ZKP technology to let enterprises do private transactions on public blockchains
There basically are four types of blockchains: the commonly known public blockchain, permissioned blockchains, private and federated blockchains. Public blockchains are open source and anyone can run a node from their devices locally and participate on the network to validate transactions as well as be a part of the consensus process. In that case, one does not need permission to access hence these networks are basically known as permissionless, non-permissioned and federated.
The second type is a permissioned blockchain network where an organization basically chooses to use a private blockchain for its operations and any participant in that network will need their permission to do so. Common with private institutions banks and other financial institutions, the transaction validator is a member of a consortium. Private blockchains operate to solve efficiency, privacy issues, and fraud on an incremental basis, but they are not as secure or as decentralized as public blockchains. Federated blockchains are those run by federations under the leadership of a group while private blockchains are entirely for private use by centralized organizations.
Although private and permissioned blockchains offer more privacy for transactions, public blockchains are more secure, resilient and powerful when compared to private blockchains. They also provide more liquidity currently and have been tried and tested at the institutional level. There is always a compromise for a company that is choosing to use a private blockchain. Hence, enter Ernst & Young's zero-knowledge proof (ZKP) technology based on the company's EY Ops Chain. ZKP will operate on the Ethereum public network.
The EY Ops Chain, Public Edition will allow private token transactions without interfering with the consensus algorithm. In other words, it will allow companies that are using private or permissioned networks to do private transactions on Ethereum public blockchain.
The currently prototyped technology, which was announced today will allow those using private and permissioned blockchains to issue and sell private products and service tokens through a public blockchain. They will do so while maintaining permissioned access to the history of transactions. It permits both payment tokens as well as product and services tokens.
What it basically means is that companies or enterprises can leverage privacy of private or permissioned networks while taking advantage of security and resiliency of the public blockchain. The technology will provide businesses with better ability to on-board business partners into their private or consortium blockchain network using the standard, secure infrastructure of a public blockchain, according to head of innovation at EY Blockchain Paul Brody. He added that the technology will help the organizations to reduce expensive and time consuming process of setting up private networks and on-boarding business partners one at a time.
It will be available to general public in 2019.
Earnest & Young announced the EY Ops Chain, which depends on Zero Knowledge proofs, in April last year. EY Ops Chain contains a number of application that will help organizations to commercialize the use of blockchain. These applications are being developed in consultation with industry collaborators, and combining EY's full range of consulting, tax and audit expertise. It will helps companies to simplify supply chain management and seamlessly integrate digital contracts, shared inventory and logistics information, pricing, invoicing and payments.
It is expected to help organizations use the blockchain to improve their performance by simplifying payments, financing, and insurance processes.
