RATS: A regulatory anonymous transaction system based on blockchain

Abstract

With the rapid development of digital currency such as Bitcoin, the digital currency transaction system with blockchain as the key underlying technology is booming, but the traditional transaction system has the risk of revealing sensitive information such as transaction content and identity. In order to enhance the security, many transactions system with privacy preserving have been proposed, such as Zerocoin, Monero, etc. As there are a decentralized credit entity and strong anonymity in these transaction systems, the authorities can effectively audit and control the participants and transactions in the digital currency system, thus making digital currency a tool for illegal transactions. Recognizing the importance of privacy preserving and regulatory, in this paper, we propose a new regulatory anonymous transaction system based on blockchain—RATS, which can not only protect the privacy of transactions on the blockchain, but also regulate illegal transactions. Firstly, we introduce regulators into the system, and at the same time, we propose a regulatory mechanism that the regulator is allowed to trace the identity of the user without affecting the transaction operation of the system when suspicious transactions are found. In particularly, during the normal transaction, we protect the privacy of users' transaction contents and addresses without affecting the anonymity of the original system. We formalize the system model and security model of RATS. Moreover, the security of the proposed scheme is strictly proved and analyzed.