Investcoin: A System for Privacy-Preserving Investments
This work addresses privacy concerns for investors in distributed crowdfunding-like platforms, offering a novel system to prevent detection of individual transactions while maintaining market liquidity.
The paper tackles the problem of privacy in investment systems by proposing a framework that conceals individual payments and returns, revealing only aggregated sums to protect investor anonymity. It presents Investcoin as an instantiation using cryptographic protocols based on the DDH assumption, with security guarantees derived from Secure Multi-Party Computation.
This work presents a new framework for Privacy-Preserving Investment systems in a distributed model. In this model, independent investors can transfer funds to independent projects, in the same way as it works on crowdfunding platforms. The framework protects the investors' single payments from being detected (by any other party), only the sums of each investor's payments are revealed. Likewise, the projects' single incoming payments are concealed and only the final sums of the incoming payments for every project are revealed. In this way, no other party than the investor (not even the system administration) can detect how much she paid to any single project. Though it is still possible to confidentially exchange any part of an investment between any pair of investors, such that market liquidity is unaffected by the system. On top, our framework allows a privacy-preserving return of a multiple of all the held investments (e.g. interest payments or dividends) to the indivdual investors while still revealing nothing else than the sum of all returns for every investor. We provide reasonable security guarantees for this framework that are based on common notions from the Secure Multi-Party Computation literature. As instantiation for this framework we present Investcoin. It is a proper combination of three cryptographic protocols, namely a Private Stream Aggregation scheme, a Commitment scheme and a Range test and it is usable in connection with any existing currency. The security of these protocols is based on the DDH assumption. By a composition theorem from the SMPC literature, the security of the resulting Investcoin protocol is also based on the DDH assumption. Furthermore, we provide a simple decentralised key generation protocol for Investcoin supporting dynamic join/leave and fault-tolarance of investors and moreover achieves some security guarantees against malicious investors.