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Graft vs Ripple and Others: Focus on Buyers, Merchants, and Their Privacy

Focus on Buyer and Merchant NeedsRipple’s is mostly focused on bank settlements, while Graft provide solutions to buyers and merchants. Buyers can pay anywhere with cryptocurrencies or plastic card using Graft wallet app. Merchants can receive payment from anyone using point of sale accepting both cryptocurrencies and plastic cards. Faster payment confirmations are provided by Graft supernode authorization sample, a process that is more similar to Dash masternode scheme. Unlike Dash masternode, however, Graft supernode is not a “wrapper” or a second tier as it is designed to be a monolithic code base that implements both real time authorization and blockchain settlement (mining) features. Such an architecture improves security of the real time authorization process, as payments cannot be settled “off supernode chain” by the “lower” level blockchain network nodes, without supernodes knowing about their existence. Thus, all Graft transactions are authorized instantly without requiring additional fee, by supernodes that are automatically selected by the network using combined proof of work and proof of stake algorithm. Focus on Absolute Privacy Ripple consensus protocol is different, and its main problem is that it does not provide privacy features: untraceability and unlinkability of payment transactions. Unlike Graft blockchain, all transaction information on the Ripple ledger is public. Ripple does not provide the privacy and untraceability that are demanded today by potential Graft users – both buyers and merchants. When we pay with credit card, we share our secret payment information (like credit card number) with some entities – the merchant, the issuing bank, the payment processor, the payment acquiring bank – but those entities are relatively trustable so they try not to share our secrets with the entire world, and no one else can see our transaction history without our or their permission. Oftentimes, however, they fail to keep our secrets (think Target and many other retail mega breaches). With Ripple or Bitcoin or most other cryptocurrencies that are not based on CryptoNote protocol, the story is exactly opposite: there is no central authority that “knows” our secret “card number” (private key), but at the same time anyone in the world can trace our payments on the blockchain and link them to our identities with minimum efforts. By Implementing CryptoNote and other features, Graft brings the level of untraceability of payment history similar to traditional credit and debit card system, while adding decentralization, privacy, and security, which are the features of any cryptocurrency that are absolutely impossible to achieve using traditional credit card payment technology.
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Graft mobile wallet and point of sale apps do not maintain a full copy of the blockchain for obvious reasons. Does it mean the wallet content is stored on supernodes which may compromise its security and privacy?

There are multiple elements of the Graft user wallet:
  • Private spend key – secret – required to spend money; stored in the wallet app
  • Private view key – “semi-secret” – required to see the balance and previous transactions
  • Payment address – public – required to receive money
In Graft, the Private spend key is always stored at the client (wallet) and never shared with the supernodes. Therefore, it is not the same as credit card when you share you card account number with the merchant, payment processor, and the bank every time you make a payment. If one of them is breached, your credit card can be stolen and used to make fraudulent payments. If any or even all supernodes are “breached”, they don’t have your private spend key so no one will be able to “use” your Graft account.
The Graft wallet balance is a “hidden” set of previous transactions. It is calculated by scanning all the previous transactions which are stored on the public blockchain but invisible without view key. Since mobile wallet app does not have direct access to the blockchain, the private view key is temporary shared with a single “proxy” (relay) supernode in order to retrieve the wallet balance; the supernode will not store this view key in any database so even if it’s “breached” the view key will not be disclosed in most cases. However, even if the view key is disclosed, it only allows to see transactions, not to spend any money.
Users (either buyers or merchants) with higher requirements for privacy can host their own private “proxy” supernode with full copy of blockchain. This way they will never share their view keys with the random “foreign” supernodes. Most probably, due to limited processing power and other resource limitations, such a private proxy supernode will not be able to participate in transaction processing and earn any block rewards or transaction fees, but it will still be able to validate transactions and view balances privately by scanning the local copy of the blockchain. For users who cannot or don’t want to host their own supernode but still don’t trust the entire network, Graft creates a special (free) cloud service with trusted proxy supernodes that are protected by multiple levels of security.
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In order to process real-time authorization (instant confirmation) Graft network puts a “lock” on buyer’s account. How does it not violate one of the main goals of any cryptocurrency system – untraceability?

First of all, untraceability is not a feature of any cryptocurrency. As of today, CryptoNote is perhaps the only protocol that enables full privacy and untraceability. The beauty of Cryptonote is that it hides the details of transaction while still preventing double-spending. This is achieved through the use of key image which is unique “fingerprint” that represents the spending address and amount without disclosing any details about the buyer or the amount. By providing the key image for upcoming transaction to the network of supernodes, the buyer’s wallet will temporarily “lock” its “account”, so no other transaction with the same key image can happen until the locked transaction is settled or the lock is removed. If the buyer will try to finalize the transaction with the key image different from the one used in the original lock, such transaction will be rejected by the supernodes. On the other hand, the key image does not contain any information about the buyer, buyer’s wallet, or recipient (merchant). In addition, any traces of communication between the buyer (wallet app), the merchant (point of sale app), and the supernodes (selected proxy and sample supernodes) during authorization phases are completely removed once transaction is settled (written into the blockchain). Even transaction fees paid by merchant to authorizing supernodes are hidden from public view, which is another major privacy improvement comparing to all previous CryptoNote implementations that do not hide transaction fees.