In July Bitcoin Magazine reported that researchers and entrepreneurs at the MIT Media Lab had started the development of a new encryption system, dubbed Enigma, based on the blockchain technology. Enigma will enable untrusted and anonymous participants to securely share sensitive information with a third party.

The name “Enigma” is part of the history of cryptography and code-breaking. It was the name of the electro-mechanical encryption system used by Germany before and during World War II, which was broken by a group of notable mathematicians and early computer scientists, including Alan Turing.

Enigma was created by Oz Nathan, a technology entrepreneur formerly associated with the Counter Terror Unit of the Israeli Defense Forces, and Guy Zyskind, a graduate student and research assistant at the MIT Media Lab whose research interests lie at the intersection of data, privacy and Bitcoin. Zyskind’s advisor, Prof. Alex “Sandy” Pentland, is associated with the Enigma team.

The new Enigma is powered by the blockchain.

Enigma is a decentralized cloud platform with guaranteed privacy,” states the Enigma website. “Private data is stored, shared and analyzed without ever being fully revealed to any party. Secure multi-party computation, empowered by the blockchain, is the magical technology behind it.”

In fact, protecting sensitive data is but a part of what Enigma will do. An important and innovative feature of the system is that it will permit analyzing the data stored by the system with external applications while keeping the data itself private and under full control of its owners.

Furthermore, data owners will be able to monetize their data. For example, participants could anonymously sell partial, controlled access to their medical data to pharmaceutical companies that need to run data analysis programs on a wide sample of patients’ data.

“[Enigma] is a peer-to-peer (P2P) network, enabling different parties to jointly store and run computations on data while keeping the data completely private,” states the Enigma whitepaper written by Nathan, Zyskind and Pentland. “Enigma’s computational model is based on a highly optimized version of secure multi-party computation, guaranteed by a verifiable secret-sharing scheme. For storage, Enigma uses a modified distributed hashtable for holding secret-shared data.

An external blockchain is utilized as the controller of the network, manages access control, identities and serves as a tamper-proof log of events. Security deposits and fees incentivize operation, correctness and fairness of the system,” the whitepaper continues. “Similar to Bitcoin, Enigma removes the need for a trusted third party, enabling autonomous control of personal data. For the first time, users are able to share their data with cryptographic guarantees regarding their privacy.”

The Enigma creators won the final round of the Summer Startup Competition organized by the MIT Bitcoin Project in 2014. “The team winning the $5,000 grand prize, Ethos – comprised of MIT Media Lab grad students Amir Lazarovich & Guy Zyskind, along with Bitcoin entrepreneur Oz Nathan – had also won prizes in the two previous rounds,” states the MIT Bitcoin Project’s announcement. “Ethos wowed judges by submitting a working prototype of a decentralized network for storing and sharing personal data, delivering on the ambitious vision they laid out in the first two rounds.”

Bitcoin Magazine reached out to the Enigma creators to find out more about Enigma’s objectives and future plans.

One of our missions with Enigma is to minimize the tradeoff between security and privacy, by enabling people and organizations to share data with each other, while maintaining control over how the data is used, without ever revealing the raw data to anyone,” Nathan told Bitcoin Magazine.

Since July, the Enigma team’s work has been focused on three things:

The implementation of Enigma;

Formally proving the Enigma protocol in an academic paper, which should be published soon;

Talking with potential users to understand what the most interesting use cases are.

“The most interesting use case we’re hearing from potential users is the ability to do data science and machine learning on encrypted data sets. Other use cases include private smart contracts and ‘IoT with privacy’,” Zyskind told Bitcoin Magazine.

The Enigma team will be launching a beta soon. Interested users can join the waiting list to participate in the beta by signing up for at the Enigma website.