Balancing privacy and accountability in digital payment methods using zk-SNARKs

In this paper we propose and implement a digital permissioned decentralized anonymous payment scheme that finds a balance between anonymity and auditability. This approach allows banks to ensure that their clients are not participating in illegal financial transactions, whilst clients stay in control over their sensitive, personal information. Existing anonymous payment schemes often provide good privacy, but only little or mostly no auditability. We provide both by extending the Zerocash zk-SNARK based approach and adding functionality that allows for customer due diligence ‘at the gate’. Clients can do fully anonymous transactions up to a certain amount per time unit and larger transactions are forced to include verifiably encrypted transactions details that can only be opened by a select group of ‘judges’

Towards Solving the Blockchain Trilemma: An Exploration of Zero-Knowledge Proofs

Research on blockchain has found that the technology is no silver bullet compared to traditional data structures due to limitations regarding decentralization, security, and scalability. These limitations are summarized in the blockchain trilemma, which today represents the greatest barrier to blockchain adoption and applicability. To address these limitations, recent advancements by blockchain businesses have focused on a new cryptographic technique called Zero-knowledge proofs . While these primitives have been around for some time and despite their potential significance on blockchains, not much is known in information systems research about them and their potential effects. Therefore, we employ a multivocal literature review to explore this new tool and find that although it has the potential to resolve the trilemma, it currently only solves it in certain dimensions, which necessitates further attention and research

On Privacy Preserving Blockchains and zk-SNARKs

Viimastel aastatel on krüptoraha ja plokiahela tehnoloogia leidnud suurt tähelepanu nii kaubanduslikust kui ka teaduslikust vaatenurgast. Krüptoraha kujutab endast digitaalseid münte, mis kasutades krüptograafilisi vahendeid võimaldab turvalisi tehinguid võrdvõrkudes. Bitcoin on kõige tuntum krüptoraha, mis võimaldab otsetehinguid kasutajate pseudonüümide vahel ilma, et oleks vaja kolmandaid osapooli. Paraku kui kasutaja pseudonüüm on seotud tema identiteediga, on kõik tema tehingud jälgitavad ning kaob privaatsus.Selle lahendamiseks on välja pakutud erinevaid privaatsust säilitavaid krüptorahasi, mis kasutavad anonüümsete tehingute saavutamiseks krüptograafilisi tööriistu. Zerocash on üks populaarseimatest privaatsetest krüptorahadest, mis kasutab iga tehingu allika, sihtkoha ja väärtuse varjamiseks nullteadmustõestust.Antud töö koosneb kahest peamisest osast.Esimeses osas kirjeldame, pärast lühikest ülevaadet mõnest privaatsest krüptorahast (Bitcoin, Monero ja Zerocoin), Zerocashi konstruktsiooni ja anname intuitsiivse seletuse selle tööpõhimõttele. Me tutvustame kasutuselevõetud primitiive ja arutleme iga primitiivi rolli üle mündi konstruktsioonis. Erilist tähelepanu pöörame kompaktsetele nullteadmustõestusetele (zk-SNARKidele), millel on peamine roll Zerocashis.Kuna nullteadmustõestus on niivõrd olulisel kohal Zerocashis (ja teistes privaatsetes rakendustes) siis töö teises osas pakume välja uue variatsiooni Grothi 2016. aasta zk-SNARKile, mis on seni kõige tõhusam.Erinevalt Grothi konstruktsioonist, meie variatsioonis ei ole võimalik tõestusi modifitseerida.Muudatused mõjutavad nullteadmustõestuse tõhusust vaid minimaalselt ning meie konstruktsioon on kiirem kui Grothi ja Malleri 2017. nullteadmustõestus, mis samuti välistab muudetavuse.During last few years, along with blockchain technology, cryptocurrencies have found huge attention from both commercial and scientific perspectives. Cryptocurrencies are digital coins which use cryptographic tools to allow secure peer-to-peer monetary transactions. Bitcoin is the most well-known cryptocurrency that allows direct payments between pseudonyms without any third party. If a user's pseudonym is linked to her identity, all her transactions will be traceable, which will violate her privacy. To address this, various privacy-preserving cryptocurrencies have been proposed that use different cryptographic tools to achieve anonymous transactions. Zerocash is one of the most popular ones that uses zero-knowledge proofs to hide the source, destination and value of each transaction. This thesis consists of two main parts. In the first part, after a short overview of some cryptocurrencies (precisely Bitcoin, Monero and Zerocoin), we will explain the construction of Zerocash cryptocurrency and discuss the intuition behind the construction. More precisely, we will introduce the deployed primitives and will discuss the role of each primitive in the construction of the coin. In particular, we explain zero-knowledge Succinct Non-Interactive Arguments of Knowledge (a.k.a. zk-SNARKs) that play the main role in achieving strong privacy in Zerocash. Due to the importance of zk-SNARKs in privacy-preserving applications, in the second part of the thesis, we will present a new variation of Groth's 2016 zk-SNARK that currently is the most efficient pairing-based scheme. The main difference between the proposed variation and the original one is that unlike the original version, new variation guarantees non-malleability of generated proofs. Our analysis shows that the proposed changes have minimal effects on the efficiency of the original scheme and particularly it outperforms Groth and Maller's 2017 zk-SNARK that also guarantees non-malleability of proofs

