Anonymization of Bids in Blockchain Auctions Using Zero-Knowledge Proof

The recent COVID-19 pandemic accelerated the world’s digitalization including transformation of traditional auctions. Although buyers cannot examine an item in online auctions, they become a more popular option. They are more convenient since buyers can participate from all around the world. Additional advantage is that the possibility to make auctions more anonymous. Specifically, it may be crucial for the user to keep their interest in the commodity hidden from other buyers and even the seller. This article explores the problem of anonymization in web services by using the example of anonymous online auctions. A system for anonymous, blockchain-based online auctions using zero-knowledge proof is proposed. The system enables a party to attend an auction anonymously digitally isolated from other competitors and the sellers. The system consists of a smart contract on a blockchain and a decentralized web application that facilitates zero-knowledge proof calculation and interactions with the smart contract.