Two bitcoin experts together with MIT Media Lab unveiled a new prototype encryption scheme, named Enigma, that uses the blockchain technology to store data.

The MIT Media Lab, a research laboratory at the Massachusetts Institute of Technology, and two bitcoin entrepreneurs have introduced a new prototype encryption system, entitled Enigma, that allows you to share data with a third party without it being decrypted.

“You can see it as a black box,” said one of Enigma’s developers Guy Zyskind. “You send whatever data you want, and it runs in the black box and only returns the result. The actual data is never revealed, neither to the outside nor to the computers running the computations inside.”

Called a “homomorphic” encryption, this method of data encryption allows untrusted computers to deal with sensitive data without putting it at any risk.

The system encrypts information by splitting it up into pieces and spreading parts of it in a random way across computers in the Enigma network. Each node of the network carries out calculations on its part of data before all the constituent parts are pulled by the user back together. The nodes can collectively perform computation without accessing the rest of the information.

“I can take my age, this one piece of data, and split it into pieces, and give it to ten people. If you ask each one of those persons, they have only a random chunk. Only by combining enough of those pieces can they decrypt the original data,” Zyskind explained.

The architecture of the system could enable a search engine to give results without seeing the user’s request. Besides, it will allow users to securely share data with advertising and pharmaceutical firms without privacy risks. The companies could get necessary results without accessing user’s information.

“No one wants to give their data to some company when you don’t know what they‘ll do with it,” said Oz Nathan, Enigma’s co-creator. “But if you have guaranteed privacy, data analysis can be a lot more powerful. People will actually be willing to share more.”

Based completely on the cryptography behind bitcoin, Enigma stores all information in the blockchain. The amount of power required by the system is less than 100 times that of the unencrypted calculation, but Enigma’s creators plan to further minimize it to about just ten times the processing power.

The computing requirements depend on the number of computers in the network. The larger number of nodes involved, the more secure user’s information is.

To ensure the accuracy of the computations, Enigma includes a security deposit, which requires users to pay in the digital currency to join the network. If a node appears to be dishonest, its deposit is seized and distributed to the other nodes. “It all balances out and kills the incentive for people to cheat,” Zyskind commented.

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