EY releases the next-generation of its privacy-preserving and now cost-cutting technology

Ernst & Young (EY) deployed the third-generation of the firm’s zero-knowledge proof (ZKP) technology (dubbed Nightfall in earlier iterations) to the Ethereum blockchain. The latest ZKP components help batch multiple transaction proofs together and reduce the size of this private transaction bundle (i.e., Merkle tree), which EY claims will dramatically improve the scale and cost at which Ethereum can process private transactions. As to why EY chose to build on public infrastructure, Paul Brody, EY’s Global Innovation Leader, said:

“I believe we will look back upon the industrialization of ZKPs as a key milestone in the wide enterprise migration from private to public blockchains. Organizations are increasingly seeing the potential for public blockchains, with 75% of enterprises likely to use these networks in the future.”

Why it matters:

• EY is a clear proponent of public infrastructure, including blockchain technology, which is a refreshing departure from the “Blockchain, not Bitcoin” narrative followed by most renowned enterprises. A few other enterprises, such as Microsoft (via its Bitcoin-based decentralized identity tool), are similarly betting on the belief most business-related blockchain use cases will eventually operate or settle on public networks.
• A significant number of enterprises opt not to use public blockchains for security and privacy concerns, as noted in a recent study conducted by research firm Forrester. These results make sense: why would any business want their transaction records to be public information. But Forrester also found enterprises find private blockchains to be insufficient in terms of interoperability, which tangentially relates to a lack of data accessibility. ZKP technology could help bridge this gap by bringing a sufficient level of transaction privacy to public networks, which are more easily accessible to by design.