Midnight: A new privacy and data protection protocol on CardanoProtecting personal data has long been debated in the crypto community. The Midnight protocol, powered by Cardano, will create new conditions for online interaction. It can grant access to regulators while maintaining user privacy.
Midnight: A new privacy and data protection protocol on Cardano
With the advent of Web2, it became possible to create social networks where people can freely communicate and share information. But these platforms are owned by centralized companies, which can expose users to restrictions or surveillance, and confidential information and personal data can be "leaked" to the network. Web3 can create an environment without censorship or control over user data. But the implementation of decentralized projects either reveals too much information about users or leads to an overly closed system.
Here's the dilemma: by making payments on the Internet using cryptocurrencies, users can thus remain anonymous by not providing their personal data to third parties. On the other hand, the more anonymous the digital process is, the more negatively the regulatory authorities treat it due to lack of control. And to solve this dilemma, IOG is set to launch a new platform called Midnight.
Midnight is a blockchain that helps protect personal and commercially sensitive data. Such a solution will be fundamentally new in online interaction: users can decide what information they want to disclose.
Midnight will operate as a sidechain on the Cardano blockchain and inherit its security and decentralization.This will significantly expand the usefulness of Cardano, as it will be possible to create an extensive network with secure data.
The platform will enable commercial companies to exchange critical information directly with each other. For example, they can transfer financial data without fear of leaks or disclosing confidential information. And private users will be able to safely share their personal data on the Internet and not be afraid that they will be misused.
Midnight will make it easier for developers to create smart contracts than ever before. In this case, you can use various popular programming languages, starting with Typescript.
Charles Hoskinson, the founder of Cardano, explained the paradox of having a privacy law and a disclosure law at the same time:
"Every time you engage in a regulated business, there’s a privacy requirement because a regulated business requires you to give away some personally identifiable information and there’s a privacy law on the other side that says you have to keep it secret. The problem is, if you try to do that in a blockchain setting, your private information becomes public to everybody."
Midnight solves this problem with several new features. An important component will be private smart contracts to help ensure regulatory compliance. Another feature would be that blockchain relies on zero-knowledge proof. It is a form of encryption and transaction verification that allows one party to prove to another that they know something without revealing the information itself.
To put it very simply, it can be explained as follows:
Imagine a cave where there is one entrance, which is divided into two paths: A and B. These two paths are connected by a closed door with a code phrase. Bob wants to check if Alice knows the code for the door. But Alice wants to keep the code from Bob.
To do this, they make a check: Bob is standing outside the cave, and Alice goes inside and takes one of two paths, and Bob needs to know which one. Next, Bob asks Alice to come back using one of the paths chosen at random. If Alice took path A, and Bob asked to exit using path B, then Alice must open the door using the passphrase. This way, she will prove that she knows it without revealing the phrase itself.
Simply put, a platform can provide access to regulators while maintaining user privacy.
Midnight is currently in development. It is worth noting that the new blockchain will have its own DUST security token, and with the help of anonymous smart contracts, the level of privacy will be transferred to the user's hands. And according to Charles Hoskinson, Midnight will replace existing confidential coins, such as Zcash and Monero.
In conclusion, Midnight is vital to Cardano's global goal of creating secure blockchain technologies. This protocol aims to solve one of the main problems in the crypto community that worries many users. This again proves that the developers remain true to their philosophy and values: making a product for people while preserving their rights and freedoms.
"Midnight – designed for developers, built for humanity."
Spacefinance
What is a crypto card?Crypto cards enable you to pay with cryptocurrency in stores and withdraw cash from almost any ATM worldwide. Additionally, each business that issues these cards offers a set of benefits for cardholders.
What is a crypto card?
If you own cryptocurrency, you've probably considered how to use it in everyday life. Currently, in order to convert Bitcoin into dollars, you must transfer BTC to a centralized exchange, convert it to USD, and then withdraw the funds to a bank card. You can also use an exchanger, but you run the risk of falling victim to scammers. The lengthy withdrawal process makes it difficult and less desirable for regular users to use cryptocurrency as a payment method.
