Over the last few months, renowned global organizations and financial establishments have proposed designs, or at least have attempted to implement Bitcoin's blockchain technology, to encrypt sensitive data or to settle transactions without the association of third-party institutions such as banks.

Continuing the global trend, the MIT Media Lab and two Bitcoin entrepreneurs have developed a prototype of an encryption system called Enigma. Enigma is a Bitcoin blockchain-based encryption system that enables untrusted and anonymous computers to share sensitive information with a third party without putting the data at risk of hacking attacks and breaches.

The system will be able to prevent shared information from being surveilled by government entities or law enforcement, as it can only be decrypted by the holder of the decryption keys.

"You can see it as a black box," explained Guy Zyskind, one of the developers of Enigma and an MIT Media Lab graduate researcher. "You send whatever data you want, and it runs in the black box and only returns the result. The actual data is never revealed, neither to the outside nor to the computers running the computations inside."

In a way, Enigma's techniques and properties resemble a few features of Bitcoin's decentralized network infrastructure. Enigma encrypts data by disassociating it into several components, and by randomly segregating it to hundreds of computers in the Enigma network, also known as nodes. Then, each node runs calculations on its assigned block of data, until a user merges the results to decrypt a block.

The mathematical algorithms are designed by the developers of Enigma, and the nodes execute calculations only on the blocks of data that it is assigned to.

The ownership of data, or chunks of information, is then stored as metadata in the Bitcoin blockchain, which prevents the ledger of ownership from being forged or altered.