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Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

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On November 9, Ethereum creator Vitalik Buterin published a blog post exploring the class of technology known as zero-knowledge Succinct Transparent ARguments of Knowledge (zk-STARKs) and how they differ from the related and better-known mechanisms that fit under the gloss of zero-knowledge Succinct Non-interactive ARguments of Knowledge (zk-SNARKs).

The concept for zk-SNARKs (which predates Ethereum, but in the Ethereum context could be used to verify transactions) caught the attention of several of that blockchain’s developers as a result of its anonymity-enabling properties.

While currently the sending address, receiving address, and the amount of Ether involved in every Ethereum transaction is a matter of public record, zk-SNARKs would effectively mask these three data points, potentially making the platform more attractive to privacy-focused users.

Among the features that enable greater anonymity is the use of a non-zero “random secret number.” The prover of a transaction multiplies this number by the product of two mathematical functions, then sends the verifier the resulting value as well as the value of the random secret number. With this information, the recipient node can verify a transaction while knowing almost nothing about it.

As the ability to verify transactions faster has become a more central concern for Ethereum, several of the blockchain’s developers have started looking at zk-SNARKs as a means to boost scalability. In addition to their potential to enhance privacy, zk-SNARKs offer the benefit of reducing transaction verification time relative to the capacity of the current protocol.

Zk-STARKs share this feature with their more famous SNARK “cousins,” but according to Buterin, also address several shortcomings, including their “reliance on a ‘trusted setup.’” Additionally, he claims that the technology is theoretically “secure even against attackers with quantum computers.”

While he estimates zk-STARKs’ proof sizes to be “a few hundred kilobytes” relative to zk-SNARKs’ 288 bytes, he argues that the tradeoff may be worthwhile “in the context of public blockchain applications where the need for trust minimization is high,” and most certainly will be “if elliptic curves break or quantum computers do come around.”

According to a PowerPoint document by computer science professor Eli Ben-Sasson, who Buterin thanks by name in his zk-STARKs blog post, a “[computational integrity and privacy] system is transparent if setup and all verifier queries are public random coins.” Unlike this technology, zk-SNARKS require a “non-transparent setup phase.”

For further details, be sure to visit Buterin’s blog post, here.

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews and holds value in Ether.

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Source: Science of Crypto
Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

The Bank of Canada Just Joined An Alliance to Develop Ethereum

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On Monday, the Enterprise Ethereum Alliance announced 86 new members that will work together to develop business applications on the Ethereum blockchain, including Toyota, Deloitte, Samsung SDS, and the National Bank of Canada.

Ethereum is an alternative to bitcoin, which still dominates the cryptocurrency world. But while bitcoin has become a haven for speculators trying to win big by trading coins, Ethereum’s promise is that its blockchain—the public ledger that records all transactions—is chiefly a platform for developing apps, powered by economic incentives. One often-floated use case for blockchains in the financial industry is as a settlement layer to instantly close transactions without middlemen.

Read More: The Bank of Canada Slipped the Konami Code Into a Bank Note Announcement

The alliance, which was founded in February of this year, is a global foundation with more than 100 members which include financial institutions like JP Morgan, Credit Suisse, and Banco Santander. Its goal is to develop business applications with Ethereum. Membership in the alliance grants organizations the ability to participate in meetings and events, as well as to make contributions to technical documents and white papers.

This isn’t the first time the Bank of Canada has dabbled in cryptocurrencies. The bank ran a pilot using an in-house digital currency to conduct interbank transactions on a blockchain in 2016, snubbing the existing bitcoin currency. However, a recent staff paper proposed ways to regulate bitcoin. Membership in the alliance is the first time the bank has indicated that it wants to have a hand in developing an existing digital currency platform itself.

Neither the National Bank of Canada nor the Enterprise Ethereum Alliance were available for comment at the time of publication.

Interest in Ethereum is growing as its boy genius creator, 23-year-old Vitalik Buterin, continues to travel the world and spread its gospel. Ethereum still might not be as valuable as bitcoin (one coin is worth over $2,000 USD at the moment, while one denomination of Ethereum, called ether, is worth $163), but it could be a whole lot more useful for banks. It was designed from the ground up to accommodate applications—called dapps, or “decentralized apps”—while bitcoin is still just a currency to many.

