Demystifying Zero-Knowledge Proofs

Zero-knowledge proofs is a cryptographic technology that allows a certain information or statement to be proved as true or not without actually revealing the information or statement itself, this enhances privacy and security in blockchain protocols.

Zero-knowledge proof (ZK proof) technologies enable one party to prove to another party that they know a piece of information without actually sharing the information with another party in order to prove their knowledge.

ZKPs are already being used by many DeFi projects to give customers better privacy and security for services like lending, borrowing, and trading.

Fundamental types of Zero Knowledge Proofs

Interactive ZKP : Under the Interactive ZKP the prover must complete a series of actions and tasks to prove to the verifier that they know and have a certain piece of information.
Non-Interactive ZKP: Non-interactive Zero-Knowledge Proofs do not require an interactive process between the prover and verifier. This types of ZKPs require more computational power as compared to Interactive Zero Knowledge Proof.

The essential properties of a ZKP

Completeness: If the input is valid, the zero-knowledge protocol always returns ‘true’. Hence, if the underlying statement is true, and the prover and verifier act honestly, the proof can be accepted.
Soundness : If the input is invalid, it is theoretically impossible to fool the zero-knowledge protocol to return ‘true’. If the statement is false, no efficient prover can convince the verifier otherwise, except with negligible probability.
Zero-knowledge: The verifier learns nothing about a statement beyond its validity or falsity (they have “zero knowledge” of the statement). This requirement also prevents the verifier from deriving the original input (the statement’s contents) from the proof.

Types of Zero Knowledge Proofs

zk-SNARKs: zk-SNARK stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. They are a type of non-interactive Zero Knowledge Proof. They allow a prover to demonstrate knowledge of information without any interaction with the verifier. ZK-SNARKs are used in blockchains like Zcash, Loopring, and StarkWare to provide privacy-preserving transactions while still ensuring the validity of the transaction history.
zk-STARKs : zk-STARKs stands for Zero-Knowledge Scalable Transparent Arguments of Knowledge, zk-STARKs are interactive Zero Knowledge Proofs that provide scalability and transparency. They enable the verification of large computations on the blockchain without revealing any sensitive information. The key advantages of STARKs over SNARKs are that they have fast prover times and are easier to scale as they offer more computing power.

Why we need Zero Knowledge Proofs

There are several reasons why zero-knowledge proofs (ZKPs) are important. We will demistify some of them below:

Privacy And Security: Zero-knowledge proofs (ZKPs) enable the verification of data without disclosing the underlying information, ensuring robust security and privacy. This feature proves especially valuable in scenarios where the confidentiality of sensitive data, such as financial transactions or personal identification, is paramount.
Compliance: Zero-knowledge proofs (ZKPs) offer organizations the means to adhere to diverse regulations, including data privacy laws, while preserving security and privacy. Additionally, ZKPs can facilitate secure and private identity verification, ensuring compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations.
Scalability: Zero-knowledge proofs (ZKPs) contribute to enhancing the scalability of blockchain networks by enabling transaction verification without disclosing the underlying data. Consequently, this reduces the volume of data that needs to be stored on the blockchain, leading to improved network efficiency.
Interoperability: Zero-knowledge proofs (ZKPs) play a pivotal role in fostering the interoperability of distinct blockchain networks through a secure and private mechanism for exchanging information among them.
Identity Verification: Zero-knowledge proofs (ZKPs) can also serve as a means for secure and private identity verification. This capability proves beneficial in situations where users seek to authenticate their identity without disclosing sensitive personal details.

Conclusion

Zero-knowledge proofs (ZKPs) are an influential resource that elevates privacy and security, ensures regulatory compliance, enhances scalability and interoperability, and enables secure identity verification. By verifying information without divulging the underlying data, ZKPs guarantee a heightened level of security and privacy, particularly in critical sectors like finance and personal identification.