Exploring the Integration of Internet Computer with Web2 and Web3: Unlocking the Potential of Cross-Chain Solutions
Recap of the Seminar “The Internet Computer — Integrating with Web2 and Web3.”
Disclaimer: both authors of the article, Wanlin Deng and Xintong Wu are research assistants of Prof. Luyao Zhang’s project entitled “From ‘Code is Law’ to ‘Code and Law’: A Comparative Study on Blockchain Economics for China and the World,” supported by the student research grant from the Center for the Study of Contemporary China (CSCC) at Duke Kunshan University (DKU). Xintong Wu is also the research assistant for Prof. Luyao Zhang’s project entitled “From ‘Code is Law’ to ‘Code and Law’: A Comparative Study on Blockchain Governance,” supported by the Summer Research Scholar (SRS) program at DKU.
Keywords (#hashtags)
#Blockchain #Integrations #Web3 to Web2 #Decentralization #ICP #Bitcoin #Ethereum #Smart Contract #Direct Communication #on-chain #off-chain
Highlights
- Research: Conduct cutting-edge interdisciplinary research to explore the integration of Internet Computer Protocol (ICP) with the Bitcoin and Ethereum networks by combining computer science and economics to analyze cross-chain solutions.
- Innovation: Understand the impact of ICP integration with other blockchains on the design of web services.
- Leadership: Provide attendees with the opportunity to develop their research skills and contribute to the development of the blockchain ecosystem through open-source code and data.
Introduction
On Apr 28, 2023, Dieter M. Sommer, the Senior Technical Program Manager from DFINITY Foundation, a non-profit organization (NPO) that develops and promotes decentralized technologies for more secure and open internet, was invited by SciEcon CIC, an NPO that focuses on cultivating interdisciplinary talent and leadership through educational events and conversations, to hold a seminar about The Internet Computer (IC) [1] — Integrating with Web2 and Web3. The Seminar was attended by scholars from prestigious institutions including Massachusetts Institute of Technology (MIT), Duke and Duke Kunshan University, and Instituto Superior Técnico Lisboa.
The seminar focused on an overview of cross-chain solutions and discussed the integration of ICs with Bitcoin and Ethereum networks. The presenter emphasized the importance of connecting blockchains to the real world and shared his insights on how ICs can be integrated with Web2 services. By discussing the differences between IC’s approach and traditional Oracle [2] solutions, such as Chainlink [3], the presenter pointed out the limitations of current solutions and shared use cases where Oracle remains necessary. The presenter also emphasized the need for continuous innovation in decentralized application development and encouraged attendees to try IC and explore its potential for creating a truly decentralized Internet. In addition, the seminar exposed code and open-access data on GitHub for researchers to learn from. The seminar also featured a Q&A session so attendees could ask questions and engage in conversation with the presenters. The seminar was held online, and participants came from different time zones.
Watch the Seminar Documentary on YouTube Channel.
Read the Publicity of the Event on DFINITY’s Linkedin Channel
About the Speaker
Dieter M. Sommer is an accomplished computer security professional with a wealth of experience in industrial research and technical project management. He currently holds the Senior Technical Program Manager position at the Dfinity Foundation [4], where he applies his expertise in developing cutting-edge technologies. Sommer’s impressive qualifications include a Ph.D. in computer security from the Darmstadt University [5] of Technology & IBM Research [6], as well as over 18 patent applications and a significant number of international publications. Widely recognized for his contributions to the field, Dr. Sommer is a sought-after speaker and presenter, and he remains at the forefront of computer security research, driving innovation with his groundbreaking work.
Recap of the seminar
1. The Problem: The need for connecting different ecosystems with Web3
Currently, the centralized nature of Web2 [7] systems has some problems, such as the concentration of power in the hands of a few large entities. This centralization means that users rely on these service providers, but they have limited control over the evolution of their services. Additionally, the public cloud that runs everything on Web2 is controlled by a handful of entities worldwide, further exacerbating the centralization issue. In contrast, Web3 [8] provides a decentralized web that enables users to co-decide on how services should evolve and removes the need to trust any single party for security.
