Major financial institutions are among the first ones to embrace blockchain. JP Morgan is arguably leading this race with its Quorum platform, but others aren’t waiting either. In fact, pretty much all big banks are testing blockchain projects or at very least securing related patents.
Today, we are looking at ING’s contribution to the decentralized computing space…
Modifying the crypto tech
It was in November 2017 when we’ve learned that ING has managed to modify zero-knowledge proofs, which are most notably used in the Zcash blockchain and cryptocurrency. This technology, which allows someone to prove that they have knowledge of a secret without revealing the secret itself, could serve as a useful tool for financial institutions which may not want to reveal too much data to their competitors (and other prying eyes). Also, it offers them a way to transfer assets without tipping their hands or compromising client confidentiality.
ING’s modification, called “zero-knowledge range proofs,” can prove that a number is within a certain range without revealing exactly what that number is. This way, less computational power is used and the system could therefore run faster on a blockchain.
One of the use cases deptics a banks inquiring about a customer’s salary range to determine whether he/she could attain a mortgage without revealing the actual figure.
“It can be used to protect the denomination of a transaction, but still allowing validation that there’s enough money in the participant account to settle the transaction,” Mariana Gomez de la Villa, global head of ING’s blockchain program, told CoinDesk.
And building from there…
A single modification to the crypto protocol is apparently not enough for ING; their latest work, called “zero-knowledge set membership,” could look beyond numbers and include other types of data to the mix — including, but not limited to, names, addresses and locations.
As such, the technology could be used to validate that any sort of data is correctly formed.
“Set membership is more powerful than range proofs,” Gomez de la Villa told CoinDesk, adding: “For example, imagine that you could validate that someone lives in a country that belongs to the European Union, without revealing which one.”
Working with blockchain community…
For its contributions to the blockchain community, ING has been invited to the table with the world’s top cryptographers and will participate in an invite-only workshop in Boston seeking to standardize zero knowledge proofs. This may not have a direct impact on the bank’s bottom line, but could definitely help it get an edge in what shapes to be the “brave new world of decentralized finances.”
Earlier this year, University College of London’s Jonathan Bootle and Stanford’s Benedikt Bunz released “Bulletproofs,” a technology that dramatically improves proof performance and allows proving a much wider class of statements than just range proofs. Many startups have jumped on this and it’s being taken into the enterprise space by the likes of Silicon Valley startup Chain.