Confidential Computing in Web3: An Arcium Case Study.
Web3 promises us a decentralized future, a world without banks and central authorities. It sounds like the perfect solution to many of our problems. But is it flawless? Not quite. With great power comes great vulnerability, and Web3 faces a significant challenge: the constant threat of hacks
Every year, billions of dollars are lost in Web3 due to security breaches in decentralized systems. In 2023 alone, security breaches resulted in $1.84 billion in losses, with private key compromises being the most costly attack vector (GlobeNewswire). The main culprit? Data exposure. Whether it’s wallets getting drained, bridges being hacked, or protocols being exploited, the underlying issue is often attackers gaining access to sensitive data.
No one willingly gives away their private keys, so attackers use various methods to extract this information without consent. We’ve been told to store our keys and seed phrases securely when not in use, and while users have adopted these practices, hacks still occur. For instance, the Poly Network hack in 2021 resulted in over $600 million being stolen due to a vulnerability exploited during the system’s operation. Many breaches happen while systems are in use, not just due to stolen keys or seed phrases. Insider attacks, for example, often occur because employees have access to critical data.
We can see here, that data is gold, and Data exposure remains a critical vulnerability in web3. All forms of hacks can be traced back to attackers having access to data they shouldn’t. This data empowers them to exploit vulnerabilities. If web3 plans to go mainstream and adopt more users, how then can we make it a safer place for user and application data? How do we minimize the risks involved?
The solution? Encryption — not just encrypting passwords and keys, but encrypting sensitive data while it’s in use. Encryption protects data in transit, but what about when data is in use? Enter confidential computing, which ensures data remains private even during processing.
In this article, you will learn what confidential computing is, its importance in Web3, and how Arcium is empowering developers and applications with this revolutionary technology.
What is Confidential Computing?
Confidential computing is essentially a technology designed to protect data while it is being processed or in use. Traditionally, confidential computing has relied on Trusted Execution Environments (TEEs) to protect data. TEEs create a segregated area of memory and CPU that is protected from the rest of the CPU using encryption. Any data in the TEE can’t be read or tampered with by any code outside that environment. However, while TEEs are powerful, they suffer from several vulnerabilities such as:
- Side-Channel Attacks: TEEs can be vulnerable to side-channel attacks where attackers exploit physical characteristics of the hardware, such as power consumption, to infer data being processed.
- Vendor Trust: Users need to trust hardware manufacturers that the TEEs are implemented correctly and that there are no backdoors or vulnerabilities.
- Third-Party Data Storage: Often, applications need to store sensitive data with third-party services. These services may require data to be decrypted for processing, creating a point of vulnerability where attackers can exploit exposed data.
If TEEs are not as safe as they seem If they propose more vulnerabilities than solutions to the data exposure problem, how then can confidential computing be used to tackle data exposure issues and aid security in web3? With Arcuim, but how?
Introduction to Arcuim
Arcium addresses these issues that arise with using TEEs to confidentially compute, by leveraging cryptographic-based solutions rather than relying solely on hardware.
It is a parallelized Confidential computing network. By Parallelized confidential computing, It means that multiple computations can happen at the same time, rather than one after the other. In Arcium’s case, this is possible because each Multi-Party Execution Environment (MXE) has its own state. This means that different MXEs can process different pieces of data simultaneously, increasing efficiency and speed.
Think of it like having several chefs in a kitchen, each cooking their own dish at the same time, rather than one chef making all the dishes one by one. This approach helps get more done faster and more efficiently.
Arcium tackles vulnerabilities in confidential computing with advanced cryptographic techniques like Multi-Party Computation (MPC), Homomorphic Encryption (HE), and Zero-Knowledge Proofs (ZKPs). These methods allow secure computations without relying solely on hardware. It provides its own flavor of confidential computing as a service to apps and developers, empowering them with all they need, to protect sensitive data, and guard against data exposure. Arcuims very aim is to bring confidentiality to every on-chain application, becoming the global computing network for the decentralized internet.
It aims to achieve the same goals as TEEs but with significantly reduced vulnerability risks and in a more decentralized manner.
you may wonder, how exactly Arcuim plans to achieve confidential computing without TEEs. How do they combine ZKPs and the rest of its ingredient technologies to achieve confidential computing without relying on hardware-based TEEs?
Let’s find out, by taking a closer look at its architecture
High-Level Overview of Arcium’s Architecture
At the core of Arcium’s architecture are MXEs, Clusters, Arx nodes, and Onchain management(Arx Network). They are the key components that make up the overall Arcium architecture. Before we put the puzzle pieces together, it’s essential to understand the technologies used by Arcium and their roles.
- Multi-Party Computation (MPC):
- Definition: MPC is a cryptographic process where multiple parties jointly compute over inputs while keeping those inputs private.
- Role in Arcium: Arcium uses MPC to enable secure computations on encrypted data across a decentralized network of nodes. This means multiple nodes participate in computing different parts of the same data. This ensures that no single node can access the entire data set, maintaining privacy and confidentiality.
