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Security, Scalability, and Privacy in Blockchain Applications and Smart Contracts

Funding: Fonds National de la Recherche > CORE
Start Date: Aug. 1, 2018
End Date: July 31, 2021

Description

Blockchain technology gathered momentum with the popularity of the Bitcoin cryptocurrency. Being an interesting practical proposal which gained a large community of followers in the last 4 years Bitcoin can be seen as a testbed for ideas in the FinTech area. By now it is clear what Bitcoin ideas can be generalized and are valuable but also what are the shortcomings of the concrete Bitcoin instantiation of a distributed ledger and cryptocurrency. For example, the scalability problem has become vital, as the transaction rate growth made the designers think to increase the block size, which in turn might lead to higher network latency and vulnerability to various network attacks. Also current proof-of-work based blockchains are very energy intensive. Active research is now happening around greener alternatives for consensus protocols, such as fault-tolerant Byzantine agreement or Proof of Stake which tolerate higher transaction rate and were tested on small networks.The security of blockchain applications with an accent on the data confidentiality is an unsolved problem. So far the blockchain ledger is implicitly public, but users demand more confidentiality for their data. On the other hand governments demand access to blockchain information for AML/KYC policies and taxation. The problem of storing and processing encrypted data on the blockchain as well as privacy vs governance tradeoff remain largely unexplored.One of the most interesting blockchain applications are smart contracts. Whereas the Bitcoin ledger consists of transactions only, a smart contract ledger contains programming code of almost arbitrary complexity, so that sophisticated financial instruments, legal contracts, and reputation systems can be encoded and executed automatically. However, the private character of contracts poses a challenge of concealing the exact functionality while, at the same time, still keeping it verifiable to the other protocol participants.Our proposal is to investigate blockchain applications from both the scalability and confidentiality point of view and to suggest new solutions in this area (Work Package 1) as well as to study the privacy and security aspects of smart contracts and to propose new efficient methods to achieve user privacy and contract confidentiality (Work Package 2).

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