Privacy: Zero Knowledge Proofs

DanielJuly 11, 2018

Komodo’s technology vision is anchored to the 4 Pillars of Blockchain Technology: security, scalability, interoperability, and adaptability. In addition, Komodo's technology was founded with a strong respect for individual privacy. This post will provide an in-depth explanation of all the optional privacy features available to businesses and third-party projects that build with Komodo's Antara Framework.

blockchain privacy

Is Privacy Really That Important?

To some people, privacy just doesn't seem that important. They either think a lack of privacy is the price we must pay to use social media and modern technology, or they feel that they have nothing to hide and don’t see the point in keeping their personal data private.

Other people recognize that privacy is crucial to healthy and free society. These individuals go to great lengths to make sure their personal data remains confidential, resisting corporate and government overreach in the collection of private citizens' personal data.

While we here at Komodo believe that personal privacy is extremely important, we respect each individual’s right to form their own opinion. We believe that each person should have the right to choose whether or not to keep their personal information private.

If privacy isn’t a big deal to you, then you shouldn’t be forced to make extra efforts or pay extra fees for the sake of privacy. On the other hand, if you do value privacy, then you should have every opportunity to protect your personal information and data.

That’s why Komodo offers several privacy options for every Smart Chain launched with Komodo's Antara Framework.

Privacy Options Within The Komodo Ecosystem

Komodo originated as a source-code-fork of Zcash, the well-known privacy project. As such, Komodo inherited the privacy protocol known as zero-knowledge succinct non-interactive argument of knowledge, or zk-SNARKs for short. This privacy technology is also sometimes called "zero knowledge proofs."

Of course, Komodo added dozens of new features in addition to the zk-SNARKs technology inherited from the Zcash code base, including a multi-chain architecture, which allows businesses and third-party projects to create independent Smart Chains.

All Smart Chains can be customized along 18 different parameters, leading to hundred of million different configurations to choose from. Options include picking your blockchain consensus protocol-- Proof of Work, Proof of Stake, or some combination of the two-- as well as your hashing algorithm, block time, pre-mine supply, block rewards, and much more.

Other Smart Chain parameters allow businesses and third-party projects to choose their privacy settings. The first option is to decide whether or not to enable the zero-knowledge proof protocol. If zero-knowledge proofs are disabled, then the entire chain and its decentralized ledger will be fully transparent.

If zero-knowledge proofs are enabled, then there is one more Smart Chain parameter to set. This second privacy option allows businesses and third-party projects to choose whether to make private transactions optional or mandatory. If private transactions are optional, then transparent transactions are still the default but users have the option to opt-in to zero-knowledge proof transactions by downloading the blockchain and using a z-address.

If zero-knowledge proofs are enabled and made mandatory, then every single transaction made on the network must be completely shielded on both ends (both the sending and receiving addresses must be z-addresses). The only exception to this rule is block rewards, which are deposited to a transparent address after a block is mined. At that point, the miner's only option is to send them to shielded z-address, since transparent transactions are against the consensus rules and will not be approved the network.

PirateChain (ARRR) is the first Smart Chain to have mandatory zero-knowledge proof privacy. This makes it one of the most, if not the most, private blockchain in existence today. Monero, a prominent privacy coin, uses a complex ring-signature protocol that scrambles all transactions, making privacy mandatory, but these transactions still leave behind traces of metadata that could be unscrambled, given enough time and resources.

The zk-SNARKs protocol, on the other hand, leaves no metadata behind. It is a completely anonymous way to send and receive funds. While Zcash and all Zcash forks use zk-SNARKs the privacy protocol, it is an opt-in feature for every single chain except PirateChain. With a limited privacy pool and very few transactions going from transparent addresses to shielded addresses (or vice versa), the privacy of any shielded transaction is somewhat limited.

That's why PirateChain offers a superior level of security. As private transactions are mandatory, the entire circulating supply of ARRR is shielded and it is virtually impossible to ascertain who is holding, sending, or receiving funds.

Leveraging Komodo’s Additional Privacy Features

There are several other privacy-focused features available within the Komodo ecosystem.

First, Komodo's industry-leading atomic swaps technology allows users to make trades securely and trustlessly, while also safeguarding their personal data. This is made possible with AtomicDEX, Komodo's third-generation decentralized exchange.

Komodo's atomic swap technology also allows users to participate in crowdfunding events privately. This offers benefits to both the entrepreneurs and the investors.

Entrepreneurs have the opportunity to accept funds from individuals who may not have contributed to the crowdfund, or who may have contributed but in a lesser amount, if this privacy feature were not available. The entrepreneurs themselves may also wish to safeguard their personal data.

At the same time, investors have the option to keep their both personal data and their financial transactions private. Again, this is not a requirement but an option available to those who wish to exercise their right to privacy. 

While zero-knowledge proofs are no longer available on the Komodo chain, the Komodo team is committed to making privacy features available to all businesses and third-party projects that build within the Komodo ecosystem. Protecting privacy is of the utmost importance.

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