2. Homomorphic Encryption (HE):
- Definition: HE is a technology that allows computations to be carried out on ciphertexts, generating an encrypted result that, when decrypted, matches the result of operations performed on the plaintext. This simply enables the encryption of the data while in use.
- Role in Arcium: HE allows Arcium to perform computations directly on encrypted data without needing to decrypt it first. This means sensitive data remains encrypted and secure throughout the entire computational process.
3. Zero-Knowledge Proofs (ZKPs):
- Definition: ZKPs are cryptographic methods by which one party can prove to another that a statement is true without revealing any information beyond the validity of the statement itself.
- Role in Arcium: ZKPs are used in Arcium to verify the correctness of computations without revealing the underlying data. This adds an extra layer of security and trust, as nodes can prove their operations are accurate without exposing any sensitive information.
Look at it this way:
Multi-Party Computation (MPC) works similarly to how blockchain distributes data across nodes. With MPC, data computation tasks are distributed across multiple Arx nodes (Arcium nodes), hence the name. Each node processes and computes a part of the encrypted data, ensuring no single point of failure or trust.
Zero-knowledge proofs (ZKPs), In this context, work just like a blockchain consensus mechanism, ensuring and proving that computations are done correctly by each node, without revealing the actual data.
Homomorphic Encryption (HE): HE ensures that data remains encrypted during the entire computational process, removing the need for decryption at any stage, which is a key vulnerability in TEEs.
Just like any functioning blockchain relies on a network of nodes and a consensus algorithm, these technologies constitute the decentralized network infrastructure behind Arcium.
So let’s put the pieces together, in the grand scheme of arcium’s overall architecture, what are MXEs, Clusters, Arx nodes, and Onchain management ? and how do they work alongside ZKPs, MPC, and HE to provide Arcium’s confidential computing service?
Multi-Party Execution Environments (MXEs)
At the core of Arcium’s architecture are MXEs. This is where Multi-party computation takes place. When different Arx nodes(Arcuim nodes) perform computation on data, they don’t just do it anywhere, but in an environment built solely for that purpose. This environment is the Multi-Party execution environment.
As MPC happens here, HE(homomorphic Encryption) allows the data that computation is being performed on, to be encrypted through the whole process. After this happens, ZKPs(Zero Knowledge Proofs) are used to verify the correctness of the computations performed by the nodes without revealing the data itself. Do You see? MXEs are where the magic happens, it’s where everything takes place.
Clusters and Arx Nodes
- Clusters: These are collections of Arx nodes that execute the MXEs. Think of clusters as the hardware infrastructure in traditional systems.
- Arx Nodes: These nodes perform the actual secure multiparty computations(MPCs). They work together to ensure that data remains encrypted and secure. They are basically arcium nodes, nodes in the arcuim network. These nodes host clusters, which also host MXEs, where MPC takes place.
Computation Definitions and Scheduled Computations
- Computation Definitions: These are like functions in traditional computing. They define the specific tasks that need to be performed on data. They are usually defined by computation customers, ie individuals, dapp builders, and or smart contracts
- Scheduled Computations: These are computation definitions that are to be executed by MXEs within the clusters.They usually come from the mempool.
On-Chain Management
The Solana blockchain plays a crucial role in managing and orchestrating the network:
- Mempool Architecture: This houses all pending computations waiting for execution by the network.
- Participant Incentivization: Ensures that compensation flows from computation customers to Arx operators and third-party delegators. This incentivizes nodes to participate and perform computations accurately.
From the breakdown, when put all together you can see that, the architecture of the Arcium Network is designed to be exceptionally versatile and flexible, making it suitable for all possible distributed confidential computing needs. Confidential computing tasks are broken down into individual Computation definitions which are executed within dedicated MPC environments called MXEs. These MXEs are operated on top of Clusters which are collections of Arx (MPC) nodes. MXEs represent the system’s state, Computation definitions act as functions, and each scheduled Computation resembles an individual function call instance.
The Arcium Network uses programs running on the Solana blockchain to manage and orchestrate all aspects of the Network’s state and services. This includes an on-chain mempool architecture that houses all pending Computations awaiting execution by the Network. Additionally, participant incentivization is also handled on-chain, with compensation for confidential computing executions flowing directly from Computation Customers to Arx Operators and 3rd-Party Delegators.
Target Audience Interaction process
Arcuim is built for developers and builders that want to confidentially compute their data and ensure data privacy, so how exactly would they use Arcuim?
When developers build applications on Arcium, they can connect to the network through APIs provided by Arcium. Here’s how the process works:
Developers and Applications:
- Developers building decentralized applications (dApps) or other applications can integrate with the Arcium Network.
- They do this through APIs or Software Development Kits (SDKs) provided by Arcium.
Submitting Tasks:
- When a dApp needs to perform confidential computations, the developer defines these tasks. These tasks can include processing user data, executing complex algorithms, or any other computation that requires confidentiality.
- The developer submits these tasks to the Arcium Network. This can be done via APIs, which send the computation tasks along with the encrypted data to Arcium.
Arcium Network:
- Mempool Architecture: The submitted tasks are first placed in an on-chain mempool (a pool of pending tasks) awaiting execution.
