The first issue Midnight seeks to address concerns data protection. Financial, insurance, and e-commerce applications need a lot of data, most of which should not be made available on a public ledger. Midnight gives developers the ability to build DApps that can control which data is made public and which data is made private, thus enabling selective disclosure.
Midnight also protects metadata – the data about data. For example, phone calls’ metadata can be used to reveal both parties’ identities, when, and for how long the call was made. Blockchains commonly disclose transactions’ metadata to everyone with a suitable application, including good and bad actors. Midnight provides features like shielded tokens which allow for interactions to occur without metadata leakage (eg, wallet addresses and transaction details are kept safe). As a result, DApps can give sensitive metadata the same level of protection as other confidential data.