Usually, public key cryptosystems, such as RSA, are multiplicative homomorphic or additive homomorphic, such as the Paillier cryptosystem, and are called Partially Homomorphic Encryption (PHE) systems.
Additive PHEs are suitable for e-voting and banking applications.
Computing on Encrypted Data Without Decrypting It
Until recently, there has been no system that supported both operations, but in 2009, a Fully Homomorphic Encryption (FHE) system was discovered by Craig Gentry.
As these schemes enable the processing of encrypted data without the need for decryption, they have many different potential applications, especially in scenarios where maintaining privacy is required, but data is also mandated to be processed by potentially untrusted parties, for example, cloud computing and online search engines.
Recent development in homomorphic encryption have been very promising, and researchers are actively working to make it efficient and more practical.
This is of particular interest in blockchain technology, as described later , as it can solve the problem of confidentiality and privacy in the blockchain.
Why This Matters for Blockchain Technology
Understanding Homomorphic encryption is not just an academic exercise — it has real-world implications for how blockchain systems are designed, deployed, and secured. Whether you are a developer building decentralized applications, a business leader evaluating blockchain adoption, or a curious learner exploring the technology, this knowledge provides a critical foundation.
Key Points to Remember
- Homomorphic encryption Usually, public key cryptosystems, such as RSA, are multiplicative homomorphic or additive homomorphic, such as the Paillier cryptosystem, and are called Partially Homomorphic Encryption (PHE) systems.
- Additive PHEs are suitable for e-voting and banking applications.
- Until recently, there has been no system that supported both operations, but in 2009, a Fully Homomorphic Encryption (FHE) system was discovered by Craig Gentry.
- Recent development in homomorphic encryption have been very promising, and researchers are actively working to make it efficient and more practical.
Conclusion
Homomorphic encryption represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.