Privacy protection for blockchain transactions

Privacy protection for blockchain transactions

Glossary

Term definitionBlockchainA distributed database that uses cryptographic methods to link data blocks together to ensure data security and immutability.TransactionsThe transfer of value on a blockchain network, such as payments of digital currency.Privacy protectionProtect sensitive information such as the identity information of transaction participants and transaction amounts from being disclosed.Commitment schemeA cryptographic technique that allows one party (the committer) to commit to a value and prove to another party (the verifier) ​​that the value meets certain conditions without revealing the value.Pedersen commitmentA commonly used commitment scheme with the characteristics of homomorphic encryption that allows addition operations to be performed on the committed value.Blinding factorA random number used in a commitment scheme to hide the committed value.Range proofA cryptographic proof used to prove that a value is within a specific range without revealing the specific information of the value.Asymmetric encryptionA type of encryption that uses a pair of keys (public and private keys) for encryption and decryption.

Short answer questions

How does blockchain technology ensure the immutability of transaction data? Blockchain uses cryptographic hash functions to link each data block to its previous block. Any tampering with the data will cause the hash value to change and be discovered by the network.

Why is privacy protection of transaction amounts important in blockchain transactions? Leakage of transaction amount information may be used to infer sensitive information such as the identities of both parties to the transaction and the purpose of the transaction, threatening user privacy security.

Briefly describe the working principle of the Pedersen commitment scheme. The Pedersen commitment scheme uses two generators G and H on the elliptic curve, as well as a random number r and the value v to be committed to generate a commitment value C = rG + vH.

Explain the role of the blinding factor in the Pedersen commitment scheme. The role of the blinding factor r is to hide the commitment value v and prevent attackers from inferring v's information through the commitment value C.

What is a range proof and how does it play a role in protecting the privacy of transaction amounts? Range proofs allow the prover to prove that a value is within a specific range without revealing the specific value. In transactions, it can be used to prove that the transaction amount is positive, prevent negative amount attacks, and protect the privacy of the amount.

In a blockchain based on an account/balance model, how can the Pedersen commitment scheme be used to hide transaction amounts? The sender can use the Pedersen commitment scheme to commit to the transaction amount and send the commitment value to the receiver. The receiver can use the confusion factor and the commitment value to verify the correctness of the transaction amount.

Describe a method of using asymmetric encryption to protect the confusion factor in the Pedersen commitment scheme. The sender can encrypt the confusion factor using the receiver's public key and send the encrypted confusion factor and the commitment value to the receiver. The receiver can decrypt the confusion factor using his own private key.

Why is it safer to store the encrypted confusion factor on the blockchain than locally? The distributed and tamper-proof characteristics of the blockchain can effectively prevent the confusion factor from being lost or tampered with, and improve data security.

In this scheme, how to verify the consistency of transaction inputs and outputs? By verifying whether r'G is equal to PC_1 + ... + PC_k - T - Y, the node can determine whether the input and output of the transaction are equal.

In addition to the transaction amount, what other types of transaction information can this scheme be applied to protect? This scheme can also be applied to protect other types of transaction information such as asset type and asset source information.