Provisions: Privacy-preserving Proofs of Solvency for Bitcoin Exchanges
Authors: G. Dagher, B. Bünz, J. Bonneau, J. Clark, and D. Boneh
Abstract:
Bitcoin exchanges function like banks, securely holding their customers'
bitcoins on their behalf. Several exchanges have suffered catastrophic
losses with customers permanently losing their savings. A proof of
solvency demonstrates that the exchange controls sufficient reserves to
settle each customer's account. We introduce Provisions, a privacy-preserving
proof of solvency whereby an exchange does not have to disclose its Bitcoin
addresses; total holdings or liabilities; or any information about its
customers.
We also propose an extension which prevents exchanges from colluding to
cover for each other's losses.
We have implemented Provisions and it offers practical computation times
and proof sizes even for a large Bitcoin exchange with millions of customers.
Reference:
In proceedings ACM CCS 2015, pp. 720-731.
Full paper: pdf