Created at 10pm, Apr 15
buaziziSoftware Development
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A Fully Homomorphic Encryption Application: SHA256 on Encrypted Input
6HqY4zrh9J1zb_QZfBMThACr5v57IYv1_FHw76dgABY
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PDF
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79
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jina_embeddings_v2_base_en
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hnsw

Nowadays, data privacy plays a key role in the context of the Cloud services,Artificial Intelligence, Internet of Things and other applications. Among all thedifferent approaches in the field of information security and cryptography for preserving the privacy and the secrecy of data, one of the most promising is FullyHomomorphic Encryption (FHE). In fact, FHE enables users to perform computations directly on encrypted data without having to first decrypt it, ensuringconfidentiality and preventing the exposure of sensitive information.This thesis presents a use case application for FHE, more specifically, a homomorphic implementation of the currently most used hash function, SHA256.The initial part of this thesis is focused on the study of FHE, initially going oversome basic fundamentals of cryptography, and then introducing various Homomorphic Encryption schemes, culminating in the FHE scheme called TFHE (FullyHomomorphic Encryption over the Torus).In the second part of this thesis we present our implementation of SHA256 thatoperates homomorphically on encrypted input. We then integrate this work in thecontext of a client-server architecture where the server can compute the hash function without knowing the input giving by the client. We develop this applicationusing the ZAMA Concrete compiler based on the TFHE scheme.Given the continuous progress in the development of FHE applications, we believethat a homomorphic version of SHA256 might be extremely helpful as a foundationfor future complex applications, aiming to increase users’ privacy.

DaiEthereum 0.51.05001000201801201807201901201907DateDai Price (USD)Ethereum Price (USD) Fig. 3. DAI remains relatively price stable despite decline in ETH price. Miscellaneous There are a few other designs that do not neatly t into any of the above categories. For example, Steem props up the price of its stablecoin, Steem Dollars, by paying interest on Steem Dollars. However, since they dont 11 12
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Amani Moin, Emin Gun Sirer, and Kevin Sekniqi set negative interest rates, this mechanism may not work if the price of Steem is too high and the interest rate is already low. Consequently, Steem Dollars traded for more than its $1 peg for months despite an interest rate of 0%. Another design is employed by NuBits (now defunct), a stablecoin which is minted when holders of a secondary coin (NuShares) vote to create more. Users are also paid interest if they temporarily remove their NuBits from circulation. This project is no longer in operation, possibly due to voting on supply changes being a slow process, thus forcing adjustments in price to lag by several days or more. Additionally, if holders of NuShares also hold NuBits, they may be reluctant to dilute the value of NuBits by printing more.
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Kowala keeps the price stable by adjusting its mining rewards. When the price of the stablecoin is too high, rewards increase to dilute the supply; when the price of the stablecoin is too low, transaction fees are burned to contract the supply. Unfortunately, a decline in the price of the stablecoin might be correlated with fewer transactions occurring, since a break from the peg would diminish users condence in the stablecoin. Since price adjustments are eected through mining and transactions, recovering from a decrease in price would take a long time. Also, since mining rewards decrease during contractionary periods, miners have less incentive to provide security which may further diminish the value of Kowala. This could lead to a feedback loop where Kowala never recovers from a price decrease.
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Finally, Phi oers people the opportunity to issue loans denominated in Phi, a stablecoin. The loan issuer has to put up collateral, which is used to pay the loan if the borrower defaults. Although the issuer does collect interest on the loan, the issuer has have no way to recover their capital if the borrower defaults. Moreover, because there is no connection to real world identities, there is no ostensible consequence to defaulting, so borrowers will likely abscond with the loan. If the borrower does pay back the loan, they are supposed to pay it with interest denominated in Phi. Since, for every loan originated in Phi, the amount paid exceeds the amount created, there could be not enough coins in existence to pay back all existing loans with interest. Finally, although Phi serves as a unit of account for the loans issued, it is not clear why the value should remain stable, or why Phi might be used as a store of value or medium of exchange.
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