I recently came across a piece titled Public Markets, Private Participants. It is one of those articles that not only explains a concept but also reframes how you think about the entire space.
After reading through it a few times, I realised it touches on something that sits right at the core of where blockchain adoption succeeds or fails. Not scaling, not fees, not even UX. It is about what these systems are actually designed to model.
This post is my interpretation and reflection on those ideas, and why I think they matter for both Cardano and Midnight Network.
The Hidden Assumption Behind Most Blockchains
Most blockchains today are built around a single idea:
Markets are public.
This assumption is so deeply embedded that we rarely question it. Every transaction is visible. Every smart contract executes in a shared global environment. Every participant interacts within the same open system.
This works extremely well for certain use cases:
- Decentralised exchanges
- Lending protocols
- Token trading and liquidity
- On-chain governance
In other words, public coordination and open financial markets.
If you look at ecosystems like Ethereum or Solana, they are optimised for exactly this. High composability, shared state, and full transparency.
Even Cardano, with its Extended UTXO model, still operates within this paradigm. It improves determinism and parallelism, but the execution layer is still fundamentally public.
The problem is not that this model is wrong. The problem is that it is incomplete.
The World Does Not Run on Public Markets Alone
When you step outside of crypto and look at how the real world operates, most meaningful interactions are not public.
Think about:
- Business contracts
- Financial reporting
- Identity and personal data
- Healthcare records
- Supply chain agreements
These are not broadcast to the world. They are private by default, with selective disclosure when required.
A company does not reveal all of its internal data to prove compliance. It reveals only what is necessary. A person does not expose their entire identity to verify age. They disclose a specific attribute.
This is a completely different model of coordination.
Instead of public markets, you have private participants interacting under controlled conditions.
The Core Limitation of Public Blockchains
Public blockchains force a trade-off:
- If you want transparency, you lose privacy
- If you want privacy, you lose verifiability
There have been attempts to solve this with privacy layers or obfuscation techniques, but they are often added on top of systems that were never designed for it.
The underlying architecture still assumes everything is visible.
This creates real constraints:
- Sensitive data cannot be handled safely
- Institutions cannot operate without leaking information
- Many real-world use cases simply cannot exist on chain
So while we talk about mass adoption, the base design is limiting what can actually be adopted.
A Different Model, Private Execution with Selective Disclosure
Midnight Network introduces a fundamentally different approach:
- Execution is private by default
- Disclosure is programmable and selective
- Verification is cryptographic
This is commonly referred to as selective disclosure, but it is better understood as the separation of execution from disclosure.
You can run a computation privately, and then choose exactly what information is revealed, to whom, and under what conditions.
At the same time, others can verify that the computation was correct without seeing the underlying data.
From Global State to Localised Computation
Most blockchains rely on a shared global state where every node processes the same information.
Midnight introduces a different approach:
- Computation happens in a private context
- Only proofs and required outputs are shared
- The network verifies correctness without full visibility
This removes the need for everything to be synchronously visible and reduces contention across the system.
Why This Matters for Cardano
Cardano is extremely strong as a settlement and coordination layer:
- Secure and decentralised
- Deterministic transaction model
- Strong foundation for DeFi and governance
However, like all public blockchains, it is constrained by transparency.
Midnight extends this by adding a privacy-preserving computation layer.
Together, they reflect how the real world operates:
- Public systems for open coordination and liquidity
- Private systems for confidential interactions and regulated environments
Expanding What Blockchains Can Represent
This is not just about adding privacy as a feature.
It is about expanding what blockchains can represent.
Without private execution and selective disclosure, blockchains are limited to:
- Speculative financial systems
- Fully transparent coordination environments
With it, entirely new categories become possible:
- Enterprise workflows with on-chain verification
- Regulated financial products
- Identity systems with minimal data exposure
- Complex contractual relationships requiring confidentiality
Final Thoughts
Reading Public Markets, Private Participants challenged a core assumption.
We often focus on scaling throughput and reducing fees. But an equally important question is:
What kinds of interactions can blockchains support?
If everything must be public, the scope is limited.
If privacy and disclosure can be programmed at the protocol level, the scope expands dramatically.
For me, this is where Midnight Network becomes a critical piece of infrastructure alongside Cardano.
Not because it adds privacy, but because it allows blockchains to model how the real world actually works.
