Blockchain technology provides a layer of openness and transparency that current central networks cannot provide, and this is not meant to share some private data publicly.

Where blockchain networks such as the Bitcoin blockchain provide the ability to see transactions between different addresses in a transparent manner without the possibility of knowing who is behind these transactions.

There are projects that obscure even transactions, these projects are known as privacy projects such as “Zcash”, “Monero” and many others.

Between this and that stands out the “Secret Network” project, which seeks to provide a transparent blockchain that mixes privacy and security.

Below we will learn about the project, its most important features, and how it works:

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What is the “Secret Network” project?

The “Secret Network” project is a blockchain designed specifically for data privacy.

By supporting the inputs, outputs and cases of encrypted smart contracts, the project provides programmable smart contracts that maintain the security of user data.

If cryptocurrencies such as Monero and Zcash are the privacy-centric development built on the Bitcoin blockchain, then the Secret Network smart contracts are similar to the evolution of the Ethereum blockchain smart contracts.

Such as The “Secret Network” project by Enigma, a startup that developed the concept of a decentralized protocol for secret smart contracts.

Enigma raised $45 million in an initial coin offering in 2017.

But she faced a lawsuit from the US Securities and Exchange Commission in 2020.

In the end, the community around Enigma decided to pursue this vision as an independent, decentralized project, giving birth to the current version of the Secret Network.

The swap allowed holders of Enigma’s Ethereum-based “ENG” to exchange it in a 1:1 ratio against SCRT, the official “Secret Network” native token used for governance and fee payments.

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Knowing that “Enigma” company participates as one of the main players in the community supporting the development of the “Secret Network” project.

How does the “Secret Network” project work?

The “Secret Network” is a Layer 1 blockchain with a proprietary consensus and governance mechanism, built on top of the Cosmos/Tendermint framework.

The project relies on a network of distributed nodes that compute smart contracts built on the “Secret Network”, but the nodes use a Trusted Execution Environment (TEE) – similar to a black box – to stay out of prying eyes.

The mechanism is similar to how a smartphone processor uses TEE to handle sensitive data such as fingerprints, but is a blockchain node instead.

The network treats its smart contracts as “secret contracts”, because they are designed to keep the data inside them private.

SCRT must be placed by nodes to participate in the network, as well as be used to pay fees and transfer value.

What distinguishes the “Secret Network” project?

Blockchain technology is immutable and transparent, but this kind of transparency and openness limits the type of data that can be safely handled by many blockchain networks, especially highly confidential data that people or companies do not want to share.

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The Secret Network project aims to fill this gap by providing a layer of privacy and security while maintaining what people love about blockchain technology.

Although this project is not the only project trying to fill this void, it is a concept that could be key to driving the future of some decentralized applications (dapps), particularly in the field of decentralized finance (DeFi).

What can be done with “Secret Network”?

The Secret Network project is designed to enable and assist decentralized applications that require a level of privacy not found in many other blockchain networks.

By using a reliable execution environment and keeping private data away from public operators and nodes, sensitive information that users and organizations may not want to share can be handled.

Network operators are proposing a plethora of potential use cases, including credit logging, lending, and dapps that ensure privacy, machine learning capabilities that remain private in the process, and improved ability to securely share and monetize data.

More broadly, the Secret Network can be useful for any dapp that handles sensitive data.

With the conclusion of the SCRT ENG to SCRT cryptocurrency swap in January 2021, the Secret Network project attempts to build toward a future that embraces interoperability with other blockchain networks.

Lack of compatibility across blockchain networks may reduce the attractiveness of the “Secret Network” project and eventually prevent it from spreading or being useful as the project developers intended.

The “Secret Network” project is driving the field of decentralized finance through its own “Secret DeFi” initiative, as the project launched a decentralized trading platform called “SecretSwap” in February 2021.

In addition, the “Secret Network” project and its cryptocurrency SCRT seem focused on getting more developers to build their own dapps, thus demonstrating more use cases.

It is worth noting that this project is not the only one that contains smart contracts that focus on privacy (the Oasis Network project is another example that we have already discussed in Article).

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