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The stars of the Israeli serial start of blockchain technology return with QEDit, a tool of diligence without proof of knowledge

Building on "breathtaking mathematics" presented as an update on the Ethereum blockchain only a few months ago, QEDit launches its product on our Battlefield Stage at TechCrunch Disrupt Berlin.

The company, which derives its name from the Latin phrase quod erat demonstrandum (which would have been demonstrated) relies on the principle of evidence of zero knowledge for the provision of services. audit and due diligence to financial institutions.

One of the problems that slows the adoption of blockchain in businesses is the way to share information based on proprietary data. Companies do not want to share much information with competitors, but must have ways to ensure that the information they receive is correct.

The QEDit service allows this on the blockchain. Create ways for multi-party transactions to make queries that prove certain facts about a company, without ever accessing the data underlying that evidence.

This differs from a "regular" blockchain where each transaction is sent to all nodes in the network and all these nodes register the rules and the value of the transaction in a public register. With QEDit, only the user executes the rules on his own data. The only thing that anyone else on the chain sees is the evidence.

One of the co-founders of the company is Aviv Zohar, a researcher at the Hebrew University, whose work was cited by the project developer Ethereum, VItalik Butarin, in his early written on cryptocurrency. Zohar has been working in the field of cryptography for years and her work is critical to the "amazing maths" that make it impossible to demonstrate knowledge.

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Jonathan Rouach and Ruben Arnold, two serial entrepreneurs who met for the first time in 1999 while they were studying at Technion University in Israel, helped him to complete the 39, QEDit team.

"We have seen that there are two contradictory trends: more and more data is accumulated in the corporate world and companies are trying to keep them for themselves and monetize them and companies are trying to to keep them for themselves, but there are cases … on the other hand, you want to share the data with other parties, "says Rouach of the idea behind QEDit." That's what we built. This is the ability to share evidence on the data without sharing the data itself. "

While Arnold is pursuing a consulting career in Paris at McKinsey & Co., Rouach remains in Israel and works in electrical engineering. But by 2012, he's interested in an innovative idea emerging from the edges of the internet called Bitcoin (it was an article on Slashdot, Rouach said).

In 2013, he co-founded Bits of Gold with his brother Yuval Rouach and Arnold as one of the first Bitcoin exchanges to be launched in Israel.

"It was technology," which first drew Rouach to the Bitcoin bomb that exploded on the Internet. "It's a nice solution to a problem I did not even think about … How can you build trust between people without central coordination?"

Rouach's fascination with this concept of anonymous trust is also a guiding thread for his future businesses – companies that are all trying to refine this notion of anonymous and verified trust.

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"Every fact on the blockchain is mathematically verified," explains Rouach. "That's enough to know what is the state of the whole world."

While Bitcoin was perhaps Rouach's entry drug into the wild world of cryptometallurgy, he quickly came to the conclusion that it was not the technology that promised to develop that notion of trust and confidence. anonymous verification.

This is because security issues around bitcoin have not been solved yet. This is how Rouach launched a second company called LedgerLock, which provided security services for a range of digital assets.

Once LedgerLock was sold to Digital Assets Holdings, during the division between the application of blockchain technology to business problems that ignored tokenization, and a more public movement that was based on symbolic sales.

QEDit is the next step towards a fully cryptographic and almost automated transaction system. The idea is to replace the army of auditors charged with exercising due diligence and overseeing negotiations and transactions that involve proprietary information.

Surprisingly (or perhaps not surprisingly), audit firms, financial services companies and large telecommunication companies are themselves on board the experiment. QEDit has partnered with Deloitte, BNP Paribas and British Telecom for its first product called QEDit Enhanced Diligence.

Contrary to the eruption of blockchain-based companies that have followed the path of selling coins, Rouach tells me that his company does not have the intention of launching an ICO . "We are completely on the blockchain side of the business and we want to make sure that companies can establish a relationship of trust between them without having to reveal their private data."

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The company sells the service by use and as part of the launch of the beta here at Disrupt the QEDit offers two free years of service to customers who sign up for its beta.

Rouach says that there is a big market for this kind of work, with about $ 6 billion floating on the only rating market.

It is difficult to understand how much the change this technology could bring to financial services could be radical.

"You have never had a way of equating an investor, an acquirer or an auditor to knock on the door of society and to prove it to me, and to know what they are doing is accurate, "says Rouach.