With most of the world’s data still in the Web2 system, it becomes especially important to integrate on-chain and off-chain data. Connecting different ecosystems to enable blockchain singularity has become the focus of blockchain development today. Web3 is embracing a world of X-chains, where decentralized applications (DApps) [9] span multiple blockchains. The X-chain paradigm allows assets such as ERC-20 tokens [10] or non-fungible tokens (NFTs) [11] to move around the blockchain and enables smart contracts on one chain to dialogue or invocation. This arbitrary interaction between smart contracts on different chains is essential to achieve the singularity of the blockchain. It is important to note that new external components and assumptions required for interoperability must be minimized to ensure a seamless experience for users.
We can thus identify the necessity of blockchain integration for the world’s computers. Trustless Hyper Text Transfer Protocol Secure (HTTPS) [12] services can be fully on-chain, without the need for intermediaries or new trust assumptions. For protocol-level integration with the Bitcoin network, chain-key signatures, secret sharing, and multi-party computation are utilized. Integration with the Ethereum network is also in the works, with the upcoming Ethereum 2.0 upgrade [13] expected to improve the network’s scalability, security, and sustainability. This integration will enable more efficient and seamless transactions across different blockchains, furthering the goal of achieving blockchain singularity.
1. Web3 <> Web2 Oracleless Integration
1.1. Oracles in the past Web3 to Web2 Interaction
Smart contracts inherently face a fundamental limitation — they cannot interact with data and systems existing outside their native blockchain environment. To enable secure interoperability between blockchain and off-chain systems, the infrastructure of “blockchain oracles” is introduced. Oracles serve as intermediaries, connecting the blockchain with external systems and facilitating information exchange between the two parties. When a smart contract needs to interact with external data or systems, it can retrieve the necessary information through an oracle and process it as input.
In the past, the interaction between Web3 and Web2 using oracles and smart contracts was a complex process. Oracles bridge the Web3 on-chain world and the Web2 off-chain world. When a Web2 application requires interaction with a smart contract on the blockchain, it sends a request to the oracle. The oracle evaluates the request and submits it to the smart contract for processing. Once the smart contract processes the request, it responds to the oracle, which then relays the response back to the Web2 application. This interaction involves multiple steps, including HTTP requests from the Web2 application to the oracle, continuous monitoring of relevant events or data by the oracle, and the oracle receiving responses from the smart contract and relaying them back to the Web2 requester. These steps ensure secure and reliable access and utilization of blockchain data and functionality by Web2 applications.
While using the oracles, blockchain can access data from the off-chain world and integrate it into smart contracts. It enhances the flexibility and functionality of the blockchain while preserving its core attributes. By connecting with oracles, the blockchain can securely and reliably communicate with real-world data sources, APIs, and sensors, enabling interoperability between the blockchain and the external environment.
1.2. The Future Solution: HTTPS outcalls in Direct Communication from Web3 to Web2
In the future, the Web3 to Web2 interaction will be particularly convenient through the use of a new technology called Canisters [14]. Canisters are smart contracts that can communicate directly with Web2 servers using the HTTPS protocol, without Oracle. The direct communication process from Web3 to Web2 involves that when an HTTP request is made to a subnet node in Web3; each subnet node sends that request to the Web2 service. After receiving a response from the Web2 service, the subnet node normalizes the response and sends it back to the other subnet nodes using the IC consensus protocol. Finally, HTTP requests and responses are sent and received as “HTTPS outcalls” [15] to ensure secure data transmission. The whole process does not require an intermediary like Oracle, which provides a decentralized, more direct, and efficient way for Web3 and Web2 to interact.
However, there are still some limitations to HTTPS outcalls. HTTPS outcalls require that the response received by each calling IC node be equal, or transformable to something equal, which may limit the scope of the use case. However, a wide range of use cases for reading and writing Web2 data can still be handled with this approach, and most APIs can be read. In addition, writing data to Web2 requires the API to be idle, which means that multiple writes of the same value are treated as the same request. Idempotency keys are a quasi-standard mechanism for achieving this purpose. However, for high-value secrets, secret storage in a canister is not recommended. Even though HTTPS outcalls have certain limitations, there are workarounds. In the case of insufficient HTTPS outcalls, Oracle can still provide alternative solutions.
