Random-Value Payment Tokens for On-Chain Privacy-Preserving Payments

Abstract

Blockchain has been proposed as a trusted execution system, ensuring business process execution integrity and transparency. Smart contracts can manage the task or workflow execution and the allocation of tasks in a decentralized and reliable fashion. Nonetheless, blockchain transactions are public and accessible to their participants, and the issue of privacy is a well-known issue of blockchain systems for business process management. In the example of a service payment occurring after a sealed-bid auction, participants may not be willing to reveal the value of the accepted bid to other competitors. In this paper, we leverage smart contracts and a bank that manages per-collaboration payment tokens. The tokens are backed with fiat money with a conversion rate that is kept secret between payment partners and the bank. Hence, partners benefit from the interests of smart contracts such as autonomous programmable payment while preserving the confidentiality of the payment value. We implement this protocol in a real-world setting to demonstrate the approach’s feasibility, and we carry on quantitative experiments to confirm the validity of the protocol.