Stegos

Multipurpose mobile apps and social media platforms have allowed millions of previouslyunconnected people to access online services and communities. However, they do so atunacceptable costs to user privacy. Conversely, blockchain and cryptocurrency platformsoffer unprecedented privacy benefits, but are currently unsustainably slow and resource-intensive, making them inaccessible to the average user. We need a way to marry privacyand accessibility in a single platform.The Stegos Privacy Platform (Stegos) combines a unique blockchain and token designto implement the first cryptocurrency that’s completely private, secure, ecient, and envi-ronmentally sustainable. Stegos is fully scalable and prunable, ensuring the chain alwaysremains compact without compromising trust. This makes Stegos the world’s first publicblockchain to offer secure and confidential data storage and transmission in addition topayment transactions.Stegos extends this blockchain foundation to provide a platform for building privacyapplications that communicate via messages sent with minimal latency. Our trusted ap-plication container (TAC) and privacy app store simplify the process of building and dis-tributing privacy applications while providing additional security for users. Last but notleast, Stegos marketplaces, chat, and red packets replicate the most popular features ofmodern multipurpose apps in a decentralized way, allowing users to transact and com-municate in complete privacy.Stegos is secured by the gamified Proof-of-stake (gPoS) consensus mechanism basedon verifiably unbiased distributed randomness. gPoS allows anyone to run the Stegosblockchain from their pocket and earn tokens for maintaining the network, even withouta high stake. This encourages an extremely wide user base by ensuring that mobile usersare properly incentivized to validate the network.

We All Deserve Privacy

Everyone deserves privacy. They also deserve access to all the services and benefits ofour modern digital world. But current technologies and business models are unable, orperhaps unwilling, to provide both simultaneously.The past decade has seen the rise of global social media platforms and multipurposeapps with integrated payments such as WeChat and Facebook. This, combined with rapidadvances in mobile internet and hardware, has allowed almost a billion people to getonline and communicate, trade, and collaborate. But these platforms are a privacy night-mare: your every action can be tracked and linked to provide a full history of everyoneyou’ve ever communicated or transacted with, whether you want to share this informa-tion or not. In addition, user data is often harvested indiscriminately into enormous datasilos, making them a target for unscrupulous advertisers, state actors, and hackers. Currentefforts to curb this abuse are ineffectual and heavy-handed, often because governmentsand regulators are unwilling to cede control and let users take responsibility for their ownonline actions.On the hardware side, solid-state technology, smartphones, and the Internet of Thingslet us carry our lives in our pockets, on our phones and on our laptops. But under the guiseof protecting us — from terrorism, from hackers, from our own alleged lack of responsibility— our privacy has been decimated. In airports, online, even on the street, we are forced toreveal our private data with alarming frequency.This intrusion leaves many of us feeling exposed and powerless. Many face even morechilling consequences, such as the loss of their jobs, liberty, or even lives.We live in an era of unprecedented state surveillance and crackdowns on freedom ofthe press and even thought. It’s nobody’s business what you do with your money, whetherpaper or digital, and it’s nobody’s business who you transact with on the blockchain.These trends have not gone unnoticed. Across the world, people are voicing their dis-pleasure at how their privacy and data are being exploited for profit. There is a groundswellof demand for more secure and private alternatives, and this is only going to grow overthe coming months and years.

Blockchain and Privacy

At the other end of the spectrum, blockchain and decentralized technologies have facili-tated massive leaps forward in digital privacy and security. While traditional data sharingand storage technologies (online cloud storage, email, laptops, etc.) have built-in security,these technologies can easily be compromised. Once someone obtains and enters yourpassword, your data is permanently exposed.A private decentralized solution based on blockchain is a far better way to keep yourprivate information safe and share it with people you trust.However, adoption levels have been disappointing. Current blockchains are slow, un-wieldy, and environmentally disastrous, and no privacy coin is as private as it claims tobe. The reliance on resource-hungry static hardware and unfriendly interfaces puts thistechnology beyond the reach of regular users, without whom blockchain platforms aredoomed to wither and recentralize. As users in all walks of online life increasingly migratefrom desktop to mobile, crypto is failing to keep pace.The solution is clear: In order to thrive, blockchain platforms must emulate the massappeal and usability of platforms such as WeChat and Facebook while maintaining strongprivacy, anonymity, and decentralization.Stegos is the first blockchain to combine these worlds. Stegos is the best mechanismfor secure transactions, data transmission, and communications because, unlike tradi-tional email and online messaging services, it’s completely decentralized, cryptographi-cally secure, and leaves no telltale clues to user identity. It’s impossible to see who sendsor receives information or establish how anyone is connecting to Stegos. No-one but theintended recipient of a communication or transaction can see what or how much wassent, and there’s nothing to link data or transactions to anyone’s real-life identities.Stegos is also the first blockchain that’s truly mobile compatible: smartphone nodeshave full validation capabilities and there’s no hardware-intensive Proof-of-work, mean-ing anyone can earn coins for supporting the network. By giving data transmission andmessaging the same priority as regular transactions, Stegos is a platform that people willactually want to use. And the focus on smartphones means people will actually be ableto use it.In our modern connected world, everyone should have access to secure and privatetransactions and communications. Stegos is the first and only blockchain platform thatcan provide this.