1.3. Exchange Rate Canister (XRC) in Native Web2 Integration
In native Web2 integration, the Exchange Rate Canister [16] serves as an important application that allows secure and direct communication between the on-chain and off-chain worlds. In the ICP on-chain world, a dApp canister can make an inter-canister call to the Exchange Rate Canister to get the current exchange rate. The Exchange Rate Canister can then use HTTPS outcalls to a Web2 service in the Web2 world to obtain the exchange rate without relying on oracles or making any extra trust assumptions. It allows for secure and direct communication between the on-chain and off-chain worlds.
2. Web3 <> Web3 Integration
2.1. Bi-Directional Integration Between Two Blockchains
During a bi-directional integration between two blockchains, it is necessary to ensure a secure data flow from the source chain to the target chain. In real-world integration, each direction can be implemented using different technologies, such as on-chain light clients for one direction and external validators [17] for the other. Securing data flow between multiple blockchains is essential and requires different technical solutions to achieve it.
2.2. Decentralization Properties of Integration Approaches
Different blockchain integration methods have different decentralization properties. Based on the seminar, this article will briefly introduce the working principle, trust level, and advantages and disadvantages of the five types of blockchain integration method models.
Solution 1: Centralized bridges
The concept of a centralized bridge involves an off-chain trusted party verifying and submitting a consensus artifact from one network A to a smart contract in another network B. A bridge smart contract assumes that the statement is true but cannot be verified due to the “trusted” property, which makes it very simple and weakens the trust model. The main advantage of centralized bridging is its efficiency, but it requires complete trust in one or several parties, so it is the weakest trust model.
Solution 2: Off-Chain Validators — Externally Validated Bridge
In external validation bridges, off-chain validators listen for changes on chain A. If most validators validate an event, they sign a transaction to a bridge contract on chain B, providing the corresponding change. This approach is simple and effective but requires significant additional trust assumptions beyond those needed for chain A and chain B. Cryptoeconomics [18] measures can produce a range of incentive designs to address this problem.
Solution 3: On-Chain Light Client & Relayer
In the work of the on-chain light client and the bridge relay, relays provide consensus artifacts to the light client smart contract on chain B, which then cryptographically validates the consensus on-chain A. Pre-compilation is used to provide gas-efficient verification of signatures to implement the on-chain light client practically. However, using relayers as off-chain components, possibly operated in the public cloud, can result in less decentralization. The security model is trustless in the light client, but it can be challenging to implement the light client gas-efficiently, and sometimes it may not be feasible.
Solution 4 . On-Chain Zero-Knowledge(ZK) Light Client [19] & Proof Generation & Relayer Network
An off-chain ZK network generates proof for consensus artifacts of Chain A that can be efficiently verified by the ZK light client on Chain B, using zk-SNARK [20] and proof techniques to reduce the proof size and verification time further. The ZK light client verifies the consensus of Chain A, and the security model is trustless. However, the ZK generation network is a massive off-chain infrastructure that can rely on the public cloud, making it less decentralized and requiring new assumptions from off-chain components’ availability properties. Currently, it requires up to > 100 high-performance machines in the ZK-proof generation network, but it solves the problem of feasibility and gas efficiency of on-chain light clients.
An off-chain ZK network generates proof for consensus artifacts of Chain A that can be efficiently verified by the ZK light client on Chain B, using zk-SNARK and proof techniques to further reduce the proof size and verification time. The ZK light client verifies the consensus of Chain A, and the security model is trustless. However, the ZK generation network is a massive off-chain infrastructure that can rely on the public cloud, making it less decentralized and requiring new assumptions from off-chain components’ availability properties. Currently, it requires up to > 100 high-performance machines in the ZK-proof generation network, but it solves the problem of feasibility and gas efficiency of on-chain light clients.
