Papyrus: Papyrus Technical Roundup #13: Status of privacy research in Papyrus.

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Papyrus’ privacy consists of two main components — state channel privacy and privacy of transactions. State channel privacy involves encryption of state channel parameters and block data. Encryption is implemented as a combination of asymmetric and symmetric algorithms. We use the symmetric AES‌-256 to encrypt channel data. The asymmetric algorithm is used only to encrypt a symmetric key for AES. State channel encryption is currently being tested and will be released soon. It will protect state channel data from being viewed by unauthorized parties.

More information about state channel privacy can be found in our previous blog post:

https://blog.papyrus.global/papyrus-technical-roundup-11-privacy-management-dbd24326553a

Protecting payment transactions generated during channel settlements is a more challenging task and cannot be achieved by applying standard encryption. Private (or shielded) payment transactions require advanced cryptography like ring signatures or zero-knowledge proofs. Our first option was to copy the existing scheme from Monero or ZCash. Effectively, this means that each node would need to run two blockchains in parallel — one for the main chain and one for shielded transactions. On one hand, there are clear benefits to taking existing thoroughly tested code, like avoiding the implementation of complex cryptography by ourselves. But on other hand, the overall architecture would become overly complicated and less maintainable so our second option, which is currently under research is to add shielded transactions directly to the blockchain layer.

Currently, there are several different approaches being researched — RingCT (Monero), zkSNARKS (zCash) and Bulletproofs. We are comparing them using the following parameters: level of privacy, transaction size, transaction generation time, transaction verification time.

Monero RingCT’s privacy and also transaction size depends on the number of inputs (mixins) and outputs. Even for typical 2-input 2-output transactions, the size is quite large — around 13Kb. For mixin transactions with lots of inputs and outputs, the size could become larger than 100Kb. The Monero team is planning to switch to Bulletproofs which will reduce transaction size by ~84% (source: https://monero.org/xmr-community-invites-auditors) so we will not consider using RingCT in Papyrus.

The key benefits of zkSNARKS are: real zero-knowledge privacy and very short proof sizes, the latter of which is critical since blockchain storage is very expensive. The ZK proof occupies 188 bytes in every Zcash transaction. Verification time is around 8–9ms. Proof generation currently takes around 40 sec and 3Gb of RAM which is far from ideal. The ZCash team is planning to improve those numbers to 7 sec and 40Mb with its next major chain upgrade called ‘Sapling’ which will be activated in September 2018 (to read more https://blog.z.cash/cultivating-sapling-faster-zksnarks). A major drawback of zkSNARKS is their dependence on the initialization phase called trusted setup. If the trusted setup phase was compromised, then the security of the entire system becomes compromised and false proofs may be generated.

Bulletproofs are a relatively new approach to generate ZK proofs. They do not require a trusted setup. According to the Bulletproofs paper (https://eprint.iacr.org/2017/1066.pdf), a single 64-bit range proof is 675 bytes and takes 65 ms to generate and 3.9 ms to verify. Bulletproofs also support very efficient batching when several proofs are verified together or combined in one single proof. Batching allows for a 30–80% reduction in proof size and proving/verifying time.

Bulletproofs look very attractive but are a relatively new technology which means that it will require some time to be property audited before being included in real production blockchains. They require no trusted setup and may be considerably more efficient than zkSNARKS but have slightly larger proof sizes. We will continue our research to ensure that the proper choice of technology for shielded transactions is made.

Papyrus Technical Roundup #13: Status of privacy research in Papyrus. was originally published in Papyrus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Original article was created by: Papyrus at blog.papyrus.global

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency or ICO.

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