Depth | A review of the seven major blockchain privacy protocol mechanisms

JPMorgan Chase, one of the largest financial services organizations in the United States, has been working to update its private-chain platform, Quorum, since it announced the development of the digital asset JPM Coin in February.

Quorum was inspired by the needs of Etherum GO customers and is part of JPMorgan's EEA (Enterprise Etherum Alliance) commitment. At the beginning of the creation, Quorum clarified its commitment to privacy protection through support for features such as private transactions and network access controls.

Last week, JPMorgan Chase added a new privacy protection feature to the Quorum protocol—an extension based on the Zether protocol that made an important contribution to mainstream enterprise adoption of blockchain technology.

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What are the characteristics of this type of privacy protocol mechanism? What kind of development history has you experienced? This article will take an inventory.

This article was written by senior investor Howard Yuan and published exclusively by Encrypted Valley Editor.

Privacy Agreement Zether and its extensions

The Zether protocol is a privacy solution for the Ethereum smart contract platform proposed by Stanford University professor Dan Boneh and his doctoral student Benedikt Bunz in collaboration with Vashi Research's Shashank Agrawal and Mahdi Zamani.

The program received solidarity and support from Nick Szabo, the father of the smart contract. It is deployed on the Ethereum in the form of Zether Smart Contract (ZSC) and has a token called Zether (ZTH). It is used as a carrier for transmission between Zether accounts of ElGamal public keys and supports anonymous smart contract interaction. For more details on related papers, please refer to the following link: https://crypto.stanford.edu/~buenz/papers/zether.pdf

Zether's technical characteristics

 

In the paper, the developers summarized the characteristics of Zether as follows:

• Privacy: Zether's transactions are confidential, and account balances and transaction addresses are always encrypted;
• Based on the account model: Currently, various privacy currencies such as Monroe and Zcash are based on UTXO, and Zether is based on the account model;
• New privacy algorithm: In order to make Zether run more efficiently, the researchers proposed a new zero-knowledge proof mechanism called Σ-Bullets. It combines the features of Bulletproofs and the protocol, and creates a privacy account system based on this, without the need for a trusted launch of Zcash;
• Easy to implement: In theory, the chain supporting smart contracts can implement the project, and the team has already conducted preliminary tests on Ethereum;
• Interoperability: Zether supports the interaction of smart contracts. Zether can be used to build four applications: confidential auction applications, confidential payment channels, confidential rights voting, and private proof-of-stake;
• Token application: The token ZTH in the Zether protocol is not an ERC20 token, but an endogenous token. By default, technical privacy features are not possible and are therefore rigid requirements.

Zether's challenges

Of course, due to the start, the Zether technology faces many challenges:

• GAS consumption is too large and costly. At present, the simplest transfer requires a fee of 0.014 ETH; if smart contract interaction is performed, the fee is higher. However, with the improvement of the algorithm and the upgrade of Ethereum, the handling fee may drop significantly;
• Ethereum's GAS mechanism may lead to privacy breaches. The smart contract deployed on Ethereum needs to pay for GAS to run. Once an address transfers ZTH tokens, he needs to pay GAS to the miners at the same time. At this time, its Ethereum address is exposed. In response to this situation, there are two possible solutions: one is that the user keeps changing the address to keep the anonymity, but this is not realistic at the operational level; the other is to let the miner receive the ZTH as a handling fee;
• A busy network may cause the transaction to fail. For traditional Ethereum transactions, you can wait while the network is busy, until the network is no longer congested, and the transaction can be completed. But Zether doesn't, because each epoch has a corresponding and unique set of proofs, and the transaction must be done in its own epoch. If it cannot be completed, it will prove that the collection will change and the transaction will fail;
• In order to ensure success, the sending account needs to ensure that within the current epoch, the corresponding anonymous set cannot be updated before the new transaction he receives, otherwise it will lead to failure.

Quorum made some subtle extensions based on the Zether protocol. In addition to the details of the transaction itself, it allowed the identity of the parties to be blurred in the transaction and solved the problem of privacy leakage.

To further explain the role of the Zether extension protocol, Oli Harris, head of the Quirum blockchain and encryption asset strategy at JP Morgan Chase, said:

“In the basic Zether protocol, account balances and transfer information are hidden, but the identity of the participants is exposed. We solved this problem. During the implementation of the agreement, we provided a certification agreement for anonymous extensions. Allows the sender of the transaction to hide the information about the recipient of the transaction itself and a group."

Harris also pointed out that as an "effective and trust-free mechanism for anonymous payments," the new extension is particularly beneficial to protecting privacy within the corporate alliance, which JPMorgan has always expected.

JPMorgan Chase has attracted about 220 banks to join its Quorum-based interbank information network and has recently completed a series of integrations with Microsoft Azure. As JPMorgan has always emphasized, user and transaction privacy protection has always been a challenge for the blockchain ecosystem.

Impossible triangle of privacy architecture

In blockchain infrastructure, privacy protection often conflicts with some other desirable features of distributed mechanisms. At least in current blockchain technologies, privacy architectures often require a balance between three basic dimensions:

• Privacy: Obviously, privacy represents the ability to protect traders and participants in a distributed network;
• Scalability: The ability to increase the amount of distributed network transaction processing and parallel processing;
• On-chain calculation: The ability to perform expensive calculations while the blockchain is running.

In many cases, the privacy architecture maximizes the first two dimensions by sacrificing the third dimension.

Private networks and scalable networks often require a chain computing model, while private networks that rely solely on chain computing are more difficult to extend to a particular point; at the same time, scalable networks with on-chain computing models can make it difficult to implement privacy. Features.

