What is Zero-knowledge? Real World Examples

As the Web3 ecosystem continues to evolve, new technologies are emerging to address the challenges of privacy, security, and scalability. One of the most promising of these technologies is zero knowledge.

Zero knowledge is a cryptographic technique that allows someone to prove the authenticity of data without revealing the data itself. This technique has a wide range of applications in Web3, from enhancing the security of digital assets to enabling private and secure transactions.

In this article, we'll explore what zero knowledge is, how it works, and why it's important for Web3.

What is Zero Knowledge?

At its core, zero knowledge is a way of proving that you know something without revealing what that something is. This might sound counterintuitive at first, but it's actually a powerful technique for enhancing privacy and security.

To understand how zero knowledge works, let's consider an example. Suppose Alice wants to prove to Bob that she knows the password to a secure website. One way she could do this is by simply telling Bob the password. But this would be a security risk, as Bob could then use the password to access the website himself.

Instead, Alice could use a zero knowledge proof to demonstrate to Bob that she knows the password without revealing the password itself. This might involve Alice performing a series of mathematical operations that prove she knows the password, but without revealing any information about the password itself. Bob can then verify the proof without ever learning the password.

This is just one example of how zero knowledge can be used to enhance security and privacy. In Web3, zero knowledge has a wide range of applications, from proving ownership of digital assets to enabling private and secure transactions.

How Zero Knowledge Works

Zero knowledge proofs rely on complex mathematical algorithms that allow someone to prove the authenticity of data without revealing the data itself. These algorithms typically involve a series of computations that are designed to be computationally expensive to perform, but easy to verify.

To understand how this works in practice, let's consider a simple example. Suppose Alice wants to prove to Bob that she knows the value of x in the equation y = x^2. Alice doesn't want to reveal the value of x to Bob, but she wants to prove that she knows it.

To do this, Alice could use a zero knowledge proof. She could start by selecting a random number r, and then computing y = r^2. She could then send y to Bob, along with a proof that she knows the value of r.

Bob can then verify the proof by performing a series of computations himself. He can check that y = r^2, and that Alice's proof is valid. If both of these conditions are true, Bob can be confident that Alice knows the value of x, without ever learning what that value is.

This is just a simple example of how zero knowledge proofs can be used to demonstrate knowledge of data without revealing the data itself. In practice, zero knowledge proofs can be much more complex, involving multiple computations and sophisticated cryptographic algorithms.

Why Zero Knowledge is Important for Web3

Zero knowledge is an important technology for Web3 for several reasons. First, it allows for enhanced privacy and security in transactions. By using zero knowledge proofs, it's possible to prove the authenticity of a transaction without revealing any personal or sensitive information.

Second, zero knowledge can help to reduce the computational burden of blockchain networks. By allowing transactions to be validated without revealing all of the underlying data, zero knowledge can help to reduce the amount of data that needs to be stored and transmitted on the blockchain.

Finally, zero knowledge can enable new applications and use cases in Web3. For example, it can be used to prove ownership of digital assets without revealing the identity of the owner, or to authenticate users without requiring passwords or other personal information.

Zero-knowledge examples

Some examples of zero knowledge include:

• Password verification: When you enter your password on a website, the website can use zero-knowledge proofs to verify your password without actually seeing it. This ensures that your password remains private and secure.
• Financial transactions: Zero-knowledge proofs can be used in financial transactions to ensure that a transaction is valid without revealing any sensitive information, such as the account balance or transaction amount.
• Identity verification: Zero-knowledge proofs can be used to verify a person's identity without revealing any personally identifiable information. This is useful in situations where privacy is important, such as in medical or legal contexts.
• Cryptography: Zero-knowledge proofs are used in various cryptographic protocols, such as anonymous digital signatures and secure multiparty computation. These protocols enable secure communication and data sharing without revealing any sensitive information.

zk-STARKs vs zk-SNARKs vs zk-rollup

zk-STARKs, zk-SNARKs, and zk-rollups are all advanced cryptographic technologies used in the blockchain industry to enhance privacy, security, and scalability.

zk-STARKs and zk-SNARKs are both types of zero-knowledge proofs that allow for efficient verification of the validity of data without revealing any sensitive information. The key difference between the two is that zk-STARKs do not require a trusted setup, making them more secure, but also more computationally intensive, while zk-SNARKs require a trusted setup, but are faster and more efficient.

On the other hand, zk-rollups are a Layer 2 scaling solution that allows for a large number of transactions to be processed off-chain and then batched and verified on-chain using zero-knowledge proofs, resulting in increased scalability and reduced gas costs. While zk-rollups do not provide the same level of privacy as zk-STARKs or zk-SNARKs, they offer a more practical solution for improving the scalability of the Ethereum network.

While zk-STARKs and zk-SNARKs provide advanced privacy and security features, zk-rollups are a practical solution for improving scalability on the Ethereum network. The choice of which technology to use ultimately depends on the specific needs and priorities of the project.