Solution 5: On-Chain Client & Native Integration
In the native integration between the on-chain client and the bridge, chain B is integrated with chain A at the protocol level and no longer requires a relay. Chain B runs an equivalent of an on-chain full client for Chain A, which can be complex to build, including novel cryptography. Smart contracts on Chain B can directly interact with smart contracts on Chain A as if they were regular users on Chain A, resulting in a trustless model where no additional assumptions are needed for availability. This model requires the computational work of threshold cryptography. It is the most decentralized model and the most powerful integration because it allows direct interaction between smart contracts on both chains. It works even if chain A does not support smart contracts. No changes need to be made on chain A; chain B implements a threshold signature for the signature scheme used by chain A’s exchange. However, this model is more complex to build, includes novel cryptography, and requires a large amount of computation for threshold cryptography.
3. Case Study of ICP and Other Networks Integration
To know how the on-chain client and native integration is done on Bitcoin and Ethereum, we first need to introduce the core building block of this kind of integration: Threshold ECDSA (Elliptic Curve Digital Signature Algorithm) [21]. Threshold ECDSA is a kind of digital signature scheme that allows participants to sign a message jointly using their private keys. In threshold ECDSA, the signing process can be divided into two phases: a sharing phase and a signing phase.
The sharing phase is based on secret sharing and cryptographic multi-party computation (MPC). The users can generate their private keys and share the private keys using the MPC protocol. MPC will split and distribute the private key in a way that ensures no one can reconstruct the keys.
The second phase is the signing stage. Each participant uses their share of the private key to compute a partial signature, and the MPC protocol will produce a joint signature. However, to produce the joint signature, a qualified subset of nodes is required, which means that there should be enough key shares to combine. Fewer key shares than a qualified subnet will contain no information on the key.
This process allows us to guarantee integration security while allowing users to sign messages collaboratively.
3.1. ICP <> Bitcoin Native Integration
The integration of the Internet Computer (IC) and Bitcoin, built on the foundation of threshold ECDSA, enables canisters on the IC subnet to receive and hold Bitcoin by obtaining a threshold ECDSA public key. Once the public key is obtained, canisters can transform Bitcoin into other canisters or users. To achieve this, canisters can access their Unspent Transaction Output (UTXO) [22] set, allowing them to ingest and process Bitcoin blocks. They can then sign messages using their private keys and send Bitcoin transactions. The threshold ECDSA mechanism ensures that the private keys remain secure and are not exposed to unauthorized parties.
Speaking in the big picture, to enable interaction between the IC and the Bitcoin network, a client canister running on the IC subnet can obtain ECDSA public keys and request ECDSA signatures through the Threshold ECDSA API in the threshold ECDSA subnet. The threshold ECDSA subnet enables secure multi-party computation (MPC) protocols for sharing private keys among participants, allowing them to sign messages collaboratively without revealing their private keys. Once a message has been signed, the signing canister can call the Bitcoin API to retrieve UTXOs and submit transactions between the IC and Bitcoin subnets. The IC <> Bitcoin subnet contains an on-chain Bitcoin node that connects to the Bitcoin peer-to-peer network and synchronizes with local Ethereum full nodes, allowing for efficient and secure cross-chain communication. This is the primary mechanism by which the IC and Bitcoin are integrated.
Specifically, chain-key Bitcoin (ckBTC) is a blockchain-based system that leverages the integration of Bitcoin with the IC to provide fast and cost-effective transactions. The system is built on the trustless, native integration between Bitcoin and the IC and is designed to reduce the risk of illegitimate Bitcoin transactions entering the ecosystem. This is achieved through decentralized on-chain Know Your Transaction (KYT) [23], which will access multiple KYT providers in the future. The system is crucial for avoiding legal and regulatory issues in an increasingly regulated environment. The on-chain KYT is realized using Oracleless web3<>web2 integration, which involves HTTPS outcalls. Overall, ckBTC provides a powerful way to transact with Bitcoin on the IC, taking advantage of the IC’s high speed, throughout, and low fees, while reducing the risk of illegal activities and regulatory issues.
In conclusion, the integration of the IC with Bitcoin promises to revolutionize the way we interact with the Bitcoin network. With web-speed smart contracts for Bitcoin, the integration removes trust assumptions and parties, making it easier for developers to use APIs and creating a better end-user experience. In addition, the integration enables the development of decentralized Bitcoin wallets on the IC, the integration of Bitcoin into any dApp, and the creation of a technical foundation for a wide range of Bitcoin smart contracts. This creates significant potential for the future development of Bitcoin, enabling new use cases and innovative solutions to be built on top of the Bitcoin network.
