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The Role of Zero-Knowledge Proof in the Blockchain World

Over the last years, more and more companies accessed and employed our data to deliver us an improved experience. And all these years we gave them a “green light” to process our sensitive information. The companies knew our names, addresses, telephone numbers, etc.

When Blockchain technology entered the game, it changed everything. Different characteristics like transparency, immutability, and decentralization were brought. This allowed us to act anonymously and perform transactions securely without disclosing unnecessary information. 

Now we can figure out how blockchain technology appeared, what Zero-Knowledge Proof algorithms are. We will also learn how a forty-year-old ZKP technology can improve blockchain functionality.

Birth of the Blockchain Technology

At the end of the 20th century, IT communities were interested in developing anonymity and security on the network. New cryptographic methods seemed to be a solution for this. Scientists and software engineers believed that the only way to maintain privacy on the network was to encrypt the data. Thus, cryptography has become the main pillar and foundation of blockchain development.

The first blockchain-like protocol was proposed in 1982 by David Chaum, an American computer scientist, and cryptographer. The technology has decades to develop until Satoshi Nakamoto presented the first decentralized blockchain in 2008.

Blockchain Banner

Since the blockchain is essentially a distributed database, it allows the storage of any information. This approach ensures the reliability and availability of information for all network participants at any time. 

However, in distributed data storage systems on the blockchain, data is encrypted and distributed between network nodes. This makes the process of changing data very slow and unreliable. It can affect the privacy required for secure transactions as well. Cybercriminals or other third parties can get access to confidential transaction data, like charges, account credentials, and account balance.

While blockchain has come up as one of the promising innovations, we need additional security standards for maintaining security in transactions. In such circumstances, Zero Knowledge Proof or ZKP is a good option. 

Why Blockchain and Zero-Knowledge Proof?

Since public blockchain platforms do not provide capabilities to address data and transaction privacy, there is a need to apply ZKP techniques. In a typical blockchain setup, all transactions are revealed to all participants. The details of interaction meant for two parties are visible to others as well. And this can result in a breach of privacy and confidentiality. 

In such cases, Zero-Knowledge Proof can ensure that others only know that a valid transaction has taken place. No information about the sender, recipient, or assets transferred is available.

ZKP Properties

One of the most popular techniques based on ZKP is zk-SNARKS (zero-knowledge – Succinct Non-Interactive Argument of Knowledge). This technique can be used to define a quadratic equation that takes public data and private data and inputs to generate proof that can be validated by the verifier. For example, ZCash is the first cryptocurrency to implement zk-SNARKS. There could be other use cases as well, such as proving age without sharing date-of-birth or proving identity without sharing identity details.

Examples of Zero-Knowledge Proofs in Blockchain

Blockchain ZKP

With Zero-Knowledge Proof, netizens can control and manage their information securely and flexibly. The high potential of ZKP technology combined with Blockchain is highly appreciated in the cybersecurity sphere, and different use-cases are already being discussed. Let’s have a brief look at them. 

Private transactions (EY and Nightfall)

EY, a British Consulting Company, has considered all the data safety concerns and implemented ZKP and blockchain in their solutions. In 2019, they released a public ZKP protocol, called Nightfall. It allows companies to stay confidential managing private and protected transactions on public blockchain platforms. 

Messaging applications

Modern messengers usually require the identity verification of the user. Even though end-to-end encryption allows sending personal data privately, users’ don’t want to share their sensitive information. ZKP allows you to prove your identity and authorize the application without releasing any other personal details.

Complex documentation

Implemented in one solution Zero-Knowledge Proof and blockchain helps users to share complex documents safely. ZKP technology allows encrypting data in sections. Its users can control specific blocks and contained data, managing access to them for other users.

Endnote

Privacy and confidentiality will continue to be an area of concern in this digital age. Methods, like Zero-Knowledge Proof, show great promise in enforcing “honest” behavior and determining transaction “validity” without compromising the sensitive details. The usage and application of zero-knowledge techniques in conjunction with blockchain are bound to increase as more efficient techniques get invented soon.

Security technologies are developing every day

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December 20, 2021