Glossary
Zero-Knowledge proofs
Imagine having knowledge of a truth that you want to prove to someone without revealing what you know. A revolutionary cryptographic scheme called zero-knowledge proof makes it possible.
Let’s explore some use cases of this scheme. Consider a scenario where you need to access a secure environment that requires knowledge of a password or secret. You can demonstrate that you possess this secret without divulging it by utilizing zero-knowledge proofs. For instance, you could prove to a security guard at a concert hall that you are of legal age without disclosing your specific age. The applications of zero-knowledge proofs are extensive and varied.
Let’s analyze the classic cave example. Picture a cave with an entrance and an exit; a door in between opens only when you utter a magic phrase. To prove that you know the magic phrase, you can be observed entering the cave and leaving through the exit. The observer, known as the verifier, will obtain proof that you possess the knowledge without gaining access to the actual secret.
In the context of blockchain, zero-knowledge proofs offer a powerful tool to enhance privacy, confidentiality, and the integrity of transactions. While blockchains provide transparency by enabling anyone to verify transactions, they also expose sensitive information, including transaction amounts and user identities, which can compromise privacy.
Integrating zero-knowledge proofs into blockchain protocols makes it possible to validate the accuracy of transactions without revealing any additional information. For example, in a cryptocurrency transaction, a zero-knowledge proof can demonstrate that the sender has sufficient funds to complete the transaction without disclosing the exact amount or the sender’s identity. This strengthens privacy by keeping transaction details confidential while still allowing for verification of transaction validity.
Another essential application in the blockchain context is scalability through a layer 2 solution known as zk-rollup. Rollups are mechanisms that delegate the computation of layer one transactions, storing only a summary of transactions and the updated state on layer one. In the case of optimistic rollups, the new state is considered correct unless proven otherwise, what results in a waiting period before states are deemed finalized. However, with zk-rollups, a zero-knowledge proof of the new state’s correctness is submitted to layer one. If the proof is accepted, the new state is considered finalized.
Zero-knowledge proofs are already employed in blockchains such as zCash, StarkNet, and zkSync. While still an evolving technique, its integration with blockchains is experimental but promising. Zero-knowledge proof is currently the leading contender for improving privacy and scalability in blockchain systems. Neo has also already implemented a zero-knowledge proof protocol, whose practical use should begin in the near future.
