Altcoin News: JPMorgan Tests Evidence-Based Privacy Technology with Zero Disclosure
March 2, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
The blockchain development team of JPMorgan Chase is testing the AZTEC protocol, created on the basis of evidence with zero disclosure (ZKP), CoinDesk reported.
This evidence, which allows confirming the truth of the data without disclosing the data itself, is considered as a solution to confidentiality problems, because of which regulated companies are afraid to use open blockchains. Previously, JPMorgan conducted research in this area in its closed version of the Ethereum blockchain — Quorum.
The global bank is currently testing another privacy solution with zero disclosure called AZTEC. This protocol, developed by a London-based startup of the same name, is designed to provide blockchain data encryption with lower costs and more efficiently than in previous versions of the technology. Speaking about technology, AZTEC CEO Thomas Pocock said:
“It’s being tested by the most important bank in blockchain today. JPMorgan Quorum actually.”
JPMorgan insider confirmed that the Quorum team is considering AZTEC and “is generally committed to the industrialization of evidence with zero disclosure to Quorum”.
The cooperation of JPMorgan and AZTEC is very unusual. To date, the bank has strictly limited its work on blockchains with managed or closed systems. Even the dollar-secured JPM Coin cryptocurrency, which the bank plans to launch, will work on Quorum and is available only to trusted institutional clients. AZTEC, on the contrary, intends to close the gap between open and private blockchains.
According to Pocock, AZTEC, which reveals faster and more efficient forms of blockchain data encryption, wants to combine the best characteristics of both types of blockchains.
“AZTEC allows you to take what would normally be restricted to a private blockchain and to issue those assets, trade and clear them on a public blockchain, with all of the additional execution guarantees,” he said.
The AZTEC protocol is well known in the community of Ethereum, where tests were carried out to convert the Maker DAI stable coin into a confidential form. AZTEC technical director Dr. Zachary Williamson explained that the protocol uses a different privacy approach than Quorum. The latter combines Constellation’s own privacy system with zero-disclosure evidence.
To do its job effectively Protocol, AZTEC uses a special type of zero-knowledge proof (ZKP), named ranges evidence (range proofs), which requires less processing power than the classic ZKP. However, they are combined with other types of cryptographic confirmation schemes.
The system also differs from other privacy solutions in Ethereum, since the totality of values is presented in a manner much more similar to Bitcoin’s unspent transaction yield (UTXO) model, where the entries in the blockchain are deleted during the execution of the transaction, while new exits are created.
Using the AZTEC system, “the user sends a ZKP [proving] that the sum of the input notes is equal to the sum of the output notes,” said Williamson. “Once you know that, then you don’t need to know what’s inside each individual note. You know that the transaction is mathematically legitimate and there isn’t double spending going on.”
In terms of ease of use and performance, the AZTEC system can significantly reduce the cost of processing transactions on the air than the ZKP currently claims, the startup says. As for throughput, currently AZTEC processes approximately 1–3 transactions per second, but this figure will be improved after the next hard fork, says Williamson.
He noted that his team was testing the protocol in the area of issuing syndicated loans, and added that at the moment the focus is not so much on scaling as on trying to get Ethereum to work as a closed settlement system. According to Williamson, bridging the gap when it is impossible legally or contractually to place data in an open blockchain is the goal of AZTEC.
Author: Marko Vidrih
