Homomorphic Encryption for Blockchain Transaction Privacy
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Solution Overview
Problem
Existing technologies for protecting transaction privacy in blockchain-based systems, such as the Account/Balance Model, face challenges in securely managing and storing transaction amounts and blinding factors, leading to potential loss or corruption, especially when using Pedersen commitment schemes.
Innovation Solution
Implementing a method that uses homomorphic encryption to encrypt and decrypt transaction blinding factors and amounts, coupled with Pedersen commitment schemes, and storing these encrypted values on the blockchain to ensure secure and decentralized management, thereby protecting transaction privacy and preventing loss or tampering.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If transaction amounts and blinding factors are stored in plaintext or weakly encrypted form, then management and verification are simplified, but security and privacy protection deteriorate
Solution Approach 1:
The patent transforms the security parameter by implementing a key management system where encryption keys are distributed across multiple nodes through threshold cryptography. This allows the system to maintain strong encryption (security) while enabling efficient decryption and verification operations (ease of operation) through the coordinated action of multiple nodes holding key shares.
Solution Approach 2:
The patent segments the encryption key into multiple shares distributed across different nodes in the network. Each node holds only a portion of the key, and collaboration between multiple nodes is required to decrypt or verify transactions. This segmentation provides both security (key compromise is minimized) and operational efficiency (distributed verification).
2Reliability
If strong encryption methods are used for transaction data, then privacy protection is improved, but computational complexity and verification overhead increase
Solution Approach 1:
The patent implements partial decryption or verification mechanisms where nodes do not need to fully decrypt transaction data to verify its validity. Instead, they can perform verification on encrypted data or use zero-knowledge proofs to confirm transaction legitimacy without exposing sensitive information, thus maintaining privacy while reducing computational overhead.
Solution Approach 2:
The patent introduces cryptographic intermediaries such as commitment schemes and zero-knowledge proofs that enable verification of transaction validity without requiring direct access to or decryption of sensitive data. These intermediaries act as mathematical mediators that preserve privacy while enabling verification.
3Reliability
If transaction data is decentralized across multiple nodes, then security and anti-tampering are improved, but storage overhead and network bandwidth requirements increase
Solution Approach 1:
The patent implements a distributed ledger where transaction data and cryptographic commitments are replicated across multiple nodes in the network. Each node maintains a copy of the transaction history and verification data, ensuring anti-tampering properties through decentralized consensus while optimizing storage through efficient data structures and selective replication.
Data Source
AI summary
A computer-implemented method comprises: committing a transaction amount t of a transaction with a commitment scheme to obtain a transaction commitment value T, the commitment scheme comprising at least a transaction blinding factor r_t; encrypting a combination of the transaction blinding factor r_t and the transaction amount t with a second public key PK_2_B of a recipient of the transaction, wherein: the recipient is further associated with a first public key PK_1_B as an address for receiving the transaction amount t; and transmitting the transaction commitment value T and the encrypted combination to a recipient node associated with the recipient for the recipient node to verify the transaction.