Paper 2020/004

BPCEX: Towards Blockchain-based Privacy-preserving Currency Exchange

Wulu Li, Lei Chen, Xin Lai, Xiao Zhang, and Jiajun Xin

Abstract

Privacy-preserving currency exchange between different cryptocurrencies on blockchain remains an open problem as the existing currency exchange schemes cannot provide anonymity of users or confidentiality of exchange amount. To solve this problem, we introduce BPCEX: a privacy-preserving currency exchange scheme which protects users' identities and the exchange amount, by usage of techniques including linkable ring signature, range proof, Diffie-Hellman key exchange, Pedersen commitment and UTXO swap. In BPCEX, the users' identities are hidden to verifiers and dealmakers, while the exchange amounts are hidden to the verifiers. BPCEX supports floating exchange rate, partial deal and public verification, without additional confirmation of traders, which improves the success rate and shortens the waiting time of the deal. Moreover, BPCEX is compatible with the regulatable privacy-preserving blockchain system, which realizes the traceability of users' identities and the exchange amount to prevent money laundering and illegal exchange, making BPCEX suitable in real-life applications, including currency market and stock market.