Japanese Company Reveals New Technology to Ensure Privacy for Bitcoin Wallets
In Japan, a cryptocurrency company Freessets has announced a new technology for the enhancement of Bitcoin wallet privacy.
The top enterprise cryptocurrency wallet provider came up with the new technology using a protocol in cryptography known as Private Information Retrieval (PIR). The technology was implemented using a customized version of Microsoft SealPIR which is among the PIR implementations. Microsoft SealPIR uses Microsoft SEAL, which is an entirely homomorphic encryption library.
Based on the announcement on June 8, it is now possible for wallets to request their addresses’ Bitcoin balances through the system developed by the company and it will not reveal the balances or transaction history to the servers from which they made the request.
The company’s CEO expressed his thoughts regarding the new development, noting that the company promises to continue with the development of proprietary products that maintain security and privacy. He said the commercialization of this technology guarantees high privacy and security for enterprise clients.
Existing technologies expose account balance and transaction history to a variety of servers and malicious third parties, thereby putting the wallets at greater risk of being hacked. This is due to utilization of the client-side Bitcoin address to query servers and this poses big privacy concerns, specifically for individuals who have a large amount of cryptocurrency.
Based on mathematical proof, the technology developed by the company will not allow the servers to learn anything from the user’s query, thereby removing these privacy concerns. The technology works as follows:
“Sorts server-side UTXO sets in the ascending order of Bitcoin addresses to enable binary search. Since there is typically more than one UTXO set per Bitcoin address, it applies “binary search for a range”. With the search, the client-side identifies the index of its targeted UTXO sets and retrieves actual UTXO sets based on it. The client-side gets to know the Bitcoin balance it has by collecting these UTXO sets.”