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Use cases

Use case examples are just some of the ways Midnight can serve the world. Midnight will not solve the problems directly. It provides features that make solutions possible. All of these use cases require the development of one or more decentralized applications (DApps).

Midnight enables these solutions with innovative features:

  • Midnight smart contracts can manage two states at once; a private state on a local machine, and the public state that exists on the public blockchain
  • Smart contracts are written in Compact, a language based on TypeScript
  • A Microsoft Visual Studio Code plugin means that this free, powerful, familiar IDE can be used in development
  • Zero-knowledge proofs in Midnight use ZK Snarks, a highly efficient form of ZK proof
  • Midnight’s ZK proofs allow selective disclosure of information while preventing leakage of information that could benefit malicious actors.

Identity verification​

Verification processes such as know your customer (KYC) and anti-money laundering (AML) can be a burden for organizations in industries like financial services, accounting, real estate, and legal services. These organizations must spend a significant amount on technology and resources to comply with the law and relevant regulations.

Using Midnight as a shared data protection platform, it’s possible to reimagine the way KYC and AML could be delivered. An individual or company could undergo full identity verification with a single entity or external verification service by traditional means. For all later identity verifications, the verifying organization can request particular assertions about the individual.

With ZKPs, there is no need to disclose any information to the client of the service apart from the truth (or otherwise) of the assertion. For these clients, this might mean they could satisfy the requirements of AML and KYC regulations without needing to collect, hold, and safeguard personally identifying information under regulations like the General Data Protection Regulation (GDPR) of the European Union.

Controlled access to tokenized digital assets​

Non-fungible tokens (NFTs) are increasingly being used to represent assets, credentials, receipts, or even loyalty attributes that can be tracked on a public ledger for any party to view. This has led to innovations in multi-party loyalty programs, cookieless e-commerce, and the ability for customers to bring their own credentials to help organizations provide targeted services or products.

An NFT recorded on a public permissionless blockchain can be visible to everybody, and importantly, metadata from transactions or wallet usage can be correlated to identify individuals and compromise their privacy.

Midnight addresses this challenge by leveraging zero-knowledge (ZK) technology, which ensures privacy in digital interactions. ZK enables one party to prove a statement or claim is true without revealing any other information. For instance, a customer can prove they are eligible for a discount without sharing their full purchase history or sensitive credentials.

With ZK, Midnight's data protection can enable tokenized assets to remain private while still allowing necessary information to be selectively revealed to conduct related activities. Customers can securely share their credentials, points, or membership details with third parties without exposing sensitive data. This approach ensures that customer identity remains secure and free from the risk of compromise through on-chain history analysis, providing privacy without sacrificing functionality.

Enhancing AI and LLM​

The influence of artificial intelligence (AI) and large language models (LLMs) in recent times is undeniable. Yet, a significant portion of their capabilities relies on training data, which is sourced from publicly available artifacts:

  • Firstly, some AIs might use proprietary or licensed content with no means, currently, to fairly attribute usage or royalties.
  • Secondly, as more AI-generated content is produced online, there will be more concern about the authenticity of the work and whether it is based on genuine human or credentialed contributors.
  • And finally, LLMs could be enhanced by providing access to private or proprietary datasets that are particularly rich, but that the owners are unwilling or legally unable to share with third parties.

To address these challenges, Midnight can help establish secure and private interactions with AI and LLMs to safeguard the confidentiality of data models and enhance the reliability and quality of outcomes, while maintaining the data privacy of sources as required by law.

Decentralized credit scoring​

Credit scoring, an important prerequisite for financial institutions to lend to individuals, normally requires the disclosure of a great deal of personal information. Once disclosed, the information is costly to process and store by receiving organizations and is in danger of leakage to malicious actors.

Midnight addresses this challenge using zero-knowledge (ZK) technology, which allows for the verification of an assertion without revealing any additional information. ZK enables one party to prove that a statement is true while keeping all other details private. For example, a borrower can prove their eligibility for a loan without disclosing sensitive financial details.

This capability is particularly valuable in decentralized credit scoring, where ZK can assign a credit score to a digital ID without the owner of the identity revealing any other personally identifiable information. This ensures that the process remains secure, private, and efficient while minimizing risks associated with data leakage or unauthorized access.

Decentralized anonymous voting​

Currently, a voter has to provide identification to prove that they are qualified to vote and have not voted before. That identification may carry other information such as a home address, date of birth, proof of funds in a certain currency, or a simple attestation from a blockchain wallet that the voter might not want to reveal publicly.

Blockchain technology provides infrastructure that reduces the opportunity for tampering. And with a DApp using Midnight’s zero-knowledge technology, voters or a decentralized autonomous organization (DAO) voting on behalf of its members can prove what they need to without disclosing unnecessary information. The implications are wide-ranging and profound.