An auditable confidentiality protocol for blockchain transactions

Abstract

Blockchain technology inherently exposes user payment details, including account balances, asset holdings, and transaction histories, posing significant security and privacy risks. Moreover, no existing cross-chain bridges support private transactions that protect users' trading histories. This paper introduces a novel confidentiality protocol that conceals user payments while ensuring auditability. The protocol employs a privacy committee, where encrypted secret shares of transaction data are distributed among committee members. Auditors can access private transaction data only with majority approval from the committee. Additionally, the protocol utilizes a zero-knowledge rollup scheme, batching multiple transactions to reduce private transaction costs by 90% compared to non-batched approaches. Implemented using ZoKrates and Solidity, the proposed scheme has been evaluated on the Ethereum test network, demonstrating a one-to-one private transaction latency of approximately 5 s. The protocol's security is rigorously analyzed using the standard real/ideal world paradigm.