A Privacy-Preserving Selectively Disclosed eKYC System Using Merkle Tree and Zero-Knowledge Proofs

Abstract

Digital identity verification has become crucial to every service in daily life. The privacy concerns associated with traditional Know Your Customer (KYC) systems have come to the forefront. These systems often require the sharing of personal information, which is stored in centralized databases, making them vulnerable to unauthorized access. To address these challenges, this work implements an electronic KYC system with selective disclosure using Merkle Tree and Zero-Knowledge Proofs (ZKP). Selective disclosure enables users to share only the necessary information, thereby reducing the exposure of sensitive data. ZKP enables the verification of this information without revealing the actual data, ensuring that privacy is preserved. The combination of selective disclosure and zkSNARKs in the proposed framework provides a solution for generating a single proof compared to multiple market proofs. This work demonstrates significant improvements in privacy protection compared to traditional identification systems. The implementation process and performance evaluation explore its potential impact on eKYC.