Privacy-Preserving Cryptocurrency With Threshold Authentication and Regulation

Cryptocurrency allows for immutable and transparent payments in the decentralized manner. The transparency nature inevitably leads to leakage of users’ private information. Although existing schemes provided privacy preservation in cryptocurrencies, they fail to consider regulation and facilitates conducting illegal activities. To solve this problem, several works aimed at striking a balance between preservation of users’ privacy and identification of malicious users. However, they introduced a central authority (which runs counter to the decentralization design of cryptocurrencies), and reveals only the pseudonym of a malicious user other than her/his real identity due to lack of authentication. In this work, we propose PICTURE, a privacy-preserving cryptocurrency with threshold authentication and regulation. In PICTURE, a user registers to a group of authorities (instead of a centralized one) who cooperatively issue the user with a master account which is actually a randomizable signature. The user randomizes the master account to be authenticated and transact anonymously. Besides, the transaction contains a record, with which the authorities can reveal the user’s identity (that is used in registration) in the threshold way. Our construction enables the user to prove that the record is well-formed with only a standard Schnorr’s protocol, leading to lower overheads compared with existing works. We provide a formal security proof to demonstrate that PICTURE is secure, and conduct a comprehensive performance evaluation to show that PICTURE is ready to be deployed in real world.