Anonymization in web auctions using Zero-Knowledge Proof in Blockchain technology

Abstract

Global digitalization has accelerated, leading to continuous online shopping and services growth. However, the centralized nature of traditional e-commerce platforms raises concerns about data control, privacy, and potential single points of failure. Blockchain technology offers a decentralized alternative that addresses these issues, improving online transactions with enhanced privacy and anonymity for users. This article explores the problem of anonymization in web services by developing an anonymous online auction system using blockchain and zero-knowledge proof (ZKP). We propose a solution that employs ZKP in two stages: first, to verify that a user is eligible to participate in the auction, thereby creating a list of potential bidders; second, to prove that a bid is placed by a user from this list without disclosing their identity. This approach allows participants to engage in auctions anonymously, protecting their interests from competitors and sellers. The system eliminates the need for a trusted third party by leveraging the blockchain immutable ledger for transparency, giving users full control over their data and participation. We present the architecture and implementation details of the system, demonstrating its feasibility and potential to enhance privacy and security in online auctions.