A crypto card could be the solution. It functions exactly like a traditional debit card. In fact, you can use a crypto debit card to pay for the same products: Bitcoin is deducted from your wallet in the amount equal to the purchase price (an automatic conversion to a specific currency occurs).
Several centralized exchanges and payment processors have already produced their own crypto debit cards. The use of such cards greatly simplifies the interaction between the traditional and cryptocurrency financial systems. When you get paid in bitcoin, you can use that money right away to make purchases for things you need on a daily basis, like food, gas, clothing, and other essentials. And since it's a debit card, you won't be able to spend more than you have.
Another significant benefit is a cashback. Cashback percentages range from 1% to 8% and are applied to purchases.
The procedure for obtaining a crypto debit card varies according to the provider, but it is very simple and quick. Some providers only offer a virtual card that you can link to your Apple Pay or Google Pay wallet or use to make purchases online. A physical card can also be issued through certain services, like BitPay.
The best crypto debit card for you will be determined by your needs and where you live. Some businesses provide cards with restrictions and daily limits. At the same time, the number of supported cryptocurrencies and the lack of regional restrictions are important factors.
Due to the fact that Visa and MasterCard support the majority of crypto cards, they are accepted at shops and ATMs throughout the world.
In the following section, we'll examine and contrast the three most widely used crypto debit cards.
Crypto.com Visa
The Crypto.com card operates on the Visa network, accepts more than 100 cryptocurrencies, and is available in more than 100 countries worldwide.
Customers are offered cards of five different levels, each with its own set of terms and remuneration structure. Obsidian's most premium card, for example, provides 5% cashback and unlimited access to airport lounges through the Lounge Key programs. This card also provides refunds on Airbnb and Expedia bookings, as well as 100% cashback on Spotify, Netflix, and Amazon Prime subscriptions, among other benefits. However, the person must stake CRO tokens worth $400,000 in order to obtain this specific card.
Binance Visa Card
This card operates on the Visa network as well, but it is only available to European customers. The user can receive up to 8% BNB cashback on each purchase and withdraw funds from ATMs without paying any fees. Both virtual and physical cards are available for free.
Coinbase Visa
The Coinbase card is available to all residents of the United States (except Hawaii) and offers up to 4% cashback on purchases. At the same time, users are not charged for servicing the card or withdrawing funds from an ATM.
In the picture you can see a comparison of these three cards according to the main characteristics:
Crypto cards significantly simplify the use of cryptocurrencies for the average user, and they do not have the same limitations as traditional bank cards. Using cryptocurrency as legal tender is a long-held desire of crypto enthusiasts, made possible by the functionality and accessibility of crypto cards.
Cardano stablecoins: USDA and DjedCardano stablecoins: USDA and Djed
Introduction
In recent years, stablecoins have come under increased scrutiny of regulators. The main concerns are the principles of operation of algorithmic stablecoins, the transparency of reserves, and the adequacy of the centralized stablecoins provision.
Incredibly often, the problems were discussed after the collapse of one of the most significant algorithmic stablecoins – TerraUSD (UST) that caused the fall of the entire cryptocurrency market. As a result, many stablecoins faced a temporary rate unpeg.
But the issue of reserves remains the main subject of discussion of their reliability. And the key concern here is that most of the reserves of centralized stablecoins are a complex mixture of stocks, secured loans, corporate bonds, precious metals, and other assets. And most typically, companies are criticized for the lack of proper audits to confirm reserves. In addition, these issuers need to be appropriately regulated, which increases the risks for investors.
Cardano is currently working on releasing two new stablecoins, which are tasked with solving critical issues inherent in most stablecoins.
The Cardano development team plans to release the first fully regulated stablecoin, USDA, backed by fiat and pegged to the US dollar in 2023. As well as an over-collateralized algorithmic stablecoin issued by the COTI platform called Djed.
The principle of operation of centralized and algorithmic stablecoins is different, and in this article, we will briefly describe the features of each of them.
USDA
On November 18, 2022, in Singapore, Emurgo announced the launch of a new stablecoin on the Cardano blockchain – USDA. This stablecoin will be fully regulated, backed by the US dollar, and pegged 1 to 1.
