Virtual Private Blockchains for GDPR: Cheap Private Blockchains out of Public Ones

Compliance with privacy regulations, like the European GDPR, poses a big pressure toward the adoption of private blockchain with respect to solutions based on public blockchains. However, there are cases in which adopting a private blockchain is hardly viable for other reasons, leading to situations that might result in a big obstacle for blockchain adoption of whatever kind. In this paper, we describe an approach to make a virtual private blockchain on top of a regular public blockchain, obtaining the security of the consensus algorithm of the latter while keeping the privacy features of a private blockchain. Our approach leverages cryptographic zero-knowledge proofs and authenticated data structures to allow the underlying public blockchain to verify that transactions of the VPBC conform to its specific consensus rules, without decrypting the transaction itself.