Paper 2021/869

MiniLedger: Compact-sized Anonymous and Auditable Distributed Payments

Panagiotis Chatzigiannis and Foteini Baldimtsi

Abstract

While privacy preserving distributed payment schemes manage to drastically improve user privacy, they come at the cost of generating new regulatory concerns: in a private ledger the transactions cannot be subject to any level of auditing, and thus are not compatible with tracing illegal behaviors. In this work we present MiniLedger, a distributed payment system which not only guarantees the privacy of transactions, but also offers built-in functionalities for various types of audits by any external authority. MiniLedger is the first private and auditable payment system with storage costs independent of the number of transactions. To achieve such a storage improvement, we introduce pruning functionalities for the transaction history while maintaining integrity and auditing. We provide formal security definitions and a number of extensions for various auditing levels. Our evaluation results show that MiniLedger is practical in terms of storage requiring as low as 70KB per participant for 128 bits of security, and depending on the implementation choices, can prune 1 million transactions in less than a second.