Ephemeral Key Pair Generation for CBDC Transaction Security
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Solution Overview
Problem
Conventional transaction systems face challenges in providing robust anonymity and security, as well as scalability, particularly in token-based cryptographic communication systems.
Innovation Solution
The system generates a new public/private key pair for each transaction using a cryptographic nonce, storing the secret off-ledger to maintain anonymity and prevent exposure. This approach enables instant verification and settlement of transactions while preserving the anonymity of participating entities.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a new public/private key pair is generated for each transaction using a cryptographic nonce, then security and anonymity are enhanced, but key storage requirements and system complexity increase
Solution Approach 1:
The system segments the key management process by generating individual key pairs for each transaction rather than using a single persistent key. Each key pair is segmented into components: the public key is stored on-chain for verification, while the private key and nonce are kept in memory during the transaction process and then discarded, eliminating the need for long-term storage of sensitive key material.
Solution Approach 2:
The system applies the discarding principle by intentionally destroying private keys and nonces after they serve their purpose in a single transaction. The private key is held only in memory during the transaction execution and is discarded afterward, while the nonce is discarded after generating the corresponding public key. This ensures that no sensitive information persists beyond what is necessary for the transaction.
2Loss of information
If secret information is stored off-ledger to maintain anonymity, then privacy is improved, but verification and validation become more difficult
Solution Approach 1:
The system introduces the nonce as an intermediary that bridges the gap between off-ledger secret storage and on-chain verification. The nonce is stored off-ledger (in memory) to maintain anonymity, but it serves as a verifiable intermediary that enables the generation of the public key, which can then be verified on-chain without exposing the underlying secret or private key.
Solution Approach 2:
The system replaces the traditional mechanical approach of storing private keys securely with a cryptographic substitution approach. Instead of relying on secure storage infrastructure, the system uses cryptographic primitives (nonce-based key generation) where the security relies on the mathematical properties of the cryptographic functions and the ephemeral nature of the nonce, rather than physical or digital storage security.
3Reliability
If extensive key storage is required for each transaction, then security is improved, but scalability and processing speed decrease
Solution Approach 1:
The system applies dynamics by making the key storage requirement temporary rather than permanent. Keys are dynamically created in memory for the duration of the transaction process and then automatically discarded. This dynamic approach allows the system to have high security during the transaction execution window while maintaining scalability, as no persistent storage infrastructure is required for key management.
Solution Approach 2:
The system treats cryptographic keys as disposable, short-living objects rather than persistent assets. Each private key and nonce is created, used once for the transaction, and then discarded. This approach eliminates the need for expensive, secure long-term storage infrastructure while maintaining security through the ephemeral nature of the keys. The computational cost of generating new key pairs is far less than the cost of securing persistent key storage.
Data Source
AI summary
Central bank digital currency (CBDC) tokens are used for payment in a transaction initiated by a payment card at an acquirer's point of sale. To facilitate these transactions, a payer node in a distributed ledger environment receives communication metadata that includes a communication value and a communication key from a payment device. The payer node can generate a communication structure that includes indications of input tokens to be spent in the transaction, as well as an output token associated with the communication key. The payer node can transmit the communication structure to a second node for verification of the signature and subsequent validation of the transaction.