3.2. ICP <> Ethereum Native Integration
The integration of IC and Ethereum is the same as Bitcoin. Benefiting from the threshold ECDSA, canisters that want to interact with Ethereum can obtain ECDSA public keys and request ECDSA signatures using threshold ECDSA API. The signing message will request Ethereum JSON RPC API from IC <> Ethereum subnet (system subnet). Then, the subnet nodes connect to the Ethereum P2P network and synchronize local Ethereum full nodes and can behave like an on-chain Ethereum node.
Conclusion & Reflection
Integrating blockchains and web2 technologies is a powerful combination that brings new possibilities and use cases to the decentralized world. The native, trustless integration of the IC with Bitcoin and Ethereum is a significant step towards achieving this vision. This integration offers the strongest security model, as it is as independent of web2 as possible, with no off-chain components that would weaken decentralization. With this integration, IC smart contracts can directly interact with the Bitcoin network or Ethereum smart contracts.
The use cases for this integration are many and varied. IC dApps can now leverage the combined strength of the IC and its natively integrated blockchains and Web2, providing users with fast, efficient, and secure access to Bitcoin and Ethereum networks. Integrating Bitcoin with the IC provides Bitcoin with smart contract capabilities, unlocking a vast range of new use cases, such as DEXs, borrowing, NFTs, fundraising, and more. Furthermore, Ethereum can bring further liquidity to IC smart contracts, while Ethereum smart contracts can offload computation or storage to the IC. In summary, this integration opens up a world of possibilities for blockchain and Web2 technologies to work together and deliver powerful decentralized solutions.
After attending this seminar on the integration of blockchains and Web3 technologies, we are truly impressed with this combination’s potential. The idea of natively integrating the IC with Bitcoin and Ethereum is a significant step towards achieving a decentralized world. A solid framework for this integration is provided by the security model, which is as independent of Web3 as feasible and without any off-chain components that can compromise decentralization.
We are particularly fascinated by the use cases that this integration can bring. The ability of IC dApps to leverage the combined strength of the IC and its natively integrated blockchains and Web2 is truly remarkable. The potential to unlock a vast range of new use cases, such as DEXs, borrowing, NFTs, and fundraising, with the smart contract capabilities of Bitcoin is exciting. Furthermore, the ability of Ethereum to bring further liquidity to IC smart contracts, while Ethereum smart contracts can offload computation or storage to the IC, is a powerful concept.
As students at Duke Kunshan University [24], pursuing a cross-disciplinary education in the liberal arts, we believe that this integration provides us with a unique perspective on the possibilities and opportunities that lie ahead in the decentralized world. This seminar has broadened our understanding of blockchain technology and its potential to disrupt traditional industries and create new ones. We are eager to go deeper into this area and discover where the combination of Web3 and blockchain technology will lead us in the future.
We believe this seminar has significantly contributed to our understanding of blockchain and its potential. The insights and knowledge gained from this seminar will help us continue our studies and pursue our interests in this field. We appreciate the seminar’s organizers for providing such a thought-provoking and enlightening experience.
Relevant Materials
[1] Internet Computer
Internet Computer is a decentralized computing platform that enables the creation of serverless applications and smart contracts on a global network of independent data centers. It uses a novel consensus mechanism and a new programming language called Motoko, aiming to provide a more secure, cost-effective, and scalable alternative to traditional web hosting and cloud computing services.
[Website]
[2] Oracle
Blockchain oracles connect blockchains to external systems, enabling smart contracts to access real-world data and interact with traditional systems. They facilitate the creation of hybrid smart contracts that combine on-chain code with off-chain infrastructure, empowering decentralized applications to respond to real-world events and interoperate with existing systems.
[Website]
[3] Chainlink
Chainlink is a decentralized oracle network that connects smart contracts to real-world data and events.
[4] DFINITY Foundation
DFINITY Foundation is a non-profit organization dedicated to developing the DFINITY blockchain network. Their goal is to create an open and decentralized “Internet Computer” that hosts smart contracts and dApps. The foundation supports research, development, and community initiatives to promote the growth and adoption of DFINITY, aiming to revolutionize the internet infrastructure.
