The team at Zcash, the privacy focused cryptocurrency have announced that they have successfully integrated their zero-knowledge security layer (ZSL) into JP Morgan’s enterprise blockchain, Quorum.
ZCash was the first cryptocurrency to make use of privacy enhancing technology called zk-snarks. These are also known as zero knowledge proofs and allow for money to be sent without any information being made public.
ZK-snarks are also being considered by a rival blockchain, Ethereum, as part of their latest moves to privacy enhancing transactions. Quorum will use this technology to obscure the transaction details including the user’s public key and amount transacted.
The partnership was between the Zcash open source community, JP Morgan and Microsoft. Umar Farooq, head of blockchain initiatives at JP Morgan said the following:
Today’s announcement is a prime example of how big banks and fintechs can work side-by-side to build groundbreaking technology for the financial markets
The idea was also to have the transactions auditable such that accountants can make manage the books.
The fact that the Blockchain had to be auditable did create certain unique challenges. For example, there was no “master key” that would give a trusted centralised figure the ability to make any changes to the blockchain.
The Qurom development language (Constellation) would allow the author of the contract to create a public key that was relevant to the numerous regulators. This would allow these bodies sufficient access to the blockchain so that they could keep tabs on compliance of the transactions.
If this is a success, it will provide for the development of numerous financial products without the need for some overseeing centralised authority. One of the most interesting examples could be that of the highly centralised and inefficient Depository Trust Company (DTC). We have previously covered how blockchain solutions can simplify share ownership at the DTC.
The major stumbling block in the past was the lack of a solution around complete privacy of the blockchain to the public. Now that Quorum has integrated the zero knowledge proofs, it has paved the way for this fully auditable blockchain.
Of course, this could be only the first implementation of ZSL. JP Morgan and the Zcash Company have stated that they want to continue advancing ZSL into other company’s enterprise solutions with possible variations.
Another really important development was that ZSL will be released to the open source community. This would mean that the world’s best developers can contribute towards the project and experiment with the codebase as well as develop their own applications.
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