Last year ING announced its Zero Knowledge Range Proofs which enable organizations to verify a range such as age older than 18, without knowing a person’s precise age. On Sunday the bank announced it plans to open source a new solution Zero Knowledge Set Membership (ZKSM).
Both innovations are based on the concept of Zero Knowledge Proofs (ZKP) which allow a third party to test encrypted data for limited facts, without full access to the data. The advantage of ZKP is it enables private information to be stored securely and privately on blockchain or distributed ledger technology (DLT), but yet still be useful.
While ING’s Range Proofs worked with numbers, the ZKSM solution can also work with textual data such as names and locations. The example ING gives is a set that contains all the names of EU countries. Hence ZKSM enables a KYC solution to verify a client is an EU citizen without knowing their specific country.
ING’s ZKSM whitepaper outlines other business applications. Ring signatures enable messages to be digitally signed by a member of a group, where each of them has keys. ZKSM could be used to construct ring signatures for the board of a company, and one member of the board can anonymously sign a contract. A lack of identity on an agreement could be undesirable, but you might want an anonymous vote.
Anti-Money Laundering often involves comparing a person’s identity to a blacklist, or a list of countries which don’t comply with money laundering rules. ZKSM could be used to check if an identity or country is on such a list. However, Zero-Knowledge Proofs are known to be computationally expensive, so it remains to be seen how well ZKSM functions for large sets such a blacklist of names.
What’s impressive about ING’s high-level approach is it’s relatively fundamental research, with broad application beyond banking.
Annerie Vreugdenhil, Head of Wholesale Banking Innovation at ING, commented: “ING’s overall goal with DLT and specifically blockchain is to create solutions that empower our clients to transform their business models. One of the key elements in this process for clients is how to deal with data and privacy. ZKSM is the next step in this journey.”