### Zero-Knowledge Proof-of-Identity: Sybil-Resistant, Anonymous Authentication on Permissionless Blockchains and Incentive Compatible, Strictly Dominant Cryptocurrencies

David Cerezo Sánchez

##### Abstract

Zero-Knowledge Proof-of-Identity from trusted public certificates (e.g., national identity cards and/or ePassports; eSIM) is introduced here to permissionless blockchains in order to remove the inefficiencies of Sybil-resistant mechanisms such as Proof-of-Work (i.e., high energy and environmental costs) and Proof-of-Stake (i.e., capital hoarding and lower transaction volume). The proposed solution effectively limits the number of mining nodes a single individual would be able to run while keeping membership open to everyone, circumventing the impossibility of full decentralization and the blockchain scalability trilemma when instantiated on a blockchain with a consensus protocol based on the cryptographic random selection of nodes. Resistance to collusion is also considered. Solving one of the most pressing problems in blockchains, a zk-PoI cryptocurrency is proved to have the following advantageous properties: - an incentive-compatible protocol for the issuing of cryptocurrency rewards based on a unique Nash equilibrium - strict domination of mining over all other PoW/PoS cryptocurrencies, thus the zk-PoI cryptocurrency becoming the preferred choice by miners is proved to be a Nash equilibrium and the Evolutionarily Stable Strategy - PoW/PoS cryptocurrencies are condemned to pay the Price of Crypto-Anarchy, redeemed by the optimal efficiency of zk-PoI as it implements the social optimum - the circulation of a zk-PoI cryptocurrency Pareto dominates other PoW/PoS cryptocurrencies - the network effects arising from the social networks inherent to national identity cards and ePassports dominate PoW/PoS cryptocurrencies - the lower costs of its infrastructure imply the existence of a unique equilibrium where it dominates other forms of payment

Note: 2.1: Proof-of-Personhood Considered Harmful (and Illegal); 4.1.5: Absence of Active Authentication; 4.2.6: Absence of Active Authentication; 4.2.7: Removing Single-Points of Failure; 4.3.2: Combining with Non-Zero-Knowledge Authentication; 4.4: Circumventing the Impossibility of Full Decentralization

Available format(s)
Category
Cryptographic protocols
Publication info
Preprint. MINOR revision.
Keywords
zero knowledgeremote attestationanonymous credentialsincentive compatibilitydominant strategy equilibriaNash equilibriaPrice of Crypto-AnarchyPareto dominanceblockchaincryptocurrencies
Contact author(s)
david @ calctopia com
History
2020-02-12: revised
See all versions
Short URL
https://ia.cr/2019/546

CC BY

BibTeX

@misc{cryptoeprint:2019/546,
author = {David Cerezo Sánchez},
title = {Zero-Knowledge Proof-of-Identity: Sybil-Resistant, Anonymous Authentication on Permissionless Blockchains and Incentive Compatible, Strictly Dominant Cryptocurrencies},
howpublished = {Cryptology ePrint Archive, Paper 2019/546},
year = {2019},
note = {\url{https://eprint.iacr.org/2019/546}},
url = {https://eprint.iacr.org/2019/546}
}

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