Promise Proxy Re-signatures

What is a Proxy Resignature? A tool to build an on-chain credit reputation

For example, Alice wishes to make a payment to Bob from her Pledge contract where she is contracted to make 2 payments over 2 blocks. In order to maintain a perfect credit score, Alice must make all her payments in each block or she will be in default for her scheduled payments. Alice make a successful payment in Block 1. However, Alice is unable to make her required payment in Block 2 because she is short of the required funds.

The Promise Protocol solves Alice’s problem by using a proxy re-signature scheme as defined by Ateniese and Hohenberger. In proxy re-signatures, multiple signatures, can coexist from distinct parties on the same message and be publicly verified as distinct signatures. A proxy in possession of a shared portion of valid public signature can complete a signature by “re-signing” a message with its share but cannot, on its own, generate signatures for either party. The proxy “translates” (re-signs) a valid public signature from one party a valid public signature from another party on the same message.

Alice has a customer Janet. Janet owes Alice a payment from goods already delivered and will have funds in Block 2. Alice needs to make her payment in Block and on time. Alice delegates Janet as a proxy to resign a payment from Janet to Bob, as Alice. Alice will delegate her proxy Janet to re-sign a transaction in only one direction: To Bob’s public key in the Promise Pledge transaction.

Bob receives his payment from Alice's proxy re-signed signature that Janet re-signed as Alice. Alice retains her credit reputation with Bob. Janet has made a successful payment to Alice. Bob is confident he can extend more credit to Alice.

Proxy Re-signature Use Cases for Business.

Prox Re-signatures opens up the world of automated 3rd party payment processing to the Blockchain. Below are some examples of how this cryptography may be used in business payments.

  • Loans and Business Credit: Credit is a measure of willingness and ability to repay. Proxy re-signatures lower the costs to repaying promissory note and credit commitments by allowing more than one party to contribute to a repayment while building credit for the borrowing party.

  • Payment Gifts and Charitable Giving: Gifts and charitable giving benefit from proxy re-signatures when benefactors wish to maintain anonoymity and make payments either as the charity or an organization making payments on behalf of a charity.

  • Emergency Cash Flow: When businesses struggle through a cash flow crunch, enabling proxy re-signatures now allow emergency funds to be routed, via proxy, as the the business that is making the payment.

  • Authorized Payments: Proxy Re-signatures allow for payment flow control so that only authorized members may prox re-sign a transaction. This is important for compliance and repayment control.

  • Credit Reputation Building and Authentication: Building credit reputation is about completing contractual obligations within the contract terms. Re-signatures make it easier for parties to adhere to contrat terms in the face of difficulties.

  • Automated Blockchain Payments: Proxy re-signatures can be automated by partners that will fill cash flow needs, for service fees so that payments continue interrupted. This may also be considered a type of insurance against non-payment.

  • 3rd Party Payment Processing (replacing Debit Cards and Credit Cards): Payment processing companies currently act as proxies for business payments and consumer payments. Proxy re-signatures now allow decentralized and automated payment processing.