Secrecy-Verifiability Paradox in Smart Contracts

Abstract

The trade-off of secrecy is the difficulty of verification. This trade-off means that contracts must be kept private, yet their compliance needs to be verified, which we call the secrecy-verifiability paradox. However, the existing smart contracts are not designed to provide secrecy in this context without sacrificing verifiability. Without a trusted third party for notarization, the protocol for the verification of smart contracts has to be built on cryptographic primitives. We propose a blockchain-based solution that overcomes this challenge by storing the verifiable evidence as accessible data on a blockchain in an appropriate manner. This solution allows for cryptographic data verification but not revealing the data itself. In addition, with our proposal, it is possible to verify contracts whose form of existence has been destroyed as long as the contract is real and the people involved remember it.