Glossary
Fully Homomorphic Encryption (FHE)
Cryptography that lets computation be performed directly on encrypted data — outputs decrypt to the correct cleartext result without ever exposing inputs.
Fully Homomorphic Encryption (FHE), first proven possible by Craig Gentry in 2009, lets you run arbitrary computation on ciphertext such that decrypting the result gives the same answer as if the computation had been done on plaintext. The data is never decrypted during processing.
For blockchains, FHE enables shielded smart contracts where the inputs, state, and outputs of computation can all remain encrypted on-chain. Zama (fhEVM), Sunscreen, Privasea, and several other teams are building production FHE-enabled chains. Performance is still orders of magnitude slower than plaintext execution, but improving steadily.