Zero-knowledge proofs (also known as ZKPs) have made a huge impact on the blockchain. This article breaks down the what, why, and how of zero-knowledge proofs and what they could do to shape blockchain’s usability into the future.
What are zero-knowledge proofs?
ZKPs are a cryptographic method in which one party can prove to another that a statement is true, without sharing any information other than that they can validate that statement. No underlying data is exposed in this transaction. The party that wants to prove the truth of the statement is known as the prover, and the party that checks its validity is known as the verifier.
What are the elements of ZKPs?
ZKPs can be broken down into three key elements.
- The parties involved
- The criteria for a reliable zero-knowledge protocol
- The type of ZKP
The parties involved are always a prover and a verifier. The prover is a person or software that wishes to verify a piece of information that they own or verify that they have performed a task, without revealing the private details involved. The verifier will verify whether the prover’s claim is true or not, again without revealing any private information. This verification may include multiple challenges, that reduce the chance of the prover receiving a false verification.
There are three conditions for a zero-knowledge protocol: completeness, soundness, and zero-knowledge. Completeness refers to the fact that ZKPs used by a verifier to challenge the prover’s claim must be able to prove beyond doubt that the claim is true. The verifier must act honestly and within the rules of the protocol. Soundness means that a zero-knowledge protocol will only verify as true if the claim is actually true. The zero-knowledge element is vital as that is what dictates that no additional information about the claim must be known, except for whether it is true or false.
Interactive vs non-interactive zero-knowledge proofs
There are two distinct types of ZKPs.
- Interactive zero-knowledge proofs. With this type, the prover interacts with the verifier in a back-and-forth dialogue. This interaction allows the verifier to become convinced of the claim's validity. This can require multiple rounds of interaction.
- Non-interactive zero-knowledge proofs allow the prover to convince the verifier, without the above-described interaction.
How can ZKPs be used?
ZKPs can be used for several important blockchain applications:
Private transactions
While blockchain transactions are private, they can be traced back to real-world identities when linked to crypto wallets. With ZPKs, information can be verified without revealing the underlying data, allowing users to maintain total anonymity on public blockchains, while still being able to prove the validity of transactions.
Improving scalability
Decongesting the blockchain is a huge positive for using zero-knowledge proofs. The Ethereum Virtual Machine network consistently comes up against congestion issues, which is why it is currently transitioning from proof of work to proof-of-stake (PoS) to allow it to scale significantly. This is where ZKPs become important. Zero-knowledge EVMs are EVM-compatible virtual machines, which take the computation off-chain. Once a zkEVM processes the computation, it creates a zero-proof and sends it to Ethereum to prove that the computations were done within the rules of the EVM. This means that the EVM does not need to perform the computation itself, and can allow for faster transactions and more space on the blockchain.
Decentralized identity
Traditionally, identification systems involve using a centralized authority that both verifies and issues identity credentials. Protocols such as KYC or AML require users to reveal their private information to be verified. This data will then live on centralized servers, at risk of breaches and theft.
With ZKPs, decentralized identities can be created, and the accuracy of said identity can be verified without having to reveal the data behind it. This reduces the risk of personal data being misused, lost, or targeted by malicious attacks.
The future of ZKPs
Zero-knowledge proofs have been a huge leap in enabling privacy and scalability in blockchain transactions. However, it is still in the early days of being used. ZK-powered blockchains have only launched recently, so the future will depend on their establishment and evolution in the coming years. Future applications of ZKPs will gain in popularity, and new cases are likely to emerge in other industries. As ZKPs become more integrated, the possibilities will continue to expand.
