Prague, Czech Republic
January 19, 2025
Blockchain and distributed ledger technologies come with numerous compelling advantages that have driven their widespread adoption – including unprecedented transparency in financial transactions, permissionless access that enables anyone to participate without intermediaries, and a degree of anonymity in digital interactions. However, despite the many noteworthy features that have revolutionized digital transactions and record-keeping, these technologies might not provide the level of privacy and security that many users assume or expect.
While privacy is a widely emphasized value in crypto and blockchain ecosystems – with many privacy-related technologies like zero-knowledge proofs emerging from cryptography – distributed ledger technologies are inherently public and only offer limited anonymity, making them fundamentally not private.
In terms of security, while blockchain technology is constantly evolving and improving, vulnerabilities in smart contracts remain a significant risk. Malicious actors can exploit these vulnerabilities to steal funds or cause other damage.
Threats like wallet hacking and phishing scams, if successful, are built on targeting individuals through the surveillance and collection of personal information: metadata about financial transactions, patterns, and IP addresses stored on wallets or exchanges. The fact that blockchain data is decentralized and public, offering certain securities over centralized data storage, however, still leaves unresolved a range of security and privacy risks for users.
“Web3 has a privacy problem,” Harry Halpin, CEO of Nym Technologies, noted. "Nothing we do online, not even crypto transactions, are actually protected. Chain or network surveillance, especially powered by AI technologies, can easily link a sender with a recipient to deanonymize any traffic or transaction. Existing solutions aren’t sufficient against global adversaries. What is needed are decentralized technologies and noise to obscure patterns of communications against even the most advanced surveillance systems.”
Another risk comes from storing crypto assets on centralized platforms instead of maintaining self-custody. These platforms and institutions can fail due to poor management or deliberate fraud (like “rugpulls”), resulting in the complete loss of user funds.
The EthereumZuri.ch conference and Nym Technologies are committed to developing decentralized solutions for these challenges. We must address the problems posed by the centralized infrastructure that currently supports the crypto space. This includes both centralized exchanges where crypto assets are stored and wallets that collect personally identifying metadata such as user IP addresses.
Some key solutions that address these challenges are a shift toward crypto self-custody that gives users complete control over their assets, and layer-0 anonymity networks like NymVPN that provide the privacy infrastructure blockchains have been lacking.
Nym is actively working to implement this privacy layer for blockchains like Celestia to address critical security issues across Web3.
As a prominent community, educational, and industry event, EthereumZuri.ch continues to foster knowledge exchange and professional discourse on these critical matters, hosted its third annual conference this year.
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