Blockchain’s transparency is a double-edged sword. It inevitably narrows the area where blockchain can be applied, as private data cannot be uploaded and shared on blockchain. How can we ensure privacy and confidentiality on blockchain while maintaining its transparent nature? How can we maximize the advantages of blockchain by addressing its limitations? We suggest Off-Chain Manager, which can be an answer to these questions.
The fundamental principle is to separate “metadata” from “data.” Blockchain only records the metadata - the ownership information - on the blockchain. The Data Stream Hub then transfers the actual data exclusively to their owners. Off-Chain Manager operates as follows:
- The Node #1 tries to share the FILE #1 to the Node #2.
- The Node #1 requests to write the ownership information to blockchain.
- Blockchain successfully creates a block containing the ownership information of the FILE #1.
- The Node #2 fetches the metadata in the new block.
- The Node #2 sends a notification of the ownership update to its client.
- The client requests the FILE #1 to the Node #2.
- The Node #2 requests FILE #1 to the Data Stream Hub.
- The Data Stream Hub validates the request from the node.
- The Data Stream Hub requests the FILE #1 to the owners, which, in this scenario, is the Node #1, with the Node #2’s public key.
- The Node #1 returns the encrypted FILE #1.
- The Data Stream Hub returns the encrypted FILE #1 to the Node #2.
- The Node #2 returns the encrypted FILE #1 to its client.
- The client can decrypt and view the FILE #1.