Abstract
With the development of credit businesses, privacy data leakage and data accuracy in loan transactions among different banks tend to be worrisome issues hindering the prosperity of the industry. To address the problem, we propose a blockchain-based cross-bank over-loan prevention (CBOL-ring) mechanism, which ensures that, on the one hand, the plaintext of loan transactions cannot be access to neither participants on the nodes except the bank that handles loan/repayment requests, so as to prevent the borrower from loaning without revealing their privacy data; on the other hand, the other participants are able to prove the effectiveness of the plaintexts through checking the ciphertexts on the blockchain. In addition, we propose a blockchain-based cross-bank over-loan prevention mechanism with low communication volume (CBOL-bullet), which reduces the size of the range proof generated by the BBCBOLP mechanism, thereby reducing the size of the communication volume and saving resources during the data transmission process. Finally, we analyze the security and performance of the two mechanisms, and compare the communication volume of the two mechanisms.
Highlights
In the credit business, the key issue is to propose a reasonable amount of loan that would not be beyond a borrower’s repayment capability
In the CBOL-ring mechanism proposed in Section 5, a combination of ring signature algorithm and range proof can verify that a value is in a specific range
This is because the number of the range proof is equal to the length l of the binary string, so the size of the range proof is linearly related to the length of the binary string, the communication volume is basically linearly related to the length of the binary string
Summary
The key issue is to propose a reasonable amount of loan that would not be beyond a borrower’s repayment capability. Blockchain technology is an unforgeable, non-tamperable and traceable data structure built in a peer-to-peer (P2P) network It is a distributed data storage system that uses P2P networks to propagate transactions and uses cryptography to connect blocks in the network; some other techniques such as merkle tree, time stamp, and smart contract are applied on blockchain. Based on blockchain and cryptographic technology, this paper constructs a mechanism to avoid the borrower applying the amount of loan in excess of his/her repayment ability from different banks, on which all the verified data are uploaded and encrypted, so that the loan information can be shared with all the participants on a chain and cannot be maliciously modified. This paper uses the Bulletproofs algorithm to optimize the communication volume of the proposed mechanism
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