Blockchain Transaction Privacy via Pedersen Commitments
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Solution Overview
Problem
Existing blockchain-based transaction systems, particularly under the Account/Balance Model, lack robust privacy protection for transaction amounts, as they are vulnerable to exposure and management complexities, such as local storage issues and frequent balance changes, which complicate multi-node backup storage.
Innovation Solution
The implementation of a method using Diffie-Hellman (DH) key exchange protocol to encrypt and decrypt random numbers and plaintext balances, combined with Pedersen commitment schemes, ensures secure management and storage of transaction amounts and blinding factors on the blockchain, providing robust privacy protection and preventing loss or tampering.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If transaction amounts and balances are stored locally in blockchain-based transaction systems, then the system can operate with basic functionality, but privacy protection is weak and data security is compromised due to exposure risks and vulnerability to theft
Solution Approach 1:
The patent introduces Pedersen commitment schemes as an intermediary mechanism between the transaction data and the blockchain storage. This commitment scheme encrypts transaction amounts and balances using cryptographic functions, creating a intermediary layer that protects the original data while allowing verification. The commitment values are stored on blockchain instead of plain transaction amounts, thus protecting privacy while maintaining system functionality.
Solution Approach 2:
The patent replaces the traditional mechanical storage approach (storing plain transaction amounts locally) with a cryptographic substitution system. Instead of directly storing and managing sensitive data, the system uses cryptographic commitment schemes and zero-knowledge proofs to represent and verify transaction data, substituting the mechanical storage model with a cryptographic verification model that inherently protects privacy.
2Reliability
If multi-node backup storage is implemented for transaction data, then data redundancy and availability are improved, but management complexity increases due to frequent balance changes and storage coordination requirements
Solution Approach 1:
The patent implements a copying mechanism where the original transaction data is transformed into cryptographic commitment values that can be replicated across multiple nodes. Instead of managing complex multi-node storage of sensitive data, the system copies and distributes commitment values that are mathematically equivalent but cryptographically protected. This allows multiple nodes to store identical protected data without the complexity of coordinating sensitive information management.
3Reliability
If transaction amounts are kept visible for verification purposes, then transaction transparency and verifiability are maintained, but privacy protection deteriorates due to exposure to identity theft and illegal transfer
Solution Approach 1:
The patent applies local quality by making different parts of the transaction data have different visibility properties. The commitment values and verification proofs are made publicly visible for verification purposes, while the actual transaction amounts and sensitive information remain hidden. This selective visibility approach allows verification where needed while protecting privacy where required, creating local differences in information transparency.
Solution Approach 2:
The patent uses zero-knowledge proofs as an intermediary mechanism that allows verification of transaction validity without revealing the underlying sensitive data. The zero-knowledge proof acts as a mediator that conveys verification information while filtering out privacy-sensitive information, enabling the system to maintain both verifiability and privacy protection simultaneously.
Data Source
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AI summary
A computer-implemented method comprises: committing a transaction amount of a transaction with a commitment scheme to obtain a transaction commitment value, the commitment scheme comprising at least a transaction blinding factor; generating a first key of a symmetric key pair; encrypting a combination of the transaction blinding factor and the transaction amount t with the first key; and transmitting the transaction commitment value T and the encrypted combination to a recipient node associated with a recipient of the transaction for the recipient node to verify the transaction.