Today, Dutch bank ING has announced it has solved one of R3’s pain points on the Corda blockchain. Corda’s ‘digital notary’ service previously had to choose between acceptable privacy or security. ING’s solution uses zero-knowledge proofs (ZKPs) to validate transactions, so their contents can be kept private without compromising on safety.
The bank today released the whitepaper: ‘Solutions for the Corda Security and Privacy Trade-off: Having Your Cake and Eating It’. Indeed, ZKPs, which allow a party to prove some information is correct or known without ever seeing it, sound too good to be true. But they are becoming a popular solution for data privacy on blockchains.
The notary service on Corda has two options, a validating notary and a non-validating notary. The first type has to see all the transaction history leading up to the one being validated, which is reliable but not private.
As Mariana Gomez de la Villa, program director of ING’s blockchain team, put it: “the notary sees the contents of a transaction before it determines if the information is correct, which means participants lose privacy,”
The second type doesn’t see the transaction content, but this “creates a security risk where the notary could sign off the wrong transaction if a malicious participant builds an invalid transaction,” de la Villa explained.
ING’s whitepaper concludes that addressing the privacy issue of the validating notary is the way forward. The proposed solution is to use ZKPs to hide the transaction information, but allow its validation. Surprisingly, the bank found that ZKP protected transactions were notarized faster than Corda’s existing method.
ING, along with EY and Hyperledger, has been working on ZKPs for some time. In 2017, the bank released its range proofs, so someone could prove they are over 18 without revealing their age. The year after, it developed Zero-Knowledge Set Membership (ZKSM) and open-sourced the solution. ZKSM allows a user, for example, to prove they live in the EU without sharing the specific country.
This year ING released Bulletproofs, which address speed and trust issues of ZKPs. This breakthrough made it into the CEO’s financial results announcement. Today marks the bank’s fourth ZKP solution and was revealed at R3’s CordaCon.