Centrally Banked Cryptocurrencies

Current cryptocurrencies, starting with Bitcoin, build a decentralized blockchain-based transaction ledger, maintained through proofs-of-work that also generate a monetary supply. Such decentralization has benefits, such as independence from national political control, but also significant limitations in terms of scalability and computational cost. We introduce RSCoin, a cryptocurrency framework in which central banks maintain complete control over the monetary supply, but rely on a distributed set of authorities, or mintettes, to prevent double-spending. While monetary policy is centralized, RSCoin still provides strong transparency and auditability guarantees. We demonstrate, both theoretically and experimentally, the benefits of a modest degree of centralization, such as the elimination of wasteful hashing and a scalable system for avoiding double-spending attacks.Comment: 15 pages, 4 figures, 2 tables in Proceedings of NDSS 201

Decentralized Anonymous Payments

Decentralized payment systems such as Bitcoin record monetary transactions between pseudonyms in an append-only ledger known as a blockchain. Because the ledger is public, permanent, and readable by anyone, a user’s privacy depends solely on the difficulty of linking pseudonymous transactions either to each other or to real identities. Both academic work and commercial services have shown that such linking is, in fact, very easy. Anyone at any point in the future can download a user’s transaction history and analyze it. In this work, we propose and implement privacy preserving coins, payments, and payment channels that can be built atop a ledger. In particular we propose: * Zerocoin A blockchain based protocol for breaking the link between a transaction that receives non-anonymous funds and the subsequent transaction that spends it. * Zerocash The successor to Zerocoin, a blockchain based payment system supporting anonymous payments of arbitrary hidden value to other parties. While payments are recorded publicly in the blockchain, they reveal almost nothing else: the recipient learns only the amount paid but not the source and anyone else learns only that a payment of some value to someone took place. *Bolt A payment channel protocol that allows two parties to anonymously and securely make many unlinkable payments while only posting two messages to the blockchain. This protocol provides for instant payments while providing drastically improved scalability as every transaction is no longer recorded in the blockchain

Introduction to Security and Privacy on the Blockchain

International audienceThe blockchain has fueled one of the most enthusiastic bursts of activity in applied cryptography in years, but outstanding problems in security and privacy research must be solved for blockchain technologies to go beyond the hype and reach their full potential. At the first IEEE Privacy and Security on the Blockchain Workshop (IEEE S&B), we presented peer-reviewed papers bringing together academia and industry to analyze problems ranging from deploying newer cryptographic primitives on Bitcoin to enabling use-cases like privacy-preserving file storage. We overview not only the larger problems the workshop has set out to tackle, but also outstanding unsolved issues that will require further cooperation between academia and the blockchain community