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Here's What You Need to Know About Zero-Knowledge Proofs

Updated: Apr 15, 2023

Within the last year or two, Layer 2 technology development has started to pick-up. One of these technical developments is the Zero-Knowledge Proof making "ZK" one of the hot new buzzwords in the crypto space.


How can you prove anything if you know nothing? That's not exactly what it means, but we'll get into that in a moment. If you're invested in Layer 2 technology or simply curious, we've got a short write-up that should provide some helpful insight about what Zero-Knowledge Proofs are and some of the blockchain solutions that are currently leveraging this technology.


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"Hello. I have zero knowledge. I would like one knowledge, please."

Zero-knowledge proofs (ZKPs) are a type of cryptographic protocol that allow one party to prove to another party that a certain statement is true, without revealing any additional information beyond the truth of the statement itself. In other words, a ZKP allows someone to prove that they know something without revealing what that something is.


One of the biggest shortcomings of most blockchain tech is the lack of privacy since public ledgers are literally public ledgers. Keep reading to learn what Zero-knowledge proofs can do to make your transactional information a little less transparent.


What Can Zero-Knowledge Do?


ZKPs have many potential applications, including privacy-preserving authentication, anonymous voting, and secure data sharing. In recent years, ZKPs have gained popularity in the blockchain community, where they are being used to improve the privacy, security, and scalability of blockchain networks. Later in this article, we'll talk about some of the companies using Zero-Knowledge tech and how they leverage this tech for blockchain development.


 

ZKP Applications and Use-Cases


One of the most important applications of ZKPs in the blockchain space is in the area of privacy. Blockchains are public ledgers, which means that all transactions on the blockchain are visible to anyone who cares to look. This lack of privacy can be a problem, particularly in applications such as financial transactions, where users may not want their financial activities to be visible to the world.


ZKPs can help to address this problem by allowing transactions to be verified without revealing any information about the transactions themselves. For example, imagine that you want to prove to someone that you have more than $10 in your bank account, without revealing exactly how much money you have. Using a ZKP, you could prove that you have more than $10 in your account without revealing your exact balance.


Lack of privacy is one of the reasons some people avoid using cryptocurrency. Zero-knowledge proofs could create an environment that could potentially attract new users to blockchain tech.


Companies are Leveraging Zero-Knowledge Proofs in Blockchain Development


One company leveraging ZKPs in the blockchain space is Aztec Protocol. Aztec is a privacy-focused platform that allows users to create confidential transactions on the Ethereum blockchain. The platform uses ZKPs to ensure that transaction details remain hidden from prying eyes, while still allowing transactions to be verified and processed on the blockchain.


StarkWare is another company that is using ZKPs in the blockchain space. StarkWare is a blockchain technology company that is focused on improving the scalability and privacy of blockchain networks. The company's technology uses ZKPs to compress the data required to verify transactions on the blockchain, which allows for faster transaction processing and lower fees.


There are other companies working on developing ZK tech for the blockchain space including ZKSync and others. Eventually (as with a lot of blockchain tech), users will have certain expectations for blockchain performance and useability. This could mean that we could eventually start to see Zero-knowledge proofs become part of validation protocols or block processing. As the space continues to grow and this technology becomes more commonplace, we can expect to see more solutions being developed in the future.


What Does This Mean for You?


So, what does all of this mean for the end user? In short, it means that blockchain technology is becoming more private, secure, and scalable, thanks to the use of ZKPs. This is good news for anyone who uses blockchain technology, whether that's for financial transactions, voting, or any other application.


By improving the privacy and security of blockchain networks, ZKPs are helping to make blockchain technology more accessible and user-friendly. For example, if you use DeFi platforms to invest your money, ZKPs can help to ensure that your financial activities remain private and secure. If you use blockchain technology for voting, ZKPs can help to ensure that your vote remains anonymous and cannot be traced back to you, which can help to prevent voter fraud and improve the integrity of the voting process.


Overall, the use of ZKPs in the blockchain space is an exciting development that has the potential to transform the way we think about privacy, security, and scalability in blockchain networks. As more companies and projects start to leverage this technology, we can expect to see even more innovative use cases and applications emerge in the coming years. If you're curious about learning more about some of the stuff that ZK might impact, take a look at our write-ups on Layer 2 solutions, setting up a Metamask wallet, or introduction to DeFi!

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