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Alibaba’s Ant Financial Invests in QEDIT, a Blockchain Project Boast a Unique Technology

Recently, QEDIT, a blockchain project focusing on the privacy technology of enterprise blockchain, has completed a $10 million financing. What is the most attractive is Alibaba’s Ant Financial has invested in the project. It is the first blockchain project in which Alibaba participates and open to public so far.

Apart from being an investor, Ant Financial is also a partner of QEDIT. Why are traditional financial companies willing to cooperate with the start-ups of blockchain? What kind of blockchain technology attract them?

QEDIT official website shows that it mainly uses the encryption technology of Zero-Knowledge Proof (ZKP) to provide enterprise solutions for the privacy protection of blockchain.

Zero-knowledge proof means that the a method by which one party (the prover) can prove to another party (the verifier) that they know a value x, without conveying any information apart from the fact that they know the value  x. This theory was first proposed by MIT professors Shafi Goldwasser, Silvio Micali and Charles Rackoff, another cryptographic master in the 1980s.1_GNlZGiQbh3nqcBur0cVTUQ

So why are financial giants interested in ZKP technology?

In fact, most financial enterprises are exploring the use of alliance chains, which can save a lot of costs for the cooperation between banks and other financial institutions by sharing books. However, there are still many drawbacks in the industry, and these drawbacks are exactly what ZKP technology aims to solve.

Privacy Protection

In traditional financial system, transaction verification process needs a lot of clear counterparty information. With ZKP technology, the system only needs simple verification, without additional privacy information. This allows transactions to be confirmed in full anonymity.

Similar to the financial industry, insurance companies often need to evaluate the user’s insurance policy application based on the user’s past medical history and other data to verify whether the user meets the insurance requirements. However, health data such as user’s medical record and death are user’s privacy. Users often do not want to present these data in detail. ZKP, therefore, can meet this requirement: without referring to the user’s specific data, insurance companies can also verify whether the user meets the insurance requirements.

Financial Service

The financial crisis in 2008 sounded a warning for financial institutions, which must pay close attention to and control the risk threshold. Zero knowledge range proof can prove that the number is within a specific range. Therefore, by using ZKP, these institutions will be able to demonstrate to auditors, governments, customers and the public in real time that they comply with risk thresholds without sharing confidential information with others. For example, encrypted currency exchanges can use ZKP to prove their ability of paying back.

In addition, ZKP can extend data to provide financial services with more measures to solve problems — for example, by allowing validation of letters or other types of data within a given set. For example, in KYC (Know-Your-Customer) checks for user compliance, ZKP can help enterprises verify whether users belong to a geographical area (e.g., whether they are citizens of the United States or the European Union) without showing the exact region or country to which they belong.

Because of  ZKP’s functions and potentials in finance, insurance and other fields, more and more traditional financial giants are interested in this technology, and ZKP is constantly  tried and widely adopted.

When the news was released, Geoff Jiang, vice president and general manager of Ant Financial Technology and Business Innovation Group, said in a statement: “Ant Financial shares a same vision with QEDIT, that is, to protect data privacy and security. It is essential to adopt measures to protect privacy for sustainable development in the financial sector. Together with QEDIT, Ant Financial is dedicated to providing such functions as part of our blockchain services. “

COMMENTS(1)

  • Vinent he
    6 months ago Vinent he

    Alibaba’s Ant Financial Invests in QEDIT, a Blockchain Project Boast a Unique Technologyhttps://news.8btc.com/alibabas-ant-financial-invests-in-qedit-a-blockchain-project-boast-a-unique-technology …

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