Auctions on Privacy Protocals
This article, “Secret Auctions with Enigma”, is posted on the official blog of Enigma. Enigma is a secure computation protocol, “where ‘secret nodes’ in our network perform computations over encrypted data,” according to Enigma’s website. And it claims to “secure the decentralized web.”
The author, Ainsley Sutherland, talks about the concept of “sealed bid” and its implementation on both Ethereum and Enigma. As its official website shows, Ethereum is “a global, open-source platform for decentralized applications.”
As discussed in class a while ago, a sealed-bid means that buyers’ bidding values of items will not be revealed during the auction process, and it can help prevent collusion between buyers. Auctions are often used when sellers don’t know what prices their buyers are willing to pay for their products. Big companies like Google and Ebay use auctions a lot.
The following pictures, provided in the article, show the difference between a typical auction process on both Ethereum and Enigma.
Auctions on Ethereum
Auction on Enigma
Based on the two charts, the major difference between the two auction processes is that the non-winning bids will not be revealed during the whole process on Enigma. While on Ethereum bids are not shown during the auction, they have to be revealed later, which increases the chance of auction corruption among bidders.
As someone who has never used decentralized protocol/application like Enigma or Ethereum before, this article seems a bit confusing even though some graphic explanations are provided. I can see the broad picture Sutherland is drawing here, but it seems to me that she focuses too much on explaining the auction processes but not the difference between Enigma and Ethereum, which is fundamental to understand the main point of this article.
Other than that, I do agree with her. Auctions serve a certain kind of platform, which enables the buyers and sellers to trade over each other, so it is important to make sure that the process is fair to everybody in the game and the process should decrease the possibility of buyers playing unfairly as much as possible.
https://blog.enigma.co/secret-auctions-with-enigma-83647a141fb5