The Aleo mainnet is scheduled to launch in the coming weeks with the lofty goal of bringing privacy to cryptocurrencies.

The Aleo mainnet is expected to launch in the coming weeks once some final bugs have been ironed out to provide privacy for cryptocurrency transactions.

“We have just completed the third phase of Testnet 3 and have a list of bugs we have discovered throughout that process. We have a list of bugs from the six audits we have conducted and two bug bounty programs,” he said. said Alex, Aleo Foundation Executive Director. Pruden.

Pruden highlighted the efforts to get to this point over the past four years, especially re-engineering the network’s consensus algorithm after the second testnet, as it was not working. “But the good news is that we are in the final stages of that journey and ready to launch soon,” he said.

Aleo’s origins begin with a 2018 academic paper written by several Zcash co-founders and co-authors of the paper on which it is based. The core idea was to extend Zcash’s private transactions into the world of smart contracts. Pruden said that while some teams tried and failed to build on the idea, it was Howard Wu, one of the paper’s co-authors, who actually did so, founding Aleo and becoming its CTO.

Pruden, a former partner at cryptocurrency VC firm a16z, was Aleo’s CEO until December. At that point, the company split in two and established a foundation that he would take charge of. This is what many cryptocurrency companies have done prior to issuing tokens, and what Aleo is planning to do.

What is the purpose of Aleo?

Pruden said the motivation for launching Aleo was to bring privacy to cryptocurrencies, with the goal of unlocking use cases related to confidential payments (e.g. payroll payments) and identity solutions.

“Despite all the use cases that people cite—I’ve been on both the investment side and the operational side when people talk about digital identity and all this stuff—the reality is that none of them exist at real scale today.” said. “The team’s core belief is that without some level of privacy this technology will not be practical or useful for anything other than a variety of casinos.”

To achieve this level of privacy, Aleo uses zero-knowledge proofs at the core blockchain level to support transactions and smart contract interactions that are private by default. This means that sender and transaction information is not publicly visible. However, the chain allows transactions to take place that show this information.

There have been issues with privacy coins, with exchanges delisting them due to regulatory pressure, but Pruden argues it’s up to projects like Aleo to champion this kind of technology. He pointed out that there are advantages, such as the ability to prove that a cryptocurrency address is not on a blacklist before sending money.

Pruden said his short-term goal is for Aleo to support real-world applications that people use every day — things that can’t be done in other forms — through real-world activities driven by those applications. His long-term dream is for this technology to be “integrated into the wider fabric of the web.”

The Good and Bad of Privacy Coins

As seen with technologies like Signal, focusing on privacy can be difficult when trying to ensure a good user experience.

One potential problem is that zero-knowledge proofs are difficult to generate. To overcome this problem, all users on the Aleo network compute offline proofs of their transactions before making them. This prevents submitting the entire computation to the chain, which is very expensive on blockchains like Ethereum, Pruden said.

Even though it is cheap, the downside is that it is a bit slow. Currently, a simple transaction takes less than a second on a laptop, but can take up to 20 seconds on devices such as mobile phones. But Pruden argued that just a few years ago, producing such evidence would have taken months. This showed the pace of development in this field and suggested that things would only get faster in the near future.

Pruden pointed out that there are side benefits to using zero-knowledge proofs in the blockchain layer. This allows Aleo to support layer 2 rollups, which rely on zero-knowledge proofs (one of the two main types of rollups) to prove that every transaction is genuine. He said there hasn’t been much work done on this yet, but it would be a natural extension of the technology. After all, he points out, one could argue that all transactions made on Aleo have already been rolled up.

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