Under the hood: The tech that powers DOP, explained
From ECDSA hashing to zero-knowledge Know Your Customer checks, here’s a look at the cryptography that makes DOP’s selective transparency possible.
A good crypto project should combine two things: simplicity for the end user, and a robust technical architecture that champions security.
And that’s our objective here at Data Ownership Protocol. We’ve created an elegant ecosystem where cryptocurrencies can be hidden from public view with a couple of clicks — and decrypted just as easily.
In this article, we’re going to pop open the hood and take a look at the cryptographic techniques that make all of this possible.
ECDSA hashing and zk-SNARKs
To achieve our goal of allowing users to keep full control of their data, and eliminate intervention from outside actors, DOP uses ECDSA hashing and zk-SNARKs. Let’s explore both of them individually.
ECDSA stands for Elliptic Curve Digital Signature Algorithm. It’s a complicated form of cryptography that’s harder for hackers to crack, meaning it’s superior to the more commonly used RSA (Rivest-Shamir-Adleman.)
Within our protocol, ECDSA is used to create digital signatures — verifying the authenticity and integrity of data that’s flowing through the ecosystem. Whenever a user encrypts and decrypts their assets, or transfers it to another wallet, their account’s private key is used to sign the data. Transactions are only executed when the data is verified through a smart contract.
Meanwhile, zk-SNARKs (that’s Zero-Knowledge Succinct Non-Interactive Argument of Knowledge in case you’re unfamiliar) is what helps DOP to preserve user privacy. In essence, such cryptographic proofs allow a person to demonstrate something is true, without revealing it. This is deployed during Know Your Customer checks — marking a stark contrast to crypto exchanges where you have to provide email addresses, passport photos, phone numbers, bank details and salary information that is at risk of being exposed in a data breach.
Zero-knowledge proofs are generated off-chain before being directed back to the blockchain for verification. All of this is designed to ensure that the network delivers peak performance at all times, and remains scalable as privacy-preserving blockchain applications continue to flourish.
Interoperability and compatibility are vital, and DOP is designed to be futureproof — continually evolving as the marketplace, and the way we interact with decentralized ledgers, changes.
So… what does this all mean for the end user, then? Well, their internal account will securely hold all of their data — without it appearing on public blockchain explorers. No one but you will know the balance of your cryptocurrencies, or the people you’ve transacted with. You have full control over which counterparties see your information and when.
DOP offers this without compromising on regulatory compliance, and ensuring that decentralization doesn’t empower cybercriminals to perform illicit activity. A collaboration with Chainalysis and zk.me ensures that bad actors and dark web entities are identified and prevented from infiltrating our ecosystem, all while giving the green light to legitimate users. And this will be an ongoing effort, with continuous research to uncover emerging attack vectors and shield the community against them.
Token standards
To begin with, DOP users will have the ability to encrypt ERC-20, ERC-721 and ERC-1155 tokens. This covers a vast array of altcoins that have been minted on top of Ethereum, as well as non-fungible tokens. Within the coming months, we’re also planning to branch out our technology to other top-tier EVM blockchains, bringing selective transparency to an even wider audience. One of our top priorities has been ensuring that our infrastructure can seamlessly integrate with the dApps and wallets you already use everyday, delivering familiarity.
A vibrant market
The business case for DOP is clear to see. Privacy coins currently have a market cap of $5.6 billion — and this is dwarfed by the $365.6 billion valuation of EVM chains. While Monero, Zcash and Dash were early entrants in this market — relying on features such as stealth addresses and ring signatures — each of these projects has limitations. Privacy-preserving features may be optional or difficult to understand, and these coins may suffer from limited compatibility with existing dApps and wallets.
Data Ownership Protocol is changing the status quo by moving the emphasis away from privacy coins. Instead, we ensure that the major, deeply liquid digital assets we all use on a daily basis can be used confidentially — from USDC to USDT, and from PEPE to SHIB. This is something that blockchain technology has failed to address since its inception. As our mainnet launch nears, with a slate of new features planned for 2024 and beyond, we believe selective transparency will unlock a wealth of applications and use cases that have never been seen before — and we’ll be supporting the developers who want to make them a reality.
