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Paper 2019/546

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

Metadata
Available format(s)
PDF
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
2019-05-22: received
See all versions
Short URL
https://ia.cr/2019/546
License
Creative Commons Attribution
CC BY
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