Last weekend in Edinburgh, Cardano's parent company announced its new sidechain Midnight. It will be a smart contract blockchain that allows users to exchange data without revealing more than they want to. Cardano expects businesses to be interested in Midnight. One of the reasons business shy away from public blockchains, is precisely their lack of privacy. 

In secret, developers have been working on Midnight for four years. Charles Hoskinson, Cardano's founder, admitted he was so excited that he had had to bight his tongue on many occasions.

To be dropped: DUST token

The sidechain Midnight will benefit from Cardano's consensus mechanism while at the same time launching its own token: DUST. It is not yet known when the airdrop will happen. The community makes it a priority to first build something of use and only then launch the token.

Use cases: identification while keeping privacy

Cardano's sidechain is based on zero-knowledge proof technology. This technique is already applied in a privacy coin such as Zcash. But Zcash is only used for payments, only a small subset of use cases of blockchain tech.

What is expected to be the main use case for Midnight? It would give you the ability to do selective disclosures. You for example prove to a (centralized or decentralized) exchange that you're a citizen of the USA without having to upload your passport aor similar documents. And indeed, my address, bank details and eye color are not their business, or are they?

Unlike what many people think, companies would welcome this technology. In many cases, they want to know no more than necessary from their clients. Extra knowledge means extra scrutiny from privacy laws and extra damage from hacks. 

In an interview with Cheeky Crypto, Hoskinson gives examples of this wide-reaching technology: 

• Private decentralized exchange, where the order book is not visible. Your trading strategies are not public and can't be exploited.
• Mining medical records while maintaining privacy, for example for statistical purposes. We want data sampling without having to compromise people's privacy.
• Ad targeting without access to individual data: targeting people without the advertiser nor the browser having to know anything about the individual user. It's the best of the old-fashioned ad model (no privacy breaches) and the targeting model (ads that make sense).

Wen Midnight? 

Midnight is still under development. Cardano's parent company IOG will continue to provide updates as they work on it into 2023. Besides Midnight, a fiat-backed stablecoin will come to Cardano soon.