[5] Darmstadt University
Darmstadt University, also known as Technische Universität Darmstadt (TU Darmstadt), is a prestigious technical university in Germany. It offers a wide range of undergraduate and postgraduate programs in fields such as engineering, natural sciences, and social sciences. The university is recognized for its research prowess, especially in areas like information technology and mechanical engineering. With a focus on innovation and collaboration, Darmstadt University is dedicated to advancing knowledge and making a positive impact on society.
[Website]
[6] IBM Research
International Business Machines Corporation (IBM) Research is a global community of scientists and researchers dedicated to leveraging the scientific method to drive innovation for IBM, clients, and the world. With a strong belief in the power of research, they continuously strive to invent and create groundbreaking technologies that shape the future of IBM and make a positive impact on society.
[Website]
[7] Web2
Web2 refers to the current stage of the Internet where centralized platforms and services, such as social media, e-commerce, and search engines, dominate the online landscape. This has led to a concentration of power among a few large corporations, concerns over data privacy, and a business model that prioritizes engagement over user well-being.
[8] Web3
Web3 refers to the next stage of the internet, which aims to create a more decentralized and democratic web that prioritizes user control, privacy, and security. Web3 seeks to create a more open and distributed internet that allows users to control their data and digital identities. This requires the use of new technologies and protocols, such as blockchain, decentralized storage, and peer-to-peer networks, that enable users to interact with each other directly, without the need for intermediaries.
[9] Decentralized Applications (dApps)
Decentralized applications (dApps) are software applications that run on a decentralized computing network, such as a blockchain, using smart contracts to enforce their rules. They aim to offer greater transparency, user control, and innovation in various industries by removing the need for centralized control and intermediaries.
[10] ERC-20 tokens
ERC-20 tokens are digital assets built on the Ethereum blockchain that adhere to the ERC-20 standard. They are fungible tokens, meaning they are interchangeable and can be easily traded or exchanged. ERC-20 tokens have become the most common type of token on the Ethereum platform and are used for various purposes, including crowdfunding, decentralized applications (dApps), and creating digital representations of assets.
[11] Non-fungible tokens (NFTs)
Non-fungible tokens (NFTs) are unique digital assets built on the Ethereum blockchain. Unlike cryptocurrencies, each NFT has its distinct value and cannot be exchanged on a one-to-one basis. NFTs have gained popularity for their ability to represent ownership of digital art, collectibles, and virtual assets.
[Ethereum — non-fungible tokens (NFTs)]
[12] HTTPS
HTTPS is a protocol for secure communication over the Internet. It is used to encrypt data sent between web browsers and web servers, ensuring that sensitive information, such as passwords and financial data, cannot be intercepted and read by unauthorized parties. HTTPS is widely used for online transactions, such as online banking, e-commerce, and other secure services.
[13] Ethereum 2.0
Ethereum 2.0 is a major upgrade to the Ethereum blockchain that aims to improve scalability, security, and sustainability. It introduces a new consensus mechanism called Proof of Stake (PoS) and shard chains to increase transaction capacity and reduce energy consumption, enabling a more efficient and robust network.
[14] Canisters
Canisters are self-contained units of computing that can run on the Internet Computer. They are designed to be secure and isolated, allowing developers to deploy and run code on the network without needing to worry about the underlying infrastructure. Canisters can communicate with other canisters and interact with users via front-end applications, making them a key building block for developing dApps on the Internet Computer.
[Internet Computer — Canisters]
[15] HTTPS outcalls
HTTPS outcalls refer to requests made by a website to another server using the HTTPS protocol. These requests are used to retrieve data or resources that are needed to display the website, such as images, videos, or other content. HTTPS outcalls are important for ensuring the security of web pages, as they encrypt all data sent between the website and the server, protecting sensitive information from being intercepted by unauthorized parties.
[Internet Computer — HTTPS outcalls]
[16] Exchange Rate Canister
The Exchange Rate Canister is a module on the Internet Computer that provides a real-time exchange rate for different currencies. It is used by dApps that require the ability to convert between different currencies or to display prices in a user’s local currency. The Exchange Rate Canister is updated regularly to ensure that it provides accurate and up-to-date exchange rates, making it a useful tool for developers building decentralized financial applications on the Internet Computer.
