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Privacy Service ​

Introduction ​

The Privacy Service is a centralized system designed to enhance the security and confidentiality of blockchain transactions. It acts as a trusted intermediary, managing sensitive transaction information through encrypted transaction memos.

Transaction memos are additional information attached to each transaction, containing sensitive details about the operation.

How the Privacy Service Works ​

  1. Involved Party Authentication:

    • Retrives the information of all parties involved in each asset.
    • Allows for efficient verification of transaction participants.

  2. Encryption-Decryption Process:

    • Leverages asymmetric cryptography for secure communication using the eth-crypto package.
    • Memos are encrypted with the Privacy Service's public key via the encryptWithPublicKey() function.
    • Decryption is handled exclusively by the Privacy Service, using its private key through the decryptWithPrivateKey() function.

  3. Verification Process:

    • Authenticates parties requesting memo decryption.
    • Ensures only authorized participants can access transaction details.

Usage Flow ​

1. Registration on Privacy Service ​

  • The Privacy Service Admin creates a user account.
  • The user logs in and sets up their account.
  • For detailed setup instructions, refer to the Privacy Service Setup.
  • The user’s API key is used for verification and decryption purposes.
  • The Privacy Service registers all involved parties under the User record.

Note: Any new party associated with an asset must be registered with the Privacy Service.

2. Transaction Initiation ​

  • Sender encrypts the transaction memo using the Privacy Service's public key.
  • The encrypted memo is included in the transaction data.

3. Memo Retrieval ​

  • Recipient receives the transaction data with the encrypted memo.
  • Recipient submits the encrypted memo to the Privacy Service for decryption.

4. Verification and Decryption ​

  • Privacy Service verifies the recipient's authorization for the specific asset.
  • Upon successful verification, the service decrypts the memo using its private key.

5. Information Disclosure ​

  • Decrypted transaction details are securely provided to the verified recipient.

Benefits ​

  1. Enhanced Transaction Privacy:

    • Sensitive details are kept off the public ledger.
    • Only authorized parties can access complete transaction information.

  2. Secure Information Sharing:

    • Utilizes strong encryption to protect data in transit and at rest.
    • Reduces the risk of unauthorized access to transaction details.

  3. Centralized Management with Decentralized Execution:

    • Combines the security of blockchain with the efficiency of centralized data management.
    • Allows for easier updates to privacy protocols and policies.

  4. Regulatory Compliance:

    • Helps businesses meet data protection and financial privacy regulations.
    • Provides a framework for controlled transparency in financial operations.

  5. Flexible Architecture:

    • Can be adapted to various blockchain networks and use cases.
    • Allows for future enhancements like multi-party computation or zero-knowledge proofs.

Conclusion ​

The Privacy Service, coupled with encrypted transaction memos, offers a robust solution for maintaining confidentiality in blockchain transactions by providing a secure mechanism for sharing sensitive information only with authorized parties.