Privacy protection of blockchain transactions

Privacy protection of blockchain transactions

Glossary

Term definitionBlockchainA distributed database that uses cryptography to link blocks of data together to form an immutable record.NodeA computer device connected to a blockchain network that can verify transactions and maintain a copy of the blockchain.MiningA process in which nodes verify transactions and add them to the blockchain by solving complex computational puzzles, and those who succeed receive rewards (such as Bitcoin).HashA function that compresses a message of arbitrary length into a message digest of fixed length, such as MD5 and SHA.BlockA blockchain database record containing transaction data and metadata.Public key cryptographyA cryptographic method that uses a pair of keys (public and private keys) for encryption and decryption.Digital signatureA technique that uses a private key to encrypt data, and the recipient can use the public key to verify the integrity of the data and the identity of the sender.UTXO (unspent transaction output)An output in a blockchain transaction that has not been spent and can be used as an input for a new transaction.The account balance model tracks the global state of each account balance, similar to a bank account.Privacy protectionA technique that protects user identity and transaction information from being leaked.Commitment schemeA cryptographic technique that allows a party to commit to a value without revealing the actual contents of the value until it is revealed later. Pedersen commitment is an additive homomorphic commitment scheme that allows addition of commitment values ​​without revealing their contents. Blinding factor is a random number used in a commitment scheme to hide the actual contents of a commitment value. Range proof is a cryptographic proof used to prove that a commitment value is within a certain range without revealing the actual contents of the value. Zero-knowledge proof is a cryptographic proof that allows one party to prove to another party that it knows the answer to a proposition without revealing any additional information.

Short answer question

How does blockchain technology ensure the immutability of data?

Blockchain links each data block to its previous block through a cryptographic hash function to form an immutable chain. Any change to a previous block changes its hash value, invalidating the links to all subsequent blocks, making it impossible to tamper with historical data.

What is the difference between the UTXO model and the account balance model?

The UTXO model represents assets as unspent transaction outputs, similar to cash, while the account balance model tracks the balance of each account, similar to a bank account. Bitcoin uses the UTXO model, while Ethereum uses the account balance model.

Why is privacy protection needed in blockchain transactions?

Since blockchain transaction records are open and transparent, information such as transaction amounts and participant identities may be leaked, threatening user privacy and business secrets. Privacy protection technology can hide this sensitive information while ensuring the validity of transactions.

What is a Pedersen commitment? What are its characteristics?

Pedersen commitment is an additive homomorphic commitment scheme that allows addition of commitment values ​​without revealing their contents. It has the properties of hiding, binding, and homomorphism, and can be used to protect the privacy of information such as transaction amounts.

What role does the blinding factor play in Pedersen commitments?

The blinding factor is a random number used in Pedersen commitments to hide the actual contents of the commitment value. Even if the commitment value and generator are known, the original value cannot be inferred through the blinding factor.

What is a range proof? What is its application in privacy-preserving transactions?

A range proof is a cryptographic proof used to prove that a commitment value is within a specific range without revealing the actual contents of the value. In privacy-preserving transactions, range proofs can be used to prove the validity of transaction amounts, such as ensuring that the transaction amount is positive and does not exceed the account balance.

Briefly describe the main steps of information protection method 300.

Information protection method 300 first uses the Pedersen commitment scheme to commit the transaction amount and generate a transaction commitment value. Then, the blinding factor and transaction amount are encrypted using the recipient's public key, and the encrypted result is sent to the recipient.

How is information protection method 400 different from method 300?

Information protection method 400 is executed by the recipient, who uses the private key to decrypt the received encrypted information, obtain the blinding factor and transaction amount, and verify the validity of the transaction.

At which stage of the transaction process are information protection method 440 and method 450 executed respectively?

Information protection method 440 is executed by the sender to encrypt the blinding factor and transaction amount before sending the transaction information. Information protection method 450 is executed by the receiver to receive and decrypt the transaction information and verify the validity of the transaction.

What are the advantages of the privacy protection scheme proposed in this study compared with existing schemes?

The solution proposed in this study uses Pedersen commitment and homomorphic encryption technology to achieve the hiding, binding and homomorphic operation of transaction amounts, while simplifying the management of blind factors and improving the security of transaction privacy.