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Privacy-preserving techniques using zero knowledge proof in public Ethereum

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Public Blockchain technology like Ethereum is gaining interest and growing use case among startup and fintechs.
Apart from scalability issues which are going to be solved with new consensus and mining techniques (Ethereum Metropolis and Bitcoin SegWit2x with Lightning network),
privacy on transaction is still an issue which is not yet fully addressed yet. Because of the public nature of a Ethereum, many businesses are reluctant to deploy Smart-contract or Dapps solutions for fear of exposing confidential or sensitive information.
The use of zk SNARKs (zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”) would essentially solve this dilemma (next EIP improvement of Ethereum called 'Byzantium' include zk SNARKS).
The idea of zk-SNARKs is that they allow verification of the correctness of computations, without a verifier having to execute those computations, or even learn what was actually executed. Using zk-SNARKs, a verifier can confirm that a computation happened correctly, with ‘zero-knowledge’ of the computation.
We propose during this talk to have a brief presentation on cryptography and theory around zero-knowledge proof algorithm.
Then we will try to showcase the benefits of zk-SNARKS and other privacy-preserving techniques (like zcash) on the public blockchain ecosystem.

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Privacy-preserving techniques using zero knowledge proof in public Ethereum

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  2. 2. Agenda ― Why Privacy is important in blockchain ? ― Theory and concept around Zero Knowledge proof ― Application of zk-Snarks in public Ethereum Blockchain ― Q & A 1 2 3 4
  3. 3. Importance of privacy 3 • It is an important human right • Allow people exercise unique moral choices • Enable our societies evolved around is healthy, and makes it more resilient and more humane
  4. 4. ©copyright 2017 Why privacy matters Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 4
  5. 5. Once data is embedded in the blockchain it cannot be altered • • •
  6. 6. Do you think Bitcoin is still anonymous ? • Wallet address re-use, linking your transactions together into a single profile. • IP address re-use. • Combining inputs from multiple transactions, • Using mobile wallet, effectively revealing to a third party your full set of addresses.
  7. 7. Following a bitcoin transaction
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  9. 9. ©copyright 2017 How to make a private transaction in the blockchain Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 9
  10. 10. ©copyright 2017 Application of Zero Knowledge Proof Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 10 Source :
  11. 11. In a Zero-knowledge (ZK) proof we have 2 participants: • Prover - Peggy • Verifier - Victor The prover wants to convince the verifier that a statement is true without leaking any extra information. E.g. the prover wants to convince the verifier that he has a secret without revealing it. Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT3811 Zero-knowledge proof
  12. 12. ©copyright 2017 Zero-knowledge proof Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 12
  13. 13. Properties of ZK proofs: • Termination: the protocol finishes after a number of steps. • Completeness: if the statement is true then the verifier will be convinced of this at the end of the protocol. • Soundness: if the statement is false then it is unlikely that the verifier will be fooled. • Zero-knowledge: at the end of the protocol no sensitive information is leaked to the verifier. Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT3813 Zero-knowledge proof
  14. 14. ©copyright 2017 zkSNARK Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 14 Zero-knowledge Succinct Non-interactive ARguments of Knowledge Zero-knowledge: proving existence of a secret without revealing it Succinct: the communication volume is small Non-interactive: no interaction Arguments of Knowledge: proving that one knows the secret
  15. 15. ©copyright 2017 Non-Interactive Zero-knowledge Proof (NIZK) Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 15 Peggy Victor Common Reference String Source: https://thenounproject.com Secret s Proof p Verify proof p
  16. 16. ©copyright 2017 Common Reference String (CRS) Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 16 Initial parameters Trusted Setup Common Reference String Destroy the parameters !
  17. 17. ©copyright 2017 Pairing on elliptic curves Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 17Source: https://desmos.com/calculator, https://en.wikipedia.org/wiki/Swiss_passport 𝐸 𝑎,𝑏 = 𝑂 ∪ { 𝑥, 𝑦 ; 𝑦2 = 𝑥3 + 𝑎𝑥 + 𝑏} RSA (bit length) EC (bit length) Security level 1248 160 80 2048 224 112 Pairing: mathematical tool used to instantiate a NIZK Elliptic curve: Efficiency Used by
  18. 18. Homomorphic encryption allows to perform operations on sensitive data while keeping it encrypted. Use case: secure cloud computing Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT3818 𝐸𝑛𝑐 𝑚 + 𝐸𝑛𝑐 𝑛 = 𝐸𝑛𝑐(𝑚 + 𝑛) Homomorphic evaluation/ encryption
  19. 19. ©copyright ELCA 2017 19
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  22. 22. ©copyright ELCA 2017 22 ? ? ? ? Reference: https://www.reddit.com/r/ethereum/comments/712idt/ethereum_testnet_just_verified_a_zcash_transaction/ TEST Contract Library: Pairing Pre-compiled EC operations
  23. 23. ©copyright ELCA 2017 23
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  26. 26. ©copyright ELCA 2017 ― ― ― ― ― 26
  27. 27. Innovations @ ELCA ELCA is working on innovation projects wich aims to cover the following domain(s) • Cloud Security and Searchable Encryption in the cloud • ChatBot and Natural Language processing • BigData • Blockchain
  28. 28. ©copyright 2017 ELCA expertise Digital & Business Transformation Complexity Reduction Modernization Automation & Standartisation Time to Market & Agility Alignement Business & IT Security … MARKET CHALLENGES PROJEKT ERFAHRUNG Consulting Software Engineering Technology Integration Application & Cloud Management BRANCHEN ERFAHRUNG Financial Services Health & Pension Public Administration Defense & Cybersecurity Transportation & Logistics Retail & Other Industries (ex. Intern. Org, Energy etc.) ANGESAGTE THEMEN IT Business Consulting ECM Enterprise Content Management CIM Customer Interaction Management Big Data & Analytics SaaS Service & Operations Architecture Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 28
  29. 29. ©copyright 2017 Blockchain team Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 29 – Blockchain – Team – Industry – Business expert Financial – Industry – Business expert Insurance – Industry – Business expert – Public sector – Industry – Business expert Healthcare Dedicated skilled Blockchain experts
  30. 30. ©copyright 2017 • • • • • • • • • • How ELCA can help on Blockchain technology Privacy-preserving techniques using zero knowledge proof in public Ethereum - Nov 3 - BAT38 30
  31. 31. Mr Nagib Aouini Mr Jorge Alvaradp Head of Cyber Security Lead Blockchain Architect Nagib.aouini@elca.ch Jorge.alvarado@elca.ch Tel : 021 613 2136 Tel : 021 613 2111 Confidential do not distribute 31 Dr Sonia Bogos Crypography Engineer Sonia.bogos@elca.ch Tel : 021 613 2111

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