Summary

The Stegos Privacy Platform (Stegos) combines a unique blockchain and token designto implement the first cryptocurrency that’s absolutely private, secure, ecient and envi-ronmentally sustainable. Stegos uses theUTXO(coin) model andgPoS(gamified Proof-of-stake) consensus, combining existing privacy coin ideas and the latest cryptographicresearch to create a fully scalable and prunable privacy blockchain and application plat-form.

Absolute privacy

Payment and data transactions in Stegos are unlinkable, untraceable, and completelyconfidential thanks to Stegos’ Snowball protocol (see Appendix B). Every Stegos transac-tion is directed to a new and unique stealth address, making it impossible to identify therecipients. Snowball also makes it impossible to trace Stegos transaction history, sinceindividual transactions are first joined together to form a supertransaction before beingsubmitted to blockchain validators. This is all done in a secure and privacy-preserving way,while ensuring that Stegos coins remain fully fungible.

Payments and messaging

Other privacy tokens — such as Monero, Dash, ZCash, and Grin — can only be used forpayments, and all display weaknesses in terms of scalability, privacy, security, or usabil-ity. Stegos builds and improves upon these and other privacy coins and can be used tosend both payments and data with complete confidentiality. The Stegos trusted appli-cation container (TAC) allows developers to easily build applications that communicateanonymously, privately, and eciently.

Scalability and data compaction

Stegos is a fast and highly scalable blockchain and, unlike other blockchains, it’s keptsmall without compromising trust. Details of spent coins and consumed data are safelyremoved from the blockchain using secure cryptographic pruning. It’s also highly scalablethanks to transactional sharding. This makes Stegos the world’s first public blockchain thatcan offer secure and confidential data storage and transmission in addition to paymenttransactions. It also ensures that Stegos is compact enough to run on smartphones.

Proof-of-stake (PoS)

Stegos is environmentally friendly and does not waste megawatts of electricity miningblocks. Instead, Stegos uses a bespoke gamified Proof-of-stake (gPoS) consensus, buildingon advancements in distributed systems theory and cryptography. Each new Stegos blockmust be verified and confirmed by a group of validators, all of whom must post tokensas bonds. The value of the tokens staked in this way directly affects the probability that avalidator will win a block and earn the associated transaction fees.

Mobile app

To showcase the power of the platform, Stegos is developing its own native multi-purposemobile application that integrates a wallet, one-one-one and group chat, the TAC, thePrivacy App Store and the Stegos red packets 4.3.2. This app will be the gateway for usersonto the Stegos Privacy Platform.

Private by Default

The original Bitcoin paper only included a very small section on privacy [1]. It assumed thateven though transaction amounts are public, it would be impossible to link those trans-actions to anyone’s real identities. This assumption has repeatedly been proven wrongby researchers, blockchain analysis companies, and hackers. Software like ChainAnalysishas made transaction analysis trivial, allowing anyone to quickly de-anonymize users ofBitcoin and other cryptocurrencies.Most blockchains have followed in Bitcoin’s footsteps with a totally transparent designthat includes visible addresses and amounts, including the balance of any wallet, howmuch money has been sent and received, and the addresses of every sender and recipient.But all this readily available information paints a large and highly visible target for hackersand Big Brother. With the rise of privacy technologies like Bulletproofs and zk-SNARKs,there’s no excuse to perpetuate Bitcoin’s mistake. Blockchain should be private by default.To this end, transactions in Stegos areunlinkable,untraceable, andconfidential:•Stegos uses one-time payment addresses which make it impossible to identify re-cipients of a transaction. Our technique for one-time addresses is very similar to thestealth addresses used in Monero and ZCash.•Stegos pools individual transactions to form super-transactions, making it impossi-ble to trace transaction histories. For this purpose, we have developed an improvedversion of the ValueShue protocol [7], the first coin mixing protocol compatiblewith confidential transactions.•All amounts in Stegos are hidden using Pedersen commitments [8] and Bulletproofs(range proofs) [4]. Validator stakes and transaction fees are the only exception, sincethese must be visible for blockchain validation.

Gamified Proof-of-stake (gPoS) consensus

Standard Proof-of-stake consensus can leave many users with smaller stakes unincen-tivized. To address this, Stegos employsgamified Proof-of-stake(gPoS), so-called becauseevery validator which has been running for a certain amount of time has the chance toreceive a randomValidator service award, regardless of the size of their stake1.To fund this, a portion of the reward from each block is added to the service awardpool, which continues to grow until a winner is selected in an ongoingcryptographiclotterybased on verifiable distributed randomness.Because smartphone nodes can have full validation capabilities, anyone can earn to-kens from their pocket.