[Github]
[17] External validators
External validators are trusted entities that are responsible for verifying the authenticity and accuracy of data or transactions on a blockchain network. They can be individuals or organizations that are selected based on their reputation, expertise, and ability to maintain the integrity of the network. External validators are an important part of many blockchain networks, as they help to ensure the security and reliability of the network by providing an external check on the actions of network participants.
[Diem Documentation — Validator]
[18] Cryptoeconomics
Cryptoeconomics is the study of how economic principles and incentives can be applied to create and manage decentralized systems, such as blockchain networks and cryptocurrencies.
[19] On-Chain ZK Light Client
On-Chain ZK Light Client is a technology that allows blockchain users to securely verify transactions and data on the blockchain without needing to fully download and store the entire blockchain. It utilizes zero-knowledge proofs (ZKPs) to provide efficient and trustless validation while reducing resource requirements.
[20] zk-SNARK
zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a cryptographic proof system that enables the verification of data without revealing any specific information, providing privacy and confidentiality in various applications such as blockchain, privacy-preserving computations, and secure authentication.
[zk-SNARK]
[21] Threshold ECDSA
Threshold ECDSA (Elliptic Curve Digital Signature Algorithm) is a cryptographic protocol where multiple participants collectively generate digital signatures using elliptic curve cryptography. This protocol enables secure digital signature generation by distributing private key shares among replicas in a threshold-ECDSA-enabled subnet. The IC leverages this approach to enhance security, trust, and functionality, enabling use cases like native Bitcoin integration, Ethereum integration, and decentralized certification authorities.
[22] Unspent Transaction Outputs
Within the realm of cryptocurrencies, an unspent transaction output (UTXO) signifies a specific quantity of digital currency that has been authorized by one account to be transferred to another. UTXOs employ the use of public key cryptography to facilitate the identification and transfer of ownership between parties possessing public/private key pairs. Each UTXO is structured with the recipient’s public key, thereby confining the ability to spend that particular UTXO exclusively to the account that can provide proof of ownership for the corresponding private key. The spending of a UTXO is contingent upon the inclusion of a digital signature linked to the attached public key from the previous transaction in which it was sent.
[23] Know Your Transaction
In the financial sector, the term “Know Your Transaction” (KYT) is used to refer to the process of carefully examining financial transactions to identify any potentially fraudulent or suspicious activities, particularly related to money laundering. As the adoption of cryptocurrencies increases, it becomes crucial for institutions to thoroughly analyze crypto transactions to detect and prevent financial crimes
[KYT]
[24] Duke Kunshan University (DKU)
Duke Kunshan University (DKU) was established in 2013 as a world-class liberal arts and sciences research university in partnership with Duke University and Wuhan University. With a focus on innovative education, interdisciplinary research, and global engagement, Duke Kunshan University offers a variety of high-quality, creative academic programs to students from around the world.
[Website]
About the Authors
Wanlin Deng
Wanlin Deng is a sophomore majoring in Political Economy at Duke Kunshan University. She has a great interest and solid foundation in economics and computer science and is interested in the interdisciplinary study fields of computational economics. Her interest areas include blockchain and trust mechanisms. Under the guidance of Professor Luyao Zhang, she is committed to researching the impact of exchange bankruptcies on trust in the crypto world.
Xintong Wu
Xintong Wu is a student in the Class of 2025 at Duke Kunshan University, majoring in Computing and Design — Digital Media. Her interested research areas are digital design, digital market research, and metaverse. She hopes to delve into the dynamic interactions between technology and society in the future Web 3.0 era and explore the infinite possibilities that technology can bring. Through the research with Prof. Luyao Zhang, she hopes to create new digital virtual worlds that are decentered, interdisciplinary, and have infinite possibilities.
Acknowledgments
We appreciate Dfinity, SciEcon CIC, and Metaversity for co-hosting this seminar talk.
Poster Design: Xinyu Tian and Zesen Zhuang
Associate Editor: Xinyu Tian
Chief Editor: Prof. Luyao Zhang
