Cryptographically Linked Identities for Verifiable KYC Trust Transfer
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Solution Overview
Problem
Existing blockchain systems lack effective methods for linking parties cryptographically and verifying these links, which is crucial for identity management and compliance with regulations like KYC, and they do not interface well with non-blockchain systems.
Innovation Solution
A method involving generating shared private keys between parties and using public-key cryptography to establish a cryptographically linked identity, which can be verified by a third party, and a method for attesting to signatures without using a party's private key.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If blockchain systems use conventional public keys for identification, then uniqueness within blockchain address space is achieved, but ability to comply with KYC regulations and interface with non-blockchain systems is lost
Solution Approach 1:
The identification system is segmented into multiple layers: conventional public keys for blockchain operations, and cryptographically linked identities for external system integration. This segmentation allows each layer to serve its specific purpose while maintaining overall system security and compliance capabilities.
Solution Approach 2:
A third-party verification mechanism acts as an intermediary between the blockchain system and external identification systems. This intermediary enables KYC compliance and non-blockchain system integration without exposing private keys or compromising the cryptographic security of the blockchain network.
2Reliability
If parties share private keys for cryptographic linking, then trust verification is enabled, but security risk increases if private keys are compromised
Solution Approach 1:
The system performs preliminary cryptographic operations to generate linked identities and verification mechanisms before actual transactions occur. This allows trust to be established in advance through cryptographic proofs without requiring continuous access to private keys during operations.
Solution Approach 2:
Instead of sharing private keys directly, the system creates cryptographic copies or proofs of identity linkage that can be verified by third parties. These copies enable trust verification without exposing the actual private keys, thereby maintaining security while enabling reliability.
3Quantity of substance
If blockchain stores additional user data in transactions, then data capacity increases, but transaction size and storage requirements increase
Solution Approach 1:
The system extracts sensitive user data from blockchain transactions and stores it in external systems. Only cryptographic proofs or hashed references of this data are stored on-chain, significantly reducing transaction size and storage requirements while maintaining data availability for verification.
Data Source
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AI summary
A computer-implemented method of linking a first party and a second party, the method being performed by the first party and comprising: obtaining a first cryptographic public- private key pair comprising a first private key and a corresponding first public key; generating a first shared private key pair known to the first party and the second party; and generating a second cryptographic public-private key pair comprising a second private key and a corresponding second public key, wherein the second private key is generated based on the first private key and the shared private key.