Practical Verifiable & Privacy-Preserving Double Auctions

Practical Verifiable & Privacy-Preserving Double Auctions

Memar Zahedani, Armin (Student TU Delft)
Vos, J.V. (TU Delft Cyber Security)
Erkin, Z. (TU Delft Cyber Security)

2023

Double auctions are procedures to trade commodities such as electricity or parts of the wireless spectrum at optimal prices. Buyers and sellers inform the auctioneer what quantity they want to buy or sell at specific prices. The auctioneer aggregates these offers into demand and supply curves and finds the intersection representing the optimal price. In this way, commodities exchange owners in an economically-efficient manner. Ideally, the auctioneer is a trusted third party that does not abuse the information they gain. However, the offers reveal sensitive information about the traders, which the auctioneer may use for economic gain as insider information. These concerns are not theoretical; investigations against auctioneers in electricity and advertisement auctions for manipulating auctions are ongoing. These concerns call for solutions that conduct double auctions in a privacy-preserving and verifiable way. However, current solutions are impractical: To the best of our knowledge, the only solutions satisfying these properties require full interaction of all participants. In this work, we design a more practical solution. We propose the first privacy-preserving and verifiable double auction scheme that does not require traders to interact actively, tailored to electricity trading on (inter)national exchanges. Our solution relies on homomorphic encryption, commitments, and zero-knowledge proofs. In a simulated auction with 256 traders, we observe that traders take up to 10 seconds to generate their order, the auctioneer takes 10 seconds to verify an order, and the auction result is computed and verified in 30 seconds. We extrapolate these results to larger auctions to show the practical potential.

Homomorphic Encryption
Periodic Double Auctions
Privacy
Zero-knowledge Proofs

http://resolver.tudelft.nl/uuid:38aa5658-5ac0-4af1-9148-6059e7da86b0

https://doi.org/10.1145/3600160.3600190

Association for Computing Machinery (ACM)

2024-02-05

9798400707728

ARES 2023 - 18th International Conference on Availability, Reliability and Security, Proceedings

18th International Conference on Availability, Reliability and Security, ARES 2023, 2023-08-29 → 2023-09-01, Benevento, Italy

ACM International Conference Proceeding Series

Green Open Access added to TU Delft Institutional Repository ‘You share, we take care!’ – Taverne project https://www.openaccess.nl/en/you-share-we-take-care Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.

Institutional Repository

conference paper

© 2023 Armin Memar Zahedani, J.V. Vos, Z. Erkin