Zero-knowledge proof is a concept of cryptography. It enables a given entity to prove that a particular statement is true, without revealing any other facts.
What does zero-knowledge mean?
The concept of zero-knowledge proof was first introduced in 1985 by MIT researchers. The reason it is called “zero-knowledge” is that the verifier does not learn anything other than the fact that the statement is true. In other words, it enables you to retain more control over your data.
The concept of zero-knowledge has applications in authentication systems, nuclear disarmament, finance, online voting, and blockchain.
How does ZKP work? An example
Picture this: you’re interviewing for a job, and want to prove to the interviewer that you know a particular book by heart. But you need to achieve this without actually revealing any of the book’s details. How do you prove you know the text?
Instead of describing the details of the story, you tell the interviewer what the tenth word of chapter 12 is, and invite them to check. By doing this, you can prove your innate knowledge of the text, without divulging any other detail about the book, or yourself.
This is the logic of ZKP.
How is zero-knowledge proof related to blockchain?
There are different use cases of zero-knowledge proof in blockchain technology. While blockchain offers incredible advantages in decentralization, transparency, and immutability, there are some privacy concerns. That is where zero-knowledge proof can play a major role. It can prove a cryptocurrency transaction to the verifier, without revealing any additional information.
Token gating is a great example. Here, an individual can prove they are authorised to access a particular service via the tokens in their wallet, without revealing any other information.
Zero-knowledge proof enables users to access blockchain services, without giving details such as an email. It can be used to encrypt data, for private transactions, blockchain messaging applications, and the secure sharing of complex documentation.
ZKP in blockchain: how does it work?
There are different methods of using zero-knowledge proof. For example, in the case of Zcash, a key generator is used to create a key pair; one is used for proving, while the other is used for verifying. The prover uses their key to prove their knowledge, while the verified will use the key to validate the authenticity of the statement. As is the case with all zero-knowledge applications, no information is divulged as part of the transaction.
Zero-knowledge proof applications
One zero-knowledge proof’s key advantages is that it can increase the throughput and scalability of blockchains.
ZK-Rollups
ZK Rollups are an Ethereum scaling solution, and a great example of this technology in action.
Instead of requiring every transaction to be handled on the main chain, which causes congestion and slows down transaction time, a ZK-Rollup enables batches of transactions to be processed on a side chain. The transactions are then passed securely back to the main chain to be settled as one large “batch”, rather than parsed individually. This innovation leverages zero-knowledge proof technology to increase the throughput of congested blockchains.
Crypto token-gating
Token-gating is another area where ZKP technology comes into play. Token-gating enables individuals to prove they have authority to access particular crypto services, via the tokens in their wallet.
Zero-knowledge proof disadvantages
Zero-knowledge proof technology – although extremely promising – is still far from being widely used.
Significant processing power is required to complete a ZKP based transaction. The originator of the transaction holds all the information for the transaction. This means that information is lost, all the data associated with the transaction is also lost.
