Today we start a series on privacy. Confidentiality is important. It’s important. It is a fundamental right, even if we don’t always say it. And it is essential to have at least some privacy when we transact with others. We will therefore examine the different forms offered by privacy cryptography projects.
We will look at the first of the 4 most common privacy types, FHE. FHE stands for Fully Homomorphic Encryption.
What is FHE?
If crypto is already encrypted, then why do we need FHE? That’s a good question. Cryptography or the crypto part of cryptocurrency means that the tokens are already encrypted. And we also know that that doesn’t really mean it’s private. Someone who REALLY wants to can find out your pseudonymous wallet address.
So FHE is like super encryption. Typical encryption locks your data. This part is good. But that also means you can’t do anything with it until you unlock it. So if you need to move funds or something like that, you need to release them first. And that’s when you submit your tokens to bad actors. Exactly when you don’t want them there.
If you want a DeFi app, for example, to process your data so that you can earn on your USDC, you must first unlock it. This is the hardest part.
FHE is an exception to this basic encryption rule. With FHE, you can perform calculations and manipulate data as much as you want WITHOUT disclosing or exposing the data to others. Think about the implications of this just in an area like healthcare or finance. A doctor doesn’t have to open your file to everyone to see what they need to see to diagnose your condition. Or to see how the medication protocol for treatment works. Isn’t that great?
What is @zama FHE?
Zama FHE stands for Fully Homomorphic Encryption, a special type of encryption that keeps data locked even while in use.
Normally, to use data you must first decrypt it, which exposes it.
But with FHE you can do calculations, run smart contracts or… pic.twitter.com/oVI5TSDYsb
— 𝗧𝗮𝗺𝗶𝗺 (@MdTamim470123) November 2, 2025
Isn’t that what we want from our data? That anyone else in the hospital only sees the encrypted data that they cannot access or share, but your doctor can use it only for what they need. Or a researcher for a medical study, without revealing that you are participating in it.
What makes FHE better than other privacy types?
Regular encryption ensures that our data is not exposed. Tools like VPNs and others that anonymize your data can hide it while it’s in transit. But neither can protect them when you need to process the data, for example when you do calculations with it. But FHE does. Calculate anything you want without revealing that data. And it’s great.
Which projects use FHE?
So who uses FHE? There aren’t many projects at the moment. From a technological point of view, FHE is difficult to implement. Zama is one of the leaders, as is Arcium, who strives to bring intimacy to Solana.
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-Arcium ☂️ (@Arcium) November 2, 2025
Honestly, there are very few despite the quality of this technology. Privacy protocols fear they won’t be able to get funding if privacy is “too difficult” for governments to enforce in a bid to open them up to criminal activity. This is why some of the less effective forms of privacy fare better. They are more flexible, for example when you have the option to turn privacy on or off. And so, they are more successful in both regulatory and financing environments.
Fhenix, Inco, Privasea and a few others are smaller and trying to build large scale projects using FHE.
Finally, let’s remember that we are here because privacy is important. But we are also here to make money. The privacy sector is up 66% over the past 7 days, according to CoinGecko.
As you can see, this is #1 across all sectors in a tough week for the market. ZCash, Dash and Railgun are leading the way, all up over 100% in the past week. And privacy could continue to work from there. Just remember why it’s important. People are starting to remember.
Next, we’ll explore a different, but popular, form of privacy in crypto in Part 2. Stay tuned for that.
Disclaimer
The information provided by Altcoin Buzz does not constitute financial advice. It is intended for educational, entertainment and informational purposes only. Any opinions or strategies shared are those of the editors/reviewers, and their risk tolerance may differ from yours. We are not responsible for any losses you may incur as a result of investments related to the information provided. Bitcoin and other cryptocurrencies are high-risk assets; therefore, perform thorough due diligence. Copyright Altcoin Buzz Pte Ltd.
The article Privacy Series Part 1: Fully Homomorphic FHE Encryption appeared first on Altcoin Buzz.
