Confidential computing technologies could unlock the next $1 trillion worth of capital for the cryptocurrency ecosystem.
More advancements in privacy technologies, like fully homomorphic encryption (FHE), could bring the next trillion into the crypto market, according to Remi Gai, the founder of Inco.
Gai told Cointelegraph exclusively, during the FHE Summit 2024:
“There’s the next trillion dollars of opportunities because if you think about what we’re building, it’s enabling creators to build more applications. So first, we’re growing the pie of what’s possible in Web3. A lot of these use cases in Web2 just cannot work in Web3 because we're missing this confidentiality aspect.”
Gai is the founder of Inco, a modular confidential computing network building FHE-based solutions aiming to become the confidential computing layer of the blockchain.
Crypto space needs more privacy for mass institutional adoption
Most of the mainstream institutions are deterred from joining the decentralized finance (DeFi) space because of a general lack of private states in Web3.
However, confidential computing-based technologies could bolster institutional participation and increase liquidity in crypto, explained Inco’s Gai. He said:
“Institutions are still having a hard time entering the space because everything is transparent. Now, if you enable an experience similar to what they're comfortable with in Web2, suddenly this could bring a lot more liquidity, use cases, bigger participants and money to enter the space.”
However, encryption is not necessarily about creating anonymity, but about the ability to encrypt valuable information, which is still missing from the blockchain space, similar to the secure sockets layer (SSL) of the internet. Gai explained:
“If blockchain is the value layer of the internet, then you need the SSL equivalent. A lot of people still think encryption means anonymity. No, it just means that you need to take certain pieces of information that are valuable through encryption. And that is what we're missing today.”
Confidential computing advancements will also attract more retail investors
When asked about the source of new capital that would be unlocked by confidential computing advancements, Gai said that it would be a mix of both new institutional and retail liquidity joining the crypto space.
He said:
“If you think about the new use cases it will create, it will also attract net new users. That will also bring in liquidity. So it could also trickle down to retail. It doesn't have to be just institutions.”
The amount of new liquidity will largely depend on the disruption potential of the new use cases introduced by confidential computing advancements.
Confidential computing technologies bring significant promises to financial institutions. For example, fully homomorphic encryption (FHE) solutions enable computations to be performed on encrypted data without decrypting it.