ING launches a blockchain-based 'zero-knowledge range proof'

The Dutch financial institution, ING, announced this Thursday that their blockchain team has devised a system to addresses one of the biggest issues with blockchain usage in financial services.

The distributed ledger technology, blockchain, was initially only used by the cryptocurrency, Bitcoin. However, it is now being deployed by prominent financial institutions all over the world for both local and international transactions. The reason for its popularity is that it enables decentralized transactions to take place, which are much faster than those carried out on a conventional medium.

Despite its advantages, some financial institutions still hesitate from using blockchain technology due to security, and data privacy, concerns. This is because this technology stores all specifications of a transaction on a public ledger, including the time and the exact amount of the transaction. This information is not kept private and is visible to all members present on the network. To address this concern, ING’s blockchain team has come up with a solution known as a Zero-Knowledge Range Proof (ZKRP).

With ZKRP, an additional layer of cryptography is added to the current blockchain system in order to ensure the privacy of users and their transactions. ZKRP is able to make this possible by using a tactic that enables users to demonstrate the truth of a statement by disclosing only the ‘what’ of the statement and nothing else.

The ING white paper further explains this concept in simple terms by stating an example. It details the way to prove that a person is of a certain age, without having to disclose their actual age. Similarly in banking terms, it allows you to prove that your transaction amount is within a specified range without the need of revealing the exact number.

It is important to note that the introduction of this “range” factor is a major breakthrough for blockchain-based financial service providers. ING’s blockchain team claims that their solution upholds “the same three principles: completeness, soundness and zero-knowledge” while already having proven itself to be 10 times more efficient than existing similar technologies in the Ethereum network. It not only enhances transparency of the system but maintains standard security too, all while costing much less than other not-as-efficient technologies.

The solution also allows any interested party to access, download and even contribute to it as it has been launched as an open source project. Considering how much it has to offer, ZKRP is likely to be employed by financial institutions across the globe.