Periodic Reporting for period 2 - PRIViLEDGE (Privacy-Enhancing Cryptography in Distributed Ledgers) Reporting period: 2019-07-01 to 2021-06-30 Summary of the context and overall objectives of the project Blockchain and distributed ledger technologies (DLTs) have emerged as one of the most revolutionary developments in recent years, with the potential to support the elimination of centralized intermediaries where needed and installing distributed trusted services. They facilitate trustworthy trades and exchanges over the Internet, power cryptocurrencies, ensure transparency for documents, and much more. This broad range of applications makes the market potential of DLTs substantial. While at the moment one of the most significant application of DLTs is in investment through cryptocurrencies and ICOs, other areas are expected to gain more importance in the future. Although based on cryptographic techniques at their core, the currently deployed DLTs do not address privacy. Even the idea of a public ledger that stores a verifiable record of transactions at first appears inherently incompatible with the privacy requirements of many potential applications, which handle sensitive data such as trade secrets and personal information. PRIViLEDGE project targets developing new cryptographic techniques and protocols to protect the data, facilitate these applications and make DLTs deliver on currently unmet promises.The work in PRIViLEDGE is structured around the following objectives: 1. To provide efficient privacy-enhancing cryptography (PEC) for enabling the execution of smart contracts on blockchains such that the privacy of users and the privacy of data is respected. 2. To develop and demonstrate cryptographic tools that aim at anonymity, transparency, and security and maintain a balance between these goals, for practical deployments of DLT and blockchains. 3. To construct efficient cryptographic blockchain consensus protocols that rely on advances in cryptography and satisfy the contradicting demands of verifiability, transparency, and stake-based governance. 4. To provide effective exploitation of the PRIViLEDGE cryptography in real operational environments, for enabling privacy in distributed ledgers. Results from PRIViLEDGE are demonstrated through four ledger-based solutions: verifiable online voting; contract validation and execution for health insurance; university diploma record ledger; update mechanism for stake-based ledgers. The selected use cases are diverse and represent the principal application domains of DLT. This ensures wide reach and impact of the techniques developed in PRIViLEDGE beyond the immediate scope of the project. Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far PRIViLEDGE project has progressed successfully towards all the set objectives and related tasks. We have released multiple deliverables describing our research and the status of the use cases. The high-level architecture for our four use-cases and our six horizontally cross-cutting toolkits has been successfully developed according to the set plan (e.g. results published via D4.3 D4.4 and D4.5). The use-case related prototypes have been successfully tested. Moreover 7 of the 10 use cases' prototypes and toolkits have been open-sourced, 1 is partially open-sourced. PRIViLEDGE has carried on with developing its strong scientific foundation, publishing 47 peer-reviewed papers during the time of the project. The scientific impact can be explored in detail through D6.4. In addition to the scientific publications PRIViLEDGE partners have published 29 blog posts on the website and have participated at over 60 events presenting the project and its results. PRIVILEDGE has had routinely updates on social media and has updated the website with new information throughout the project. What is more, PRIViLEDGE has also successfully organised four workshops dedicated to their specific target audiences. The project has delivered both communication and dissemination strategy (the latest, D5.4) as well as an exploitation roadmap (D5.3) and reported on stakeholder engagement (D5.6) as well as on exploitation (D5.5).To sum up, the PRIViLEDGE consortium:1) disseminated the project’s successes to the relevant experts, academia, industry and policy makers using a variety of dissemination tools; 2) engaged with the stakeholder community and validated the results; 3) created a liaisons with other projects; 4) produce high quality journal articles and conference presentations describing the project results and recommendations;5) organised workshops and participated in events;6) designed and implemented 6 toolkits and 4 prototypes, which acted as a bridge between the research results and real-world requirements captured by the use cases; 7) open-sourced 8 of the toolkits and prototypes to ensure that stakeholders outside of the project could test, validate and use them in their own endeavours. Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far) The PRIViLEDGE project has continuously aimed to produce impact in two following aspects:(1) In research because the unique requirements of DLT call for new cryptographic techniques. These techniques will have to guarantee the privacy of data, while preserving the verifiability provided by the DLT. At the same time, they must be highly efficient in order to facilitate a high transaction throughput. These stern demands will lead to high-level research results published at major international venues.(2) At the market level, because the technologies developed in PRIViLEDGE will enable new applications of DLT in areas where strict data privacy is required, such as e-government or insurance. Indeed, the PRIViLEDGE use cases were chosen to be representative for expected major application areas of DLT, which ensures the impact of PRIViLEDGE even far beyond the limits of the four discussed use cases.We have made progress towards the following goals:(a) Increasing the trustworthiness of European ICT services and products and the competitiveness of the European cryptography and smart card industry”. By focusing on strong cryptography for privacy protection, PRIViLEDGE addresses the goals of privacy and data protection, which are much more important in European policy than in other geographies.(b) Increasing trust in ICT and online services. Although cryptography is a key component in e-commerce, the fintech industry and blockchain platforms have a mixed reputation regarding privacy. By focusing on sound cryptographic solutions for privacy in distributed ledgers, users will gain more trust in forth coming blockchain solutions.(c) Protecting the European Fundamental Rights of Privacy and Data Protection. PRIViLEDGE is fully aligned with the goals of the EU General Data Protection Regulation (GDPR). Lack of privacy protection can be a major inhibitor to DLT. PRIViLEDGE aligns the most prominent European research teams with expertise in cryptographic privacy protection and DLT; it contributes fundamentally to novel applications of privacy-preserving cryptography.(d) Improving in performance and efficiency of Cryptography beyond the state of the art. With the focus on blockchain and DLT, the project has contributed to ensuring that efficient cryptography is available for this promising new field of application.(e) Protecting against emerging threats such as quantum computation. PRIViLEDGE has addressed a range of solutions. It focuses attention to primitives that are quantum-safe, notably through work in WP2 and a focus in WP3. PRIViLEDGE booth at the Convergence conference exhibition area (Malaga, 2019)
