ING’s blockchain team is testing a privacy technology called “bulletproofs,” the latest in a series of seemingly unlikely cypherpunk experiments at the Netherlands-based global bank.
Developed and refined by hardcore cryptographers at Stanford University, University College London and startup Blockstream, bulletproofs are designed to hide the amounts being transferred in bitcoin transactions, which are normally visible to anyone. But banks have privacy concerns about blockchains too, since they don’t want to expose competitive or sensitive client data to rivals.
One early solution was zero-knowledge proofs (ZKPs), a way of proving possession of a secret without revealing the secret itself. Over the past year or so, ING has explored ZKP variants such as range proofs (where a hidden number is proven to be within a certain range) and zero-knowledge set membership (where alphanumeric data can be validated within a specified set).
But ZKPs eat up a lot of computation and so potentially slow down a blockchain. Now, ING sees bulletproofs as a much more efficient, therefore applicable, version of these proofs.
The bank found bulletproofs turn out to be “roughly ten times faster than other range proofs, for a single range proof,” said Mariana Gomez de la Villa, global head of ING’s blockchain program.
And when aggregated together these proving schemes gain efficiency. Gomez de la Villa gave the example of a cryptocurrency exchange using range proofs to show it has enough funds to pay all its clients if they want to withdraw their money at the same time.
In this case, “bulletproofs would allow a solution that is 300 times more efficient than other alternative range proofs,” she said.
While a lot of this stuff is academic, ING is now looking to where it can apply the tech. Potential uses touch on the need to obey the Europe Union’s General Data Protection Regulation (GDPR); for instance, ZK set membership can prove an individual…