ING, the Netherlands-based global bank, is testing a privacy technology called ‘bulletproofs’ in its series of blockchain experiments.
According to Coindesk, this technology has been “developed and refined by hardcore cryptographers at Stanford University, University College London and startup Blockstream.” The bulletproofs are designed to hide the amounts being transferred in bitcoin transactions, which are normally visible to anyone. As Coindesk says, banks have privacy concerns and don’t want to “expose competitive or sensitive client data to rivals.”
ING had been exploring the use of zero-knowledge proofs (ZKPs), but found they consume a lot of computation power and so potentially slow down a blockchain. Mariana Gomez de la Villa, global head of ING’s blockchain programme said the bank found bulletproofs turn out to be “roughly ten times faster than other range proofs, for a single range proof.”
However, when aggregated, these range proofs have increased efficiency. Gomez de la Villa gave the example of a cryptocurrency exchange using range proofs to show it has enough funds to pay all its clients if they want to withdraw their money at the same time, and said that in this case, “bulletproofs would allow a solution that is 300 times more efficient than other alternative range proofs.”
While the solution is still ‘academic’, ING is now exploring where it can be applied to the technology. Potential uses touch on the need to obey the Europe Union’s General Data Protection Regulation (GDPR); for example, ZK set membership can prove an individual belongs to a given EU member state without disclosing any other information about their identity.
Blockstream mathematician Andrew Poelstra told CoinDesk via email: “When we developed bulletproofs in 2017, we did not expect such an uptake. We’re very excited and proud whenever we see the technology being applied to real world problems, if a little surprised it has found a use-case in traditional banking!”