[Paper Review] Short Paper: Design and Evaluation of Privacy-preserved Supply Chain System based on Public Blockchain

Takio Uesugi, Yoshinobu Shijo+1 more|arXiv (Cornell University)|Apr 16, 2020

Blockchain Technology Applications and Security4 references4 citations

TL;DR

This paper proposes a privacy-preserving supply chain system on public blockchain that encrypts ownership transfer records and uses zero-knowledge proofs to verify legitimacy without exposing blockchain addresses. The method enables manufacturers to trace products while protecting sensitive distribution data, with transaction fees capped at $2.60 per party on Ethereum.

ABSTRACT

Securing the traceability of products in the supply chain is an urgent issue. Recently, supply chain systems that use public blockchain (PBC) have been proposed. In these systems, PBC is used as a common database shared between supply chain parties to secure the integrity and reliability of distribution information such as ownership transfer records. Thus, these systems secure a high level of traceability in the supply chain. However, the distribution information, which can be private information, is made public since the information recorded in PBC can be read by anyone. In this paper, we propose a method for preserving privacy while securing traceability in a supply chain system using PBC. The proposed method preserves privacy by concealing the distribution information via encryption. In addition, the proposed method ensures distribution among legitimate supply chain parties while concealing their blockchain address by using a zero-knowledge proof to prove their authenticity. We implement the proposed method on Ethereum smart contracts and evaluate cost performance based on transaction fees. The results show that the fee per party is at most 2.6 USD.

Motivation & Objective

• To address the privacy leakage in public blockchain-based supply chains where ownership transfer records are publicly visible.
• To enable manufacturers to trace products without exposing sensitive distribution data or participant identities.
• To ensure only legitimate supply chain parties can participate in transfers while concealing their blockchain addresses.
• To evaluate the cost performance of the system in terms of Ethereum transaction fees.
• To enable practical deployment for high-value products by keeping operational costs low.

Proposed method

• The system uses the manufacturer’s public key to encrypt blockchain addresses of supply chain participants before storing them on the public blockchain.
• Private keys held by the manufacturer allow decryption and tracking of product ownership through the chain of custody.
• Zero-knowledge proofs (zk-SNARKs) are used to verify that a party possesses a secret token, proving legitimacy without revealing their identity or address.
• Three smart contracts are implemented: ManufacturerManagerContract (MMC), ProductsManagerContract (PMC), and VerifierContract (VC) on Ethereum.
• The implementation leverages ZoKrates for zk-SNARKs and Solidity 0.5.11 for smart contract logic, with gas costs measured via Remix IDE.
• The system assumes a product distribution flow starting from the manufacturer, with distinct transaction processes for shipping and receiving.

Experimental results

Research questions

• RQ1 Can a public blockchain supply chain system preserve the privacy of ownership transfer records while maintaining full traceability?
• RQ2 How can supply chain participants prove their legitimacy without exposing their blockchain addresses?
• RQ3 What is the transaction cost overhead of integrating encryption and zero-knowledge proofs in a real-world blockchain deployment?
• RQ4 Can the system be practically applied to high-value products despite blockchain transaction fees?
• RQ5 How can the system be extended to support product assembly and disassembly processes?

Key findings

• The proposed method successfully conceals blockchain addresses and distribution information from public view, preserving privacy.
• The manufacturer can accurately track product ownership by decrypting encrypted addresses using its private key.
• Zero-knowledge proofs effectively verify participant legitimacy without leaking identity or address information.
• The maximum transaction fee per party across all operations was $2.60, based on gas costs measured on Ethereum at the time of evaluation.
• The system is viable for high-value products such as cars and appliances, where the $2.60 fee is justifiable as a warranty or recall management cost.
• Future cost reduction is possible by pre-deploying the VerifierContract, minimizing repeated deployment fees.