Building a Privacy-Preserving Blockchain-Based Bidding System: A Crypto Approach

Blockchain-based bidding systems are becoming increasingly popular nowadays. Due to the properties of blockchain, bidding records are unchangeable. With existing encryption techniques, these bidding records can only be shared by the bidder and the seller. Although this scenario sounds secure, it does not consider a coercion case. A powerful coercer may force the bidding system to open the records stored on the blockchain, and the system loses privacy. To solve this problem, in this paper, we introduce a new encryption scheme called deniable matchmaking encryption (DME). This new encryption scheme provides deniability not only for the message, but also for the identities. We use the chameleon hash function to make fake message and fake identities indistinguishable from the real message and the real identities. Therefore, the bidding system can use fake information to answer the coercer, and user privacy is kept by the blockchain-based bidding system.