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Build Trust in Supply Chains with Blockchain Technology and Zero-Knowledge Proofs

30 Jun 2023 - Technology, Production

Using digital technology to create transparency and trust in the metals industry. Source: Adobe Stock/Parradee. Edited by PSI Metals
Using digital technology to create transparency and trust in the metals industry. Source: Adobe Stock/Parradee. Edited by PSI Metals

Metal consumers are interested in the properties of the products they are about to buy. Blockchain technology provides these details and creates transparency. This transparency could expose confidential information about production processes that could harm the company's competitiveness. By combining blockchain technology with zero-knowledge proofs, metal producers can successfully provide this information without revealing confidential details about their production processes.

Imagine blockchain technology being a notary that certifies all products along the supply chain, ensures that (intermediate) products are made from certified materials, inspects the production processes and ensures that all quality claims are correct. With the notary’s presence throughout the entire supply chain, from the ore in the mountain to the finished car, the customer is convinced the car was produced according to the information provided in the certificates.

In this manner, blockchain technology enables various properties of metals products to be certifiable, such as the product’s overall CO2 footprint or qualitative statements of mill test certificates. Each product certificate provides a link to its predecessors, i.e. the consumed input materials, which creates a certification tree that lists the full history, implying full traceability. Furthermore, digital identities prevent the possibility of impersonation.

Certificates point to their predecessors
Certificates point to their predecessors and implicitly create a certification tree. © S1SEVEN GmbH (

Blockchain technology enables easy and thorough tracking of properties and offers you even the possibility to publish detailed measurements taken during production processes.

Many (mechanical) properties can be derived from these measurements and letting the notary inspect and publish all details would strengthen trust and transparency.

However, producers do not want to share their secret recipes, which would be the consequence of publishing detailed information. This is where blockchain technology hits its practical borders.

Zero-Knowledge Proofs: Kill 3 Birds With One Stone

While metals producers want to build trust by publishing product information, they also need to keep some details about the production processes private for competitive reasons. These requirements cannot be solved with blockchain technology alone.

To help, zero-knowledge proofs create a link between confidential production details and the product information asked for by the customer. By combining blockchain technology with zero-knowledge proofs, metals producers can both create trust and transparency while withholding confidential details.

What Is a Zero-Knowledge Proof?

A zero-knowledge proof is a cryptographic building block that allows proving the correctness of a statement without revealing any further details. As an example, imagine that digital passports and border controls were done using zero-knowledge proofs. Then, one could prove to border control that they have eligible criteria to enter a country, without disclosing their full identity.

Further examples for zero-knowledge proofs include:

  • Imagine if voting in government elections was done with zero-knowledge proofs. Then, one could prove to an auditor that they voted on one of the eligible parties, without disclosing what party they voted for.
  • Imagine if COVID-19 certificates were done with zero-knowledge proofs, one could prove that they benefit from softened travel restrictions without revealing if they were vaccinated, tested, or recovered from COVID.

Transparency Without Revealing Confidential Details

Recall that from the beginning of this article, the “simple” notary consists of blockchain technology only. On the other hand, the “enhanced” notary is blockchain technology combined with zero-knowledge proofs. 

As an example inside the metals industry, one reveals all of their production details to the “enhanced” notary and tells them that they shall not publish certain details. In contrast, the “simple” notary publishes everything shown to them and they are unable to keep some information private. The following figure explains the difference between the “simple” and the “enhanced” notary.

Computation of Characteristics of test certificates
Enhanced notary provides privacy, while simple notary provides no privacy at all © PSI Metals

Some potential use cases for the “enhanced” notary are:

  • Creating a strong and trustworthy link between products’ CO2 footprints and the factory’s CO2 footprint while keeping production details private.
  • Strengthening the statements provided in mill test certificates (EN 10204) while keeping production processes / performed tests private.

In conclusion, zero-knowledge proofs enable producers to be transparent about their production processes, while not revealing any confidential data.

Want to Learn More?

More details are available in the paper Holler, R., Gnauk, J., Sperl, H.: Blockchain-based tracking of steel products’ properties enhanced by zero-knowledge proofs as it was part of the proceedings of the 6th ESTAD Conference 2023 in Düsseldorf.

As the proceedings are not openly accessible via ESTAD, you can simply request the download of the full paper here.

Learn more about deviations in steel production:

Deviations in Steel Production: How to Get From Iron Ore to Different Steel Products?

Roman Markus Holler

Competence Center Quality, PSI Metals GmbH

Roman Markus Holler graduated in 2022 from Graz Technical University, Austria with a Dipl.-Ing. in Computer Science. His master's studies had a strong focus on IT security, which deepened his knowledge and expertise in creating secure solutions. Since joining PSI Metals in 2016, he supports customers globally to produce high-quality products. Apart from his professional undertakings he enjoys climbing, playing the guitar, and dancing.

Dr. Joachim Gnauk

Head of Competence Center Quality, PSI Metals GmbH

Graduated as physicist at University of Oldenburg/Germany, he received his doctor degree at technical university of Berlin in 2002. Between 1997 and 2007, he worked at Max-Planck-Institute of iron research in Düsseldorf, since 2001 as head of a research group. After that time, he gathered over 10 years’ experience in the production process of steel and aluminum, holding several quality related positions in the metals industry. Since 2018, Joachim Gnauk is responsible for the quality related development of PSImetals.

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