Despite the great potential and flexibility of smart contract-enabled blockchains, building privacy-preserving applications using these platforms remains an open question. Existing solutions fall short since they ask end users to coordinate and perform the computation off-chain themselves. While such an approach reduces the burden of the miners of the system, it largely limits the ability of lightweight users to enjoy privacy since performing the actual computation on their own and attesting to its correctness is expensive even with state-of-the-art proof systems.To address this limitation, we propose smartFHE, a framework to support private smart contracts using fully homomorphic encryption (FHE). To the best of our knowledge, smartFHE is the first to use FHE in the blockchain model; moreover, it is the first to support arbitrary privacy-preserving applications for lightweight users under the same computation-on-demand model pioneered by Ethereum. smartFHE does not overload the user since miners are instead responsible for performing the private computation. This is achieved by employing FHE so miners can compute over encrypted data and account balances. Users are only responsible for proving well-formedness of their private inputs using efficient zero-knowledge proof systems (ZKPs). We formulate a notion for a privacy-preserving smart contract (PPSC) scheme and show a concrete instantiation of our smartFHE framework. We address challenges resulting from using FHE in the blockchain setting—including concurrency and dealing with leveled schemes. We also show how to choose suitable FHE and ZKP schemes to instantiate our framework, since naively choosing these will lead to poor performance in practice. We formally prove correctness and security of our construction. Finally, we conduct experiments to evaluate its efficiency, including comparisons with a state-of-the-art scheme and testing several private smart contract applications. We have open-sourced our (highly optimized) ZKP library, which could be of independent interest.

Privacy is a huge concern for cryptocurrencies and blockchains as most of these systems log everything in the clear. This has resulted in several academic and industrial initiatives to address privacy. Starting with the UTXO model of Bitcoin, initial works brought confidentiality and anonymity to payments. Recent works have expanded to support more generalized forms of private computation. Such solutions tend to be highly involved as they rely on advanced cryptographic primitives and creative techniques to handle issues related to dealing with private records (e.g. concurrency and double spending). This situation makes it hard to comprehend the current state-of-the-art, much less build on top of it. To address these challenges, we develop a systematization of knowledge for privacy-preserving solutions in blockchain. To the best of our knowledge, our work is the first of its kind. After motivating design challenges, we devise two systematization frameworks-the first as a stepping stone to the second- and use them to study the state-of-the-art. For our first framework, we study the zero-knowledge proof systems used in surveyed solutions, based on their key features and limitations. Our second is for privacy-preserving solutions; we define several dimensions to categorize the surveyed schemes and, in doing so, identify two major paradigms employed to achieve private computation. We go on to provide insights to guide solutions' adoption and development. Finally, we touch upon challenges related to limited functionality and accommodating new developments.