage of the Enigma network, in which it migrates from Ethereum to its own Enigma Chain. This will also migrate ENG from an Ethereum token and require a token swap. This is the final production state many investors wait for, and providing this by 2021 should boost token adoption and liquidity.
Enigma Voyager – Pitched on the initial roadmap as another implementation, the Enigma Voyager branding is taken up by a completely different project with similar visions. This could confuse potential enterprise customers. Enigma.co (this project) and Enigma.com (run by Enigma Technologies, Inc) are two completely different projects from different teams, but offering essentially the same value to businesses.
Governments – Secret contracts are at the base of Enigma’s technology. Many government agencies, like the Japanese Financial Services Authority (FSA) and US Securities and Exchange Commission, have apprehensions about this type of technology. And government agencies routinely require backdoors in software, shutting down companies who don’t comply (see Lavabit). Should governments aggressively pursue privacy coins, Enigma could find itself in the crossfire.
Enigma 2019 Summary
The Enigma platform was created as a secure platform to connect blockchains to each other and exchange data and value in private. These privacy-focused features come at a time when personal data security is a hot-button issue for enterprise, government, and consumers.
Enigma is a strong technical platform built by a team with extensive industry knowledge. It’s well funded ($45 million invested in the ICO), with a strong advisory board and development partnerships.
When the mainnet launches, Enigma will be fully integrated into a dozen crypto projects, and its success can be lifted by the successes of each individual part.