- The Midnight blockchain offers privacy and enterprise-grade reliability.
- Midnight aims to offer viable mass adoption by offering 4th generation capabilities.
- Midnight will feature a dual token system.
Blockchain technology has rapidly evolved over the past decade, with each innovation building on the last. Bitcoin pioneered peer-to-peer digital currency. Ethereum took this further by enabling smart contracts. Cardano then focused on improving code quality for proof-of-stake mechanisms. Now, the advent of privacy solutions like Midnight signals the beginning of the 4th generation evolution of blockchain.
Under Midnight’s grand plans, developers can build decentralized apps to handle sensitive data without fear of leaks, companies can share mission-critical information beyond organizational borders, and individuals can operate freely in an interconnected world without compromising their privacy. By finally addressing this fundamental need for data protection, Midnight intends to take blockchain from a niche offering into the mainstream. But little is known about Midnight due to it being a relatively new project.
DailyCoin’s Senior Journalist, Insha Zia sat down with Midnight CEO Eran Barak at the Cardano Summit 2023, in Dubai, to discover more about the project’s vision for revolutionizing data privacy and ushering in mass adoption.
Midnight Kicks Off the 4th Gen Era
Giving the background on how Midnight came to be, Barak explained that Cardano founder Charles Hoskinson and the Input Output (IO) team were considering how to add data protection into existing blockchain capabilities around five years ago. The outcome of this was a research paper titled “Kachina – Foundations of Private Smart Contracts”.
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Over time, the Midnight team gradually turned research theory into “a production-ready technology”, with Barak tasked with taking the product to market when he joined the team earlier this year,
While the word “transformative” has become something of a cliche in blockchain circles, Barak believes Midnight is truly groundbreaking in that it kicks off a new era of 4th generation blockchain technology, as envisioned by Hoskinson.
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This essentially refers to improving the limitations of scalability, privacy, interoperability, and security from older generations of blockchains, finally making the technology a viable proposition for mass adoption, particularly at the enterprise level.
In a nod to Midnight’s relationship to Cardano as a “sidechain”, or separate but compatible network, Barak explained that this vision for 4th generation blockchain encompasses interoperability between different chains and concepts that will eventually eschew maximalism and tribalism, which is so prevalent within the industry.
Explaining further, Barak used the analogy of different modes of transport on a highway. Each type of vehicle meets the needs of its users for different reasons, but Barak was keen to stress that this doesn’t mean one type is objectively better than another.
“You’ve got trucks, you’ve got cars, you’ve got motorcycles, maybe bicycles, it’s not that one is better than the other. An off-road vehicle may not be as fast on the road, but you know, a sports car will struggle off-road”, explained Barak.
At its core, Midnight rejects the maximalist notion that one blockchain should rule them all. As Barak stated, the transformative power that will take the crypto industry forward into mass adoption lies in embracing multichain and building off of each chain’s strengths.
Mass Adoption
Although blockchain technology has been around for over a decade, mass adoption has been relatively sluggish. However, the catalyst for crossing into the mainstream will be addressing the friction points that make blockchain second best. Barak distilled these friction points to fears over data protection and the lack of enterprise-grade reliance
“I don’t know of any general purpose, corporate or government function that is going to put sensitive information on a public chain. You would not publish your secrets on the internet. They just won’t do that”, stated Barak.
Midnight is capable of providing protection for transactional data, while also giving the same degree of privacy to metadata, stated Barak. This 360-degree shielding closes off prying eyes for complete data confidentiality.
Moreover, the Midnight CEO stated that mass adoption comes when projects switch their focus from the technology side of blockchain building to the success of their customers, particularly in the case of enterprises, that demand reliable infrastructure, predictable costs, and proven security, as well as data privacy.
“They need to know it’s always available like any other cloud resource, let’s say from Google, Amazon Microsoft that they are using, they also need to know that the cost of operating this infrastructure is fairly flat or flat because again, they need to budget flat for how much is going to cost me to run my business application on this technology”, explained Barak.
Barak believes Midnight can tackle the real-world friction points blocking mainstream blockchain adoption. By building to customers’ requirements Barak is confident that Midnight will be among the first of the next generation of technologies that will entice businesses to cross over to blockchain en mass.
Tokenomics
Tokenomics is another important aspect that needs to be addressed to ensure mass adoption. Tokenomics refers to the economics of a blockchain token, including the total supply of tokens, the distribution of tokens, the inflation rate, the security of the project, and use cases.
The Midnight team discovered that privacy coins suffer from limited liquidity due to resistance from exchanges to list privacy tokens from fear of regulatory backlash, as well as a general aversion toward them based on their association with nefarious activities.
To overcome this problem, Barak explained that Midnight will use a two-token solution. The first token is shielded to ensure private transactions, offering confidentiality by obscuring transaction details and associated metadata. The second token interacts with external chains to permit trading on exchanges and decentralized apps. This unshielded asset unlocks the liquidity Midnight needs for security and decentralization.
Through its innovative privacy-first sidechain architecture and dual token model, Midnight offers a tantalizing glimpse into the future of mass blockchain adoption. By tackling data protection and network reliability head-on, Midnight aims to push decentralized technologies across the chasm into the mainstream.
Barak confirmed that Midnight will open up its dev net on November 13, with the test to follow at a future date.
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