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Cryptography Startup Brings Private Payment Channels to Tezos Blockchain

Cryptography Startup Brings Private Payment Channels to Tezos BlockchainCryptography Startup Brings Private Payment Channels to Tezos Blockchain

Cryptography firm Bolt Labs has launched a private payment solution, zkChannels, on Tezos. 

The startup is now working with Tezos developer groups Nomadic Labs and Metastate to implement the tech in the next network update. 

Similar to the Lightning Network, zkChannels is a payment channel for blockchains but with zero-knowledge proofs attached. A current problem with Lightning – a payment solution built on top of the Bitcoin blockchain – is that in certain settings, you can see other people’s de facto bank accounts, called funding channels. zkChannel hides that information from merchants.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Related: ‘I Failed Terribly at Keeping My Identity Secret’: Scott Alexander on the Value of Pseudonymity” data-reactid=”22″>Related: ‘I Failed Terribly at Keeping My Identity Secret’: Scott Alexander on the Value of Pseudonymity

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“zkChannels is a chain-agnostic anonymous off-chain protocol that enables cheap and private value transfer between a customer and merchant,” Bolt Labs said in a blog post.” data-reactid=”23″>“zkChannels is a chain-agnostic anonymous off-chain protocol that enables cheap and private value transfer between a customer and merchant,” Bolt Labs said in a blog post.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Lightning developers are working on similar concepts through different means with projects such as multi-part payments.” data-reactid=”24″>Lightning developers are working on similar concepts through different means with projects such as multi-part payments.

Bolt Labs

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Bolt Labs was founded in 2018 by J. Ayo Akinyele with Zcash co-founders Ian Miers and Matthew Green. The privacy project raised $1.5 million in an April 2019 seed round joined by Lemniscap, Xpring and others in addition to numerous angel investors such as Zcash co-founder Zooko Wilcox.” data-reactid=”26″>Bolt Labs was founded in 2018 by J. Ayo Akinyele with Zcash co-founders Ian Miers and Matthew Green. The privacy project raised $1.5 million in an April 2019 seed round joined by Lemniscap, Xpring and others in addition to numerous angel investors such as Zcash co-founder Zooko Wilcox.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more: Bolt Labs Raises $1.5 Million Seed Round to Boost Lightning Privacy” data-reactid=”27″>Read more: Bolt Labs Raises $1.5 Million Seed Round to Boost Lightning Privacy

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Related: DC Lawyers Can Now Accept Crypto for Legal Fees” data-reactid=”28″>Related: DC Lawyers Can Now Accept Crypto for Legal Fees

Akinyele said the team built on top of Tezos to act as a testing ground of sorts for other blockchains. 

According to the firm’s announcement post:

We are also interested in building a cross-chain bridge via zkChannels for connecting Zcash or Bitcoin to Tezos, and provides censorship-resistance to decentralized finance (DeFi) applications.

Why Tezos?

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tezos raised $232 million in a 2017 initial coin offering (ICO), marketing itself as the “self-amending” ledger. That means the blockchain can conduct periodic code updates due to its hands-on governance procedures. For example, academic work detailing a possible selfish mining scheme led to a code patch mere weeks after the paper’s publication.” data-reactid=”34″>Tezos raised $232 million in a 2017 initial coin offering (ICO), marketing itself as the “self-amending” ledger. That means the blockchain can conduct periodic code updates due to its hands-on governance procedures. For example, academic work detailing a possible selfish mining scheme led to a code patch mere weeks after the paper’s publication.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="zkChannels is Bolt Labs’ first account-model implementation of its tech, Akinyele told CoinDesk. (Blockchains come in two flavors: the unspent transaction output (UTXO) model used by Bitcoin and the account model employed by Ethereum.) The firm also has private channel implementations for both Bitcoin and Zcash, with the latter still in development.&nbsp;” data-reactid=”35″>zkChannels is Bolt Labs’ first account-model implementation of its tech, Akinyele told CoinDesk. (Blockchains come in two flavors: the unspent transaction output (UTXO) model used by Bitcoin and the account model employed by Ethereum.) The firm also has private channel implementations for both Bitcoin and Zcash, with the latter still in development. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more: Why Harvard Research on a Low-Profit Tezos Attack Matters for Proof-of-Stake” data-reactid=”36″>Read more: Why Harvard Research on a Low-Profit Tezos Attack Matters for Proof-of-Stake

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The use of a payment channel on a blockchain that barely breaks $100 in average daily fees – compared to the hundreds of thousands of dollars processed by Bitcoin and Ethereum daily – seems questionable.&nbsp;” data-reactid=”37″>The use of a payment channel on a blockchain that barely breaks $100 in average daily fees – compared to the hundreds of thousands of dollars processed by Bitcoin and Ethereum daily – seems questionable. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Indeed, as CoinDesk reported, 76% of Tezos transactions can be tied back to network validation, called “Baking,” or a coin “faucet” that spouts free XTZ.” data-reactid=”38″>Indeed, as CoinDesk reported, 76% of Tezos transactions can be tied back to network validation, called “Baking,” or a coin “faucet” that spouts free XTZ.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Akinyele said Bolt Labs built zkChannels on Tezos over other candidates due to the blockchain’s malleable governance. Moreover, zkChannels is easier to implement on a more “pairing friendly” curve called BLS12-381 that Tezos is currently adding. Ethereum operates on another older elliptic curve model and will not support BLS until a network overhaul called Eth 2.0 is completed.” data-reactid=”39″>Akinyele said Bolt Labs built zkChannels on Tezos over other candidates due to the blockchain’s malleable governance. Moreover, zkChannels is easier to implement on a more “pairing friendly” curve called BLS12-381 that Tezos is currently adding. Ethereum operates on another older elliptic curve model and will not support BLS until a network overhaul called Eth 2.0 is completed.

“We’re looking at the fact that Tezos is a new blockchain, but that has a lot of promise based on the building blocks it’s making available to developers,” Akinyele said.

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This article was originally published on Yahoo Finance UK

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