This article is a post from the community. The author is Kenny Li, co-founder of Manta Network, a programmable privacy Layer 1 protocol powered by zero-knowledge proof technology.
Summary
Zero-knowledge proof (ZKP) is a cryptographic technology that allows the truth of a piece of information to be verified without disclosing the information itself. This technology is becoming increasingly important in blockchain, cryptocurrencies, and decentralized finance (DeFi) to improve privacy and security.
Most DeFi projects already use ZKP to provide better privacy and security for users for services such as lending, taking loans, and trading. A number of Layer 1 blockchains add ZKP or zkEVM based roll-up. Zero-knowledge proof is expected to play an increasingly important role in the world of blockchain and Web3, because its applications are expected to be adopted more widely.
How Does Zero-Knowledge Proof Work?
In the zero-knowledge proof method, one party (the prover) can prove to another party (the verifier) that a statement is true without revealing additional information. This is especially useful when the information is sensitive and the verifier does not want the verifier to be able to access it.
The prover provides mathematical proof that only he can produce, then the verifier can use this proof to verify the truth of the statement. However, the verifier cannot use such evidence to reconstruct the original information.
Imagine a tunnel with two entrances, namely A and B. There is a locked door with a secret code that blocks the only way and prevents people from walking through the tunnel from one end to the other (from A to B). You know the secret code and want to sell it to Mrs.
You want him to pay up front before you reveal the code to him. However, he wants you to prove first that you actually know the code. In this situation, he can only do so by standing at the front of the tunnel and watching you walk in at one end and out the other. This way, he will feel confident that you really know his secret code.
Why Use Zero-Knowledge Proof?
The popularity of zero-knowledge proofs in blockchain and crypto is driven by the increasing demand for privacy and security in digital transactions. With the emergence of blockchain technology and cryptocurrencies, there is an increasing need for ways to verify transactions without disclosing sensitive information. This need can be met by ZKP.
Zero-knowledge proof has attracted greater attention and interest in recent years. Many protocols leveraging ZKP have launched and major blockchains have built zero-knowledge roll-ups. Clear evidence of the popularity of zero-knowledge proof was seen at the DevCon 2022 conference. More than 20% of the discussions were related to this technology.
Important Developments
One important development in zero-knowledge proof is the increasing use of zk-SNARKs, a special type of ZKP. zk-SNARK has been widely adopted in various DeFi applications, such as private token transactions and the granting and taking out of protected loans. Another major development in zero-knowledge proof is the increased focus on zkRoll-up scalability and performance.
zk-SNARK
Zero-knowledge succinct non-interactive argument of knowledge (zk-SNARK) is a special type of zero-knowledge proof that allows a statement to be verified without revealing information about the statement itself.
zk-SNARK has been used in applications such as Zcash and JP Morgan Chase's blockchain-based payment system. zk-SNARK has also been used as a way to securely authenticate clients to servers.
zkRoll-up
zkRoll-up is a scaling solution for blockchain networks that facilitates grouping multiple transactions into one large transaction that is then recorded on the blockchain. For example, BNB Chain launched the zkBNB testnet built on the zkRoll-up architecture in 2022.
zkBNB can bundle hundreds of transactions into one batch off-chain and generate cryptographic proof to prove the validity of all transactions. zkRoll-up provides a balance between scalability and security, and is suitable for blockchain networks with high scale and low latency.
Kegunaan Zero-Knowledge Proof
Zero-knowledge proof has many uses. Some of them have already been realized, while others are expected to be realized in the future. Some of the main uses of ZKP include:
Digital identity verification
Zero-knowledge proof can be used to verify a user's identity without disclosing sensitive personal information. This can be useful in applications such as digital voting systems that require voter identity verification without sacrificing anonymity.
Privacy-preserving transactions
One of the most popular uses for zero-knowledge proofs in crypto is to enable privacy-preserving transactions. For example, Manta Network's decentralized application (DApp), MantaPay, uses ZKP to allow users to make transactions on decentralized exchanges (DEX) without revealing their identity or transaction details. This allows users to maintain privacy while still being able to use the platform for transactions.
Protected transactions
Zcash is a cryptocurrency that uses zero-knowledge proof to allow shielded transactions. In such transactions, the sender and recipient addresses, as well as the transaction amount, are masked from the public blockchain to provide additional privacy for users.
Tokenization and ownership verification
Zero-knowledge proofs can also be used to tokenize assets and verify proof of ownership. For example, a property can be tokenized and any party can verify its ownership without publicly disclosing any other information.
Global compliance
Some countries have strict regulations regarding the collection and sharing of financial information. This may be difficult for decentralized platforms to comply with. Zero-knowledge proof can be used to share necessary information with regulators while maintaining its privacy from others.
This can bridge the gap between decentralized platforms and traditional financial institutions, making it easier for DeFi to comply with regulations in various jurisdictions.
The Future of Zero-Knowledge Proof in Blockchain
Zero-knowledge proof is likely to usher in new technological innovations in the future. A number of future developments related to ZKP that are worth paying attention to include:
Cross-chain privacy layer
As the blockchain and DeFi ecosystem continues to grow and develop, there is an increasing need for interoperability between various blockchain networks. A cross-chain privacy layer will allow transactions to be carried out on multiple blockchain networks while maintaining the privacy of the parties involved.
zk-STARK
Another area worth watching is the increasing use of zk-STARK (zero-knowledge scalable transparent argument of knowledge), a new type of zero-knowledge proof that is considered more efficient and secure than zk-SNARK. Another advantage is that zk-STARK is verified more quickly and does not require trusted settings compared to zk-SNARK.
A range of user-friendly tools
Zero-knowledge proof technology can be complicated. Not all development teams are experts in this particular area of cryptography. ZKP's suite of user-friendly tools can help bridge this gap and make it easier for developers from various backgrounds to use this technology.
Batasan Zero-Knowledge Proof
Zero-knowledge proof represents a unique method of verifying the correctness of information while maintaining privacy, but does not provide a 100% guarantee. Although the probability of verification when the prover is lying is very small, users should be aware that ZKP is not perfect.
In addition, the algorithm used by zero-knowledge proof requires high computing resources. In some types of ZKP, intensive computation is required because it requires a lot of interaction between the verifier and prover. In other types, the algorithm is very computationally intensive, potentially limiting the applicability of ZKP.
Closing
Zero-knowledge proof is quickly attracting attention because it has the unique characteristics of privacy preservation and scaling potential. The increasing application of this technology in blockchain, cryptocurrencies, and DeFi is likely to bring about more innovative services that will greatly benefit users. Zero-knowledge proof is expected to play an important role in creating a more secure, private and efficient DApp ecosystem.
Further Reading
Explanation of zk-SNARK and zk-STARK
Blockchain Scaling Solution Layer 1 vs. Layer 2