Emurgo is one of the co-founders of the Cardano project. Its mission is to develop and support businesses and help integrate businesses into the Cardano ecosystem.
One of the Cardano’s global goals is to provide access to banking products to every person in the world. The company has been successfully developing its products for a long time in the markets of Africa and Asia. People there have no access to banking services, and the country's national currency is depreciating too quickly to act as a store of value.
To achieve this goal, the Cardano developers are introducing a set of products called “Anzens”, designed to connect traditional financial services to cryptocurrency. USDA will be the first product to help bridge the gap between TradFi (traditional finance) and DeFi (decentralized finance).
“The Cardano ecosystem was built on the ethos of bringing real world applications to crypto and creating the foundation to build the economy of the future. The introduction of a fully fiat-backed, regulatory compliant stablecoin is the next step in realizing the future for our community. This stablecoin not only offers stability to investors conducting financial transactions on the blockchain but advances a path forward for the Cardano ecosystem to address a problem we are uniquely positioned to solve — banking the underbanked,” says EMURGO Fintech Managing Director Vineeth Bhuvanagiri.
Users can tokenize their USD to USDA via credit cards, wire transfers, direct deposits or payments, and native ADA token conversion. USDA is scheduled to launch in the first quarter of 2023 on the Anzens platform. It will be followed by implementing plans to provide a secure and convenient conversion of other stablecoins to USDA (for example, USDC and USDT), as well as cryptocurrencies such as Bitcoin, Ethereum, and others.
To fully comply with regulatory requirements and ensure compliance with oversight rules, Emurgo has partnered up with an as-yet-unnamed regulated US financial services company to act as the banking partner responsible for issuing USDA tokens and holding deposits.
By relying on regulation and the provision of tangible assets, the USDA can guarantee reliable long-term price stability, ultimately opening more global financial services to the Cardano ecosystem.
Djed
Unlike fiat-backed stablecoins, algorithmic stablecoins are regulated by specific algorithms that manage the balance between supply and demand, thus ensuring exchange rate stability.
Djed is an algorithmic, overcollateralized stablecoin backed by the Cardano (ADA) token and SHEN.
Algorithmic stablecoins, backed by a single currency, have some vulnerabilities. To solve this problem, Djed has a reserve asset – the SHEN token.
The concept of “over-collateralization” means that the stablecoin is backed by excess collateral in the form of a cryptocurrency held in reserve. And, if ADA falls too quickly, the underlying smart contracts include a reserve SHEN token that will be used to balance price fluctuations, helping to ensure a 400% to 800% over collateral level.
This stablecoin has been developed for more than two years in partnership with the COTI platform and IOG (please see the document describing all the technological features and operation of the stablecoin)
COTI is a first-level blockchain payment network that provides a throughput of up to 100,000 transactions per second through the Proof-of-Trust consensus mechanism. COTI provides the infrastructure needed to create and issue stablecoins that are highly secure, scalable, and have low transaction fees.
Input Output Global is an engineering and technology company engaged in cryptocurrency development and research activities.
On January 31, 2023, after completing a series of audits and stress tests, the developers of the COTI blockchain platform, in collaboration with Input Output, announced that Djed had successfully launched on the Cardano mainnet.
During the Cardano Summit in November, COTI CEO Shahaf Bar-Geffen stated, “Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized, and has on chain proof of reserves.”
Conclusion:
The primary mission of Cardano is to bring blockchain technologies into real life and provide access to them to anyone in the world. It is much work from a technological point of view, but the Cardano team is making good progress in this direction.
Providing economic identification is a crucial component in countries where people do not have an identity card or access to the banking sector. For example, in developing countries in Africa and Asia, digital services and decentralized identity will give people access to education, banking services, and the employment market. And Cardano is already addressing some of these issues by developing projects like Atala Scan, Atala Trace, and Atala Prism.
Cardano-powered stablecoins that share these values will help bring stability to the broader ecosystem and restore trust by acting as a trusted channel between TradFi and DeFi. It can bring cryptocurrencies closer to their original goals: provide access to digital financial for every person and ensure independence from centralized issuers.
