Building the Tools for Private and Local-First Coordination
Why PriFi needs more than a private blockchain
Nasrudin
Privacy in the world of blockchain and decentralised finance has been almost entirely focused on blockchain mechanisms, which is understandable enough, since that is where value transfers are settled and where a permanent public record forms. However, reducing exposure here still leaves most of a transaction’s supply chain unprotected.
Finding a counterparty, establishing their identity, and agreeing on terms all happen somewhere else, on infrastructure that is leaky and vulnerable to exposure. By the time a shielded transfer is executed on the blockchain, there have already been myriad opportunities to expose data around it.
PriFi is an approach to taking privacy across the whole lifecycle of a transaction seriously, reducing exposure every step of the way. If you’re new to PriFi, we recommend reading this introductory explainer before continuing with this more technical article.
In this article, we refresh our memories on the concept of PriFi before drilling into the first few stages of a transaction’s lifecycle and how Logos is building infrastructure that aims to reduce your exposure when coordinating a transaction.
To understand more about how transactions can leak information, download Logos Basecamp and install Muster, an application built on Logos by Dr Corey Petty, to demonstrate how transactions can leak information throughout their lifecycle.
What is PriFi?
PriFi (private finance) is an infrastructure design philosophy that aims to make every step of the transaction supply chain private, secure, and immune to leakage. It unlocks elective disclosure, allowing people or institutions to choose how much or how little about their transactions they want to share.
It is not a single solution and is best understood as an ongoing principle of development for sovereign and privacy-preserving infrastructure – a north star guiding the course for building parallel systems that hand true control to their users.
The lifecycle of a transaction can be seen as seven distinct stages:
| # | Stage | Operation |
| 1 | Discovery | Finding who has what you want |
| 2 | Diligence | Verifying they are who they claim |
| 3 | Negotiation | Agreeing on price and terms |
| 4 | Contracting | Committing in enforceable form |
| 5 | Ordering | Deciding whose trade goes when |
| 6 | Settlement | The only link where value moves |
| 7 | Enforcement | Making the outcome stick |
Exactly one of those stages – settlement – happens on a blockchain, although it has seen outsized development efforts among those working on private finance infrastructure. As a result, the industry as a whole has made great strides in strengthening privacy in the settlement stage through work on blockchain architecture.
The other six stages often rely on systems owned by other people or third parties, and each of them contains multiple vectors for information leakage.
Discovery can begin in a browser, which can expose your IP address, location, internet provider, and more. Connecting a wallet to a browser frontend links your onchain identity with that of your browser and device. In the diligence stage, looking up address data through hosted RPC providers leaves a trace back to you, allowing that provider to collect data and create and sell identity graphs.
Read this interactive article about how your browser is betraying you for an idea of how your transaction can be compromised before it is even created.
Negotiation is often done through hosted platforms or third-party services like Telegram or public mempools, where a record of your coordination is kept, and your identity is linked to other information exposed during the lifecycle.
How Logos is patching the holes in coordination
The coordination of a transaction has to happen somewhere, and a messaging layer is the natural place to begin.
Logos Messaging comprises two modules for peer-to-peer communication: Chat and Delivery. Chat runs on top of Delivery, which can leverage the Mix protocol for improved privacy. Chat is the end-to-end encrypted user-facing application, while Delivery is the secure transport layer for peer-to-peer messaging.
These modules inherit the underlying privacy-preserving communications infrastructure of the Logos stack, which includes a decentralised system that allows node operators to trustlessly peer with others who offer the services they need, without relying on a single source of truth.
Read the full specification for more about decentralised peer discovery.
When it comes to preserving privacy for transaction discovery, diligence, and negotiation, the Mix protocol aims to do a lot of heavy lifting. Designed as a decentralised, private routing layer for libp2p networks, it routes each packet through a decentralised overlay network composed of participating libp2p nodes, known as mix nodes.
Read the full specification for more information about Mix.
Peer-to-peer messaging protocols are often subject to spam or denial-of-service attacks, which Logos defends against through the implementation of Rate Limiting Nullifier (RLN) that limits messages while preserving privacy.
In addition to the above protocols that are part of the Logos stack’s privacy-preserving messaging capabilities, the infrastructure is also designed to be run locally, not accessed through a hosted provider.
Basecamp is a desktop application that runs the Logos stack on your own machine. It is a return to local-first principles: the whole stack, node included, on hardware you control, installed the way any other application is installed, but without needing to trust a third party.
It is an open and accessible interface for people who use Logos and the applications built on top of the stack, including private p2p chat, atomic swaps, or a blockchain wallet.
