Privacy-preserving KYC on Ethereum Introduction A decentralized - PowerPoint PPT Presentation

Privacy-preserving KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Privacy-preserving KYC on Ethereum Introduction A decentralized KYC-compliant identity Alex Biryukov, Dmitry Khovratovich, Sergei Tikhomirov Conclusion and future work SnT, University of Luxembourg 9 May 2018 CWI, Amsterdam, The Netherlands 1/20

Privacy-preserving Outline KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity Introduction Conclusion and future work A decentralized KYC-compliant identity Conclusion and future work 2/20

Privacy-preserving Identity is data that represents a user KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity Identity is used for: Conclusion and ◮ Authentication: proves the user is who they claim to be; future work ◮ Authorization: ensure the user is eligible for an action. In cryptographic terms, user is represented by a private-public key pair. 3/20

Privacy-preserving Centrally managed identity KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ Prevalent model today Conclusion and future work ◮ User delegate identity management to companies, get access using password ◮ Risks: identity theft, central point of failure 4/20

Privacy-preserving Decentralized identity KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ Putting users in charge of managing their data Conclusion and future work ◮ Can be implemented using blockchains ◮ Does it respect privacy? ◮ Does it comply with regulations? 5/20

Privacy-preserving Bitcoin KYC on Ethereum Biryukov, Khovratovich, ◮ A decentralized digital currency [Nakamoto 2008] Tikhomirov Introduction ◮ Combines cryptography and economics to prevent A decentralized KYC-compliant double spending without a trusted third party identity Conclusion and future work 6/20

Privacy-preserving Ethereum: generalized blockchain KYC on Ethereum Biryukov, Khovratovich, ◮ A blockchain-based application platform [Buterin 2014] Tikhomirov Introduction ◮ Key feature: Turing complete programming A decentralized KYC-compliant identity Conclusion and future work 7/20

Privacy-preserving Ethereum tokens KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ A popular use case for smart contracts Conclusion and future work ◮ A fungible unit of value maintained by a smart contract ◮ ERC20 is the de-facto standard token API ◮ Decentralized exchanges – a promising direction 8/20

Privacy-preserving ERC20 functions KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ transfer – send tokens to an address Conclusion and future work ◮ approve – allow other user to transfer my tokens ◮ transferFrom – send other user’s tokens (only if approve d) 9/20

Privacy-preserving A decentralized KYC-compliant identity KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized Our identity management design for financial services is: KYC-compliant identity ◮ Decentralized (on-chain) Conclusion and future work ◮ Privacy-preserving ◮ Can be made compliant ◮ Extendable to many application types (consider a token exchange as an example) 10/20

Privacy-preserving Cryptographic accumulator KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ A cryptographic primitive: absorbs algebraic objects Conclusion and future work ◮ Provides interface to verify whether a value was accumulated ◮ Preserves privacy: individual values are not disclosed 11/20

Privacy-preserving Accumulator-based identity workflow (1/2) KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant ◮ A KYC Provider publishes a contract with an empty identity accumulator Conclusion and future work ◮ A User interacts with the Provider (possibly offline) and gets their value accumulated ◮ The Provider issues a witness s.t. the User can later prove their eligibility 12/20

Privacy-preserving Accumulator-based identity workflow (2/2) KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity To prove eligibility, a user submits an (atomic) Conclusion and zero-knowledge proof of the statement: future work ◮ I know the private key corresponding to msg.sender ; ◮ I know a signature and a witness for some value which was previously accumulated. 13/20

Privacy-preserving KYC Provider interface KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity ◮ add(user, token) – makes user eligible Conclusion and future work ◮ remove(user, token) – makes user not eligible ◮ isEligible(user, token) – check if the user is eligible 14/20

Privacy-preserving Use case 1: compliant exchange KYC on Ethereum Biryukov, Khovratovich, Tikhomirov ◮ An exchange verifies users before making transactions Introduction A decentralized KYC-compliant ◮ Traded tokens do not need to be aware of KYC identity Conclusion and future work 15/20

Privacy-preserving Use case 2: compliant token KYC on Ethereum Biryukov, Khovratovich, Tikhomirov ◮ A token verifies users before making transactions Introduction A decentralized KYC-compliant ◮ Services (exchanges) do not need to be aware of KYC identity Conclusion and future work 16/20

Privacy-preserving Implementation details KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction ◮ A PoC implementation (not privacy-preserving): joint A decentralized KYC-compliant 1st prize at the Luxblock hackathon in May 2017 identity Conclusion and future work ◮ (The team also included: Daniel Feher, Dmitry Khovratovich, Aleksei Udovenko, Maciej Zurad) ◮ Accumulator implementation depends on new opcodes: currently Ethereum does not natively support all required cryptographic operations ◮ Updating the accumulator is expensive if done on-chain 17/20

Privacy-preserving Conclusion and future work KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant ◮ Ethereum provides ways to encode and enforce digital identity agreements Conclusion and future work ◮ Cryptography allows for additional eligibility checks which minimally impact the users’ privacy ◮ Many technical challenges to overcome before realizing this idea 18/20

Privacy-preserving Research question KYC on Ethereum Biryukov, Khovratovich, Tikhomirov Introduction A decentralized KYC-compliant identity Conclusion and Can we leverage sophisticated cryptography in future work public blockchains to provide stronger security and privacy guarantees? 19/20

Privacy-preserving Questions? KYC on Ethereum Biryukov, Khovratovich, Tikhomirov ◮ cryptolux.org Introduction A decentralized KYC-compliant identity Conclusion and ◮ s-tikhomirov.github.io future work 20/20