In short, in most blockchains, any two of these features conflict with a third party. For example, you can deploy privacy and chain-based computing protocols on a chain, but you can't balance scalability. However, most digital assets are both scalable and usable, but not private.

While this dilemma of privacy protection is widely accepted in today's blockchain technology, this situation may change over time.

Privacy protection is one of the fastest growing areas of blockchain technology. We have noticed that the technology evolution trend of privacy agreements has continued to advance.

Evolution of privacy agreements

When we talk about privacy attributes in blockchain scenarios, we can't avoid the term "ZKP" (zero-knowledge-proofs).

Zero-knowledge proof is a form of cryptography implemented in technologies such as zk-SNARKs and encrypted digital assets such as ZCash. It allows one of the parties (the certifier) ​​to prove to the other party (the verifier) ​​that its statement is true without revealing any valid information beyond the stated statement.

The blockchain space has made a number of advances in privacy protocols that extend the value proposition of zk-SNARKs. All of these extensions attempt to find a delicate balance within the three main dimensions of the privacy architecture.

In addition to the zk-SNARKs architecture, blockchain technology has some new breakthroughs in privacy protocol development and cryptography research, but it is still not well known.

We can simply sort out the evolution of the basic protocol of the blockchain privacy mechanism:

• CryptoNote and ring signature: CryptoNote (CryptoNight) is the originator of blockchain privacy technology. Conceptually, in distributed networks, CryptoNote uses traceable ring signature encryption to confuse messages between a group of nodes. Improvements to the CryptoNote protocol have proven to produce high levels of anonymity in scalable levels of operation. Bytecoin, released in 2012, is a pioneer in the adoption of CryptoNote. Monero, which has the highest market value of anonymous currency, is also based on the CryptoNote protocol.
• zk-SNARKS: The protocol behind ZCash is zk-SNARKs. zk-SNARKs is a relatively new zero-knowledge encryption algorithm. Since the release of Zcash, zk-SNARKs has been applied to different blockchain technologies. Based on Zcash, there are many other anonymous coins, including Komodo, Zcoin, Horizon, Zclassic, Zencash, etc. It can be said that Zcash and the zk-SNARKs protocol behind it have created half of the anonymous currency.
• zk-STARKS: From the trigonometry theory, since the complexity of the proof grows linearly with the size of the database, one of the challenges of zk-SNARKs is that it is difficult to apply on a large scale. In view of this, Professor Eli-Ben Sasson of the Israel Institute of Technology published a high-profile paper that proposed a faster alternative to zk-SNARKs. In order to maintain mystery, he called it zk-STARKs.

Professor Ben Sasson explained: “zk-SNARKs uses public key cryptography to ensure security, and zk-STARKs uses simpler symmetric encryption, an anti-collision hash function, so there is no need for trusted initial settings. Meanwhile, zk-STARKs Eliminating the number theory hypothesis of zk-SNARKs, this assumption requires a lot of computational power and is easily attacked by quantum computers. This allows zk-STARKs to be generated quickly and anti-quantum because it no longer uses elliptic curves and exponential assumptions. "At present, there is no official anonymous currency based on zk-STARKS, but we have reason to expect the birth of a new anonymous currency based on the zk-SNARKs framework.

• TEE (Trusted Execution Enviorme nts): The Trusted Execution Environment is a popular method of introducing trusted computing into blockchains . For example, Intel's Software Protection Extensions (SGX) TEE technology isolates trusted paths for code execution, remote attestation, security configuration, data secure storage, and code execution. APPs running in TEE are secured and are almost impossible to access by third parties. Related projects based on TEE technology are such as Oasis, TEEX, Covalent, and the like. Oasis Labs' Ekiden protocol is a smart contract execution platform that relies on a trusted execution environment to isolate private computing.
• Enigma Protocol: Enigma is a blockchain protocol developed by MIT cryptographers in 2017 to enable "encryption contracts." The protocol allows nodes to compute using encrypted segments of smart contracts without decryption, which is not possible with other blockchains. Enigma uses TEE to isolate cryptographic calculations from the rest of the blockchain, rather than relying on proof of possession protocols such as zk-SNARS / zk-STARKS.
• MimbleWimble Agreement: The MimbleWimble protocol was launched in 2016 to improve the scalability, privacy and substitutability of digital currency. It combines multiple privacy protection technologies such as confidential transactions, transaction mix and dandelion protocol, which eliminates the transaction amount and eliminates the transaction amount. The transaction address, and the intermediate status can be combined to simplify the transaction size while protecting transaction privacy. Based on the MimbleWimble protocol, two Gemini and Beam twin stars have been born and have been highly recognized by the market.
• Zether (Quorum): As mentioned earlier, Zether brings a new privacy protection mechanism to Quorum, which is already very powerful. The current Quorum architecture protects the identity of participants by protecting transactions and node-level privacy. These features can be combined with the access control features already in the Quorum mechanism to provide a powerful end-to-end security experience.

In addition to the above seven main types of privacy protocols, Secure Multi-Party Computation (SMPC) is also worth noting. Secure multiparty computing is an encryption technique that allows calculations to be performed on a set of inputs while maintaining the privacy of the input data. It can be used by parties in a secure token exchange to exchange information while maintaining the privacy of the actual information.

As part of the blockchain mechanism, new privacy protection technologies are constantly being evaluated and adjusted. As the industry develops, we will see the advent of a new generation of privacy protocol technology that will bring decentralized privacy protection and computing to new heights. In particular, the rise of the cross-chain ecosystem represented by Cosmos and Polkadot this year, we also have reason to expect that the trans-currency and cross-asset transaction privacy transaction solutions can be realized, which will become an important development direction of the encryption economy.

Howard Yuan author

Edited by Sonny Sun

Source: Encrypted Valley

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