Download and install Basecamp.
What’s being built in Logos Testnet v0.3
Much of what is currently being developed on the Logos stack is foundational infrastructure for reducing exposure across the transaction lifecycle. The first step in securing information along the design of PriFi is to reduce reliance on centralised operators and trusted third parties.
Trustless, verifiable protocols offer the decentralisation required for building truly private infrastructure, and version 3.0 of the Logos Testnet is deploying these protocols for early testing and integration by developers.
Several protocol improvements in Testnet v0.3, which is expected to be released at the end of September, relate to coordination leaks in the transaction lifecycle.
Service Discovery
In Testnet v0.3, Service Discovery is available as a separate Logos Core module, configurable as an alternative to discv5 for ambient peer discovery, so that a node can ask for peers offering a specific capability without having to span several separate networks in order to find them.
The benchmark targets are comparable performance to discv5 when every node supports the same service and better performance when the service being sought is sparse, and the module API improves so that several modules can share a single Service Discovery instance instead of each running its own.
Mix
Testnet v0.3 sees substantial progress made on the development of the Mix protocol in Logos. It will be integrated into the Logos Delivery module with exposure on the Messaging API, and Mix nodes now have a local reputation record for peers. A new dedicated Mix module also allows Logos node operators to run Mix nodes via their Logos nodes. Large messages get an application-level mechanism that segments them and routes the pieces over multiple paths, with multiple-SURB paths for large responses.
Hidden services are specified and implemented so that providers can anonymously register and clients can discover and anonymously access them. A standalone Logos Mix module, encapsulating nim-libp2p-mix together with RLN-based denial-of-service protection and cover traffic, is also now available to be integrated by developers looking to experiment with building on Logos.
RLN
The simple method of preventing abuse of a p2p system is to know who people are and rate-limit per account, but this exposes who talks to a network and how often, removing any privacy gained by the p2p architecture. Rate-Limiting Nullifiers charge the sender a proof instead, so that a sender demonstrates they are within their allowance without revealing which member they are. If they exceed their allowance, they are exposed.
Testnet v0.3 specifies and implements a basic RLN membership management module, migrates Logos Delivery onto LEZ-based RLN through it, and adds both a standalone membership allocation service and a full RLN module that generalises the mechanism so it can rate-limit anything on the stack, with advanced authentication techniques for membership allocation still under active research.
Chat
The Chat module is a user-facing chat application that bundles RLN, Scalable Data Sync, mix and de-MLS together, which allows a negotiation to be encrypted, reliably ordered, resistant to traffic analysis and protected from spam at the same time, with no central delivery service.
Testnet v0.3 includes an early implementation of the λAccount mechanism, long-lived addresses that survive key rotation, which can be used to enable privacy-preserving diligence while requiring no third-party authorisation.
The development of architecture for PriFi is an ongoing effort, which requires the rollout of foundationally privacy-preserving infrastructure to underpin truly private transactions across the lifecycle.
In Testnet v0.3, this foundational architecture continues to be built out and will be available to developers to tinker with and contribute towards.
Read more about the architecture of the Logos stack.
Improvements coming to Basecamp
Basecamp is the local-first launcher for privacy-preserving infrastructure.
Local-first means your node, your keys, and your data live on hardware you control, improving privacy within the discovery and diligence phases of the transaction lifecycle. A message or transaction sent from Basecamp enters the peer-to-peer network from your own machine, as a peer. Other nodes relay the traffic, and on testnet, the first hop is to bootstrap the infrastructure that the project runs.
Basecamp is still in development, and v0.3 will continue to build out the open-source application, which is a gateway to any public applications compatible with the Logos stack.
The app and many applications will receive an improved interface in Testnet v0.3, and Basecamp will continue to receive iterative updates aimed at improving its usability.
In addition, the package manager module can now be used to source module contents using CIDs via Logos Storage, reducing reliance on GitHub, although at this early stage of development, indexing and metadata will remain on GitHub.
The place to build for PriFi
The design philosophy of Logos, to build privacy-preserving infrastructure that unlocks parallel systems, makes it the best place to be for those interested in realising the vision of PriFi.
Testnet v0.2.1 is running now. If you would like to get involved, download Basecamp and run a node on your machine.
If you want to contribute capacity and play a role in the network, check out the node operator guide.
Building infrastructure for everyone is an open, collaborative effort. If you have ideas, objections, or want to understand more about what Logos is building at the edge of PriFi, join the conversation on the Logos forum.
Build the parallel.
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