Research on Blockchain Data Isolation Technology

Glossary

Term DefinitionDistributed Ledger System (DLS)A database system that allows multiple parties to share, copy and synchronize data, also known as a consensus network or blockchain network. Blockchain is a chain data structure consisting of multiple blocks, each of which contains multiple transaction information and is linked together by cryptography to ensure that the data cannot be tampered with. Blockchain networkA network consisting of multiple nodes, which jointly maintain and update blockchain data and ensure data consistency through a consensus mechanism. Public blockchain networkA blockchain network that anyone can join and participate in, such as the Bitcoin network. Private blockchain networkA blockchain network with limited access, where only authorized nodes can join and participate, such as the blockchain system used within an enterprise. Consortium blockchain networkA blockchain network jointly managed by multiple institutions, such as an inter-bank payment system established by multiple banks. Public transactionsA transaction that is broadcast in a public blockchain network and visible to all nodes. Private transactionsA transaction that is visible only to the two parties to the transaction, and other nodes cannot obtain transaction details. Proof of Work (POW)A consensus mechanism that requires nodes to perform complex calculations to add new blocks, such as the consensus mechanism used by Bitcoin. Proof of Stake (POS)A consensus mechanism that determines the right to generate blocks based on the proportion of stake held by a node, such as the consensus mechanism used by the Ethereum 2.0 plan. Proof of Authority (POA)A consensus mechanism in which pre-designated nodes are responsible for block generation, such as the consensus mechanism used by the enterprise-level blockchain Hyperledger Fabric. Workflow nodes are responsible for processing private transactions, maintaining private blockchains and local data storage. Account records are records of account balance information, stored in the public blockchain, and used to publicly verify transactions. Private transaction representations are stored in private blockchains to record summaries of private transaction information, such as transaction hashes and participant identities. Local representations are copies of account records stored locally by workflow nodes, used to speed up transaction processing.

Short answer questions

Briefly define the distributed ledger system (DLS) and explain its relationship with blockchains and consensus networks.

What types of blockchain networks can be divided into based on access rights? Describe the characteristics of each type.

Explain the difference between public transactions and private transactions, and give examples of application scenarios for private transactions.

What is proof of work (POW)? List at least two other consensus mechanisms and briefly describe their principles.

What problem does the data isolation technology proposed in this article aim to solve? Briefly describe the core idea of this technology.

What role does the workflow node play in data isolation technology? List its main functions.

Where is the private transaction representation stored? What information does it contain?

Where is the account record stored? What is its role?

Why is it necessary to delay the public account balance update information? What are the benefits of doing so?

What are the advantages of the data isolation technology proposed in this article compared with the traditional blockchain data privacy protection scheme?

Answer

A distributed ledger system (DLS) is a database system that allows multiple parties to share, copy and synchronize data. It is also called a consensus network or blockchain network because blockchain technology is a common way to implement DLS. A consensus network refers to the nodes in the network reaching data consistency through a consensus mechanism.

Blockchain networks can be divided into public blockchain networks, private blockchain networks and consortium blockchain networks based on access rights.

Public blockchain networks allow anyone to join and participate, such as the Bitcoin network.

Private blockchain networks restrict access rights, and only authorized nodes can join and participate, such as the blockchain system used within an enterprise.

Consortium blockchain networks are jointly managed by multiple institutions, such as an inter-bank payment system established by multiple banks.

Public transactions are broadcast in the public blockchain network and visible to all nodes, while private transactions are only visible to the two parties of the transaction, and other nodes cannot obtain transaction details.

Application scenarios of private transactions: For example, two competing companies are trading with each other. They want to keep the transaction amount confidential. Private transactions can be used to protect business secrets.

Proof of Work (POW) is a consensus mechanism that requires nodes to perform complex calculations to add new blocks, consuming a lot of computing power to ensure network security, such as the consensus mechanism used by Bitcoin.

Proof of Stake (POS): The right to generate blocks is determined according to the proportion of stake held by the node, reducing the waste of computing power, such as the consensus mechanism used by the Ethereum 2.0 plan.

Proof of Authority (POA): Pre-designated nodes are responsible for block generation, improving transaction efficiency, such as the consensus mechanism used by the enterprise-level blockchain Hyperledger Fabric.

The data isolation technology proposed in this paper aims to solve the problem of open and transparent private transaction data in blockchain networks. The core idea is to store the details of private transactions in the local database of the workflow node, and only record the transaction summary and account balance update information on the blockchain, thereby achieving data isolation and privacy protection.

Workflow nodes play a key role in data isolation technology, responsible for processing private transactions, maintaining private blockchains and local data storage. Its main functions include:

Receive and verify private transaction requests.

Record the details of private transactions in the local database.

Record private transaction representations in the private blockchain, including transaction hashes and participant identities.

Generate and update account records, and send account balance update information to the public blockchain.

Private transaction representations are stored in the private blockchain, and the information they contain includes:

Transaction hashes: used to uniquely identify transactions.

Participant identities: used to identify both parties in the transaction.

Account records are stored in the public blockchain, and their role is to record account balance information, which is used to publicly verify transactions and ensure that all nodes reach a consensus on the account status.

Delaying the disclosure of account balance update information is to prevent observers from inferring the details of private transactions by analyzing changes in account balances. This can improve the security of private transactions and prevent information leakage.

Compared with traditional blockchain data privacy protection schemes, the data isolation technology proposed in this paper has the following advantages:

Higher security: The details of private transactions are stored in the local database, which can only be accessed by authorized nodes, effectively preventing data leakage.

Higher efficiency: Private transactions are processed faster because not all transaction details need to be recorded on the blockchain.

Better scalability: The technology can be applied to various types of blockchain networks, including public blockchains, private blockchains, and consortium blockchains.

Essay questions

Discuss the advantages and challenges of blockchain technology in the financial field in detail, and analyze its development prospects based on specific cases.

Analyze the advantages and disadvantages of different types of blockchain consensus mechanisms and explore their applicable scenarios.

Analyze the challenges of blockchain data privacy protection from a technical perspective and compare and analyze common solutions.

Combined with actual cases, discuss how to use blockchain technology to achieve innovation and development of supply chain finance.

Explore the integration and development trend of blockchain technology with other emerging technologies (such as artificial intelligence, Internet of Things, etc.), and analyze its impact on future society.