What is zk-SNARKs?

zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) are a type of ZKP that were introduced by the Zcash project in 2014. They are used to enable private transactions on the Zcash blockchain, and have since been adopted by other projects in the Web3 ecosystem.

The basic idea behind zk-SNARKs is to allow someone to prove that they have knowledge of a private key without revealing the key itself. This is accomplished by creating a proof that the prover knows a set of values that satisfy a set of constraints. This proof can then be verified by anyone without revealing any information about the private key.

One of the advantages of zk-SNARKs is that they are very efficient. They allow for very short proofs that can be verified quickly and without much computational power. However, they have some limitations. For example, they require a trusted setup process to create the initial parameters, and the details of this process must be kept secret to prevent attacks on the system.

What is zk-STARKs?

zk-STARKs (Zero-Knowledge Scalable Transparent Argument of Knowledge) are a more recent type of ZKP that were introduced in 2018. They were developed to address some of the limitations of zk-SNARKs, particularly their reliance on trusted setup processes.

The basic idea behind zk-STARKs is to allow someone to prove that they have knowledge of a private key without relying on any secret parameters. This is accomplished by creating a proof that the prover knows a set of values that satisfy a set of constraints, but without relying on any cryptographic assumptions.

One of the advantages of zk-STARKs is that they are more transparent than zk-SNARKs. Because they don't rely on any secret parameters, there is no need for a trusted setup process. This makes them more resistant to attacks and easier to audit.

However, zk-STARKs are less efficient than zk-SNARKs. They require longer proofs that take more computational power to verify. This can make them less practical for some applications.

What is a zk-rollup?

A zk-rollup is a Layer 2 scaling solution that enables a blockchain to process a large number of transactions off-chain and then batch them together in a single transaction on-chain. This allows for much faster and more efficient processing of transactions, while maintaining the security and decentralization of the underlying blockchain.

The "zk" in zk rollup stands for zero-knowledge, which refers to the use of zero-knowledge proofs (ZKPs) to ensure the validity of the off-chain transactions. ZKPs enable someone to prove that they know something without revealing what they know. In the context of zk-rollups, they are used to prove that the off-chain transactions are valid and that they should be included in the on-chain batch.

A zk rollup works by creating a smart contract on the blockchain that acts as a "validator" for the off-chain transactions. This smart contract contains a Merkle tree of the off-chain transactions, which allows the smart contract to verify the validity of the transactions without having to process each one individually.

To submit a transaction to the zk rollup, a user sends their transaction data to an aggregator, which is responsible for collecting and verifying the transactions. The aggregator then uses a ZKP to prove to the smart contract that the transactions are valid and that they should be included in the on-chain batch.

Once the smart contract has verified the validity of the off-chain transactions, it creates a single transaction on the blockchain that includes all of the transactions in the batch. This allows the network to process a large number of transactions at once, while maintaining the security and decentralization of the underlying blockchain.

One of the main benefits of zk-rollups is that they allow blockchains to process a large number of transactions without sacrificing security or decentralization. This makes them an attractive solution for scaling blockchain networks, particularly those that require high levels of security and decentralization.

Another benefit of zk-rollups is that they can significantly reduce the cost of transactions. Because the off-chain transactions are processed separately from the main blockchain, they don't require the same level of computational power or resources. This can help reduce transaction fees and make blockchain technology more accessible to a wider range of users.

What companies are using Zero Knowledge? 

Several crypto companies are currently using zero knowledge technology in their products and services. Here are a few examples:

• Aztec Protocol: Aztec Protocol is a privacy-focused Layer 2 scaling solution that uses zk-SNARKs to enable confidential transactions on the Ethereum network.
• StarkWare: StarkWare is a blockchain technology company that uses zk-STARKs to provide scalability and privacy solutions for decentralized applications.
• Matter Labs: Matter Labs is a blockchain technology company that uses zk-rollups to provide scalable and efficient solutions for decentralized applications.
• Status: Status is a decentralized platform that aims to make Web3 more accessible and user-friendly. It provides a mobile app and desktop client that allow users to interact with decentralized applications (dApps) on the Ethereum network, as well as to securely store, send, and receive cryptocurrencies. Status also offers a range of other features, such as encrypted messaging, peer-to-peer payments, and a decentralized VPN, which enable users to access the full potential of the decentralized web in a secure and user-friendly way.
• Zcash: Zcash is a privacy-focused cryptocurrency that uses the zk-SNARK protocol to shield transaction data and keep them private.

Zero Knowledge Jobs

Find the best Zero Knowledge Jobs and zk-Snark Jobs.

Conclusion

In conclusion, choosing the right scaling solution for your blockchain project will depend on a variety of factors, including your specific needs and priorities.

• If you need to scale quickly and maintain high levels of security and decentralization, zk-rollups may be the best choice.
• If security is your top priority and you have limited trust in the setup process, zk-STARKs may be the way to go.
• If speed is your primary concern, zk-SNARKs may be the best option

By understanding the strengths and weaknesses of each of these approaches, you can make an informed decision that will help you achieve your goals and build a successful blockchain project.