How Web3 Projects Empower Users to Take Control of Their Data: Aleo, Fhenix, Coti 

Principle behind Web3 has always been to dispense with intermediaries and let people exchange value in a global network controlled by no one.

Guy making power moves with bitcoins.
Created by Kornelija Poderskytė from DailyCoin

The debate over data privacy in an age of oligopolies such as Apple, Google, Meta (Facebook) and many other tech giants has been bubbling for many years. Many of these companies sell your data as their core business, and they’ve gotten incredibly creative over the years in how they collect, process and resell their users’ information.

These tech giants are Web2, in a nutshell. While they changed and arguably improved our lives in countless ways, the user-facing side of these platforms hides a complex machine of data collection, in which the users have very little say, if any.


Like with all other legacy platforms, it wasn’t always like this. The current data sharing and tracking crept up on us over many years, as the basic desktop and browser experience morphed into a fully connected world where there’s an app for everything. Now, we’re “stuck” in this world, as the Oligopoly has made itself largely indispensable for everyone’s personal and professional lives.

For fairness, the current data-industrial complex is being mostly used to deliver cat food ads to cat owners, travel agency ads to newly-engaged couples, sex toy ads to sex toys users — and so on. But we’ve already seen how this power can be used for much more. For example, the Trump campaign was particularly innovative in 2016 for its use of Big Data. Or, more recently, governments around the world are using targeted ads to deliver propaganda to their own or their enemy’s citizens.

In short, the power of the modern digital world to identify, persuade, locate and hinder an individual would make the dystopian writers of the last century shudder. Some of the greatest tragedies in history were severely hampered by the inefficiency of the state and the analog world. Today’s tools are extremely powerful, and hoping for no one to misuse them is naive at best.

How Can Web3 Help?

The principle behind Web3 has always been to dispense with intermediaries and let people exchange value in a global network controlled by no one.


Bitcoin and cryptocurrencies are the first example of a network for exchanging monetary value, and it has worked incredibly well for it. Unlike what earlier narratives might focused on (“pay for coffee with Bitcoin”), cryptocurrencies have been a great connector of many local economies and financial rails. They are, essentially, a replacement for Swift — and they’ve been great at that.

Now, the idea is to expand the principle of self-sovereignty and freedom to transact embedded in Bitcoin to more than just money.

Blockchains make it possible to store data in a globally accessible, resilient, tamper-proof and verifiable ledger. You couldn’t have asked for better if the goal is to store a person’s data, such as government records, medical records, or their browsing history on Google.

The only issue with Web3 as it stands today is that all the data is completely public. Blockchains have no real privacy, as all transactions can be clearly seen on block explorers. While you wouldn’t necessarily know who did it just by looking at it, there are plenty of ways to reconstruct a person’s entire transaction history with external metadata.

This is where privacy protocols come in to save the day. From their humble beginnings of “just” basic privacy coins like Zcash, Monero and others, the privacy space in Web3 is now filled with teams researching breakthroughs in fundamental cryptographic science. And some of these discoveries might make a full Web3 transition possible in just a few short years.

Privacy Solutions: Aleo, Fhenix and Coti 

The holy grail of privacy on-chain is to have a fully programmable and cheap blockchain that can encrypt data and give its owners full control over who can access it and how.

The hard part in implementing this is securing the blockchain itself. If we can’t verify that the operations done in privacy are still following some basic rules, then such a blockchain couldn’t work. In a privacy coin setting, for example, the cryptography is there to ensure a very basic thing: that the sender is not trying to send funds he doesn’t own.

There are multiple competing solutions for implementing private smart contract programs, each using a different type of technology.

Zero Knowledge proofs are perhaps the best known. Projects like Aleo are building private chains relying on zk-proofs to verify each smart contract for correctness, even if the inputs and outputs aren’t known. In Aleo, developers would use a language called Leo to build their own private programs.

While the project has received significant funding, it’s still unclear when it may launch and how, despite being in development for many years. Aztec, another project based on ZK proofs, is similarly more than 6 years old. 

As the ZK space matures its technology, other teams are working on alternatives. One example is Fhenix, which is set to use Fully Homomorphic Encryption (FHE) to provide a similar practical outcome: all computations and their inputs would be encrypted, enabling private storage and operations with data.

Fhenix came relatively early on the field, but it seems to be in a good position to launch around next year. The platform would also offer EVM compatibility, which would help adoption.

Finally, Coti recently came out with its Garbled Circuits implementation, claiming to have made a significant advance in this privacy-preserving technology. Garbled Circuits are a form of Multi-Party Computation (MPC), allowing multiple parties to compute a function over their inputs without revealing them to each other. This technology, initially thought theoretical due to its computational intensity, has been made practical by Coti through innovative optimizations.

Recent developments have seen Coti successfully implement Garbled Circuits on the blockchain, achieving computation speeds up to 1000 times faster than FHE, which looks quite promising. 

Garbled Circuits would offer yet another cryptographic path to privacy on-chain. Which ones will ultimately prevail is yet to be seen, but the space is incredibly promising: a working implementation of private Web3 smart contracts would be truly revolutionary.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Alex Costa

Alex Costa is a crypto writer and investor specializing in researching, analyzing and reporting on promising small-cap projects that are gaining traction in the industry. He has been in crypto since 2018, when he began looking for hidden gems in crypto. Today, he is dedicated to finding the next top performing NFTs and tokens.