What privacy problem are you solving?
Today, anyone can send BTC, ETH, and thousands of other cryptocurrencies to another party without going through a financial institution. For those who value privacy, these cryptocurrencies come with a big tradeoff. Transactions are recorded on public ledgers, displaying amounts involved, inscribing virtual identities of their senders and receivers. Given the choice, we strongly believe that very few people will willingly disclose their crypto financials to the entire world.
The inherent lack of privacy to cryptonetworks today is a real and present threat to the entire crypto space.
What is the solution?
We’re proposing a solution to shield any cryptocurrency – BTC, ETH, USDT, etc. In effect, any cryptocurrency can now be a privacy coin. Both shielding and unshielding processes are carried out via a decentralized group of trustless custodians. Once shielded, transactions are confidential and untraceable.
Shielding is the process of turning cryptocurrencies on other cryptonetworks (or “public coins”) into privacy coins on Incognito. Through Portal, a public coin can be shielded to obtain its privacy coin counterpart of the same value. For example, BTC can be shielded to obtain the privacy coin pBTC. pBTC has the same value as BTC, so 1 pBTC can always be redeemed for 1 BTC and vice versa.
Once shielded, privacy coin transactions are confidential and untraceable. A privacy coin enjoys the best of both worlds. It retains the value of its original counterpart and can be transacted confidentially on the Incognito network
Figure 1. Shielding BTC and minting pBTC. Other public coins follow the same shielding process. Note that we simplify step 5 to make it simple for readers to follow the main logic: the proof of deposit is not generated by the custodian, but by the miners of underlying cryptonetwork.
Unshielding is the reverse process of shielding: turning privacy coins back into public coins
Figure 2. Unshielding pBTC and releasing BTC. Other public coins follow the same unshielding process
What substitutes do people resort to because this doesn’t exist yet?
Current blockchain interoperability solutions mostly involve building ad-hoc bridges. BTC Relay, WBTC, and TBTC build ad hoc bridges between Bitcoin and Ethereum, while Kyber Network builds Waterloo, an ad hoc bridge between Ethereum and EOS. For Portal, doing it ad hoc – one bridge for every cryptonetwork – is not a scalable option.
Portal takes a different approach: build once, work with any cryptonetwork. The shielding mechanism operates via a general bridge design that connects Incognito to any number of cryptonetworks, allowing for secure bi-directional transfers of cryptocurrencies whenever privacy is needed. This means any coin can now be a privacy coin. This approach is especially helpful for creating interoperability with cryptonetworks that do not support smart contracts, like Bitcoin and Binance Chain.
Who are you?
@duc is the engineer of Incognito’s interoperability team. He’s been with the project since the beginning, leading the design and implementation of the Ethereum bridge (see Incognito mode for Ethereum). Previously, @duc worked on data engineering, AI, and scalable systems. His first crypto project was on decentralizing data sets for machine learning.
@hiennguyen is an engineer in Incognito’s interoperability team. She joined Incognito at the very beginning. Previously, @hiennguyen worked on cryptography and has now implemented the privacy protocol for Incognito. She is looking forward to increasing her knowledge and experience by moving on and helping to build out the Portal project.
Why do you care?
Monero, Zcash, and Grin introduced their own version of cryptocurrencies that focus on privacy. Portal takes a different approach, based on the premise that people don’t want a new cryptocurrency with privacy. What they really want is privacy for their existing cryptocurrencies: incognito mode for any cryptocurrency.
Portal is designed so users don’t have to choose between their favorite cryptocurrencies and privacy coins. They can have both. They can hold any cryptocurrency and still be able to use it confidentially whenever they want. Privacy needs to be ubiquitous, inclusive, and accessible.
For these reasons, Portal is a really challenging project that is and worth solving, and we’re excited to make it happen.
What’s your plan? What’s your schedule?
The project duration will be 2 months from Feb 1, 2020 to May 31, 2020.
|March 31, 2020||Ship trustless bridge with Bitcoin, Binance Chain (Incognito bond contract) for Protocol side|
|April 30, 2020||Ship trustless bridge with Bitcoin, Binance Chain (Incognito bond contract) for App side|
|May 31, 2020||Ship trustless bridge with Bitcoin (Ethereum bond contract) for both Protocol and App|
What are the key results?
Goals for May, 2020
Trustless bridge V2
Get the protocol deployed on Mainnet after passing all test-cases from QA team.
Trustless bridge V3
Implement SPV function to verify Bitcoin transaction on Ethereum bond contract along with its unit-tests.
What’s your budget?
The project will be undertaken by 2 engineers for 4 months:
|Incognito protocol engineer||2||3,000 PRV|
|TOTAL (x 4 months)||12,000 PRV|
Is there an existing conversation around this idea?
A few months ago, we received a grant from Binance that took the development of Portal to this point, and will help offset additional development costs going forward. See Binance funds development of the Incognito Portal for more details.
Is there anything else you would like the community to know?
We are always happy to hear feedback from the community so feel free to leave comments if any. Thanks.