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March 07, 2014, 03:57:17 AM |
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Concern has been expressed that the transparent block chain of most first-generation cryptocurrencies ,which allows complete public analysis of every transaction ever made, presents an undesirable privacy and security risk. Systems which periodically prune the block chain, discarding old blocks no longer in active use, might mitigate the problem slightly, but only if it is assumed that no one is keeping unofficial off-line archives of the entire chain (an assumption which may not be valid.) One way to address this might be to use what I would call an opaque block chain. Such an entity would be engineered and encrypted such that:
-The private-key holder of a given address could view the contents of that address, but no one else could (or even prove that any specific address exists for which s/he does not have the key;)
-The sender and receiver of a transaction could view the transaction data and transaction ID, but no one else could (or even demonstrate that a transaction occurred;) when the block is finally pruned, the ability to view this data would vanish.
-The system as a whole might, if needed, have some internal master key giving it the ability to access all the data in the block chain, but such a key would be purely internal and no human being would know it or be able to extract it;
-Some limited statistical data such as total hashrate, total units outstanding, number of active addresses, etc. might be still publicly viewable, but no data concerning individual addresses.
In addition, if it is a concern that computers running Shor's algorithm might be able to break the encryption, a layer of encryption using a Shor-resistant protocol (such as Ntrue) might be considered.
With all the new cryptocurrencies coming out almost every day, it seems, one would hope that a few might consider these recommendations.
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