Joining the EEA is one more indication that the Bank of Canada is open to new technologies in the finance industry, but perhaps even more significantly, it appears to have chosen Ethereum as its horse in the race over bitcoin.

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Source: Science of Crypto
The Bank of Canada Just Joined An Alliance to Develop Ethereum

Worlds collide: JPM works with team behind anonymous crypto Zcash

Worlds collide: JPM works with team behind anonymous crypto Zcash

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Blockchains make strange bedfellows.

For years, Jamie Dimon has derided digital currencies. Now, his company has teamed up with the creators of one of the most prominent “altcoins” to build privacy features for the bank’s blockchain platform.

JPMorgan Chase’s partnership with Zerocoin Electronic Coin Co., announced Monday, is perhaps the most surprising alliance yet as traditional financial institutions co-opt a technology originally developed to route around them.

ZECC’s founder, Zooko Wilcox, was part of the 1990s cypherpunk movement, which sought to defend individual privacy through strong cryptography. Last year his firm released Zcash, a cryptocurrency designed to be more anonymous than bitcoin.

Just that phrase, “more anonymous than bitcoin,” might send shivers up the spines of some bank compliance officers, to say nothing of regulators. So, just to be clear: JPMorgan isn’t using Zcash. “This is solely a technology transfer agreement,” Wilcox said.

Instead, his team will use the same cryptographic techniques to add a “security layer” to Quorum, the system JPMorgan is developing to run smart contracts.

In their most basic form, blockchains allow all participants in a network to see who has done what. But that transparency has been a turn-off for financial institutions, which don’t want to tip their hands to competitors, or reveal confidential client data.

“Existing smart contract systems on replicated shared ledgers are unable to provide data privacy — transactions and smart contract state data are exposed in the clear on the replicated shared ledger,” JPMorgan said in a white paper for Quorum published in November.

Quorum was designed so that a smart contract would be visible only to the parties, not the whole network. But that, by itself, precludes the contracts from involving assets that could later be transferred to other participants in the network. “You can’t prove to Charlie that Bob is the legitimate owner of an asset while concealing that Alice was the previous legitimate owner,” Wilcox said. (“Alice and Bob” are regular characters in the hypothetical examples given by cryptographers.)

The Zcash developers plan to enable Quorum smart contracts to trade transferable, resellable tokens, through a cryptographic method called zero-knowledge proofs. These allow someone to prove that a statement is true without conveying any other information.

In the Zcash currency, for example, zero-knowledge proofs provide assurance that users are only spending money that they have without revealing on the public ledger how much they have received from or sent to others. Participants can selectively decrypt such details about their own transactions, however, making it possible to comply with audits or court orders. Otherwise, the ledger is just a list of timestamped transactions, with the senders, recipients and amounts obscured.

Applying that technology to Quorum would allow tokens (representing real-world financial assets, say, shares in Apple) to circulate throughout the network, rather than be confined to bilateral agreements between banks, without sacrificing privacy.

“By adding the zero-knowledge security layer into Quorum, we are able to explore how state of the art cryptographic privacy technology will enhance the next generation of financial services applications,” Suresh Shetty, an executive director and lead architect for JPMorgan’s Blockchain Center of Excellence, said in a press release Monday.

Dimon has famously predicted that decentralized currencies like bitcoin — which let anyone with an internet connection send money anywhere in the world without the permission of an intermediary — are doomed. According to published reports, his bank has expressly forbidden banks it does business with to work with digital currency exchanges.

“Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” Dimon said in 2015. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

Bitcoin vending machine next to a Chase branch in Austin, Texas, photographed March 14, 2015
Together at last?

Around that time, JPMorgan and other banks had begun to investigate the possibilities for their business of blockchain technology, which was originally developed to prevent double-spending of bitcoins. One advanced use case is smart contracts, which theoretically can cut costs in the financial system by automating much of the work done by lawyers, compliance officers, syndication desks, and others.

“Smart contracts on a replicated, shared ledger hold the promise of improving efficiency and lowering costs compared with existing enterprise systems based on duplicated business logic and consensus by reconciliation,” the bank’s Quorum white paper said.

JPMorgan participated in several of the industry alliances that are working to develop blockchain solutions for financial services, though it recently quit the R3 consortium. The bank decided to model Quorum on another open-source platform, the bitcoin rival Ethereum.

While Zcash started as a “fork,” or modified version, of bitcoin, Wilcox’s company has joined the Enterprise Ethereum Alliance, of which JPMorgan is also a member.

