Vitalik: Combining obfuscation with blockchain can get close to a “trustworthy third party without needing trust,” but it is still far from practical.
Vitalik Buterin points out that obfuscation is a strong primitive for hiding a program’s internal logic while keeping the output in plaintext, and iO is a typical form. If combined with blockchain, obfuscation can enable applications that are nearly trustless, secure, private, and resistant to collusion, but it cannot prevent self-replication or handle stateful currencies. Existing research shows that iO can be achieved under reasonable security assumptions, but the runtime is extremely long—nearly galactic. In the future, it may be possible to optimize the construction through more aggressive lattice assumptions or non-lattice schemes; if successful, it could theoretically implement protocols that are currently described in terms of idealized trusted third parties, though the remaining challenges are still enormous.