As users of Facebook (FB  ) worldwide are still reeling from last month's revelation of the Cambridge Analytica data breach scandal, a startup blockchain project offers a glimmer of hope for digital privacy.

Here's what happened: back in 2014, a researcher created a personality app. Over a quarter million people installed the app on their Facebook accounts. The app was able to access the data of the users and their friends. The researcher gave a database of users' private information to the data analytics firm Cambridge Analytica. Cambridge Analytica used the data of 50 million users to create millions of psychographic profiles in order to influence global elections. Facebook violated users' trust by not preventing data sharing by third parties and waiting over a year after it first became aware of the breach to inform the public.

Even if few people actually delete their Facebook accounts and leave, the scandal highlights the problems that arise when a monopolistic company with a history of unaccountability and privacy invasion provides people with the most popular social media ecosystem. Once a person sends information online, the data are no longer theirs, but instead the property of a private company. Privacy, security, and transparency all are at risk.

Blockchain technology might offer a solution. But blockchain alone cannot solve Facebook's problems. Enigma (ENG) is a nonprofit startup that recognizes that a privacy protocol is the key to transforming the social media space. Enigma's mission is to solve blockchain's two issues of scalability and privacy. The project's in-progress Enigma protocol turns smart contracts into "secret contracts" that hide inputted data from nodes in the Enigma network.

Enigma's main features are off-chain storage and privacy-enforcing computation. The distributed storage means data will be encrypted, private, and linkable to the main blockchain. Off-chain storage helps address scalability and access to large amounts of data. Its multi-party computation uses advanced cryptography techniques to enable end-to-end secure decentralized applications.

One of Enigma's foremost real-world applications is a data marketplace. A decentralized market for personal data would allow people to buy and sell their data but also ensure privacy. Unlike Facebook, which sells personal data access to advertisers who create micro-targeted ads, a decentralized data market would let people choose how to monetize and protect their data.

Many societal changes are required in order for Enigma to succeed in its ambitious goals. While Enigma's primary value proposition-digital privacy-is enormously precious, external factors will affect its future potential. First, Western consumers and users, who have grown complacent about big tech's data exploitation policies, need to collectively awaken and realize how companies like Facebook profit from their data. Second, the epiphany needs to translate into massive consumer demand for privacy-focused services and privacy-enabling technologies. Finally, Enigma needs to effectively provide and maintain a next-generation decentralized social network that is actually user-friendly and easy for the average person to understand. Whether that grand project will succeed depends mostly on people's response to the unsettling news.

The author holds no positions in any of the securities above.