A Decentrlized Trading Model Based on Public Blockchain with Regulatable Bi-Tierred Identities
Hongbo Li, Tao Xie, Jin Xie · 2021
Traditional network trading platforms process transactions and store data on their centralized servers. Usually, users deem them as the third parties worth to be trusted, while exploitations and leaks of user privacy never cease. Emerging cryptocurrency systems based on blockchains provide a P2P trading model in a decentralized way, avoiding many problems inherent in traditional centralized platforms. However, the intrinsic anonymity makes it hard to trace identities and regulate the blockchain system when something goes wrong with the transactions, always causing financial losses to users.In this paper, we propose a blockchain trading prototype based on a traceable two-tier identity structure, which combines a personal CA-based identity with anonymous addresses to enable appealings without centrally keeping transaction data, hence protecting privacy and regulating transactions simultaneously. We develop an off-chain transaction confirmation protocol and build an on-chain regulatory agency based on smart contracts. The separation of the on-chain part from the off-chain part makes it suitable to be deployed in many cryptocurrency system that supports smart contracts. Experiments show that all the transaction data can be stored by users themselves and the regulatory agency still works independently. A security analysis on the supervision smart contract is also made. We recommend this model to be an alternate to the traditional centralized electronic business, if privacy preserving and regulations are both considered.