Wilcox said the Zcash currency has served as a showcase of sorts for the technology his company has been pitching to enterprises.

“We can point to the thing running live in the wild as proof that it works and we can deliver,” he said.

Source: Science of Crypto
Worlds collide: JPM works with team behind anonymous crypto Zcash

Deloitte Exec Departs to Launch Tokenized Blockchain Research Lab

Deloitte Exec Departs to Launch Tokenized Blockchain Research Lab

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Iliana Oris Valiente

Back when Iliana Oris Valiente first started pitching her colleagues at Deloitte on the possible benefits of bitcoin, she was cautioned by a senior level executive that she might be doing damage to her reputation.

Now, one of the co-founders of Deloitte‘s influential Rubix blockchain initiative is well-know for helping push the professional services firm to the forefront of distributed ledger consulting and development. That is, until last Friday, when she completed her final day at the firm.

Revealed today exclusively to CoinDesk, Valiente is now launching two startups in the research and development space.

The first, is a an open-source, crowdfunded, crowdsourced applied research and development hub. The second is an educational enterprise designed to shorten the learning curve for recent computer science grads seeking to make meaningful contributions to the blockchain industry.

The co-founder of Rubix by Deloitte, and former strategy and execution lead, told CoinDesk she views her new customers as the very same people who will help her pull off the endeavor: open-source researchers, startup employees and corporate executives.

Valiente said:

“This has value to all those groups of stakeholders, whether you’re talking about the research and development hub or the educational initiative, and I want to continue playing that role as a translator and a liaison between these various communities.”

First revealed today as part of her trip to CoinDesk’s Consensus 2017 conference, the research and development hub called ColliderX takes its name from the CERN particle collider in Switzerland, which leverages researchers, scientists and academics to make technological discoveries.

Borne from her own personal experience encountering research questions, the newly launched Toronto non-profit organization gathers difficult to answer questions from around the industry and then lets contributors, backers, and a scientific selection committee prioritize the order they are addressed.

Crypto-tokens minted through an unspecified platform will then be used to rank the research questions in the order they will be answered based on the resources available, though she was careful to point out she doesn’t think the “governance tokens” as she called them will accrue value “as soon as it hits an exchange”.

A new business model

Initially, Valiente will encourage participants to select topics based on their status as foundational to the ability to answer other questions, and on them having a “smallish” scope that could lead to publishable results by a team of two researchers in a matter of months.

Currently, she has collected 25 topics provided by industry developers, including the potential roll that artificial intelligence could play to figure out upper and lower bounds for smart contracts performance, leading to what she termed the creation of “crowd-trained smart contracts” that self-improve.

Among the list of researchers who have already submitted topics are Mir Adnan Ali of CG Blockchain who wants to explore how the augmented reality space can be tied into blockchain and Steve Mann, an early innovator in wearable augmented reality devices and a former professor at MIT.

ColliderX now counts among its partners the Association for Computing Machinery, which administers the Turing prize, representatives from the University of Waterloo, the University of Toronto, York University and MIT, with advisory work contributed by MME the law firm that helped incorporate the Ethereum Foundation.

ACM chair of the Practitioners Board Conference Committee, Toufi Saliba, said:

“We feel their intersection of effort with our initiative of colliding AI experts with Blockchain experts is quiet fascinating. We couldn’t wish for a better timing in running this and we will be looking forward working closely.”

Blockchain learning curve

While the first half of Valiente’s post-Deloitte career is aimed at answering questions the professionals have, the second half of her work aims at questions of a different sort.

By the time Valiente left Rubix, she said her team was spending a significant amount of time on-boarding recently graduated new hires who had not been adequately prepared for a career in blockchain, something she hopes to change by working closely with schools and universities.

Initially, she said she’s starting with a handful of universities at which she has contacts, working with them to built out their curriculum to better prepare graduating students for the blockchain work force.

As jobs in the blockchain space become increasingly in demand, Valiente believes her second project has as much a chance to go global as the research and development itself.

She concluded:

“Ideally, the fundamentals would be covered in training programs and schools before candidates start full time work. There’s plenty of on the job learning that will still need to happen once the theory ends and the practice begins.”

Image of Iliana Oris Valiente courtesy of subject

Source: Science of Crypto
Deloitte Exec Departs to Launch Tokenized Blockchain Research Lab