- Orchestration: The Solana blockchain manages the orchestration, scheduling these tasks for execution across the Arx nodes.
Execution:
- MXEs: The tasks are executed within Multi-Party Execution Environments (MXEs). These environments use Multi-Party Computation (MPC) to perform computations on the encrypted data.
- Arx Nodes: Multiple Arx nodes collaborate to process these tasks without ever decrypting the data. They use Homomorphic Encryption (HE) to ensure data remains encrypted throughout the computation.
- Zero-Knowledge Proofs (ZKPs): These proofs verify that the computations are done correctly without exposing the underlying data.
Results:
- Once the computations are completed, the results are sent back to the dApp. These results can still be in encrypted form if needed, ensuring that the data remains confidential throughout the entire process.
Why Arcuim?
From the explanation above, we can see that Arcuim is set up for success. It mainly stands out, due to its distinct key features :
Parallel Execution Arcium excels with parallel execution, ensuring high throughput from the get-go. Unlike other platforms where global states can bottleneck performance, each Multi-Party Execution Environment (MXE) in Arcium operates independently. This setup allows seamless parallelization, ideal for scalable applications across Web3 and beyond.
Configurable Setups MXEs in Arcium are highly customizable to fit precise requirements. Whether encrypting specific application components or deploying confidential smart contracts, Arcium’s flexible framework supports diverse use cases. It’s designed to empower developers with tailored solutions that enhance security and functionality across various verticals.
Composable Architecture Arcium’s architecture is chain-agnostic, simplifying development for ecosystem-specific needs without compromising on interoperability. This feature not only ensures streamlined integration across multiple blockchains but also accommodates non-blockchain applications by adapting the trust model to specific requirements.
Arcium in Practice
Arcium’s innovative approach to confidential computing is poised to revolutionize several key verticals within Web3:
- Financial Services: Secure processing of financial transactions, protecting sensitive data such as transaction details, balances, and user identities.
- Healthcare: Confidential computation of sensitive health data for diagnostics, research, and patient records without compromising privacy.
- Supply Chain: Ensuring privacy and security in tracking and managing supply chain data, including inventory, logistics, and provenance.
- Data Analytics: Secure data processing for analytics, allowing businesses to derive insights while protecting proprietary information and customer data.
Real-World Use Cases and Applications
Arcium’s technology opens up a plethora of practical applications across various sectors:
- Decentralized Finance (DeFi): Enabling secure lending, borrowing, and trading of digital assets while protecting user financial information.
- Healthcare Data Management: Facilitating secure sharing and analysis of patient data among healthcare providers and researchers.
- Supply Chain Transparency: Verifying product authenticity, tracking shipments securely, and ensuring compliance with regulations.
- Data Privacy in AI: Performing secure computations on sensitive data for machine learning models without exposing raw data.
Tools that Can Be Built Using Arcium
Developers can leverage Arcium to build a wide range of tools and applications:
- Secure Wallets: Confidentially manage and transact digital assets while protecting private keys and transaction details.
- Privacy-Preserving Smart Contracts: Execute smart contracts that handle sensitive data, ensuring confidentiality during computation.
- Auditing and Compliance Solutions: Perform secure audits and compliance checks on blockchain transactions and sensitive data.
- Data Analytics Platforms: Analyze encrypted data sets securely while preserving data privacy and confidentiality.
The Importance of Confidential Computing
Confidential computing plays a pivotal role in enhancing the security and privacy of Web3 applications:
- Data Protection: Safeguards sensitive data during processing, preventing unauthorized access and data breaches.
- User Privacy: Ensures that user information, transactions, and interactions remain confidential and secure.
- Trust in Decentralization: Strengthens trust in decentralized networks by mitigating risks associated with data exposure and unauthorized access.
How Confidential Computing Can Address Security Concerns in the Blockchain Space
Confidential computing addresses critical security concerns in blockchain technology:
- Mitigating Data Exposure: Protects against vulnerabilities that expose sensitive information, such as private keys and transaction details.
- Enhancing Trust: Builds trust among users and stakeholders by ensuring that sensitive operations and data remain confidential.
- Compliance and Regulatory Alignment: Facilitates compliance with data protection regulations and enhances security standards within decentralized ecosystems.
The Broader Implications of Confidential Computing Beyond Web3
Beyond Web3, confidential computing offers transformative potential across industries:
- Enterprise Security: Enhances data security measures for enterprises handling sensitive information and intellectual property.
- Government Applications: Supports secure data processing for government agencies, ensuring confidentiality in critical operations.
- Global Impact: Promotes data sovereignty and privacy rights globally, fostering a more secure digital infrastructure.
Conclusion
Arcium represents a significant leap forward in confidential computing for Web3, offering a robust solution to data exposure. By leveraging cryptographic techniques and a decentralized architecture, Arcium enhances security without relying on vulnerable hardware-based solutions. As Web3 evolves, Arcium’s approach provides a safer environment for decentralized applications, paving the way for a future where data vulnerabilities are minimized, and user trust is maximized.
In essence, Arcium embodies the promise of Web3 — a decentralized future secured through innovation and cryptographic resilience.
