Regulation-Friendly Privacy-Preserving Blockchain Based on zk-SNARK

Recently, blockchain has attracted much attention from industries, due to its good characteristics such as decentralization and tamper proofing. To ensure that sensitive transaction data are not disclosed to the public, many privacy protection methods have been proposed for blockchain, which generally conflicts with regulatory requirements. To resolve such a conflict, in this paper we propose a privacy-preserving account-based blockchain system which supports auditing on transactions. The proposed system protects the privacy of a transaction via homomorphic encryption. The validity of the transaction is guaranteed via zero-knowledge proof. Especially, details of a transaction are presented in form of ciphertexts on the public ledger, which can be decrypted by regulatory authorities. We have implemented a demo of the proposed system using the Substrate framework. Simulation results show that the system has acceptable performance.