Atomic Private Ledger Transfers With Decoupled Account State
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Solution Overview
Problem
Existing blockchain protocols face challenges in providing robust privacy measures that maintain transaction validity, transparency, and compliance with regulations like GDPR and AML, while ensuring efficient and atomic transactions, particularly in public and private blockchains.
Innovation Solution
A decoupled account state model (DAS) using encryption and zero-knowledge proofs for atomic private transactions, enabling auditability with inactive auditors and preserving user privacy.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If all transaction information is shared across the network to ensure strong data integrity, then transparency and security are improved, but user privacy is compromised
Solution Approach 1:
The patent segments transaction information into two distinct parts: public transaction metadata (sender, receiver, timestamp) that is shared across the network for integrity verification, and private transaction details (amount, account balances) that are encrypted and kept private. This segmentation allows the system to maintain data integrity through public information while protecting user privacy through encryption of sensitive data.
2Loss of information
If encryption is used to protect transaction privacy, then user privacy is improved, but transaction auditability deteriorates
Solution Approach 1:
The patent introduces auditors as intermediary entities who are granted special access credentials to decrypt and review encrypted transaction information. These auditors act as mediators between the privacy-protecting encryption system and the regulatory audit requirements, allowing them to verify transaction legitimacy and detect money laundering activities without compromising the overall privacy of the system for regular users.
3Reliability
If atomic transactions are implemented to ensure transaction validity, then transaction reliability is improved, but system complexity increases
Solution Approach 1:
The patent implements preliminary validation checks before transactions are committed to the blockchain, including verification of encrypted digital signatures, validation of account balance commitments, and pre-checks for double-spending attempts. By performing these validation actions beforehand, the system ensures atomic transaction validity without requiring complex post-transaction resolution mechanisms, thereby reducing overall system complexity.
Data Source
AI summary
Various aspects of the subject technology relate to systems, methods, and machine-readable media for improving the privacy of transfers in a distributed ledger. Various aspects may include creating account state commitments for a transaction including at least an encrypted amount and the account state commitment. Aspects may also include receiving the transaction and storing the account state commitment in a first data structure. Aspects may also include determining an encrypted balance for a receiver based on the encrypted amount included in the transaction. Aspects may also include storing, in a second data structure, the encrypted balance mapped to a public key of the user. Aspects may also include atomically updating an encrypted outgoing balance of the user and a current encrypted balance of the receiver according to the transaction.