HodlX Guest Post Submit Your Post As 2025 dawns, FHE (fully homomorphic encryption) is a PET (privacy-enhancing technology) on the cusp of going mainstream. FHE keeps data encrypted during computation so that even if it’s intercepted, it can’t be read. Hardware acceleration, venture capital investment and cross-industry standards development organization and consortia all have gathered strong prevailing winds behind FHE, and the next two years will see the first commercial applications. In 2025, I’m expecting to observe three trends as FHE adoption begins in earnest. 1. Adoption will start on the bleeding edge with AI and blockchain AI requires third-party computation on a massive, unprecedented scale, and that data is vulnerable during every query. Despite all the potential benefits of artificial intelligence (AI), many chief security officers (CSOs) have put off adoption due to the security risk. AI providers need FHE to create an ironclad security solution for enterprise clients. Blockchain is the other industry currently straining at the traces to implement FHE. Blockchain ledgers are public and immutable, which prevents certain desirable activities and makes it difficult for blockchain applications to fully comply with privacy regulations like General Data Protection Regulation (GDPR) and the Health Insurance Portability and Accountability Act (HIPAA). FHE would allow users to process transactions or execute smart contracts while keeping all personal identifiers private, enabling use cases like private DeFi (decentralized finance) or private auctions. Since the 2024 election swept several noted crypto enthusiasts into power in the US, we’re also in the middle of an undeniable blockchain resurgence. The crypto bull market will fuel a wave of new investment in blockchain technology, accelerating development efforts in an industry that’s already proven eager to embrace FHE. 2. Law enforcement will warm to widespread encryption Bodies such as the FBI and the IACP (International Association of Chiefs of Police) have warned that encryption allows criminals to ‘go dark,’ making it impossible for law enforcement agencies to obtain digital communications records even with a warrant. Lately, however, the FBI has also found itself promoting the use of encrypted messaging tools in response to ‘Salt Typhoon,’ a massive telecommunications cyberattack attributed to Chinese actors. Salt Typhoon makes clear that widespread encryption is a matter of national security. Perpetrators were reportedly able to steal communications metadata and even record exchanges involving US government officials – and they were empowered by the fact that perimeter-based security cannot scale fast enough to keep pace with the billions of endpoints and attack surfaces inherent to global telecommunications (telcos). The data itself must be encrypted at every stage. The threat extends far beyond telcos. Amazon has reported observing a 750% increase in the number of attacks in 2024 – up to nearly one billion hack attempts per day. State and non-state actors work tirelessly to gain access to financial records, personal data, enterprise records and more. Encrypting all of this data would massively exacerbate the issue of ‘going dark’ – but FHE offers some mitigation. Using FHE, regulatory bodies can perform compliance checks and audits without needing to view sensitive data as plain text. Similarly, law enforcement can analyze a dataset for evidence of a suspected crime without exposing the suspect’s entire private life to scrutiny. FHE could prevent ‘digital stop and frisk’ without impeding the ability to investigate serious crimes. 3. It’s going to be a group effort We’re done with ‘security by obscurity.’ Practical, scalable FHE solutions will emerge not from private Skunk Works but from a foundation of collaboratively developed industry standards. Closed development of security solutions often hides vulnerabilities until after they are widely deployed. Perhaps if Intel’s SGX had been subject to open design review, its vulnerability to Spectre- and Meltdown-style side-channel attacks would have been exposed before widespread implementation. The same could be said of the AMD Zen Two Zenbleed exploit, or the Rowhammer vulnerabilities across multiple generations of DRAM. Open development and review encourage broader scrutiny, uncovering flaws faster. What’s more – privately developed solutions can be unacceptable to many stakeholders. As a case in point, look at Google’s efforts to bootstrap new private browsing solutions. In 2019, Google launched the ‘Privacy Sandbox’ initiative to replace third-party cookies with privacy-preserving technologies that would still allow targeted advertising. A year later, they announced plans to eliminate the use of third-party cookies in Chrome. Cookie phase-out was supposed to be complete in 2024, but UK antitrust regulators intervened to oppose the change. Why? Google’s competitors in the targeted ads business worried that the various schemes proposed under Privacy Sandbox would leave them more reliant on Google’s internal Chrome browser data. This led, in their view, to a serious risk that Google Ads would get preferential access to data. UK regulators agreed , forcing Google to reconsider. Privacy Sandbox continues to work with the World Wide Web Consortium (W3C) to develop more open private browsing alternatives – but Google’s original plan to rapidly phase out third-party cookies has been consigned to the ash heap of history. FHE hardware and software providers and users need to work together to develop standards for hardware/software interoperability, implementation best practices, compute optimization guidelines and more. This work is currently being undertaken by FHE- and PEC-focused consortia and industry associations, with new organizations launching within the last 12 months to focus specifically on removing roadblocks to commercial implementation. Open standards will help the industry build solutions that are more secure, broadly supported and easier to implement and scale. Despite the appetite of industries like AI and blockchain for FHE solutions – and the urgency of the risks they face – t hese collaborative efforts are still in the early phases. Still, in 2025, I expect things to move fast – and as we begin to see real-world benefits in emerging use cases, mainstream compute applications will shortly follow. Jorge Myszne is the chief product officer for Niobium Microsystems , a developer of groundbreaking zero trust computing hardware solutions. He is a successful entrepreneur, having founded two startups that were later acquired and held technical and executive positions at Intel and Qualcomm. Check Latest Headlines on HodlX Follow Us on Twitter Facebook Telegram Check out the Latest Industry Announcements Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. 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