Ensuring the privacy of information in distributed ledger systems with zero-knowledge proofs

Abstract

This article addresses the privacy issue in distributed ledger technology (DLT) and blockchain. The research focuses on the applied use case of private transactions involving digital assets. The article provides a comparison of various privacy methods, including mixing networks, ring signatures, and off-chain protocols. It is noted that these methods do not achieve the target level of decentralization, which is a crucial property for blockchain. To address these limitations, the article introduces zero-knowledge proof methods, with a particular emphasis on SNARK. Mathematical descriptions of SNARK methods are presented, along with software implementation approaches. The research includes experiments conducted to compare the performance and information security properties of SNARK methods in the use case of private transactions involving digital assets. The experimental results highlight approaches to improve performance using batch verification methods. The findings of this research have practical implications for the development of systems requiring high levels of privacy and decentralization in blockchain-based systems.

Keywords

• distributed ledger, blockchain, confidentiality, zero knowledge proofs.