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I've just found this paper on a new "distributed and privacy-preserving credit network that does not require any ledger to protect the integrity of transactions". It's is called Whispers. I'm not sure if this is a new competitor to the Ripple protocol, a complementary protocol for existing disbributed ledgers or both. The title says "Not Every Online Payment Network Requires a Public Ledger".
Could this Whispers network become a real challenge to RCL/XRP?
Could anyone with knowledge of cryptography please give an opinion?

http://crypsys.mmci.uni-saarland.de/projects/DecentralizedPrivPay/draft-paper.pdf

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CONCLUSIONS

In this work, we presented Whispers, the first privacy-preserving distributed credit network. Whispers achieves a number of privacy properties (i.e., sender, receiver, link, and value privacy), preserves the correctness of transactions and provides an accountability mechanism to enforce the correctness of link updates. Whispers supports concurrent transactions, dynamic user churn and faulty nodes. Use of highly connected and readily available nodes such as gateways and validators in Ripples is a crucial ingredient to make our system efficient, robust, and scalable. We implemented the cryptographic schemes employed in Whispers and demonstrated through an experimental evaluation the practicality of our approach for real-life payment systems. In particular, we showed that our solution allows for fast transactions, and scales to a growing number of users. Moreover, we discussed how Whispers can be used to instantiate currently available applications based on credit networks on a distributed manner. Finally, Whispers demonstrates that a privacy-invasive public ledger is not necessary for the secure instantiation of a credit network. In the future, we intend to explore the use of Whispers in the emerging Inter Ledger Protocol [66], a technology to bridge the gap among the wide range of ledger based payment systems, and the Lightning Network [55], designed to enable path-based payments in Bitcoin. Furthermore, Whispers could constitute an ideal technology to enforce privacy properties in webs of trust.

 

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    • We formalize for the first time the desired privacy properties of a credit network (i.e., value privacy, link privacy, sender privacy, and receiver privacy) following the universal composability (UC) paradigm and prove that Whispers constitutes a secure realization.
    • We present two extensions of Whispers to enhance its robustness, by supporting offline nodes, and security, by considering fully malicious landmarks. We discuss in detail the tradeoffs in terms of availability, performance, and privacy induced by these extensions.
    • We have implemented Whispers as a C++ library and evaluated its performance to demonstrate the practicality of our approach. Specifically, we have extracted transactions from Ripple activity in the period October 2013–January 2015 to set up the parameters of Whispers and thereby simulate a realistic scenario. Our experiments show that in Whispers it is possible to perform a transaction in about 1:3 seconds. The precision of Whispers is optimal (1.0), which implies the absence of false positives and that users do not incur any money loss. The performance evaluation and the capability of handling concurrent transactions and network churn show that Whispers can be effectively deployed as a real world transaction network, since it is efficient and scales to a growing number of users and payment transactions.

     

    Section 4.2 outline how the Whispers protocol would function. Seems a stand alone attempt to create privacy focused credit network and that they hope to use ILP and other bridges to increase access

Edited by Mercury

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Ripple is working for something to make transactions private too (maybe).

From Ripple website:

Quote
SECURE
  • Complete transaction privacy for each financial institution*
  • PII data stays behind your bank’s firewall
  • Transactions cryptographically signed using ECDSA and ED25519 algorithms

 

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I don't understand what they mean by public ledger when they say that a public ledger is not required. Do they mean that transactions are recorded on a shared ledger like RCL but in private way or that the shared ledger is not required at all?

Edited by xourexe

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14 hours ago, tulo said:

Ripple is working for something to make transactions private too (maybe).

From Ripple website:

SECURE
  • Complete transaction privacy for each financial institution*
  • PII data stays behind your bank’s firewall
  • Transactions cryptographically signed using ECDSA and ED25519 algorithms

I am very happy that someone finally discovered that Ripple is addressing this issue. I can't imagine any FI that want to have their accounts and transactions freely browsable via tools like bithomb.

Could anyone from Ripple comment on this and perhaps provide more details?

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1 hour ago, tommytrain said:

My guess ... Private chain with ring signatures, ILP enabled.

 

I would prefer a public chain, with transaction details encrypted and visible only to parties with access (sender, receiver, authority...).

@JoelKatz, @nikb, @mDuo13, any comments?

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18 hours ago, tulo said:

Ripple is working for something to make transactions private too (maybe).

 

@tulo - thanks for posting; however, if it's currently on their website, why do you state it as "is working for something" or "(maybe)"?   In my opinion, if a company advertises a capability, that speaks to their current ability to do something, not something in the future. 

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3 hours ago, Hodor said:

@tulo - thanks for posting; however, if it's currently on their website, why do you state it as "is working for something" or "(maybe)"?   In my opinion, if a company advertises a capability, that speaks to their current ability to do something, not something in the future. 

Because there is a little asterisk that says "Coming Soon", so I don't know if they are actively working on it or it is just planned and wrote there to show banks they want to do it.

There is also an "Ability for banks on different networks to transact directly*", that means integration with ILP, but that is hard, since ILP doesn't exist yet ;)

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19 hours ago, tulo said:

Because there is a little asterisk that says "Coming Soon", so I don't know if they are actively working on it or it is just planned and wrote there to show banks they want to do it.

There is also an "Ability for banks on different networks to transact directly*", that means integration with ILP, but that is hard, since ILP doesn't exist yet ;)

I missed the asterisk; but after today, ILP does exist, and is handling production transactions (first transaction happened between Gatehub and Bitstamp) 

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On 7/5/2016 at 3:12 PM, tulo said:

Ripple is working for something to make transactions private too (maybe).

From Ripple website:

SECURE
  • Complete transaction privacy for each financial institution*
  • PII data stays behind your bank’s firewall
  • Transactions cryptographically signed using ECDSA and ED25519 algorithms

ILP enables this, I believe, at the Connector level.

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