Better applications better decisions

By Kurt Nielsen, PhD, President of Partisia Blockchain Foundation

In this blog post, I will provide an overview of our short run focus on applications in the Partisia Blockchain project.

From an economist’s point of view, the intriguing value driver that Partisia Blockchain enables is the possibility to automate and improve the coordination in the economy and remove middlemen, which follows from the three main components:

• Decentralized immutable ledger or traditional blockchain, which allows for the removal of the traditional coordinator as middleman.
• Decentralized zero-knowledge computation like MPC, which allows for the removal of the traditional trustee as middleman.
• Public and private smart contracts, which allows for the automated use of the Partisia Blockchain infrastructure for private and public coordination.

These basic components and value drivers have a potential profound impact on decision making and the economy in general. In the short run, however, our focus is to work with partners on applying decentralized privacy and interoperability to improve; a) the DeFi ecosystem, b) data exchange in general and c) applications that bring control back to the data providers.

As a developer you can integrate with the network in a number of different ways across platforms. While Partisia Blockchain is a full stack public blockchain on its own terms, it is designed to function as a fully orchestrated ”second layer” that adds privacy and more interoperability to existing blockchains as well as off-chain systems.

Now let’s talk about the 3 types of applications.

DeFi ecosystem
Trading platforms such as decentralized exchanges and auctions are a core field of applications. In fact, the first large scale and commercial use of MPC was a decentralized exchange conducted in 2008 by the team behind Partisia Blockchain followed by a number of MPC based auctions within energy, finance and telecoms. A recent trading platform that utilizes the combination of MPC and blockchain is cyberian.digital — a financial order matching service. In general, most trading solutions are designed to address market failures and improve trust through a mix of confidentiality and transparency. An example of such a mix could be to use the public smart contract to keep track of buyers and sellers and the resulting trades while the private smart contracts keep private bids/asks confidential.

The use of market mechanisms such as auctions is the backbone in market solutions across industries from finance and energy to commodity markets in general. Unless the price of goods and services is obvious, dynamic price setting mechanisms like auctions add value. With increasingly complicated supply chains and niche products, price setting and auctions are becoming an integrated part of many markets. This may, however, be hidden from the ordinary consumer or be reduced to feeding a bidding agent with private preferences, which allow users to act more professional on market for e.g. electricity, loans or insurance contracts.

The many interesting new market solutions that are being “tested” in the somewhat isolated DeFi ecosystem, may become a part of this evolution across markets and platforms. Our initial focus, however, is on bridging different blockchains and allowing users to seamlessly move data and tokens from one blockchain and security paradigm to another. The aim is to increase the participation on existing DeFi solutions and to lower the barrier for bringing DeFi to traditional markets.

Data Exchange
With the decentralized approach to privacy that comes with Partisia Blockchain, application developers can build solutions that keep the participants’ private data private while providing full transparency about the data sources and algorithms used. In the short run, this better data protection allows for more use (not sharing) of the most valuable but sensitive data in a sound and regulatory compliant way. In the long run, this has the potential to change the power structures operating in the internet economy of today and allowing for more competition on the application and service level.

A prime example of a platform that utilizes MPC and blockchain is Instars.com which uses technology developed by the Partisia Blockchain team. Here, the user’s data is kept confidential and data requesters find suitable data points through a decentralized MPC based matching process. The exchange of data points is orchestrated by public smart contracts and has been in use since 2017 with more than 250,000 users. Another example is the Data for Good Platform designed to allow citizens to donate data for confidential use (not sharing) using MPC and blockchain to strike the right balance between confidentiality and transparency. This platform, built by the Partisia Blockchain team, is operational in a pilot study with cancer patients donating data for analysis improving cancer treatments.

This emerging market for data exchange that brings the control back to the data providers has a tremendous long run potential. To support this development, we are building the basic components for trustworthy representation of data across platforms as input and output, in and out of the privacy preserving use of data via Partisia Blockchain.

My data
The trustworthy transfer and confidential use of values and data briefly described above provide an unprecedented platform for an emerging market of applications that reclaim control of data while putting it to use.

This may disrupt the current business model for existing services like online advertisement, surveys, market analysis and replace intermediators with the actual data providers. It may also open up for new services that directly include the data providers such as telemedicine, drug assessment, collaborative fraud detection etc. Let’s consider two examples:

Online advertisement: The current dominating business model for online advertisement is fueled by the market for user data harvested by services and cookies more or less outside of the users control. As an alternative, Partisia Blockchain provides the infrastructure for privacy preserving digital agents that automatically bring the users’ data in play on demand without exposing the data itself. Hereby, the user benefits directly as part of the data market and the advertisers base its advertisement on information directly from the user.

Collaborative fraud detection: Addressing financial fraud in the existing financial system requires better insights into the individual financial transactions and better mapping of the transactions to gradually reveal fraud patterns. This required collaboration is limited by both data and competition regulation, preventing banks from sharing customer data as well as regulators reluctance to get involved across jurisdiction in order to maintain arms-length regulation. Partisia Blockchain provides the infrastructure to facilitate this collaboration and conduct arms-length privacy preserving fraud detection.

In later posts we will dive more into the different applications, and showcase how the Partisia Blockchain infrastructure adds value through better applications supporting better decisions.

Kurt Nielsen, PhD, President of Partisia Blockchain Foundation